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on Environmental Economics |
| By: | Patrick Criqui (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II); Pierre-Olivier Peytral (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II); Jean-Christophe Simon (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II) |
| Abstract: | The report is prepared with three main objectives: i/ Review of general information and scientific literature to be shared with members of the scientific committee and with other contributors to the seminar. ii/ Analysis of energy trends and carbon emission patterns, and identification of major issues related to low carbon scenarios analysis. iii/ Exploration of some topics for further debate and analysis : Overview on the dual climate change and development challenge, with emphasis on the scope for policy options related to the current debate on “Green Growth” ; retrospective analysis of CO2 emissions profiles in Thailand over 1990-2008 ; review of methodologies low carbon scenario The conclusion will address the rationale for Nationally Appropriate Mitigation Actions that could be implemented in the years to come. This report is built on documents and literature published prior to December 2009 and therefore does not deal with new issues considered as in a ‘post Copenhagen Conference' perspective. |
| Keywords: | climate policy ; carbon emissions ; scenario ; Thailand |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00467462_v1&r=env |
| By: | Paul J.J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)); Jens K. Perret (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)); Deniz Erdem |
| Abstract: | Summary: The traditional discussion about CO2 emissions and greenhouse gases as a source of global warming has been rather static, namely in the sense that innovation dynamics have not been considered much. Given the global nature of the climate problem, it is natural to develop a more dynamic Schumpeterian perspective and to emphasize a broader international analysis, which takes innovation dynamics and green international competitiveness into account: We discuss key issues of developing a consistent global sustainability indicator, which should cover the crucial dimensions of sustainability in a simple and straightforward way. The basic elements presented here concern genuine savings rates – covering not only depreciations on capital, but on the natural capital as well -, the international competitiveness of the respective country in the field of environmental ("green") goods and the share of renewable energy generation. International benchmarking can thus be encouraged and opportunities emphasized - an approach developed here. This new EIIW-vita Global Sustainability Indicator is consistent with the recent OECD requirements on composite indicators and thus, we suggest new options for policymakers. The US and Indonesia have suffered from a decline in their performance in the period 2000-07; Germany has improved its performance as judged by the new composite indicator whose weights are determined from factor analysis. The countries covered stand for roughly 91% of world GDP, 94% of global exports, 82% of global CO2 emissions and 68% of the population. |
| Keywords: | CO2 Emission, Global worming, Sustainability, International country competitiveness |
| JEL: | Q54 Q01 O57 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:eiiwdp:disbei174&r=env |
| By: | Francesco Bosello (Unversity of Milan and Fondazione Eni Enrico Mattei); Carlo Carraro (University of Venice, CEPR, CESifo and Fondazione Eni Enrico Mattei); Enrica De Cian (University of Venice and Fondazione Eni Enrico Mattei) |
| Abstract: | It has become commonly accepted that a successful climate strategy should compound mitigation and adaptation. The accurate combination between adaptation and mitigation that can best address climate change is still an open question. This paper proposes a framework that integrates mitigation, adaptation, and climate change residual damages into an optimisation model. This set-up is used to provide some insights on the welfare maximising resource allocation between mitigation and adaptation, on their optimal timing, and on their marginal contribution to reducing vulnerability to climate change. The optimal mix between three different adaptation modes (reactive adaptation, anticipatory adaptation, and investment in innovation for adaptation purposes) within the adaptation bundle is also identified. Results suggest that the joint implementation of mitigation and adaptation is welfare improving. Mitigation should start immediately, whereas adaptation somehow later. It is also shown that in a world where the probability of climate-related catastrophic events is small and where decision makers have a high discount rate, adaptation is unambiguously the preferred option. Adaptation needs, both in developed and developing countries, will be massive, especially during the second half of the century. Most of the adaptation burden will be on developing countries. International cooperation is thus required to equally distribute the cost of adaptation. |
| Keywords: | Climate Change Impacts, Mitigation, Adaptation, Integrated Assessment Model |
| JEL: | Q54 Q56 Q43 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.32&r=env |
| By: | Francesco Bosello (University of Milan, Fondazione Eni Enrico Mattei and Euromediterranean Center on Climate Change (CMCC)) |
| Abstract: | This work develops a framework for the analysis at the macro-level of the relationship between adaptation and mitigation policies. The FEEM-RICE growth model with stock pollution, endogenous R&D investment and emission abatement is enriched with a planned-adaptation module where a defensive capital stock is built through adaptation investment. Within this framework the optimal path of planned adaptation, the optimal inter and intra temporal mix between adaptation, mitigation and investment in R&D, and the sensitivity of a strategy to each other is identified. The major conclusions of this research show that adaptation, mitigation and R&D are strategic complements as all concur together to the solution of the climate change problem; nonetheless the possibility to adapt reduces the need to mitigate and partly crowds out other forms of investment like those in R&D. The optimal intertemporal distribution of strategies is also described: it requires to anticipate mitigation effort that should start already when climate damages are low and postpone adaptation intervention until they are substantial. Thus the possibility to adapt is not a justification to delay abatement activities. A sensitivity analysis demonstrates the robustness of these results to different parameterizations, in particular to changes in expected climate-change damages and in the discount rates. |
| Keywords: | Climate Change Impacts, Mitigation, Adaptation, Integrated Assessment |
| JEL: | Q25 Q28 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.22&r=env |
| By: | Cathrine Hagem (Statistics Norway) |
| Abstract: | The European Union (EU) identified some positive and negative externalities related to energy production and consumption when adopting its Renewable Energy and Climate Change Package. Given these externalities, we derive the optimal combination of policy instruments. Thereafter, we explore the second-best outcome, given constraints on the use of some policy instruments, due to political considerations and international regulations. We show that the choice of policy instruments to promote renewable energy production (subsidies versus green certificates) affects the optimal level of energy consumption taxes. A second-best optimum for the EU cannot be achieved without a coordination of energy taxes and renewable energy policy instruments in each country, given the externalities addressed in this paper. |
| Keywords: | climate policy; energy policy; green certificates; energy subsidies; energy ta |
| JEL: | D62 H21 H23 Q48 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:610&r=env |
| By: | Moore, Winston R.; Harewood , Leandra; Grosvenor, Tiffany |
| Abstract: | Assuming nothing is done to address greenhouse gas emissions, sea levels across the world are anticipated to rise by between 0.2m and 1m over this century. Higher sea levels can be particularly devastating to small states. It is expected that rising sea levels will result in coastal squeezing and the loss of their main tourist attraction, beach tourism. Climate change is also forecasted to result in more severe storm activity, which could also lead to flooding and damage from storm force winds. This study attempts to quantify the potential supply-side effects of climate change on tourism in the small island state of Barbados. Using a database of 181 hotels, a model is employed to evaluate the effects of coastal squeezing and storm activity on accommodation establishments. |
| Keywords: | Climate Change; Tourism; Caribbean |
| JEL: | O54 L83 Q54 |
| Date: | 2010–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:21469&r=env |
| By: | Moore, Winston; Lewis-Bynoe, Denny; Howard, Stacia |
| Abstract: | The tourist industry is widely recognised as the key engine of growth in the Caribbean, representing a significant source of foreign exchange earnings and employment. The present study provides an assessment of how climate change could likely impact on regional tourism features. The analysis is undertaken by comparing historical tourism climatic indices to those obtained under the various climate change scenarios. The results suggest that the biggest losers, in terms of deteriorations in their climatic features, are likely to be the Caribbean, Central America and South America. |
| Keywords: | Tourism climate index; Climate Change; Caribbean |
| JEL: | Q50 C43 L83 |
| Date: | 2009–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:21470&r=env |
| By: | Valentina Bosetti (FEEM and CMCC, Italy. Visiting Fellow at Princeton Environmental Institute); David G. Victor (International Law & Regulation (ILAR) at UC San Diego, School of International Relations and Pacific Studies) |
| Abstract: | Modellers have examined a wide array of ideal-world scenarios for regulation of greenhouse gases. In this ideal world, all countries limit emissions from all economic sectors; regulations are implemented by intelligent, well-informed forward-looking agents; all abatement options, such as new energy technologies and forestry offsets, are available; trade in goods, services and emission credits is free and unfettered. Here we systematically explore more plausible second-best worlds. While analysts have given inordinate attention to which countries participate in regulation—what we call “variable geometry”—which has a strikingly small impact on total world cost of carbon regulations if international trade in emission credits allows economies to equilibrate. Limits on emission trading raise those costs, but by a much smaller amount than expected because even modest amounts of emission trading (less than 15% of abatement in a plausible scenario that varies the geometry of effort) have a large cost-reducing impact. Second best scenarios that see one sector regulated more aggressively and rapidly than others do not impose much extra burden when compared with optimal all-sector scenarios provided that regulations begin in the power sector. Indeed, some forms of trade regulation might decrease the financial flows associated to a carbon policy thus increasing political feasibility of the climate agreement. Much more important than variable geometry, trading and sectors is another factor that analysts have largely ignored: credibility. In the real world governments find it difficult to craft and implement credible international regulations and thus agents are unable to be so forward-looking as assumed in ideal-world modelling exercises. As credibility declines the cost of coordinated international regulation skyrockets—even in developing countries that are likely to delay their adoption of binding limits on emissions. Because international institutions such as treaties are usually weak, governments must rely on their own actions to boost regulatory credibility—for example, governments might “pre-commit” international regulations into domestic law before international negotiations are finally settled, thus boosting credibility. In our scenarios, China alone would be a net beneficiary of pre-commitment that advances its carbon limits two decades (from 2030, in our scenario, to today) if doing so would make international regulations more credible and thus encourage Chinese firms to invest with a clearer eye to the future. Overall, low credibility is up to 6 times more important in driving higher world costs for carbon regulations when compared with variable geometry, limits on emission trading and variable sectors. In this paper, we have not explored the other major dimension to the second-best: the lack of timely availability of the full range of abatement options, although our results suggest that even this will be less consequential than credibility. |
| Keywords: | Greenhouse Gases, Second-best Regulation |
| JEL: | Q5 Q58 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.29&r=env |
| By: | Iwata, Hiroki; Okada, Keisuke; Samreth, Sovannroeun |
| Abstract: | This paper empirically investigates the environmental Kuznets curve (EKC) for CO2 emissions in the cases of 11 OECD countries by taking into account the role of nuclear energy in electricity production. The autoregressive distributed lag (ARDL) approach to cointegration is employed as the estimation method. Our results indicate that energy consumption has a positive impact on CO2 emissions in most countries in the study. However, the impact of trade is not statistically significant. The results provide evidence for a role of nuclear power in reducing CO2 emissions only in some countries. Additionally, although the estimated long-run coefficients of income and its square satisfy the EKC hypothesis in Finland, Japan, Korea and Spain, only Finland’s EKC turning point is inside the sample period of the study, providing poor evidence in support of the EKC hypothesis. |
| Keywords: | CO2; Environment; EKC; OECD; ARDL |
| JEL: | Q53 Q51 Q43 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:21520&r=env |
| By: | Dalmazzone Silvana (University of Turin); La Notte Alessandra |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:200910&r=env |
| By: | Medina, Martin |
| Abstract: | Many cities in Africa, Asia, and Latin America face serious problems managing their wastes. Two of the major problems are the insufficient collection and inappropriate final disposal of wastes. Despite spending increasing resources, many cities – particularly in Africa and Asia – collect less than half of the waste generated. Most wastes are disposed of in open dumps, deposited on vacant land, or burned by residents in their backyards. Insufficient collection and inadequate disposal generate significant pollution problems and risks to human health and the environment. Over one billion people living in lowincome communities and slums lack appropriate waste management services. Given the rapid population growth and urbanization in many cities, the management of wastes tends to further deteriorate. This paper examines the challenges and opportunities that exist in improving the management of waste in Africa, Asia, and Latin America. It is argued that, despite a worsening trend, there are opportunities for reducing pollution, alleviating poverty, improving the urban environment, and lowering greenhouse gas emissions in developing countries by implementing low-cost, low-tech, labour-intensive methods that promote community participation and involve informal refuse collectors and waste-pickers. Evidence from several cities in Africa, Asia, and Latin America is discussed. |
| Keywords: | urbanization, cities, environment, waste |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-23&r=env |
| By: | Carlsson,, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Kataria, Mitesh (Max Planck Institute of Economics, Germany); Lampi, Elina (Department of Economics, School of Business, Economics and Law, Göteborg University); Löfgren, Åsa (Department of Economics, School of Business, Economics and Law, Göteborg University); Sterner, Thomas (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | By using a choice experiment, this paper focuses on citizens’ preferences for effort-sharing rules of how carbon abatement should be shared among countries. We find that Swedes do not rank the rule favoring their own country highest. Instead, they prefer the rule where all countries are allowed to emit an equal amount per person, a rule that favors Africa at the expense of high emitters such as the U.S. The least preferred rule is reduction proportional to historical emissions. Using two different treatments, one where the respondents were informed about the country names and one where the country names were replaced with anonymous labels A-D, we also test whether people’s preferences for effort-sharing rules depend on the framing of the problem. We find that while the ranking of the principles is the same in both treatments, the strength of the preferences is significantly increased when the actual names of the countries are used.<p> |
| Keywords: | climate change; fairness; framing; ethics; effort-sharing rules |
| JEL: | Q54 |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0437&r=env |
| By: | Lucia Ceccato (Ca’ Foscari University); Valentina Giannini (Ca’ Foscari University and Fondazione Eni Enrico Mattei); Carlo Giupponi (Ca’ Foscari University and Fondazione Eni Enrico Mattei) |
| Abstract: | This work illustrates the preliminary findings of a participatory research process aimed at identifying responses for sustainable water management in a climate change perspective, in two river basins in Europe and Asia. The paper describes the methodology implemented through local workshops, aimed at eliciting and evaluating possible responses to flood risk. Participatory workshops allowed for the identification of four categories of possible responses and a set of nine evaluation criteria, three for each of the three pillars of sustainable development. The main outcome of such activities consists in the ranking of broad response categories instrumental to the objective of the Brahmatwinn research project, i.e. the identification of Integrated Water Resource Management Strategies (IWRMS) based upon the issues and preferences elicited from local experts. The mDSS tool was used to facilitate transparent and robust management of the information collected through Multi-Criteria Decision Analysis (MCDA) and communication of the outputs. |
| Keywords: | Participatory Process, Climate Change, Flood Risk, Decision Support System, Multi Criteria Analysis, MCA, Eliciting Responses, Evaluating Responses, Integrated Water Resources Management, IWRM, Mulino Decision Support System, mDSS |
| JEL: | C61 Q01 Q54 Q56 Q58 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.28&r=env |
| By: | Hassan Benchekroun; Cees Withagen |
| Abstract: | We provide the closed form solution to the Dasgupta-Heal-Solow-Stiglitz (DHSS) model. The DHSS model is based on the seminal articles Dasgupta and Heal (Rev. Econ. Stud., 1974), Solow (Rev. Econ. Stud., 1974) and Stiglitz (Rev. Econ. Stud., 1974) and describes an economy with two assets, man-made capital and a nonrenewable resource stock. We explicitly characterize, for such an economy, the dynamics along the optimal trajectory of all the variables in the model and from all possible initial values of the stocks. We use the analytical solution to prove several properties of the optimal consumption path. In particular, we show that the initial consumption under a utilitarian criterion starts below the maximin rate of consumption if and only the resource is abundant enough and that under a utilitarian criterion, it is not necessarily the present generation that benefits most from a windfall of resources. |
| JEL: | E20 Q30 C65 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:mcl:mclwop:2010-01&r=env |
| By: | Harstad, Bård (Kellogg School of Management, Northwestern University); Eskeland, Gunnar S. (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration) |
| Abstract: | Permits markets are celebrated as a policy instrument since they allow (i) firms to equalize marginal costs through trade and (ii) the regulator to distribute the burden in a politically desirable way. These two concerns, however, may conflict in a dynamic setting. Anticipating the regulator's future desire to give more permits to firms that appear to need them, firms purchase permits to signal their need. This raises the price above marginal costs and the market becomes inefficient. If the social cost of pollution is high and the government intervenes frequently in the market, the distortions are greater than the gains from trade and non-tradable permits are better. The analysis helps to understand permit markets and how they should be designed. |
| Keywords: | Tradable permits; time inconsistency; the ratchet effect; rent-seeking; plan vs. market |
| JEL: | Q50 |
| Date: | 2010–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2010_002&r=env |