nep-env New Economics Papers
on Environmental Economics
Issue of 2010‒08‒28
sixteen papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Towards a Green Post-Crisis Economy - The Position of Finland in Environmental Technologies By Christopher Palmberg; Tuomo Nikulainen
  2. Impacts of climate change on water resources and agriculture in Sri Lanka: a review and preliminary vulnerability mapping By Eriyagama, Nishadi; Smakhtin, Vladimir; Chandrapala, L.; Fernando, K.
  3. Prices vs. Quantities with Fiscal Cushioning By Moritz Rohling; Markus Ohndorf
  4. Sharing the Cost of Global Warming By Etienne Billette de Villemeur; Justin Leroux
  5. Greening Supply Chains: Impact on Cost and Design By Mallidis, I.; Vlachos, D.; Dekker, R.
  6. Optimal Provision and Finance of Ecosystem Services: the Case of Watershed Conservation and Groundwater Management By James Roumasset; Christopher Wada
  7. Inequality, Social Respectability, Political Power and Environmental Devastation By Jon D. Wisman
  8. Less Smoke, More Mirrors: Where India Really Stands on Solar Power and Other Renewables By David Wheeler and Saurabh Shome
  9. Concentrating Solar Power in China and India: A Spatial Analysis of Technical Potential and the Cost of Deployment By Kevin Ummel
  10. Cooperation Toward Environmental Innovation: an Empirical Investigation By Valentina De Marchi
  11. Energy Consumption and Carbon Emission-Based Productivity Change and Industrialization in Post-Reform By Chen, Shiyi; Santos-Paulino, Amelia U.
  12. HEALTH EFFECTS OF TRANSPORT EMISSIONS - A review of the state of the art of methods and data used for external costs calculations By Mellin, Anna; Nerhagen, Lena
  13. Natural Resources and Chronic Poverty in India: A Review of Issues and Evidence By Amita Shah
  14. La gestion des ressources forestières au Maroc: Une approche par le capital social By Adil ROUMANE; Augendra BHUKUTH; Damien BAZIN
  15. Quand les inégalités régulent la pression sur les ressources forestières: Une comparaison entre deux sites dans la région SAVA, Nord-Est de Madagascar By Jérôme Ballet; Mahefasoa Randrianalijaona
  16. Natural resource distribution and multiple forms of civil war By Massimo Morelli; Dominic Rohner

  1. By: Christopher Palmberg; Tuomo Nikulainen
    Abstract: Climate change is a major global challenge and governments around the world are now promoting environmental technologies to address both climate change and realize new employment and growth opportunities in this rapidly expanding area. Investments have reached unprecedented levels and stimulus packages to tackle the recent economic crisis also contain noticeable commitments to green technologies. Innovation policies are now under pressure to capitalize these investments and define priorities in the application of environmental technologies to both boost competitiveness and eco-innovation. The aim of this paper is to clarify foreseen impacts of growing environmental technology investments, ‘green’ components of economic stimulus packages and the ideas of a ‘Global Green New Deal’ and ‘Green Growth’ and to assess how Finland is positioned in environmental technologies. The paper reviews existing studies, analyzes global and Finnish patenting and considers the role of environmental technologies in its industrial context in Finland. The findings suggest that renewable energy is the most rapidly expanding environmental technology area, while the economic stimulus packages will play a lesser role than originally anticipated in transitions to low-carbon economies. Finland is comparatively well positioned in environmental technologies by overall levels of patenting activity. Nonetheless, Finland does not have a specific specialization profile in the area, neither a comparative advantage in renewable energy technologies as the most rapidly expanding fields globally. Environmental technologies are developed in the context of a broad range of Finnish industries whereby the application potentials of these technologies are manifold
    Keywords: environmental technologies, ‘Global Green New Deal’, ‘Green Growth’, investments, patenting, Finland
    Date: 2010–08–13
  2. By: Eriyagama, Nishadi; Smakhtin, Vladimir; Chandrapala, L.; Fernando, K. (International Water Management Institute; International Water Management Institute)
    Keywords: Climate change / Rain / Water resource management / Crops / Mapping / Sri Lanka
    Date: 2010
  3. By: Moritz Rohling (Chair of Economics, Institute for Environmental Decisions IED, ETH Zurich); Markus Ohndorf (Chair of Economics, Institute for Environmental Decisions IED, ETH Zurich)
    Abstract: Regulating international externalities, like climate change, raises various enforcement problems. It is often argued that international price-based regulations (e.g. emission taxes) are more difficult to enforce than quantity-based regulations (e.g. tradable pollution permits). In this paper, we analyze the relative performance of price-based and quantity-based instruments when costs and benefits are uncertain and enforcement of quantity regimes is stricter than that of price regimes. We show that under these conditions, instrument choice solely based on the relative slopes of the marginal curves can yield inefficient results. If policy enforcement differs, rational policy choice should also take into account the level of the marginal benefit curve, as well as institutional parameters. In contrast to earlier analyses on "Prices vs. Quantities", we find that the choice of instrument also depends on the variance of the marginal abatement costs. Numerical simulations of our stylized model suggest that, for climate policies, quantity-regulations might well be preferable to price-based approaches after all.
    Keywords: market-based instruments, incomplete enforcement, uncertainty, environmental regulation
    JEL: D8 L51 K42 Q58
    Date: 2010–07
  4. By: Etienne Billette de Villemeur; Justin Leroux
    Abstract: Due to meteorological factors, the distribution of the environmental damage due to climate change bears no relationship to that of global emissions. We argue in favor of offsetting this discrepancy, and propose a “global insurance scheme” to be financed according to countries’ responsibility for climate change. Because GHG decay very slowly, we argue that the actual burden of global warming should be shared on the basis of cumulated emissions, rather than sharing the expected costs of actual emissions as in a Pigovian taxation scheme. We characterize new versions of two well-known cost-sharing schemes by adapting the responsibility theory of Bossert and Fleurbaey (1996) to a context with externalities. <P>Du fait de phénomènes météorologiques, la répartition des dommages environnementaux est indépendante de celle des émissions de gaz à effet de serre (GES). Nous explorons la possibilité de corriger cette inadéquation via un « fonds assuranciel global », financé en fonction de la responsabilité de chaque pays concernant les changements climatiques. Étant donné la très longue durée de vie de plusieurs GES dans l'atmosphère, nous avançons que les dommages observés doivent être partagés en fonction des émissions cumulées, plutôt que de partager les coûts futurs espérés des émissions actuelles, comme le ferait une taxe pigouvienne. Nous employons la théorie de la responsabilité de Bossert et Fleurbaey (1996), adaptée à un contexte avec externalités, pour caractériser de nouvelles versions de deux mécanismes de partage connus.
    Keywords: climate change, cost sharing, responsibility, compensation , changements climatiques; partage de coûts, responsabilité, compensation
    JEL: D62 D63 Q54
    Date: 2010–08–01
  5. By: Mallidis, I.; Vlachos, D.; Dekker, R.
    Abstract: The consideration of environmental issues has emerged as a topic of critical importance for today’s globalized supply chains. The purpose of this paper is to develop a strategic-tactical decision-support methodology to assist managers in evaluating the impact of environmental issues, related to transportation emissions, on the transport geography of a region. Specifically we provide a tool that addresses: (i) supply chain network design, including port of entry and transportation mode, and (ii) decisions on leasing vs. outsourcing of transportation and distribution centers. The applicability of the proposed methodology is examined through the development of a sustainable supply chain network in the South-Eastern Europe region. The results indicate that in most cases outsourcing distribution centers to Third Party Logistics operators improves both the cost and the environmental performance of a company. In all cases outsourcing of transportation operations minimizes the amount of CO2 and PM emissions generated, while leasing minimizes costs.
    Keywords: supply chain sustainability;carbon footprint;supply chain design
    Date: 2010–08–16
  6. By: James Roumasset (Department of Economics, University of Hawaii at Manoa); Christopher Wada (University of Hawaii Economic Research Organization, University of Hawaii at Manoa)
    Abstract: Payments for ecosystem services should be informed by how both the providing-resource and the downstream resource are managed. We develop an integrated model that jointly optimizes conservation investment in a watershed that recharges a downstream aquifer and groundwater extraction from the aquifer. Volumetric user-fees to finance watershed investment induce inefficient water use, inasmuch as conservation projects actually lower the optimal price of groundwater. We propose a lump-sum conservation surcharge that preserves efficient incentives and fully finances conservation investment. Inasmuch as proper watershed management counteracts the negative effects of water scarcity, it also serves as adaptation to climate change. When recharge is declining, the excess burden of non-optimal watershed management increases.
    Keywords: Renewable resources, dynamic optimization, groundwater allocation, watershed conservation, multiple resource stocks
    JEL: Q25 Q28 C61
    Date: 2010–08
  7. By: Jon D. Wisman
    Abstract: Although healthy societies may require a degree of material inequality, higher levels of inequality have been linked to negative social consequences ranging from poorer health to lessened democracy. However, the greatest contemporary threat of excessive inequality might be its contribution to increased environmental degradation. Indeed, avoiding devastation of our habitat may be the greatest challenge ever faced by humanity. This article explores the manner in which inequality encourages consumption, by drawing upon Thorstein Veblen’s theory of consumer behavior, whereby in societies in which fluid social mobility is believed possible, inequality encourages households to seek social certification and social status through consumption. Rising inequality strengthens the intensity with which households struggle to maintain social respectability through increased consumption. The ideology, institutions, and behavior generated by this focus on consumption reduce the potential for people to achieve certification of value through more environmentally friendly domains such as work and community. This article also addresses the manner in which inequality impedes responses aimed at reducing environmental damage by augmenting the political power of those whose interests would be harmed by environmental measures. Indeed, the wealthy benefit threefold from pollution: Their disproportionate consumption is made less expensive, their assets yield higher profits, and they are better able to shield themselves from the negative consequences of environmental destruction.
    Keywords: Conspicuous consumption, political power, ideology, work quality, community
    Date: 2010–07
  8. By: David Wheeler and Saurabh Shome
    Abstract: Until recently, India’s intransigent negotiating posture has conveyed the impression that it will not accept any carbon emissions limits without full compensation and more stringent carbon limitation from rich countries. However, our assessment of India’s proposed renewable energy standard (RES) indicates that this impression is simply wrong. India is seriously considering a goal of 15 percent renewable energy in its power mix by 2020, despite the absence of any meaningful international pressure to cut emissions, no guarantees of compensatory financing, and a continuing American failure to adopt stringent emissions limits. If India moves ahead with this plan, it will promote a massive shift of new power capacity toward renewables within a decade. We estimate the incremental cost of this change from coal-fired to renewable power to be about $50 billion—an enormous sum for a society that must still cope with widespread extreme poverty. If India moves ahead with its current plan, it should give serious pause to those who have resisted U.S. carbon regulation on the grounds on that it will confer a cost advantage on “intransigent” countries such as India.
    Keywords: India, Solar Power, carbon emissions, renewable energy
    Date: 2010–03
  9. By: Kevin Ummel
    Abstract: Coal power generation in China and India is expected to double and triple, respectively, over the next 20 years, increasing exposure to fuel price volatility, exacerbating local air pollution, and hastening global climate change. Concentrating solar power (CSP) is a growing source of utility-scale, pollution-free electricity, but its potential in Asia remains largely unexamined. High-resolution spatial data are used to identify areas suitable for CSP and estimate power generation and cost under alternative land-use scenarios. Total technical potential exceeds current coal power output by a factor of 16 to 23 in China and 3 to 4 in India. A CSP expansion program and attendant transmission requirements are simulated with the goal of providing 20 percent of electricity in both countries by midcentury. Under conservative assumptions, the program is estimated to require subsidies of $340 billion in present dollars; coal-associated emissions of 96 GtCO2eq are averted at an average abatement cost of $30 per tCO2eq. Estimated costs are especially sensitive to the assumed rate of technological learning, emphasizing the importance of committed public policy and financing to reduce investment risk, encourage expansion of manufacturing capacity, and achieve long-term cost reductions. The results highlight the need for spatially explicit modeling of renewable power technologies and suggest that existing subsidies might be better used through integrated planning for large-scale solar and wind deployment that exploits spatiotemporal complementarities and shared infrastructure.
    Keywords: solar thermal power, greenhouse gas mitigation, abatement cost, electricity generation, technological
    JEL: A12 J11 J13 J14 O13 Q01 Q56
    Date: 2010–07
  10. By: Valentina De Marchi (Università di Padova)
    Abstract: This paper explores the relationship between firms’ cooperation and their propensity toward environmental innovation. Previous literature has emphasized the peculiarities of such innovations based on their drivers, their positive spill-overs and the importance of regulation to trigger them. This paper contributes to the literature by focusing on the importance of cooperation and of vertical, horizontal and lateral cooperative agreements on environmental innovation propensity. I test these hypotheses through a large scale dataset, the Community Innovation Survey for Spanish firms (PITEC), through the use of estimation techniques that allow to control for possible selection bias. The econometric estimations suggest that environmental innovative firms cooperate on innovation to an higher extent than other innovative firms. Furthermore, cooperation with suppliers, KIBS and universities is more relevant than for other innovative firms, whereas cooperation with clients does not seem to be differentially important.
    Keywords: environmental innovation, cooperation, R&D, two step logit model, innovation survey.
    Date: 2010–09
  11. By: Chen, Shiyi; Santos-Paulino, Amelia U.
    Abstract: The paper investigates the determinants of productivity growth in China. It also analyses the sustainability of the country’s industrial growth by estimating sectoral productivity, accounting for energy usage and emission since the start of the marketoriented reforms in the late 1970s. The growth accounting analysis indicates that productivity is the most significant driver of growth. Energy and capital are also important factors promoting China’s industrial growth. The substantial productivity improvement of China’s industry is attributable more to high-tech light industrial sectors. Heavy industry, characterized by high energy emission levels, lags behind in terms of productivity and overall technical change.
    Keywords: productivity growth, industrial sustainability, energy consumption, carbon emission
    Date: 2010
  12. By: Mellin, Anna (VTI); Nerhagen, Lena (VTI)
    Abstract: The purpose is to provide a background for a discussion concerning the methods and values used in cost-benefit analysis in Sweden for air pollutions', from traffic, impact on human health and the research needs in this area. We provide an overview of the current state of the art of models used for and input needed for external cost calculations of the health impacts. The calculations are not straightforward and depend on the collaboration between several research disciplines. In the ExternE projects, which have been used as a reference point in this study, there are still uncertainties concerning which pollutants to take into consideration. <p> Regarding the health impacts, we have recapitulated some of the main conclusions in a review by the American Heart Association (2010). They state that e.g. the following issues need further research: the importance of ultrafine particles, what constituent parts make traffic related air pollution more harmful than PM2.5 in general and the importance of coarse particles. <p> Concerning external cost calculations these can be of help to reveal important health aspects to consider in further research, if done in a transparent way. Some pollutants which are very harmful are released in such small concentrations that the overall effect is still relative limited. Hence, undertaking external cost calculations gives an indication of which pollutants to cover in the models and analyses to make them relevant but at the same time manageable. <p> Further, there are the questions of how to handle the relationship between Value of a Statistical Life and age, and of which values that should be used for children. This is an area where little research has been carried out. One important area is how to use discounting to account for the time dimension since current air pollution may influence children’s health in the future. More research is also needed regarding the valuation of morbidity. Here there are two issues to consider, the value of the welfare loss from being ill and the cost of illness. We have not found reliable estimates of these components for Sweden.
    Keywords: Health effects; External cost calculations; ExternE; Emissions; Transport
    JEL: H23
    Date: 2010–08–18
  13. By: Amita Shah
    Abstract: Natural resources perform multiple functions as a driver, maintainer, potential exit route, and also an effective escape mechanism in the context of poverty dynamics, especially in a predominantly agrarian economy such as India. The discourse on poverty reduction however, has often overlooked some of the major concerns of natural resource management, despite recognizing the criticality of agricultural growth for reducing rural poverty in the country. This paper presents an overview of the interface between natural resources and poverty in India and pleads for better equity and sustainability in resource management by ensuring sustained investment in support institutions at various levels. [Working Paper No. 43]
    Keywords: Natural resources, Poverty, India, Dry land, Forest, Tribal
    Date: 2010
  14. By: Adil ROUMANE; Augendra BHUKUTH; Damien BAZIN (Fonds pour la Recherche en Ethique Economique)
    Abstract: Social capital appears only very rarely in the nomenclature related to the management of forest resources in Morocco. Far from being a semantic detail, this lexical omission comes as a revelation of a policy change. Public authorities have established, in spite of the positive externalities that social capital generates, a bureaucratic management source of heaviness and ineffectiveness. The proof is a recession of the wooded surfaces accompanied by an irreversible degradation of the natural environment on one hand and of the intrinsic quality of the forests on the other hand. This political position raises questions. Thereby, we suggest that the management of forest resources could be optimized if handled through an approach coming from social capital. Our hypothesis is to set forth that this caesura took place through the disappearance of the local traditional organizations, certainly a vector of social capital but also protector of the natural environment. It is possible, by questioning the past, to find an opening in the forest crisis by rehabilitating the Jemaâ in a modern vision.
    Keywords: Common management, Forestry, Jemaâ, Morocco, Social capital
    JEL: O15 O18 Q57
    Date: 2010
  15. By: Jérôme Ballet; Mahefasoa Randrianalijaona (Fonds pour la Recherche en Ethique Economique)
    Abstract: This paper examines the role of economic inequalities in natural resources management. It is based on a comparative study between two forest community-based management contracts in the North-east of Madagascar. The study underlines: firstly, that economic inequalities play a role via rules of control set up in the community-based management contract; secondly, that economic inequalities play a role through access to land. In particular, the most unequal site, where access to land is restricted through inheritance, is also the more sustainable one.
    Keywords: Community-based management, inequalities, forest, Madagascar
    JEL: Q23 Q28
    Date: 2010
  16. By: Massimo Morelli; Dominic Rohner
    Abstract: We examine how natural resource location, rent sharing and fighting capacities of different groups matter for ethnic conflict. A new type of bargaining failure due to multiple types of potential conflicts (and hence multiple threat points) is identified. The theory predicts conflict to be more likely when the geographical distribution of natural resources is uneven and when a minority group has better chances to win a secessionist rather than a centrist conflict. For sharing rents, resource proportionality is salient in avoiding secessions and strength proportionality in avoiding centrist civil wars. We present empirical evidence that is consistent with the model.
    Keywords: Natural resources, conflict, strength proportionality, resource proportionality, secession, bargaining failure.
    JEL: C72 D74 Q34
    Date: 2010–08

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