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on Environmental Economics |
| By: | Mattoo, Aaditya; Subramanian, Arvind |
| Abstract: | How global emissions reduction targets can be achieved equitably is a key issue in climate change discussions. This paper presents an analytical framework to encompass contributions to the literature on equity in climate change, and highlights the consequences -- in terms of future emissions allocations -- of different approaches to equity. Progressive cuts relative to historic levels -- for example, 80 percent by industrial countries and 20 percent by developing countries -- in effect accord primacy to adjustment costs and favor large current emitters such as the United States, Canada, Australia, oil exporters, and China. In contrast, principles of equal per capita emissions, historic responsibility, and ability to pay favor some large and poor developing countries such as India, Indonesia, and the Philippines, but hurt industrial countries as well as many other developing countries. The principle of preserving future development opportunities has the appeal that it does not constrain developing countries in the future by a problem that they did not largely cause in the past, but it shifts the burden of meeting climate change goals entirely to industrial countries. Given the strong conflicts of interest in defining equity in emission allocations, it may be desirable to shift the emphasis of international cooperation toward generating a low-carbon technology revolution. Equity considerations would then play a role not in allocating a shrinking emissions pie but in informing the relative contributions of countries to generating such a pie-enlarging revolution. |
| Keywords: | Climate Change Mitigation and Green House Gases,Climate Change Economics,Environmental Economics&Policies,Air Quality&Clean Air,Environment and Energy Efficiency |
| Date: | 2010–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5383&r=env |
| By: | Jiang, Yong; Koo, Won |
| Abstract: | The purpose of this study is to examine the possible local impacts of cap-and-trade climate policy on agricultural producers in the Northern Plains. This study explicitly considers farmer behavior with respect to agricultural opportunity in carbon offset provision and ability of adaptation to mitigate the production cost impact under a cap-and-trade climate policy. Based on empirically estimated farmer behavior models, a policy simulation with agricultural census data identifies farmer acreage enrollment in carbon offset provision, carbon offset supplies and revenues, the production cost impacts of carbon prices, and impacts on net farm income and their distributions among heterogeneous farmers. Our analysis find that: 1) farmer ex ante preferences in general are biased against participating in carbon credit programs although farmer involvement increases with carbon prices; 2) with the fertilizer industry exempted from cap-and-trade regulation, the production cost impacts would be small, and more than half of the farms or farmland would probably gain for a carbon price higher than $10 per metric ton of carbon; and 3) the production cost impacts with a capped fertilizer industry would be 2 times higher, and more than half of the farms or farmland would lose unless the carbon price could reach beyond $55 per metric ton of carbon. This study sheds some light on agricultural potential to adapt to economy-wide climate change mitigation while providing a bottom-up economic assessment of the costs and benefits of a cap-and-trade climate policy to agricultural producers in the short run. |
| Keywords: | greenhouse gas, cap-and-trade, climate change, agricultural impact, economics, carbon offsets, Agricultural and Food Policy, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91278&r=env |
| By: | Beach, Robert H.; Thomson, Allison M.; McCarl, Bruce A. |
| Abstract: | There is general consensus in the scientific literature that human-induced climate change has taken place and will continue to do so over the next century. The Fourth Assessment Report (AR4) of the Intergovernmental Panel on Climate Change concludes with âvery high confidenceâ that anthropogenic activities such as fossil fuel burning and deforestation have affected the global climate. The AR4 also indicates that global average temperatures are expected to increase by another 1.1°C to 5.4°C by 2100, depending on the increase in atmospheric concentrations of greenhouse gases that takes place during this time. Increasing atmospheric carbon dioxide levels, temperature increases, altered precipitation patterns and other factors influenced by climate have already begun to impact U.S. agriculture. Climate change will continue to have significant effects on U.S. agriculture, water resources, land resources, and biodiversity in the future as temperature extremes begin exceeding thresholds that harm crop growth more frequently and precipitation and runoff patterns continue to change. In this study, we provide an assessment of the potential long-term implications of climate change on landowner decisions regarding land use, crop mix, and production practices in the U.S., combining a crop process model (Environmental Policy Integrated Climate model) and an economic model of the U.S. forestry and agricultural sector (Forest and Agricultural Sector Optimization Model). Agricultural producers have always faced numerous production and price risks, but forecasts of more rapid changes in climatic conditions in the future have raised concerns that these risks will increase in the future relative to historical conditions. |
| Keywords: | climate change, crop yields, EPIC, FASOM, Crop Production/Industries, Environmental Economics and Policy, International Relations/Trade, Land Economics/Use, Resource /Energy Economics and Policy, C61, Q18, Q54, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91393&r=env |
| By: | Weindl, Isabelle; Lotze-Campen, Hermann; Popp, Alexander; Bodirsky, Benjamin; Rolinski, Susanne |
| Abstract: | Until 2050, the global population is projected to reach almost 9 billion people resulting in a rising demand and competition for biomass used as food, feed, raw material and bio-energy, while land and water resources are limited. Moreover, agricultural production will be constrained by the need to mitigate dangerous climate change. The agricultural sector is a major emitter of anthropogenic greenhouse gases (GHG). It is responsible for about 47 % and 58 % of total anthropogenic emissions of methane (CH4) and nitrous oxide (N2O) (IPPC, 2007). CH4 emissions are associated with enteric fermentation of ruminants, rice cultivation and manure storage; N2O emissions are related to nitrogen fertilizers and manure application to soils, but also to manure storage. Land use changes, pasture degradation and deforestation are the main sources of agricultural CO2 emissions, where livestock is a major driver of deforestation and climate change, accounting for 18 % of anthropogenic GHG emissions (Steinfeld et al., 2006). In this context, the key role of livestock is to be investigated. According to FAO, livestock uses already about 30% of the Earthâs land surface as resource for grazing while demand for livestock products will continue to rise significantly, especially to feed the animals. For the assessment of future food supply and land-use patterns as well as the environmental impacts of the agricultural sector, there is an urgent need to identify and analyse main characteristics of the livestock sector. Concerning the conversion efficiency of natural resources like land and water to animal products, feeding technologies play a crucial role. They also determine the magnitude of environmental impacts per amount commodity generated. For ten world regions we define the feeding technology for five livestock subsectors as a set of the following parameters: feed mix, feed energy requirements per unit output, and methane emissions per unit output. We calculate these parameters on the basis of FAO Food Balance Sheets and data from the literature. The resulting regional feed demand of marketable feed is consistent with FAO data. To assess the impacts of different feeding technologies, we implement this concept in the global land use model MAgPIE that is appropriate to assess future anthropogenic GHG emissions from various agricultural activities and environmental and economic impacts of different pathways of the agricultural sector by combining socio-economic regional information with spatially explicit environmental data. We compare three alternative feeding scenarios in terms of GHG emissions from agricultural activities (CH4, N2O). We find that methane emissions rise significantly under a scenario of production extensification (i.e. higher roughage shares in feed mixes). Under an intensification scenario, future methane emissions are even lower than in 1995, but N2O emissions from nitrogen fertilizers and manure application to soils increase. |
| Keywords: | Environmental Economics and Policy, Livestock Production/Industries, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91277&r=env |
| By: | Zahniser, Steven; Arriola, Christine; Somwaru, Agapi |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91406&r=env |
| By: | Dominguez, Ignacio Perez; Britz, Wolfgang |
| Abstract: | In this paper the agricultural sector model CAPRI is expanded to cover non-CO2 greenhouse gas emissions from agricultural sources in Europe and policy instruments for their reduction. A stylised spatial trade model for emission permits is methodologically described and applied to the assessment of three potential policy alternatives for enforcing emission reductions from European agriculture: the EU âeffort sharing agreementâ, an EU-wide emission trading scheme between regions inside each Member State and, finally, an EUwide emission trading scheme between all European regions. This paper builds in the experience accumulated by Pérez DomÃnguez et al. (2010) and provides a through review of the underlying methodology, a expansion of emission sources and a larger projection line (year 2020). Results shows the importance of selecting an adequate combination of instruments of emission abatement for the design of efficient emission reduction policies. |
| Keywords: | Copenhagen agreement, effort sharing agreement, agricultural policy, economic modelling, tradable emission permits, Agricultural and Food Policy, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91396&r=env |
| By: | Moran, Dominic; Macleod, Michael; Wall, Eileen; Eory, Vera; McVittie, Alistair; Barnes, Andrew; Rees, Robert; Topp, Cairistiona F.E.; Moxey, Andrew |
| Abstract: | This paper addresses the challenge of developing a âbottom-upâ marginal abatement cost curve (MACC) for greenhouse gas emissions from UK agriculture. A MACC illustrates the costs of specific crop, soil, and livestock abatement measures against a ââbusiness as usualââ scenario. The results indicate that in 2022 under a specific policy scenario, around 5.38 MtCO2 equivalent (e) could be abated at negative or zero cost. A further 17% of agricultural GHG emissions (7.85 MtCO2e) could be abated at a lower unit cost than the UK Governmentâs 2022 shadow price of carbon (£34 (tCO2e)-1). The paper discusses a range of methodological hurdles that complicate cost-effectiveness appraisal of abatement in agriculture relative to other sectors. |
| Keywords: | Climate change, Marginal abatement costs, Agriculture, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q52, Q 54, Q58, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91399&r=env |
| By: | Rose, Steven K.; McCarl, Bruce |
| Abstract: | This paper investigates three important energy and climate policy issues: (1) the availability of biomass for electricity generation (i.e., supply), (2) climate policy effects on this supply, and (3) the net greenhouse gas reduction when biomass is used for electricity generation. Using a detailed model of U.S. agriculture and forestry markets and land-use, that includes a broad and diverse set of biomass feedstocks, we evaluate competing potential sub-national and feedstock specific supplies of biomass for U.S. electricity generation. Our preliminary results suggest significant supply, with residues dominating at lower delivered energy prices, and dedicated crops significant at higher prices. Sub-national variation is dramatic and will affect generation siting and sustainability. We find displacement of food crops, but net forest land and cropland expansion. We also find that GHG policies could substantially increase the delivered cost of biomass; however, the implications for individual regions and feedstocks is non-uniform, with some supplies falling to zero and others increasing. Finally, we find that bioelectricity is not carbon neutral, but can be emissions reducing relative to coal generation, yield greater direct GHG benefits than biofuels, and even result in domestic indirect emissions reductions with incentives for forest based feedstocks. |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91402&r=env |
| By: | Ludena, Carlos E. |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91397&r=env |
| By: | De Pinto, Alessandro; Robertson, Richard |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91272&r=env |
| By: | P. Balachandra; B. Sudhakara Reddy |
| Abstract: | With the alarming rate of growth in vehicle population and travel demand, the energy consumption has increased significantly contributing to the rise of GHG emissions. Therefore, the development of a viable environmentally benign technology/fuel, which minimises both global and local environmental impacts, is the need of the hour. [Working Paper No. WP-2007-004] |
| Keywords: | alarming, rate of growth,vehicle population, travel demand, energy consumption, GHG emissions, global, local environmental impacts |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2721&r=env |
| By: | Dumas, P.; Hourcade, J. C.; Fabert, B. Perrissin |
| Abstract: | This paper confronts the wide political support for the 2C objective of global increase in temperature, reaffirmed in Copenhagen, with the consistent set of hypotheses on which it relies. It explains why neither an almost zero pure time preference nor concerns about catastrophic damages in case of uncontrolled global warming are prerequisites for policy decisions preserving the possibility of meeting a 2C target. It rests on an optimal stochastic control model balancing the costs and benefits of climate policies resolved sequentially in order to account for the arrival of new information (the RESPONSE model). This model describes the optimal abatement pathways for 2,304 worldviews, combining hypotheses about growth rates, baseline emissions, abatement costs, pure time preference, damages, and climate sensitivity. It shows that 26 percent of the worldviews selecting the 2C target are not characterized by one of the extreme assumptions about pure time preference or climate change damages. |
| Keywords: | Climate Change Mitigation and Green House Gases,Climate Change Economics,Science of Climate Change,Global Environment Facility,Environment and Energy Efficiency |
| Date: | 2010–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5392&r=env |
| By: | Thompson, Wyatt; Meyer, Seth; Westhoff, Pat |
| Keywords: | Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, International Relations/Trade, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91404&r=env |
| By: | Arief Anshory Yusuf (Department of Economics, Padjadjaran University); Ahmad Komarulzaman (Department of Economics, Padjadjaran University); Wawan Hermawan (Department of Economics, Padjadjaran University); Djoni Hartono (Graduate Program of Economics, University of Indonesia); Kindy R. Sjahrir (Fiscal Policy Office, Ministry of Finance. Republic of Indonesia) |
| Abstract: | As mandated by the recent Copenhagen Accord, Indonesia submitted a nationally appropriate mitigation actions plan to reduce greenhouse gasses emission by 26% by 2020. However, for now, specific strategies especially appropriate instruments to achieve those targets are yet under early planning stage. This study is an attempt to contribute to the policy design on how Indonesia can achieve that target in particular for the energy sector by looking directly at specific instruments available and under the discretion of Indonesian government particularly the Ministry of Finance. For this purpose, we constructed AGEFIS-E model, a computable general equilibrium (CGE) model with a focus on energy sector and fiscal instruments. As the departure from the previous literature on CGE modeling in Indonesia, this model incorporates explicitly the renewable energy such as geothermal and hydropower. It was used to exercise various scenarios of finding an effective mix of instruments to reduce emissions from the energy sector. We find that a scenario of engineering the energy relative prices through pricing-instruments is an effective way to achieve a given target of reducing emissions from the energy sectors. More specifically, we conclude that removing energy subsidy (fuel and electricity) can contribute to significant reduction in carbon emissions. Adding a carbon tax to the policy mix will complement to find the best scenario to achieve a certain target of emissions reduction. A target of 14% reduction of emissions from the energy sector, for example, can be achieved by removing energy subsidy complemented by a carbon tax of only around US$3/ton CO2. Half of the reduction is attributed to the removing energy subsidy alone, suggesting evidence that the emissions reduction potential of energy pricing reform has been overlooked in the policy agenda. |
| Keywords: | climate change, computable general equilibrium model, fiscal instruments, energy, Indonesia |
| JEL: | D30 D58 Q40 Q48 Q54 Q56 Q58 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:unp:wpaper:201005&r=env |
| By: | Blandford, David; Gaasland, Ivar; Vardal, Erling |
| Abstract: | As a result of substantial government support, Norway is more or less self-sufficient in its main agricultural products. This contributes to both trade distortions and higher greenhouse gas (GHG) emissions. In multinational negotiations separate efforts are being made to liberalize trade (through the World Trade Organization) and to reduce global GHG emissions (through the United Nations). Using a model of Norwegian agriculture, we explore interconnections between trade liberalization and GHG emission reductions. We show that the Doha proposals would involve no major cut in either agricultural production or GHG emissions due to weakness in the disciplines on trade distorting support. We contrast further trade liberalization and the use of a carbon tax to achieve emission reductions. Trade liberalization involves relatively large impacts on agricultural activity. Trade distortions decrease, and, economic welfare increases substantially due to lower production. For a high cost country like Norway, this indicates that the GHG abatement cost is negative in the sector if no value is attributed to agricultural activity beyond the world market price of food. A more targeted policy to reduce GHG emissions is to use a carbon tax. Compared to the trade liberalization case, both production and land use can be kept at a higher level with only a modest decrease in economic welfare. The side-effect is, however, higher trade distortions. |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, International Relations/Trade, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91261&r=env |
| By: | Leclere, David; Jayet, Pierre-Alain; Zakharov, Paul; De Noblet-Ducoudré, Nathalie |
| Abstract: | We present here preliminary results of an integrated modelling approach combining a crop model (STICS) and an economic model (AROPAj) of European agricultural supply. This modelling framework is designed to perform quantitative analysis, regarding climate change impacts on agriculture and more generally the interactions between soils, land use, agriculture and climate integrating physical and economical elements (data, process, models). It explicitly integrates an agricultural diversity dimension with regards to economic set of choices and soil climate spatial variability. First results are given in term of quantitative analysis combining optimal land allocation (economic optimality) and âdose-responseâ functions related to a large set of crops in Europe, at the farm group level, covering part of the European Union (EU15). They indicate that accounting for economical and spatial variability may impact both regional aggregated scales results. |
| Keywords: | Crop Production/Industries, Environmental Economics and Policy, International Relations/Trade, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91267&r=env |
| By: | Hertel, Thomas W.; Rosch, Stephanie D. |
| Abstract: | Even though much has been written about climate change and poverty as distinct and complex problems, the link between them has received little attention. Understanding this link is vital for the formulation of effective policy responses to climate change. In this article, we focus on agriculture as a primary means by which the impacts of climate change are transmitted to the poor, and as a sector at the forefront of climate change mitigation efforts in developing countries. In so doing, we offer some important insights that may help shape future policies as well as ongoing research in this area. |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, Food Security and Poverty, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91437&r=env |
| By: | Messerlin, Patrick A. |
| Abstract: | Contrary to what is still often believed, the climate and trade communities have a lot in common: a common problem (a global"public good"), common foes (vested interests using protection for slowing down climate change policies), and common friends (firms delivering goods, services, and equipment that are both cleaner and cheaper). They have thus many reasons to buttress each other. The climate community would enormously benefit from adopting the principle of"national treatment,"which would legitimize and discipline the use of carbon border tax adjustment and the principle of"most-favored nation,"which would ban carbon tariffs. The main effect of this would be to fuel a dual world economy of clean countries trading between themselves and dirty countries trading between themselves at a great cost for climate change. And the trade community would enormously benefit from a climate community capable of designing instruments that would support the adjustment efforts to be made by carbon-intensive firms much better than instruments such as antidumping or safeguards, which have proved to be ineffective and perverse. That said, implementing these principles will be difficult. The paper focuses on two key problems. First, the way carbon border taxes are defined has a huge impact on the joint outcome from climate change, trade, and development perspectives. Second, the multilateral climate change regime could easily become too complex to be manageable. Focusing on carbon-intensive sectors and building"clusters"of production processes considered as having"like carbon-intensity"are the two main ways for keeping the regime manageable. Developing them in a multilateral framework would make them more transparent and unbiased. |
| Keywords: | Climate Change Mitigation and Green House Gases,Climate Change Economics,Emerging Markets,Carbon Policy and Trading,Debt Markets |
| Date: | 2010–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5378&r=env |
| By: | Saunders, Caroline; Kaye-Blake, William |
| Abstract: | In the land-based sectors, agricultural production generally is a source of carbon, while forestry may be thought to act as a sink. This paper focuses on new research examining the interaction of the two. The core of the research is the Lincoln Trade and Environment model (LTEM), a partial equilibrium model which links trade in NZ with the main trading countries overseas, through to production and associated environmental consequences . This paper reports on research expanding the model to include forestry from incorporating the capabilities of the Global Forest Products Model (GFPM) into the LTEM and hence producing an integrated model of agricultural and forestry land-uses for NZ and overseas. The paper extends the environmental modelling capabilities of the LTEM to include the impacts of climate change. The paper thereby reports on the development of a model of international trade that encompasses major agricultural commodities and forestry, complete with linkages and feedback with the environment and differentiated international markets. The paper then presents results of scenarios around changes in consumer behaviour and production using the new model. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91947&r=env |
| By: | Schmidt, Thomas G.; Osterburg, Bernhard |
| Abstract: | How can we estimate the negative externalities of agriculture at the national level, and attribute these to specific production activities and outputs? The paper presents a method that calculates the mass flow in the whole agricultural sector including inputs from other sectors, and that allows to analyse resource use and emissions, e.g. of greenhouse gases. Data inputs are the German economic accounts for agriculture, farm structural survey and market statistics, as well as environmental statistics. In the framework of the German agricultural sector model RAUMIS, material flows within the agricultural sector are described, as well as inputs from other German sectors and imports. Through a processanalytical approach, all information is integrated and matrices of resource use and emissions for all agricultural production activities are generated. A monetary allocation is used to identify the respective activities that are responsible for emissions, including indirect emissions in upstream sectors. Related to the market output, cumulative emissions per unit of output can be computed. Results for the period from 1995 to 2007 show the trend of resource uses and emissions for the national average values of important commodities such as milk and meat. |
| Keywords: | SEEA, Input-Output Analysis, agriculture, resource use, trade, emissions, carbon footprint, Livestock Production/Industries, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91268&r=env |
| By: | Beach, Robert H.; Daigneault, Adam J.; McCarl, Bruce A.; Rose, Steven K. |
| Abstract: | A key consideration for development of energy and climate policy affecting the forestry and agricultural sectors is that the selection of specific mechanisms implemented to achieve bioenergy production and/or greenhouse gas (GHG) mitigation targets may have substantial effects on landowner incentives to adopt alternative practices. For instance, the prices of allowances and offsets are expected to diverge under some policies being considered where there is a binding cap on the quantity of offsets from the agricultural and forest sectors. In addition, provisions that limit or exclude specific practices from receiving carbon payments will affect the quantity and cost of GHG mitigation opportunities available. In this study, the recently updated Forest and Agriculture Sector Optimization Model with GHGs (FASOMGHG) was used to estimate GHG mitigation potential for private land in the contiguous U.S. under a variety of GHG price policies. Model scenarios suggest that U.S. forestry and agriculture could provide mitigation of 200 â 1000 megatons carbon dioxide equivalent per year (Mt CO2e/year) at carbon prices of $15 to $50/tCO2e. Binding limits on offsets have increasingly large effects on both the total magnitude and distribution of GHG mitigation across options over time. In addition, discounting or excluding payments for forest sinks can reduce annualized land-based mitigation potential 37-90 percent relative to the full eligibility scenario whereas discounting or excluding agricultural practices reduces mitigation potential by less than 10 percent. |
| Keywords: | Climate policy, energy policy, FASOMGHG, GHG mitigation, Agricultural and Food Policy, Environmental Economics and Policy, Resource /Energy Economics and Policy, C61, Q42, Q54, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91394&r=env |
| By: | Michael Ash; James Boyce; Grace Chang; Helen Scharber |
| Abstract: | This paper examines spatial variations in exposure to toxic air pollution from industrial facilities in urban areas of the United States, using geographic microdata from the U.S. Environmental Protection Agency’s Risk-Screening Environmental Indicators project. We find that average exposure in an urban area is positively correlated with the extent of racial and ethnic disparity in the distribution of the exposure burden. This correlation could arise from causal linkages in either or both directions: the ability to displace pollution onto minorities may lower the effective cost of pollution for industrial firms; and higher average pollution burdens may induce whites to invest more political capital in efforts to influence firms’ siting decisions. Furthermore, we find that in urban areas with higher minority pollution-exposure discrepancies, average exposures tend to be higher for all population subgroups, including whites. In other words, improvements in environmental justice in the United States could benefit not only minorities but also whites. |
| Keywords: | environmental justice; air pollution; industrial toxics; Risk-Screening Environmental Indicators. |
| JEL: | P16 Q53 Q56 R3 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:uma:periwp:wp229&r=env |
| By: | Randall S. Jones; Byungseo Yoo |
| Abstract: | Les émissions de gaz à effet de serre ont pratiquement doublé en Corée entre 1990 et 2005, soit la progression la plus forte dans la zone de l’OCDE. La Corée s’est récemment fixé un objectif de réduction des émissions de 30 % en 2020 par rapport au statu quo, ce qui représente une baisse de 4 % par rapport au niveau de 2005. Pour réaliser cet objectif avec le meilleur rapport coût/efficacité possible, il faut passer d’une stratégie reposant sur des engagements volontaires des entreprises à la mise en place d’instruments de marché. La priorité est d’établir un dispositif complet de plafonnement et transfert, complété, si nécessaire, par une taxe sur le carbone dans les secteurs qui ne sont pas couverts par des permis d’émission. Réduire sensiblement les émissions implique de privilégier les industries sobres en carbone par rapport à celles à forte intensité énergétique. La Corée est déterminée à promouvoir la croissance verte via son plan quinquennal, qui prévoit de dépenser à cet effet 2 % du PIB par an jusqu’en 2013. L’un des principaux enjeux est de veiller à ce que ces dépenses soient efficacement ciblées sur le développement des technologies vertes tout en évitant les risques que présente toute politique industrielle.<P>Stratégie de croissance verte pour la Corée : lutter contre le changement climatique et tirer parti des nouvelles sources de croissance<BR>Les émissions de gaz à effet de serre ont pratiquement doublé en Corée entre 1990 et 2005, soit la progression la plus forte dans la zone de l’OCDE. La Corée s’est récemment fixé un objectif de réduction des émissions de 30 % en 2020 par rapport au statu quo, ce qui représente une baisse de 4 % par rapport au niveau de 2005. Pour réaliser cet objectif avec le meilleur rapport coût/efficacité possible, il faut passer d’une stratégie reposant sur des engagements volontaires des entreprises à la mise en place d’instruments de marché. La priorité est d’établir un dispositif complet de plafonnement et transfert, complété, si nécessaire, par une taxe sur le carbone dans les secteurs qui ne sont pas couverts par des permis d’émission. Réduire sensiblement les émissions implique de privilégier les industries sobres en carbone par rapport à celles à forte intensité énergétique. La Corée est déterminée à promouvoir la croissance verte via son plan quinquennal, qui prévoit de dépenser à cet effet 2 % du PIB par an jusqu’en 2013. L’un des principaux enjeux est de veiller à ce que ces dépenses soient efficacement ciblées sur le développement des technologies vertes tout en évitant les risques que présente toute politique industrielle. |
| Keywords: | renewable energy, R&D, climate change, energy efficiency, energy subsidies, carbon tax, greenhouse gas emissions, Kyoto protocol, Clean Development Mechanism, environmental taxes, green growth, Korean economy, emissions trading system, green certificates, National Strategy for Green Growth, R&D, changement climatique, taxes carbone, émissions de gaz à effet de serre, Protocole de Kyoto, énergies renouvelables, Mécanisme pour un développement propre, efficacité énergétique, croissance verte, économie coréenne, système d'échange de permis d'émission, taxes environmentales, subventions d'énergie, certificats verts, Stratégie nationale pour la croissance verte |
| JEL: | Q Q28 Q48 Q54 Q56 Q58 |
| Date: | 2010–07–28 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:798-en&r=env |
| By: | Bushnell, James; Wolfram, Catherine |
| Abstract: | This paper analyzes the effects of the New Source Review (NSR) environmentalregulations on coal-fired electric power plants. Regulations that grew out of the Clean Air Act of 1970 required new electric generating plants to install costly pollution control equipment but exempted existing plants. Existing plants lost their exemptions if they made ``major modifications.'' We examine whether this caused firms to invest less in grandfathered plants, possibly leading to lower efficiency and higher emissions. We find evidence that heightened NSR enforcement reduced capital expenditures at vulnerableplants. However, we find no discernable effect on other inputs or emissions.This paper analyzes the effects of the New Source Review (NSR) environmental regulations on coal-fired electric power plants. Regulations that grew out of the Clean Air Act of 1970 required new electric generating plants to install costly pollution control equipment but exempted existing plants. Existing plants lost their exemptions if they made ``major modifications.'' We examine whether this caused firms to invest less in grandfathered plants, possibly leading to lower efficiency and higher emissions. We find evidence that heightened NSR enforcement reduced capital expenditures at vulnerable plants. However, we find no discernable effect on other inputs or emissions. |
| Keywords: | New Source Review; Environmental Regulations; productivity; electricity |
| JEL: | L51 L94 Q52 Q58 |
| Date: | 2010–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:31805&r=env |
| By: | Keisaku Higahsida (School of Economics, Kwansei Gakuin University); Tsuyoshi Toshimitsu (School of Economics, Kwansei Gakuin University) |
| Abstract: | Employing an environmentally-differentiated products model with heterogeneous consumers in terms of environmental consciousness, this paper examines the effect of a unilateral change in a home emission standard on the qualities of products, aggregate emissions, and welfare of both home and foreign countries. When firms compete with each other in a Cournot fashion, as the home emission standard becomes stricter, aggregate emissions of both domestic and foreign countries decrease, if a firm which produces a gdirtier producthf supplies the same product to both domestic and foreign markets. On the other hand, if the firm supplies different products in environmental features to different markets, a stricter emission standard by the home government increases aggregate emissions of the foreign country. Even in the Bertrand duopoly case, the effects of a stricter emission standard on both countries could be different from each other. |
| Keywords: | emission standards, international duopoly, environmentally differentiated products |
| JEL: | D43 F12 Q28 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:58&r=env |
| By: | Tavoni, Alessandro; Dannenberg, Astrid; Löschel, Andreas |
| Abstract: | Free riding and coordination difficulties are held to be the primary causes of cooperation breakdown among nonrelatives. These thwarting effects are particularly severe in the absence of effective monitoring institutions capable of sanctioning deviant behavior. Unfortunately, solutions to global environmental dilemmas, like climate change, cannot depend on coercion mechanisms, given the transnational effects of emissions. A further complication is that it yields 'common but differentiated responsibilities'. Such asymmetries in wealth and carbon responsibilities among the actors, and the ensuing issues of equity, might further impede cooperation. Yet, a growing literature stresses the importance of non-economic factors in explaining human behavior; therefore, instruments that go beyond the traditional incentives might prove effective in facilitating the task. Given the empirical nature of the problem, we address it by means of a controlled laboratory experiment: a framed threshold public goods game is used to investigate the degree of cooperation and coordination achieved by groups of six participants in combating simulated catastrophic climate change. While necessarily simple for the sake of tractability, the game is designed to incorporate key real-world issues, such as inequity and the impact of emergent institutions based on nonbinding 'pledge and review' mechanisms. -- |
| Keywords: | experimental economics,threshold public goods game,climate change,inequality,pledge |
| JEL: | C72 C92 Q54 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10049&r=env |
| By: | Valdes, Constanza; Arriola, Christine; Somwaru, Agapi; Gasques, Jose |
| Abstract: | Current climate adaptation polices in Brazil are influencing not only the choice of crops but also many agricultural practices at the farm level including changes in planting and sowing periods, use of irrigation-saving technologies, and increased nitrogen fertilization, among others. The shape and content of these adaptation policies and measures for Brazil are not limited to production agriculture, but include also conservation reserve and risk-reducing farm programs. In addition, the decades-old adaptation and management strategies for agricultural production under tropical conditions carried out by EMBRAPA, Brazilâs premier agricultural research agency, continue to play a prominent role. As Brazil is one the worldâs largest agricultural producers and exporters of agricultural commodities, impacts in Brazil that may occur under different climate scenarios could have broad implications for food supply and prices worldwide. We find that farmersâ adoption of adaptation strategies could result in significant increases in agricultural productivity, changes in suitable crop growing areas, reduced vulnerability to temperature changes, and improved income generation for farmers. |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91420&r=env |
| By: | Jeremy Lawson |
| Abstract: | European energy policy faces a number of interrelated challenges, including making the transition to a low–carbon economy, increasing cross–border competition in electricity and gas markets and diversifying Europe’s energy supply. The EU has developed a comprehensive strategy in all of these areas, encapsulated in 2020 targets for reducing greenhouse gas emissions, raising renewable energy and increasing energy efficiency. These targets are underpinned by an Emissions Trading Scheme, legally binding reduction commitments by member states for the emissions not covered by the trading scheme, the third energy liberalisation package and the Energy Security and Solidarity Plan. The steps the EU have taken are worthwhile but there is also room for improvement. To ensure that the transition to a low–carbon economy is achieved at a low cost, the EU should seriously consider including all transport sectors in the Emissions Trading Scheme when practical and appropriate, and ensure that only sectors rigorously identified as being at genuine risk of carbon leakage should continue to receive free allowances until 2020. Consideration should be given to making use of an EU–wide market instrument to deliver the EU’s renewable energy target, and it will be important to ensure that the 10% renewable transport fuel target efficiently achieves its objectives of sustainability and security of supply given the high cost of many renewable transport fuels. Measures to raise energy efficiency will have to be designed carefully so that the overall cost of mitigation is not raised. The Commission’s third energy market liberalisation package should be strengthened by requiring full ownership unbundling of transmission service operators and ensuring the powers of the proposed Agency for Co–operation of Energy Regulators are broad enough to contribute effectively to a truly single European energy market. This Working Paper relates to the 2010 Economic Survey of the European Union. (www.oecd.org/eco/surveys/EuropeanUnion)<P>Politique énergétique européenne et le passage à une économie sobre en carbone<BR>La politique énergétique de l’Europe doit relever plusieurs défis interdépendants, dont le passage à une économie sobre en carbone, l’accentuation de la concurrence transfrontalière sur les marchés de l’électricité et du gaz et la diversification des sources d’énergie. Dans tous ces domaines, l’Union européenne a conçu une stratégie globale inscrite dans les objectifs de 2020 pour la réduction des émissions de gaz à effet de serre, qui fait une plus grande place aux énergies renouvelables et favorise l’augmentation de l’efficacité énergétique. Ces objectifs reposent sur plusieurs piliers : le système communautaire d’échange de quotas d’émission (SCEQE), des engagements de réduction légalement contraignants des États membres pour les émissions non couvertes par le système d’échange, le troisième paquet énergie et le Plan d’action européen en matière de sécurité et de solidarité énergétiques. Les mesures prises par l’Union européenne sont louables, mais des améliorations sont toutefois possibles. Pour passer au moindre coût à une économie sobre en carbone, l’UE devrait sérieusement envisager d’inclure tous les secteurs des transports dans le système d’échange de quotas d’émission lorsque c’est possible et judicieux, et veiller à ce que seuls les secteurs rigoureusement identifiés comme présentant un risque significatif de fuite de carbone continuent de recevoir des quotas gratuits jusqu’en 2020. Il faudrait envisager de mettre en place un instrument de marché à l’échelle européenne pour réaliser l’objectif de développement des énergies renouvelables, et vu le coût élevé de nombreux carburants de transport renouvelables, il conviendra de veiller à ce que l’objectif de 10 % de carburant renouvelable réponde à l’ambition d’assurer la durabilité et la sécurité des approvisionnements. Les mesures en faveur de l’efficacité énergétique devraient être conçues avec le plus grand soin si l'Europe veut éviter de payer un coût total plus important. Il faudrait renforcer le troisième paquet énergie de la Commission, en exigeant une séparation patrimoniale totale des exploitants de services de transport et en veillant à doter la future Agence de coopération des régulateurs de l’énergie de pouvoirs suffisamment importants pour qu'elle puisse efficacement travailler à la mise en place d'un véritable marché unique européen de l’énergie. Ce document de travail porte sur l'Étude économique de l'Union Européenne (www.oecd.org/eco/etudes/UnionEuropeénne ) |
| Keywords: | European Union, renewable energy, emissions trading, Climate change mitigation, energy market regulation, Union européenne, énergies renouvelables, Atténuation du changement climatique, échanges de droits d'émission, régulation du marché de l'énergie |
| JEL: | Q4 Q5 |
| Date: | 2010–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:779-en&r=env |
| By: | Jean-Marc Burniaux; Jean Chateau; Romain Duval |
| Abstract: | Concern that unilateral greenhouse gas emission reductions could foster carbon leakage and undermine the international competitiveness of domestic industry has led to growing calls for carbon-based border-tax adjustments (BTAs). This paper uses a global general equilibrium model to assess the economic effects of BTAs and comes to three main conclusions. First, BTAs can reduce carbon leakage if the coalition of countries taking action to reduce emissions is small, because in this case leakage (while typically small) mainly occurs through international trade competitiveness losses rather than through declines in world fossil fuel prices that trigger rising carbon intensities outside the region taking action. Second, the welfare impacts of BTAs are small, and typically slightly negative at the world level. Third, and perhaps more strikingly, BTAs do not necessarily curb the output losses incurred by the domestic energy intensive-industries (EIIs) they are intended to protect in the first place. This is in part because taken as a whole, EIIs in industrialised countries make important use of carbon-intensive intermediate inputs produced by EIIs in other geographical areas. Another, deeper explanation is that EIIs are ultimately more adversely affected by carbon pricing itself, and the associated contraction in market size, than by any international competitiveness losses. These findings are shown to be robust to key model parameters, country coverage and design features of BTAs.<P>Y-a-t-il un argument en faveur d’une taxe carbone aux frontières ? : Une analyse d’équilibre général<BR>Les craintes que des réductions unilatérales d’émissions de gaz à effet de serre soient en partie compensées par des fuites de carbone tout en ayant un effet négatif sur la compétitivité des industries domestiques ont entraîné des appels croissants en faveur de taxes carbone aux frontières (TCFs). Cet article utilise un modèle d’équilibre général appliqué pour évaluer les effets économiques des TCFs et aboutit à trois conclusions. Premièrement, les TCFs peuvent réduire les fuites de carbone lorsque la coalition de pays prenant des mesures de réduction des émissions est réduite, car dans ce cas les fuites carbone (quoique typiquement faibles) se produisent essentiellement via des pertes de compétitivité internationale, plutôt que via des baisses du prix mondial des énergies fossiles qui entraînent une hausse de l’intensité en carbone dans le reste du monde. Deuxièmement, les impacts des TCFs sur le bien-être sont faibles, et typiquement légèrement négatifs au niveau mondial. Troisièmement, et peut-être de façon plus frappante, les TCFs n’atténuent pas nécessairement les pertes de production subies par les industries domestiques intensives en énergie (IIEs) qu’elles sont pourtant censées protéger. Cela tient en partie à ce que prises dans leur ensemble, les IIEs dans les pays industrialisés utilisent de façon importante des intrants intensifs en carbone produits par les IIEs d’autres zones géographiques. Une autre explication plus profonde est que les IIEs sont in fine davantage touchées par l’existence d’un prix du carbone lui-même, et par la contraction de la taille du marché qui s’en suit, que par de quelconques pertes de compétitivité internationale. Ces résultats s’avèrent robustes à des hypothèses alternatives concernant certains paramètres clé du modèle, les pays couverts et les modalités de mise en place des TCFs. |
| Keywords: | migration, climate change, computable general equilibrium model, border tax adjustment, modèle d'équilibre général calculable, changement climatique, atténuation, taxe carbone aux frontières |
| JEL: | D58 H25 Q54 |
| Date: | 2010–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:794-en&r=env |
| By: | Feix, Rodrigo Daniel; Miranda, SÃlvia Helena G. de |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, International Relations/Trade, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91280&r=env |
| By: | Holst, Rainer; Yu, Xiaohua |
| Abstract: | Drawing on the method developed by Just and Pope (1978, 1979), this paper separately analyzes the marginal contributions of both regular input factors and climate factors to mean output and to production risk in Chinese inland aquaculture. Furthermore, the net change in output following a 1°C increase in annual average temperature will be determined. According to the results obtained, the impending changes in global climate will have both positive and negative impacts. While an increment in annual average temperatures will increase mean output and decrease production risk, an increase in temperature variability will reduce mean output and cause a higher level of production risk. The corresponding measures of precipitation however have no significant impact on mean output and production risk. Finally, a 1°C increase in annual average temperature is, ceteris paribus, likely to increase national mean output by 1.47 million tons. |
| Keywords: | Aquaculture, climate change, production risk, China, Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty, Q1, Q54, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91275&r=env |
| By: | Roder, Norbert; Osterburg, Bernhard |
| Abstract: | 6.5% of the German UAA is located on organic soils (fens and bogs). Nevertheless, the drainage of these areas in order to allow their agricultural utilization causes roughly a third of the greenhouse gas emissions (GHG) of the German agricultural sector, being equivalent to 4% of the total German GHG emissions. Obviously, German policies trying to reduce the GHG emissions successfully must tackle this issue. The abandonment of the cultivation of organic soils would be an effective policy to reduce the GHG emissions however the question remains whether it is an efficient measure compared with the other options? In the paper we compare the land use on mineral and organic soils using the data of the farm structure survey. We assess the mitigation costs on the basis of the standard gross margin of the agriculturally used peatlands and with the sector model RAUMIS. Without engineering and transaction costs the mitigation costs are in the magnitude of 10 to 45 ⬠per to of CO2eq.. This makes rewetting of peatlands at least in the medium and long run a fairly efficient options for reducing GHG emissions, especially as the implications on the sector are fairly small due to reallocation affects. |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91270&r=env |
| By: | Motamed, Mesbah J.; Arriola, Christine; Hansen, Jim; MacDonald, Steve |
| Abstract: | This paper examines the impacts of different irrigation scenarios on Uzbekistan's cotton sector and world cotton trade. The immediate challenges for this region's water resource management represent a test case for the long-run challenges associated with global climate change. With an eye towards this eventuality, this paper describes a variety of water policy scenarios relevant to Central Asia's agriculture and simulates their impacts on cotton markets in this region and around the world. |
| Keywords: | water, cotton, agricultural trade, Central Asia, Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, International Relations/Trade, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91400&r=env |
| By: | Witzke, Peter; Fabiosa, Jacinto; Gay, Stephan Hubertus; Golub, Alla; Havlik, Petr; Msangi, Siwa; Tokgoz, Simla; Searchinger, Tim |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91430&r=env |
| By: | Arief Anshory Yusuf (Department of Economics, Padjadjaran University) |
| Abstract: | A trial estimate of the Green or Eco-Regional Domestic Product (ERDP) for 30 provinces in Indonesia for the year 2005 was attempted. ERDP was calculated by subtracting from “brown” Gross Regional Domestic Product (GRDP), the value of liquidation of all kind of assets, man-made and natural. The types of assets covered are man-made capital, oil and natural gas, as well as other non-oil-gas minerals. The environmental assets liquidation included are environmental degradation of local and global pollution. This estimate is the first covering all provinces in Indonesia which enable informative cross-provincial comparison. It is found that the sustainability of the economic development of such provinces as Papua, East Kalimantan, West Nusa Tenggara, Riau and South Sumatra are in question as they rank low in term of the ratio of ERDP to GRDP. It implies that their future generations are among the most vulnerable. The rapid economic development in the provinces is dominantly caused by the liquidation of natural resource assets especially from oil, gas and other mineral extraction. The findings call for the need to diversify economic activity to avoid being too dependent on the extractive and polluting sectors. Sustainability could also be enhanced by way of increasing productivity so that for each unit of the liquidation of natural assets, we can generate welfare as much as possible. |
| Keywords: | Green Regional Domestic Product, Green Accounting, Indonesia |
| JEL: | Q56 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:unp:wpaper:201004&r=env |
| By: | Katharina Wick (Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna); Christine Heumesser (Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna); Erwin Schmid (Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna) |
| Abstract: | Nitrogen is an important input to agricultural production but also detrimentally affects the environmental quality of air, soil and water. Identifying the determinants of nitrate pollution and in turn defining sensible performance indicators to design, enforce and monitor regulatory policies is therefore of utmost importance. Using data on more than 1000 Austrian municipalities, we provide a detailed econometric analysis of (1) the determinants of nitrate concentration in groundwater, and (2) the predictive abilities of one of the most commonly used agri-environmental indicators, the Nitrogen Balance. We find that the proportion of cropland exerts a positive effect on the nitrate content in groundwater. Additionally, environmental factors such as temperature and precipitation are found to be important. Higher average temperature leads to lower nitrate pollution of groundwater possibly due to increased evapotranspiration. Equally, higher average precipitation dilutes nitrate content in the soil, reducing nitrate concentration in groundwater. To assess the Nitrogen Balance, we link observed pollution levels to the theoretical indicator and evaluate its ability to measure nitrate pollution effects. Indeed, the indicator proves to be a good predictor for nitrate pollution. We also show that its predictive power can be improved if average precipitation of a region is taken into account. If average precipitation is higher, the Nitrogen Balance predicts nitrate levels in groundwater more precisely. |
| Keywords: | nitrate concentration, groundwater contamination, Nitrogen Balance, agriculture, regression analysis |
| JEL: | Q10 Q53 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:sed:wpaper:492010&r=env |
| By: | Aurbacher, Joachim; Lippert, Christian; Krimly, Tatjana |
| Abstract: | To assess the impact of climate change on agriculture in German districts, a Ricardian analysis accounting for spatial autocorrelation is used. The analysis relies on land rental prices from agricultural statistics and climate data from the network of German weather observation stations. The results of the cross-sectional analysis show a significant correlation between land rents and increasing mean temperatures, as well as (except for East Germany) a significant increase of land rents along with declining spring precipitation. Next, climate data from the regional climate model REMO are used to calculate local land rent changes under different IPCC scenarios for a time horizon between 2011 and 2040. The overall result is an increase in land rents which relates to 5-6 % of net German agricultural income. In West Germany the increase in land rents rises from the north to south, because of the higher temperature increases in the South of Germany. East Germany shows a greater increase in land rents than West Germany, due to the presently more unfavourable climatic water balance which profits from the increase in spring precipitation. However, agricultural income in Germany might decrease in the long run, when the changes in the climatic conditions will be more severe than those simulated in this study. We plan to extend and improve the research in this field. Different approaches to consider soil qualities at district level shall be compared. In order to understand farmersâ adaptation to different climatic conditions multinomial logit models will be used to investigate how German land use structures depend on the climate. Furthermore, a typology of related transaction costs shall be devised. This will allow the identification of those regions where the adaptation needs and the corresponding costs are likely to be relatively high. |
| Keywords: | Crop Production/Industries, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91257&r=env |
| By: | Bushnell, James; Chen, Yihsu |
| Abstract: | The allocation or assignment of emissions allowances is among the most contentious elements of the design of emissions trading systems. Policy-makers usually try to satisfy a range of goals through the allocation process, including easing the transition costs for high-emissions firms, reducing leakage to unregulated regions, and mitigating the impact of the regulations on product prices such as electricity. In this paper we develop a detailed representation of the US western electricity market to assess the potential impacts of various allocation proposals. Several proposals involve the ``updating'' of allowance allocation, where the allocation is tied to the ongoing output of plants. These allocation proposals are designed with the goals of limiting the pass-through of carbon costs to product prices, mitigating leakage, and of mitigating the costs to high-emissions firms. However, some forms of allocation updating can also inflate allowance prices, thereby limiting the benefits of such schemes to high emissions firms. Thus, the anticipated benefits from allocation updating can be diluted and further distortions introduced into the trading system. |
| Keywords: | electricity markets; Cap-and-Trade; Emissions Leakage |
| JEL: | H23 Q50 Q54 |
| Date: | 2010–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:31804&r=env |
| By: | Lopez, Ramon E. |
| Abstract: | This paper studies the interactions between harvesters that depend on the renewable resource as a vital factor of production (i.e., fisheries) and industries that can have important impacts on the renewable resource but whose production does not depend on it (i.e., off-shore oil extraction) in the context of a growing economy. We examine these issues in the context of a closed economy focusing on how the co-existence between these two sectors affects the potential for sustainable development and how the well-being of the poor, i.e., the harvesters, is affected. We identify conditions under which existence and expansion of a resource-impacting sector may make sustainable development more likely. However, if these conditions are not met growth of the resource-impacting sector leads to resource depletion or even complete extinction and thus to the disappearance of the harvesting activity over the long run. |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umdrwp:92390&r=env |
| By: | Lee, Sangjun; Thornsbury, Suzanne |
| Abstract: | When assessing climate change impact, adaptation is an important behavioral response to reduce potential risk. But it has been widely recognized that there are barriers to adaptation. And attempts to estimate impacts may be biased when these barriers neglected. Potential barrier on adaptation decision from market structure have not been identified. We develop a theoretical model to evaluate adaptation incentives of farmers under climate change across various market structures. In agricultural production where acreage adjustment is costly, our theoretical model suggests that the âcompetition effectâ plays an important role in determining incentives to adapt. The competition effect in the market may outweigh the production effect and reduce producer incentives to change production practices. Results also suggest that monopolists may have a higher incentive to adapt since the market is under their direct control with less competition even though these incentives are still much smaller than socially optimal levels. In contrast, there can be strategic interactions among players which can lead to inaction (not investing in adaptations) due to the threat of potentially higher competition in other market structures. |
| Keywords: | Environmental Economics and Policy, Industrial Organization, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91258&r=env |
| By: | Becker, Arno; Adenauer, Marcel; Blanco Fonseca, Maria |
| Abstract: | Even though recent discussions on food prices and indirect land use change point at potential conflicts associated with the production of biofuels the appraisal of biofuels as an effective instrument to slow down climate change and reduce energy dependency still prevails. The EU Renewable Energy Directive (EUROPEAN COMMISSION, 2009) underlines this trend by setting a target of 10% share of energy from renewable sources in the transport sector by 2020. As economic competitiveness of biofuel production is still not given in most European countries, support policies are essential to achieve this target. Second generation technologies have still not attained marketability, wherefore biofuel consumption will continue to significantly affect agricultural markets. Furthermore, biofuel trade receives more attention. Apart from Brazil the USA has evolved to one of the key biofuel producer in recent years replacing the EU as the dominant biodiesel exporter. Those developments in regions outside the EU have to be considered within the evolution of biofuel markets. The primary objective of this paper is to analyse in detail impacts of future biofuel developments on agricultural markets under several assumptions regarding the availability of 2nd generation technologies, the EU support policy framework and the EU trade policy regime. Therefore, we developed an extended version of the comparative static agricultural sector model CAPRI which covers global biofuel markets with a detailed focus on Europe. The results supplement already existing model-based impact assessments while focussing on EU Member State level and introducing global bilateral trade of biofuels based on the Armington approach. The results of our scenario analysis presented in this paper indicate that the European 2020 biofuel target will significantly affect global and European biofuel- as well as agricultural markets. Thereby, global biofuel trade will notably increase, especially flows of biodiesel from the USA and Argentina and of ethanol from Brazil into the EU will increase accentuating the net-importing position of the EU by 2020. On the agricultural markets, we can observe that additional demand caused by European biofuel production will be, on the one hand, partially compensated by substitution effects on the feed market and, on the other hand, mainly filled by increasing imports. Thus, effects on agricultural product prices will also be significant, while effects on EU agricultural production will only be marginal. This leads consequently to only marginal environmental impacts within Europe and confirm the assumption that notable environmental effects caused by EU biofuel production and consumption will mainly take place outside Europe, especially in those countries which are important producers of biofuel feedstock. |
| Keywords: | Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, International Relations/Trade, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91395&r=env |
| By: | Hennessy, Hugh; Tol, Richard S. J. |
| Abstract: | We examine the impact of recent tax reforms in Ireland on private car transport and its greenhouse gas emissions. A carbon tax was introduced on fuels, and purchase (vehicle registration) and ownership (motor) taxes were switched from engine size to potential emissions. We use a demographic model of the car stock (by age, size, and fuel) and a car purchase model that reflects the heterogeneous distribution of mileage and usage costs across various engine sizes. The model shows a dramatic shift from petrol to diesel cars, particularly for large engines. The same pattern is observed in the latest data on car sales. This has a substantial impact on tax revenue as car owners shift to the lower tax rates. The tax burden has shifted from car ownership to car use, and that the overall tax burden on private car transport falls. As diesel engines are more fuel efficient than petrol engines, carbon dioxide emissions fall modestly or, if we consider the rebound effect of travel costs on mileage, minimally. From the perspective of the revenue, the costs per tonne of carbon dioxide avoided are (very) high. |
| Keywords: | Private car transport/Republic of Ireland/carbon dioxide emissions/fiscal policy/taxes/ireland/taxes/Ireland/Private car transport/transport/Car ownership/Carbon dioxide emissions |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp349&r=env |
| By: | Osberghaus, Daniel; Reif, Christiane |
| Abstract: | Adaptation to climate change is gaining increasing relevance in the public debate of climate policy. However, detailed and regionalised cost estimates as a basis for cost-benefit-analyses are rare. We compose available cost estimates for adaptation in Europe, and in particular Germany, Finland and Italy. Furthermore, a systematic overview on fiscal aspects of adaptation is provided, with focus on budgetary effects of adaptation in the different impact sectors. Combining cost estimates, considerations on fiscal aspects and governmental interventions in adaptation processes, we present data-based guesses of public adaptation costs in the EU, divided by impact sectors. The findings show an expectedly large public burden in the adaptation of transport infrastructure and coastal protection, while high adaptation costs in the agriculture sector are predominantly private. The change in energy demand may well lead to a significant decrease in public expenditure. Considering the regional heterogeneity of adaptation measures and the high uncertainty of quantitative adaptation analyses, further research in the form of bottom-up-studies is needed. -- |
| Keywords: | adaptation,climate change,adaptation costs,fiscal effects,governmental intervention |
| JEL: | H54 Q54 Q58 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10046&r=env |
| By: | Cristina Martinez-Fernandez; Carlos Hinojosa; Gabriela Miranda |
| Abstract: | The impacts of climate change - and especially the subsequent mitigation and adaptation policies - on labour markets are still largely unknown despite the recent demand for knowledge production and diffusion on this topic and the increasing avalanche of reports and studies from public, private and not-for-profit organisations. The search for alternative models of growth in the midst of the financial crisis has increased interest in the "green growth paradigm" and what it means for a rich-jobs recovery. This paper discusses some of the impacts of climate change including labour market regulation, the dynamics of green growth at the level of jobs and skills development, and the local implications for mitigation and enabling green growth. Although the paper does not provide all the answers to the green enigma (green jobs will come but how?), it argues that much benefit will come from focusing efforts on skills transformation, tools and initiatives. This paper benefits from the financial support of the European Commission. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2010/2-en&r=env |
| By: | Alain de Serres; Fabrice Murtin; Giuseppe Nicoletti |
| Abstract: | This paper proposes an analytical framework for assessing policies that will contribute to a better integration of environmental externalities in the pursuit of economic efficiency and growth objectives. The framework consists of two parts. The first part lays out principles and criteria for the identification and selection of policies that will benefit both income and the environment or that will boost income at the least cost in terms of the environment (and vice-versa). In general putting a price on a pollution source or on the over-exploitation of a scarce resource is found to be the most efficient single policy to address many environment externalities. However, given that environmental damage often result from several interacting market failures, an appropriate policy response will in many cases involve a mix of complementary instruments. The second part focuses more on issues of structural adjustment related to the transition towards a greener economy. It finds that green growth policies could lead to significant re-allocation of resources within and across broad economic sectors. A policy framework facilitating the re-deployment of labour across firms and sectors, as well as the entry of new firms and the exit of firms in declining industries will thus be important in order for countries to seize the opportunities brought about by green growth policies.<P>Un cadre d’analyse pour évaluer les politiques de la croissance verte<BR>Cette étude propose un cadre d’analyse pour évaluer les politiques pouvant contribuer à une meilleure intégration des externalités environnementales dans la poursuite d’objectifs d’efficience et de croissance économique. Le cadre suggéré comporte deux volets. Le premier établit un certain nombre de critères et principes permettant l’identification et le choix de politique qui soient bénéfiques à la fois pour le revenu et l’environnement, ainsi que celles pouvant stimuler la croissance des revenus au moindre coût en termes de qualité de l’environnement (et inversement). De manière générale, la politique la plus efficace en ellemême pour prendre en compte diverses externalités environnementales consiste à mettre un prix à l’émission de pollution ou la sur-exploitation d’une ressource naturelle. Toutefois, dans la mesure où les dommages environnementaux résultent dans bien des cas de l’interaction de plusieurs défaillances de marché, la réponse la mieux adaptée aux circonstances comportera généralement plusieurs instruments de politiques. Le deuxième volet explore les questions d’ajustement structurel que pose la transition vers une économie plus verte. Pour tirer parti des possibilités offertes par une éventuelle restructuration, les politiques facilitant l’entrée de nouvelles firmes et la sortie de firmes dans les secteurs en déclin joueront un rôle important. |
| Keywords: | competitiveness, market failure, environmental taxes, green growth, green economy, environmental externalities, cost-effectiveness, compétitivité, défaillances de marché, croissance verte, économie verte, externalités environnementales, efficacité par rapport aux coûts, fiscalité environnementale |
| JEL: | H23 H41 Q51 Q52 Q53 Q54 Q55 |
| Date: | 2010–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:774-en&r=env |
| By: | Stefan AMBEC; Mark A. COHEN; Stewart ELGIE; Paul LANOIE (IEA, HEC Montréal) |
| Abstract: | Twenty years ago, Harvard Business School economist and strategy professor Michael Porter stood conventional wisdom about the impact of environmental regulation on business on its head by declaring that well designed regulation could actually enhance competitiveness. The traditional view of environmental regulation held by virtually all economists until that time was that requiring firms to reduce an externality like pollution necessarily restricted their options and thus by definition reduced their profits. After all, if there are profitable opportunities to reduce pollution, profit maximizing firms would already be taking advantage of those opportunities. Over the past 20 years, much has been written about what has since become known simply as the Porter Hypothesis (“PH”). Yet, even today, there is conflicting evidence, alternative theories that might explain the PH, and oftentimes a misunderstanding of what the PH does and does not say. This paper provides an overview of the key theoretical and empirical insights on the PH to date, draw policy implications from these insights, and sketches out major research themes going forward. |
| Keywords: | Porter Hypothesis, environmental policy, innovation, performance. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iea:carech:1002&r=env |
| By: | Oberndorfer, Ulrich; Alexeeva-Talebi, Victoria; Löschel, Andreas |
| Abstract: | In making key decisions for the future phases of the European Union Emissions Trading Scheme (EU ETS), policy makers need to fully understand the competitiveness implications of these decisions on industrial sectors. In this paper, we conduct an empirical analysis of cost pass-through ability of producers of selected products within the sectors refineries, glass, chemicals and ceramics of the UK economy. Our results provide new insights into the debate on the ability of pass-through of costs generated by the EU ETS. They suggest that some of the sectors analysed have the ability to pass-through a portion of their carbon costs to the consumers: The UK sectors are not capable to completely pass-through their costs into output prices, with the exception of UK ceramic goods. -- |
| Keywords: | Emissions Trading,Competitiveness,Cost Pass-Through |
| JEL: | C22 D40 H23 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10044&r=env |
| By: | Bandza, Alexander J.; Vajjhala, Shalini P. (Resources for the Future) |
| Abstract: | Recent policy debates suggest that geologic carbon sequestration (GS) likely will play an important role in a carbon-constrained future. As GS evolves from the analogous technologies and practices of enhanced oil recovery (EOR) operations to a long-term, dedicated emissions mitigation option, regulations must evolve simultaneously to manage the risks associated with underground migration and surface tresspass of carbon dioxide (CO2). In this paper, we develop a basic engineering-economic model of four illustrative strategies available to a sophisticated site operator to better understand key deployment pathways in the transition from EOR to GS operations. All of these strategies focus on whether or not a sophisticated site operator would store CO2 in a geologic formation. We evaluate these strategies based on illustrative scenarios of (a) oil and CO2 prices; (b) leakage estimates; and (c) transportation, injection, and monitoring costs, as obtained from our understanding of the literature. Major results reveal that CO2 storage in depleted hydrocarbon reservoirs after oil recovery is associated with the greatest net revenues (i.e., the “most-preferred” strategy) under a range of scenarios. This finding ultimately suggests that GS regulatory design should anticipate the use of the potentially leakiest, or “worst,” sites first. |
| Keywords: | carbon sequestration, enhanced oil recovery, leakage, regulatory design, risk management |
| JEL: | Q42 Q48 |
| Date: | 2010–07–23 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-08-29-rev&r=env |
| By: | Golub, Alla; Hertel, Thomas; Taheripour, Farzad; Tyner, Wally |
| Abstract: | Over the past decade, biofuels production in the EU and US has boomed - much of this due to government mandates and subsidies. The US has now surpassed Brazil as the world's leading producer of ethanol. The economic and environmental impact of these biofuel programs has become an important question of public policy. Due to the complex intersectoral linkages between biofuels and crops, livestock as well as energy activities, CGE modeling has become an important tool for their analysis. This chapter reviews recent developments in this area of economic analysis, and suggests directions for future research. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:gta:workpp:3406&r=env |
| By: | Cororaton, Caesar B.; Timilsina, Govinda; Mevel, Simon |
| Abstract: | This paper analyzes the impact of expansion in biofuels on the global economy, income distribution and poverty. It utilizes simulation results of two World Bank models: a global computable general equilibrium (CGE) model integrated with biofuels, land-use, and climate change modules, and a global income distribution model that utilizes household survey data of 116 countries. The first model simulates the effects over time of large scale expansion of biofuels on resource allocation, output prices, commodity prices, factor prices, and household income of the different countries and regions in the world. The second model uses these results recursively to calculate the impact on global income distribution and poverty. The results from the CGE model indicate that large scale expansion of biofuels lead to higher world prices of sugar, corn, oilseeds, wheat, and other grains, which lead to higher food prices. The increase in food inflation is higher in developing countries than in developed countries. The expansion of biofuels results in higher wages of unskilled rural labor relative to wages of the other labor types which are skilled urban, skilled rural, and unskilled urban, especially in developing countries. These positive wage effects on unskilled rural labor trigger movement of unskilled urban labor towards rural and agriculture. This is because production of feedstock in developing countries is relatively intensive in the use of unskilled rural labor. The effects of large scale expansion of biofuels on poverty vary across regions. But overall there is a slight increase in global poverty. The increase largely comes from South Asia (particularly India) and Sub-Saharan Africa. Significant number of countries in Sub-Saharan Africa show higher poverty with large scale expansion of biofuels. However, poverty declines in East Asia and Latin America regions. Overall, there is a slight increase in the GINI coefficient. There is a slight increase in the GINI coefficient in Sub-Saharan Africa and East Asia. There is a small reduction in the GINI coefficient in the rest of the regions. |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, Food Security and Poverty, International Relations/Trade, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91279&r=env |
| By: | Drabik, Dusan; de Gorter, Harry |
| Abstract: | Leakage in the fuel market differs, depending on whether ethanol production is determined by a tax credit or consumption mandate. Two components of market leakage are distinguished: domestic and international. Leakage with both a tax credit and a consumption mandate depends on market elasticities and consumption/production shares, with the former having a bigger impact. Leakage is also more sensitive to changes in market supply and demand elasticities in the country not introducing biofuels. Although positive with a tax credit, market leakage can be negative with a consumption mandate, meaning that one gallon of ethanol can replace more than a gallon of gasoline. We also show that being a small country biofuels producer does not necessarily mean that leakage for this country is 100 percent. Our numerical estimates show that one gallon of ethanol replaces approximately 0.2-0.3 gallons of gasoline in the U.S. |
| Keywords: | Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, International Relations/Trade, Resource /Energy Economics and Policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr10:91265&r=env |
| By: | Halkos, George |
| Abstract: | It is reasonable to consider the stock of any renewable resource as a capital stock and treat the exploitation of that resource in much the same way as one would treat accumulation of a capital stock. This has been done to some extent in earlier papers containing a discussion of this point of view. However, the analysis is much simpler than it appears in the literature especially since the interaction between markets and the natural biology dynamics has not been made clear. Moreover renewable resources are commonly analyzed in the context of models where the growth of the renewable resource under consideration is affected by two factors: the size of the resource itself and the rate of harvesting. This specification does not take into account that human activities other than harvesting can have an impact on the growth of the natural resource. Furthermore, natural resource harvesting are not productive factories. Fishery economic literature (based on the foundations of Gordon, 1954; Scott, 1955; and Smith, 1963) suggests particular properties of the ocean fishery which requires tools of analysis beyond those supplied by elementary economic theory. An analysis of the fishery must take into account the biological nature of fundamental capital, the fish and it must recognize the common property feature of the open sea fishery, so it must allow that the fundamental capital is the subject of exploitation. The purpose of this paper is the presentation of renewable resources dynamic models in the form of differential games aiming to extract the optimal equilibrium trajectories of the state and control variables for the optimal control economic problem. We show how methods of infinite horizon optimal control theory may be developed for renewable resources models. |
| Keywords: | Renewable resources; exploitation of natural resources; dynamic optimization; optimal control |
| JEL: | Q32 C61 C62 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24119&r=env |
| By: | Jérémy LAURENT-LUCCHETTI; Marc SANTUGINI (IEA, HEC Montréal) |
| Abstract: | It has long been recognized that the quality of property rights greatly impacts the economic development of a country and the use of its natural resources. Since Long (1975), the conventional wisdom has been that ownership risk induces a firm to overuse the stock of a resource. However, the empirical evidence is mixed. In particular, Bohn and Deacon (2000) finds that weak property rights have an ambiguous effect on present extraction. We provide a theoretical model supporting these mixed observations in a common resource environment. We show that if ownership risk includes a risk of expropriation in which the identities of the excluded firms are unknown ex ante, then the present extraction of all firms may decrease along with a higher risk of expropriation. The elasticity of demand for the resource is key in explaining the effect of ownership risk on present extraction. |
| Keywords: | Common Resource, Expropriation, Extraction behavior, Ownership risk, Property rights, Tragedy of the Commons. |
| JEL: | D21 D23 D92 Q30 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iea:carech:1003&r=env |