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on Environmental Economics |
| By: | Benchekroun, H.; Ray Chaudhuri, A. (Tilburg University, Center for Economic Research) |
| Abstract: | In the absence of a successful international cooperative agreement over the control of emissions there is a growing interest in the role that clean technologies may play to alleviate the climate change problem. Within a non-cooperative transboundary pollution game, we investigate, analytically and within a numerical example based on empirical evidence, the impact of the adoption of a cleaner technology (i.e., a decrease in the emission to output ratio). We show that countries may respond by increasing their emissions resulting in an increase in the stock of pollution that may be detrimental to welfare. This possibility is shown to arise for a signi…cant and empirically relevant range of parameters. It is when the damage and/or the initial stock of pollution are relatively large and when the natural rate of decay of pollution is relatively small that the perverse e¤ect of clean technologies is strongest. Cooperation over the control of emissions is necessary to ensure that the development of cleaner technologies does not exacerbate the free riding behavior that is at the origin of the climate change problem. |
| Keywords: | transboundary pollution;renewable resource;climate change;clean technolo- gies;differential games |
| JEL: | Q20 Q54 Q55 Q58 C73 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:201097&r=env |
| By: | Étienne 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. |
| Keywords: | Climate Change, Cost Sharing, Responsibility, Compensation |
| JEL: | D62 D63 Q54 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:1030&r=env |
| By: | Leroux, Justin (HEC Montréal, CIRANO and CIRPEE); de Villemeur, Étienne (Toulouse School of Economics (IDEI & GREMAQ)) |
| 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 fincanced 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, raher 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. |
| JEL: | D62 D63 Q54 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:23125&r=env |
| By: | Sánchez-RodrÃguez, Roberto; Mumme, Stephen |
| Abstract: | Environmental issues and the management of natural resources have become a significant element of the binational relationship between Mexico and the United States during the last three decades. The environmental challenges now shaping the bilateral agenda for environmental cooperation are formidable and their address engages a rich and diverse set of institutions and stakeholders at multiple levels of government across the international boundary. This chapter studies environmental issues relevant to the two countries in the 21st century and suggests policy strategies to address them. The first part of the chapter discuss relevant environmental issues common to Mexico and the United States and their potential implications for their relationship in the short and long term. The second part analyzes binational efforts created to manage environmental issues and provide a critical perspective of their strengths and shortcomings. The last section of the chapter suggests recommendations to address those environmental challenges in the 21st century. |
| Keywords: | natural resources, environment, environmental policy |
| Date: | 2010–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:usmexi:1545142&r=env |
| By: | Theodore Palivos (Department of Economics, University of Macedonia); Dimitrios varvarigos (Department of Economics, University of Leicester) |
| Abstract: | In a two-period overlapping generations model with production, we consider the damaging impact of environmental degradation on health and, consequently, life expectancy. The government’s involvement on policies of environmental preservation proves crucial for both the economy’s short-term dynamics and its long-term prospects. Particularly, an active policy of pollution abatement emerges as an important engine of long-run economic growth. Furthermore, by eliminating the occurrence of limit cycles, pollution abatement is also a powerful source of stabilisation. |
| Keywords: | Growth, Cycles, Enviromental quality, Pollution Abatement. |
| JEL: | Q41 Q56 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:mcd:mcddps:2010_13&r=env |
| By: | Jean-Philippe Boussemart (LEM-CNRS (UMR 8179), IÉSEG School of Management,); Hervé Leleu (CNRS-LEM (UMR 8179), IÉSEG School of Management,); Oluwaseun Ojo (CNRS-LEM (UMR 8179), IÉSEG School of Management,) |
| Keywords: | agricultural intensification (AI), agricultural extensification (AE), pesticide reduction, environmental performance, non parametric cost-functions |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ies:wpaper:e201003&r=env |
| By: | Robert A. Ritz |
| Abstract: | Edgworth’s taxation paradox states that an excise tax can decrease the market price of a good. This paper presents a new version of the paradox in which a tax reduces price because it attracts entry of additional firms into the market. The paper also presents two new applications: (i) an emissions tax that leads to an increase in industry emissions (due to entry), and (ii) an interest rate cut by the central bank that reduces lending by commercial banks (due to exit). Basic principles of environmental regulation and monetary policy therefore fail under the conditions of the paradox. |
| Keywords: | Bank lending, Cost pass-through, Edgeworth's paradox, Environmental regulation, Market structure, Taxation |
| JEL: | D43 G21 H22 Q50 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:502&r=env |
| By: | Roman Mendelevitch; Johannes Herold; Pao-Yu Oei; Andreas Tissen |
| Abstract: | We present a mixed integer, multi-period, cost-minimizing carbon capture, transport and storage (CCTS) network model for Europe. The model incorporates endogenous decisions about carbon capture, pipeline and storage investments; capture, flow and injection quantities based on given costs, certificate prices, storage capacities and point source emissions. The results indicate that CCTS can theoretically contribute to the decarbonization of Europe's energy and industry sectors. This requires a CO2 certificate price rising to 55 € in 2050, and sufficient CO2 storage capacity available for both on and offshore sites. However, CCTS deployment is highest in CO2-intensive industries where emissions cannot be avoided by fuel switching or alternative production processes. In all scenarios, the importance of the industrial sector as a first mover to induce the deployment of CCTS is highlighted. By contrast, a decrease of available storage capacity or a more moderate increase in CO2 prices will significantly reduce the role of CCTS as a CO2 mitigation technology, especially in the energy sector. Continued public resistance to onshore CO2 storage can only be overcome by constructing expensive offshore storage. Under this restriction, to reach the same levels of CCTS penetration will require doubling of CO2 certificate prices. |
| Keywords: | carbon capture and storage, pipeline, infrastructure, optimization |
| JEL: | C61 H54 O33 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1052&r=env |
| By: | European Commission |
| Abstract: | The European Commission services published a staff working document assessing the main sources of innovative financing under discussion. The analysis shows that for some of the instruments a "double dividend" of both raising revenues and improving market efficiency and stability could be reaped, in particular by putting a price on risk-taking in the financial sector and on carbon emissions. |
| Keywords: | European Union, taxation, financial transaction tax, bank levy, bonus tax, carbon tax, financial institutions |
| JEL: | G15 G18 G28 H21 H22 H23 H25 H27 H62 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:tax:taxpap:0023&r=env |
| By: | Russell Smyth; Paresh Kumar Narayan; Hongliang Shi |
| Abstract: | China’s iron and steel sector is the largest in the world and has been the backbone of Chinese heavy industry. This sector is also a major consumer of energy and, in particular, coal. As a result, the iron and steel sector in China is a major contributor to greenhouse gas emissions and other pollutants. In this paper we examine the potential for inter-fuel substitution between coal, electricity, natural gas and oil in the Chinese iron and steel sector and find that these energy inputs are substitutes. The finding that these alternative energy sources are substitutes for coal suggests that China has the potential to switch from coal to cleaner energy sources; hence, retaining the ability to fuel its iron and steel sector, while reducing the adverse environmental implications. |
| Keywords: | China, inter-fuel substitution, iron and steel |
| JEL: | D24 O33 Q41 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2010-22&r=env |
| By: | Brooke Peterson; Carl Middleton |
| Abstract: | This paper reviews the available literature that links regional food security to the Mekong River’s wild capture fisheries, and argues for recognition of the existing contribution that the fisheries make to regional development. With a focus on the proposed Mekong mainstream dams, it explores how decision-making on large water infrastructure should be strengthened by appropriately recognizing and accounting for basin-wide environmental, social and cultural considerations, in addition to economic factors. |
| Keywords: | economic factors, regional, food security, Mekong, river, fisheries, development, water, infrastructure, environmental, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2824&r=env |
| By: | Luisito Bertinelli (CREA, University of Luxembourg); Benteng Zou (CREA, University of Luxembourg) |
| Abstract: | Adopting clean technologies is a long term process which requires structural changes in production and consumption habits. In the present paper, we focus more on short term issues related to pollution reduction and analyze a pollution abatement game in a 2-country dynamic model. Transboundary pollution is treated as a common state variable while pollution reduction is reached via abatement rather than the adoption of cleaner technologies. Symmetric open-loop and Markovian Nash equilibrium are studied and compared as well as the analysis of Markovian strategies of more than two countries case around the steady state. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:10-07&r=env |
| By: | Vinod Mishra; Russell Smyth |
| Abstract: | In this study we examine the extent to which firms pass back the cost of pollution regulation to workers in the form of lower wages using a unique matched employer-employee dataset for Shanghai. The benefits and costs of pollution regulation in China are important topics to study as China comes under increasing pressure to move from a single-minded focus on energy-driven economic growth to a more balanced approach to economic growth. The benefits of such a shift, particularly in terms of health, are relatively well-studied, but the costs are less so. The hip-pocket effect of pollution regulation on workers’ wages is particularly important given that it is likely to influence public support for a more balanced approach. Our main finding is that the reduction in average wages attributable to firms taking measures to control for pollution is between 13.8% and 18.8%, all things being equal. |
| Keywords: | Wages, Pollution abatement, China |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2010-21&r=env |
| By: | Hahn, Robert W. |
| Abstract: | In response to the increasing impact of laws and regulations, several governments have introduced economic analysis as a way of improving regulatory decision making. This paper provides the first comprehensive assessment of governmentsupported economic analysis of laws and regulations. It also reviews the changing role of economic analysis in regulatory decision making. I find that there is growing interest in the use of economic tools, such as benefit–cost analysis; however, the quality of analysis in the U.S.A. and European Union frequently fails to meet widely accepted guidelines. Furthermore, the relationship between analysis and policy decisions is tenuous. To address this situation, I recommend alternative legal and institutional frameworks that could allow economics to play a more central role in regulatory decision making. In addition, I suggest that prediction markets could help improve regulatory policy. Published in the International Review of Environmental and Resource Economics: Vol. 3:No 4, 2010, pp. 245-298. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:reg:rpubli:611&r=env |
| By: | Sophie Bernard (Department of Economics, University of Ottawa, Ottawa, ON) |
| Abstract: | In a stylized model of international trade, a monopolist in the North exports second-hand products to a representative firm in the South to be reused as intermediate goods, with potential trade gains. The degree of reusability of waste products is a crucial choice variable in the North. This is because with a lack of international vigilance, non-reusable waste can be mixed illegally with the reusable waste. I explore the driving forces for the movement of illegal waste, paying particular attention to the role of local waste regulations, such as the EU's Waste Electrical and Electronic Equipment directive. Under mild conditions, it is shown that increased regulation stringency in the North leads its firm to reduce the degree of reusability of its products. As a result, the flow of non-reusable waste to the South increases, providing another channel for the Pollution Haven Hypothesis. |
| Keywords: | second-hand products, illegal waste, environmental regulation, trade |
| JEL: | F18 L10 O20 Q53 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:1006e&r=env |
| By: | Zhe Li; Shouyong Shi |
| Abstract: | When a society wants to control aggregate emission under a certain target level, is it more desirable to impose a tax or a regulatory standard on emission? To answer this question, we explore a model where plants are heterogeneous in productivity and monopolistically competitive in the production of a set of varieties of (dirty-) goods whose by-product is emission. The main result is that the standard yields higher welfare than the tax if and only if productivity dispersion is small and the monopoly power in the dirty-goods sector is strong. In the process of obtaining this result, we find that, if the plants have no access to an abatement technology, then the tax dominates the standard unambiguously. When the plants do have access to an abatement technology, there can be less price distortion under the standard than under the tax, in which case the standard can yield higher welfare. These results illustrate that productivity dispersion is important for evaluating market-based environmental policies relative to non-market based policies. |
| Keywords: | emission tax; standard; productivity dispersion;abatement. |
| JEL: | E60 |
| Date: | 2010–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-409&r=env |
| By: | Sudhir A. Shah |
| Abstract: | The objective of this paper is twofold. Firstly, to propose a conceptual and institutional framework for the first step of the Kyoto procedure. This framework is formally expressed in a non-cooperative model of emission capping, i.e., the creation of endowments of emission rights. [Working Paper No.88] |
| Keywords: | conceptual, institutional, framework, Kyoto, non-cooperative, emission capping |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2828&r=env |
| By: | Patrick Criqui (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II); Constantin Ilasca (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II) |
| Abstract: | De Rio à Copenhague : grandes étapes de la négociation climatique, attentes et résultats de Copenhague 2009, perspectives pour l'après-2012 |
| Keywords: | CHANGEMENT CLIMATIQUE ; NEGOCIATIONS ; APRES-KYOTO |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00514870_v1&r=env |
| By: | Clark, Gordon L. |
| Abstract: | This paper explores two inter-related themes. One addresses fundamental questions of human nature, arguing that conventional theories of behaviour lack a credible appreciation of the interaction between cognition and context (or what is often termed as the 'environment'). The second considers decision-making under risk and uncertainty, focusing upon customary behaviour and the significance or otherwise of conscious deliberation. My argument is intended to be both critical and constructive, exploring the claims of the emerging school of behaviouralism associated with Kahneman and Tversky now sweeping the social sciences. Most importantly, it is argued that economic geography should take more seriously the nature and scope of behaviour recognising its attributes including related social and cultural aspirations. These ideas are illustrated by a set of recent studies dealing with financial decision-making and individuals' attitudes towards risk in personal and occupational pension plans. The importance of this project lies in the urgent need to understand the diversity of behaviour of men and women in, and through, the communities in which they live without being reduced to yet another version of environmental determinism. In conclusion, implications are drawn for understanding the global financial crisis. |
| JEL: | D81 J12 G11 D14 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ner:oxford:http://economics.ouls.ox.ac.uk/14856/&r=env |
| By: | Scheierling, Susanne M.; Bartone, Carl; Mara, Duncan D.; Drechsel, Pay |
| Abstract: | Wastewater use in agriculture is a growing practice worldwide. Drivers include increasing water stress, in part due to climate change; increasing urbanization and growing wastewater flows; and more urban households engaged in agricultural activities. The problem with this trend is that in low-income countries, but also in many middle-income countries, it either involves the direct use of untreated wastewater or the indirect use of polluted waters from rivers that receive untreated urban discharges. This poses substantial risks, in particular microbial risks to public health. To address these risks, the World Health Organization in 2006 issued new guidelines for the safe use of wastewater.This paper aims to highlight the growing importance of improving wastewater use in agriculture across the spectrum from lower to high-income countries. It presents an innovative approach linking key issues related to different aspects of wastewater irrigation to a country’s level of economic development. Based on data presented in the World Bank’s World Development Report, it differentiates between four country income levels to create a typology for analyzing current issues, trends, and priorities for improving agricultural wastewater use with a focus on reducing the risks to public health. It also presents the basic principles of the new 2006 World Health Organization Guidelines, and how to apply them. Beyond regulatory aspects, the paper also discusses other aspects that are important for achieving a more integrated approach to agricultural wastewater use, including institutional/planning, technological, economic/financial, and social issues. Finally, the paper provides recommendations for moving the wastewater irrigation agenda forward. |
| Keywords: | Water and Industry,Wastewater Treatment,Sanitation and Sewerage,Water Supply and Systems,Water Conservation |
| Date: | 2010–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5412&r=env |
| By: | Kvamsdal, Sturla Furunes (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration); Stohs, Stephen M. (Southwest Fisheries Science Center) |
| Abstract: | An economic activity interacts with an endangered species. The activity can be divided into mutually exclusive strata with different levels of interaction. Observing the activity in order to monitor interactions is costly. It may be desirable to manage the activity with a probability model which balances the benefit from the activity against the cost of the interaction with the endangered specie instead. The model gives rise to a permit scheme which fixates the risk of interaction over all strata and which uses the market mechanism to optimally allocate the activity between strata. The model can facilitate uncertainty in interaction rate estimates. |
| Keywords: | Endangered species interactions; permit scheme; probability model |
| JEL: | Q50 |
| Date: | 2010–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2010_011&r=env |