nep-env New Economics Papers
on Environmental Economics
Issue of 2010‒09‒25
thirty-six papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Environmental performance rating and disclosure : an empirical investigation of China's green watch program By Jin, Yanhong; Wang, Hua; Wheeler, David
  2. Voluntary pollution abatement and regulation in the presence of a green market By Michael , Delgado; Neha , Khanna
  3. The "Social Cost of Carbon" Made Simple By Steve Newbold; Charles Griffiths; Christopher C. Moore; Ann Wolverton; Elizabeth Kopits
  4. Modeling the global trade and environmental impacts of biofuel policies By Bouët, Antoine; Dimaranan, Betina V.; Valin, Hugo
  5. Using Choice Modelling to assess the willingness to pay of Queensland households to reduce greenhouse By Galina Ivanova; John Rolfe; Gail Tucker
  6. Prices vs. Quantities with incomplete enforcement and different enforcement probabilities By Rohling, Moritz
  7. Strategies for adapting to climate change in rural Sub-Saharan Africa By Nzuma, Jonathan Makau; Waithaka, Michael; Mulwa, Richard Mbithi; Kyotalimye, Miriam; Nelson, Gerald
  8. Impacts of climate change on agriculture and policy options for adaptation By Yu, Bingxin; Zhu, Tingju; Breisinger, Clemens; Hai, Nguyen Manh
  9. Sustainable Economic, Marketing, Environmental and Financial Opportunities for Biogas Recovery Systems By Steglin, Forrest
  10. The role of patent protection in (clean/green) technology transfer By Hall, Bronwyn; Helmers, Christian
  11. Regulatory Impact Analyses of Environmental Justice Effects By Spencer Banzhaf
  12. Developing Economies and the Environment: The Role of Trade and Capital Flows By Partha Sen
  13. Measuring the Environmental Impacts of Changing Trade Patterns on the Poor By Kaliappa Kalirajan; VenkatachalamAnbumozhi; Kanhaiya Singh
  14. The impact of environmental performance rating and disclosure: an empirical analysis of perceptions by polluting firms'managers in China By Jin, Yanhong; Wang, Hua; Wheeler, David
  15. Net Farm Income and Land Use under a U.S. Greenhouse Gas Cap and Trade By Baker, Justin S.; McCarl, Bruce A.; Murray, Brian C.; Rose, Steven K.; Alig, Ralph J.; Adams, Darius; Latta, Greg; Beach, Robert; Daigneault, Adam
  16. Higher water tariffs for less river pollution—evidence from Min River and Fuzhou City, People’s Republic of China By Jiang, Yi; Jin, Leshan; Lin, Tun
  17. Growing State-Federal Conflicts in Environmental Policy: The Role of Market-Based Regulation By Williams III, Roberton C.
  18. Subjective Well Being and the Impact of Climate Change By Grün, Carola; Grunewald, Nicole
  19. Valuing environmental improvements in the Great Barrier Reef: Ecological and preference heterogeneity in local area case studies By John Rolfe; Jill Windle
  20. A New Zealand Electricity Market Model: Assessment of the Effect of Climate Change on Electricity Production and Consumption. By Lewis Evans; Greame Guthrie; Andrea Lu
  21. Development of the Latvian energy sector system dynamic model By Skribans, Valerijs
  22. Developing Asia’s Competitive Advantage in Green Products: Learning from the Japanese Experience By Fukuya Iino; Alva Lim
  23. Performance payments: A new strategy to conserve large carnivores in the tropics? By Zabel, Astrid; Engel, Stefanie
  24. The global institutional frameworks and the diffusion of renewable energy technologies in the BRICS countries By Bodas-Freitas, Isabel Maria; Dantas, Eva; Iizuka, Michiko
  25. Provision of an environmental output within a multi-output distance function approach By Areal, Francisco J; Tiffin, Richard; Balcombe, Kelvin
  26. Do values for protecting iconic assets vary across populations? A Great Barrier Reef case study By John Rolfe; Jill Windle
  27. Quota Enforcement in Resource Industries: Self-Reporting and Differentiated Inspections By Lars Gårn Hansen; Frank Jensen; Linda Nøstbakken
  28. Economic Causes of Deforestation in the Brazilian Amazon: A Panel Data Analysis for 2000s By da Silva, Jorge Hargrave Gonçalves; Kis-Katos, Krisztina
  29. Factors Determining Public Demand for Safe Drinking Water (A Case Study of District Peshawar) By Iftikhar Ahmad; Miraj ul Haq; Abdul Sattar
  30. Economic valuation of development projects : a case study of a non-motorized transport project in India By Wang, Hua; Fang, Ke; Shi, Yuyan
  31. Paper Tigers, Fences-&-Fines or Co-Management? Community conservation agreements in Indonesia's Lore Lindu National Park By Engel, Stefanie; Palmer, Charles; Pfaff, Alex
  32. Evaluation of European electric vehicle support schemes By Kley, Fabian; Wietschel, Martin; Dallinger, David
  33. Adoption of certified organic technologies: the case of coffee farming in Colombia By Ibanez, Marcela
  34. Optimal rainfall insurance contracts for maize producers in Ghana’s Northern Region By Muamba, Francis M.; Ulimwengu, John M.
  35. Re-evaluating the success of the EPA's 33/50 program: evidence from facility participation By Martina, Vidovic; Neha, Khanna
  36. Rural biomass energy 2020: People's Republic of China By Zhang, Qingfeng; Watanabe, Makiko; Lin, Tun

  1. By: Jin, Yanhong; Wang, Hua; Wheeler, David
    Abstract: Environmental performance rating and disclosure has emerged as an alternative or complementary approach to conventional pollution regulation, especially in developing countries. However, little systematic research has been conducted on the effectiveness of this emerging policy instrument. This paper investigates the impact of a Chinese performance rating and disclosure program, Green Watch, which has been operating for 10 years. To assess the impact of Green Watch, the authors use panel data on pollution emissions from rated and unrated firms, before and after implementation of the program. Controlling for the characteristics of firms and locations, time trend, and initial level of environmental performance, the analysis finds that firms covered by Green Watch improve their environmental performance more than non-covered firms. Bad performers improve more than good performers, and moderately non-compliant firms improve more than firms that are significantly out of compliance. The reasons for these different responses seem to be that the strengths of incentives that the disclosure program provides to the polluters at different levels of compliance are different and the abatement costs of achieving desired levels of ratings are different for different firms.
    Keywords: Water and Industry,Brown Issues and Health,Green Issues,Pollution Management&Control,Energy Production and Transportation
    Date: 2010–09–01
  2. By: Michael , Delgado; Neha , Khanna
    Abstract: We present a model in which firms voluntarily abate emissions in a market that values environmental quality such that firms can charge a premium for goods that are environmentally friendly. Our results establish conditions under which mandatory abatement crowds out voluntary abatement, or, alternatively, provides an incentive for firms to increase their level of voluntary abatement in order to maintain product differentiation. In addition, we identify cases under which firms that do not abate voluntarily would support mandatory abatement if they are able to collectively pass off (at least part of) the costs of abatement to consumers. Our model predicts that regulatory policies that ignore voluntary abatement are likely to over-regulate non-abating firms compared to the level of regulation that accounts for voluntary abatement if consumer income levels in the green market are relatively high. If consumer income levels in the green market are relatively low, regulation may be ineffective in improving overall environmental quality.
    Keywords: Voluntary Pollution Abatement; Regulation; Markup
    JEL: K32 Q52 Q58
    Date: 2010–07–29
  3. By: Steve Newbold; Charles Griffiths; Christopher C. Moore; Ann Wolverton; Elizabeth Kopits
    Abstract: The “social cost of carbon” (SCC) is the present value of the future stream of damages from one additional ton of carbon emissions in a particular year. This paper develops a simple model for calculating the SCC and compares estimates of the SCC under certainty and uncertainty. Our model includes the key ingredients shared by several of the more complex integrated assessment models in the climate economics literature, but is designed to be more transparent and easier to use by decision-makers and non-specialists. We conduct a series of sensitivity analyses to examine the influences of several key parameters in the deterministic case. We also conduct a formal uncertainty analysis using Monte Carlo simulation, which shows that the certainty-equivalent SCC can be substantially larger than the expected value of the SCC. We explain that this difference arises due to the combined effects of uncertainty and risk aversion. Finally, we compare the present value of benefits estimated using the SCC to the compensating variation of consumption in the initial period for a wide range of hypothetical emission reduction policies.
    Keywords: climate change, social cost of carbon, integrated assessment model
    JEL: Q54
    Date: 2010–08
  4. By: Bouët, Antoine; Dimaranan, Betina V.; Valin, Hugo
    Abstract: There is rising skepticism about the potential positive environmental impacts of first generation biofuels. Growing biofuel crops could induce diversion of other crops dedicated to food and feed needs. The relocation of production could increase deforestation and bring significant new volumes of carbon into the atmosphere. In this paper, we develop a methodology for assessing the indirect land use change effects related to biofuel policies in a computable general equilibrium framework. We rely on the trade policy model MIRAGE and on the GTAP 7 database, both of which have been modified and improved to explicitly capture the role of different types of biofuel feedstock crops, energy demand and substitution, and carbon emissions. Land use changes are represented at the level of agroecological zones in a dynamic framework using land substitution with nesting of constant elasticity of transformation functions and a land supply module that takes into account the effects of economic land expansion. In this integrated global approach, we capture the environmental cost of different land conversions due to biofuels in the carbon budget, taking into account both direct and indirect carbon dioxide emissions related to land use change. We apply this methodology to look at the impacts of biofuel (ethanol) policies for transportation in the United States and in the European Union with and without ethanol trade liberalization. We find that emissions released because of ethanol programs significantly worsen the total carbon balance of biofuel policies. Ethanol trade liberalization benefits are ambiguous and depend highly on the parameters governing land use change, particularly in Brazil. We conclude by pointing out the critical aspects that have to be refined in order to improve our understanding of the environmental implications of biofuel development.
    Keywords: Biofuels, indirect land use change, trade liberalization,
    Date: 2010
  5. By: Galina Ivanova (Faculty of Arts, Business, Informatics and Education at CQ University); John Rolfe (Faculty of Business and Informatics at Central Queensland University); Gail Tucker (Centre for Environmental Management at CQ University)
    Abstract: This paper presents the results of a choice modeling survey of households in Queensland to assess values for reductions in national greenhouse emissions by 2020. The study is novel in two main ways. First, labeled alternatives were used to assess whether the types of broad management options for reducing net emissions (green power, alternative technologies or carbon capture) are significant in understanding preferences for reducing emissions. Second, the importance of the level and type of uncertainty involved in reductions is tested. They include (1) the uncertainty of achieving emissions reduction and (2) the uncertainty of international participation as the percentage of total global emissions covered by international agreements. The results of this survey identified how choice responses vary when the level of uncertainty associated with emissions reduction options are included within choice alternatives.
    Date: 2010–05
  6. By: Rohling, Moritz
    Abstract: Regulating inter-country externalities, like climate change, raises various enforcement problems. It is often argued that international pricebased 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 for cases where costs and benefits are uncertain and enforcement of quantity regimes is stricter than for price-based regimes. We show that under these conditions, instrument choice solely based on the relative slopes of the marginal costs can be inefficient. If enforcement probabilities differ, 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 difference in welfare for both policy instruments also depends on the variance of the marginal abatement costs. Furthermore, 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,environmental regulation,uncertainty
    JEL: D8 L51 K42 Q58
    Date: 2010
  7. By: Nzuma, Jonathan Makau; Waithaka, Michael; Mulwa, Richard Mbithi; Kyotalimye, Miriam; Nelson, Gerald
    Abstract: The ten ASARECA member countries (Burundi, Democratic Republic of Congo, Eritrea, Ethiopia, Kenya, Madagascar, Rwanda, Sudan, Tanzania, and Uganda) have adopted, or are planning to adopt, a range of climate change adaptation strategies in agriculture (see Table 1 for a summary). Of the 26 strategies mentioned, only two are common to all 10 countries, while five more are common to five or more. The strategies common to all member countries include the development and promotion of drought-tolerant and early-maturing crop species and exploitation of new and renewable energy sources. Most countries have areas that are classifiable as arid or semiarid, hence the need to develop drought-tolerant and early-maturing crops. Strangely, only one country recognizes the conservation of genetic resources as an important strategy although this is also potentially important for dealing with drought. Biomass energy resources account for more than 70 percent of total energy consumption in ASARECA member countries. To mitigate the potential adverse effects of biomass energy depletion, ASARECA countries plan to harness new and renewable energy sources, including solar power, wind power, hydro and geothermal sources, and biofuels. Eight of the 10 countries cite the promotion of rainwater harvesting as an important adaptation strategy, either small scale with small check dams or large scale with large dam projects. The five measures that are common to more than five countries are (a) the conservation and restoration of vegetative cover in degraded and mountain areas; (b) reduction of overall livestock numbers through sale or slaughter; (c) cross-breeding, zero-grazing, and acquisition of smaller livestock (for example, sheep or goats); (d) adoption of traditional methods of natural forest conservation and food use; and (e) community-based management programs for forests, rangelands, and national parks. The promotion of environmentally friendly investments and Clean Development Mechanism (CDM) projects that can be funded through carbon trading is a feature of only one country. Three examples of strategies that warrant greater region wide collaboration are the conservation of genetic materials, development and promotion of drought-tolerant species, and soil conservation. To date, the national adaptation policies of only three countries have indicated that they carry out these strategies.
    Keywords: Adaptation, ASARECA, Climate change, NAPA, Natural resource management, PRSP,
    Date: 2010
  8. By: Yu, Bingxin; Zhu, Tingju; Breisinger, Clemens; Hai, Nguyen Manh
    Abstract: Vietnam is likely to be among the countries hardest hit by climate change, mainly through rising sea levels and changes in rainfall and temperatures. Agriculture can be extensively affected by climate change, and designing effective adaptation strategies will be critical for maintaining food security, rural employment, and foreign exchange earnings. This paper examines these critical issues and thereby makes two contributions to the literature. First, we estimate the impacts of climate change on agricultural and water systems in Vietnam based on crop simulation, hydrological simulation, and river basin models. We then present a yield function approach that models technology advances and policy interventions to improve rice productivity and mitigate the impact of climate change, using a multilevel mixed effects model. This two-pronged approach allows rice yield changes to be linked with both biophysical and socioeconomic conditions. The results indicate that rice production is likely to be severely compromised by climate change. However, investment in rural infrastructure, such as irrigation and road, and human capital can mitigate the negative impacts of climate change. Due to substantial regional variations in impacts and responses, localized policy packages will be key for effective mitigation. Government policies targeting ethnic-minority and poor communities will be especially important components of climate change adaptation strategies.
    Keywords: Climate change, productivity, rice,
    Date: 2010
  9. By: Steglin, Forrest
    Abstract: Livestock producers operating large-scale confinement operations, such as dairies, are looking for ways to handle and dispose of manure that are cost effective and efficiently meet odor and pollution policies. Farm level production of biogas using anaerobic digesters is one solution that helps control methane emissions. Methane is an odorless gas that can be used to generate electricity, develop fiber products (such as fiber boards, decking, cow pots and building materials) and potting medium as a soil or peat replacement and livestock bedding, establish carbon credits, or provide other value-added products like fertilizer and raw gas or transport fuel, thereby having marketability and economic value. Substantial environmental benefits of odor control, water quality protection, and greenhouse gas reductions also exist. Because of the tangible and intangible benefits possible from reducing methane emissions via anaerobic digesters, biogas recovery systems are prudent financially as well, with single-digit payback periods, double-digit simple rates of return, approximately $1 million (USD) in net present value, double-digit internal rates of return, and relatively large benefit-cost ratios associated with the savings over time.
    Keywords: Agribusiness,
    Date: 2010–06
  10. By: Hall, Bronwyn (University of California at Berkeley, UNU-MERIT, and Maastricht University); Helmers, Christian (CEP, London School of Economics and Political Science, and CSAE, University of Oxford)
    Abstract: Global climate change mitigation will require the development and diffusion of a large number and variety of new technologies. How will patent protection affect this process? In this paper we first review the evidence on the role of patents for innovation and international technology transfer in general. The literature suggests that patent protection in a host country encourages technology transfer to that country but that its impact on innovation and development is much more ambiguous. We then discuss the implications of these findings and other technology-specific evidence for the diffusion of climate change-related technologies. We conclude that the "gdouble externality" problem, that is the presence of both environmental and knowledge externalities, implies that IP may not be the ideal and cannot be the only policy instrument to encourage innovation in this area and that the range and variety of green technologies as well as the need for local adaptation of technologies means that patent protection may be neither available nor useful in some settings.
    Keywords: climate change, intellectual property, innovation, technology transfer
    JEL: O19 O33 O34 Q54 Q55 Q58
    Date: 2010
  11. By: Spencer Banzhaf
    Abstract: Finding an appropriate way to incorporate environmental justice considerations into policy-making has been a procedural challenge since President Clinton issued Executive Order 12,898 over 15 years ago. Moreover, environmental justice continues to be overshadowed by efficiency considerations as embodied in benefit-cost analysis. This article argues that the environmental justice and benefit-cost policies and procedures in EPA's rule-making can both be improved by bringing them closer together, ultimately improving environmental regulations as well. In particular, environmental justice consideration should be incorporated into Regulatory Impact Analyses (RIAs) by drawing on the much older tradition of incorporating distributional effects into benefit-cost analysis. By providing information on the distribution of benefits and costs of its regulatory actions, EPA would further its environmental justice objectives by providing the information that all groups—including the poor, minorities, and environmental justice communities—need to understand the impacts of a regulatory action. By incorporating such information into its RIAs, EPA would integrate environmental justice considerations into its development of regulations. Finally, by actually allowing the new information to inform the design and selection of regulations so as to better protect disadvantaged groups, adding distributional impacts to RIAs would improve the distributive justice associated with EPA's actions as well as the procedural justice.
    Keywords: benefit-cost analysis, environmental justice, disperse pollutants
    JEL: Q56
    Date: 2010–08
  12. By: Partha Sen
    Abstract: This paper reviews (critically and selectively) the literature on the link between economic development, the environment and international trade (and capital flows). In particular, how stricter environmental regulation in the North affects trade and capital movements between the North and the South. It also discusses how trade and capital flows in turn, affect environmental policy. [Working Paper No. 172]
    Keywords: literature, economic development, international trade, capital movements, environmental policy
    Date: 2010
  13. By: Kaliappa Kalirajan; VenkatachalamAnbumozhi; Kanhaiya Singh (Asian Development Bank Institute)
    Abstract: It is an empirical fact that it is very difficult to balance economic growth, poverty reduction, and environment protection, particularly for developing and transitional economies. While the economic environment of a country is influenced by conditions within the country, it is also influenced by external shocks such as the recent global financial crisis depending on how integrated the country is with the rest of the world. Thus, it poses a continuing challenge for policy makers in developing and transitional countries to readjust the economic environment in a way that leads to better and more effective targeting of the chronic issue of poverty reduction without causing damage to the natural environment. It is in this context that this paper attempts to measure the environmental impact of changing trade patterns on the poor. The recent financial crisis has discouraged United States (US) private consumption, which in turn has significantly reduced exports from Asia. However, Asia’s private consumption is at a very low level even when compared with the current reduced US private consumption. Therefore, it is possible for Asian countries to focus more on improving regional trade and domestic consumption to compensate for the revenue losses that resulted from the reduction in global demand. This paper argues that energy-efficient production methods and service-led growth, particularly trade in environmental goods and services, provide good opportunities for Asian countries to enjoy “inclusive growth” without damaging the natural environment.
    Keywords: poverty reduction, environmental sustainability, trade, United States, Asia
    JEL: E20 Q43 Q56
    Date: 2010
  14. By: Jin, Yanhong; Wang, Hua; Wheeler, David
    Abstract: Environmental performance rating and disclosure has emerged as a substitute or complement for traditional pollution regulation, especially in developing countries. Using data from China's Green Watch program, this study extends previous research on performance rating and disclosure by considering firms'perceptions of public and market responses to their ratings. The results suggest that the Green Watch has significantly increased market and stakeholder pressures on managers to improve their firms’ environmental performance. More specifically, controlling for the characteristics of locations, firms, and individual managers, the analysis finds that firms with better ratings perceive positive impacts on market competitiveness, overall market value, and relationships with different stakeholders, while the firms with bad ratings are more likely to perceive deterioration. Among these factors, managers perceive a more active role for markets than for stakeholder relations.
    Keywords: Markets and Market Access,Microfinance,Water and Industry,Brown Issues and Health,Green Issues
    Date: 2010–09–01
  15. By: Baker, Justin S.; McCarl, Bruce A.; Murray, Brian C.; Rose, Steven K.; Alig, Ralph J.; Adams, Darius; Latta, Greg; Beach, Robert; Daigneault, Adam
    Keywords: Environmental Economics and Policy, Land Economics/Use, Q15, Q18, Q54,
    Date: 2010–04
  16. By: Jiang, Yi; Jin, Leshan; Lin, Tun
    Abstract: Upstream nonpoint source pollution has become a significant threat to urban drinking water safety in the People’s Republic of China. Payment for environmental services (PES) is seen as a promising mechanism to deal with the situation. In designing a sound PES, it is crucial to determine the willingness to pay (WTP) of urban beneficiaries for upstream water pollution controls. An analysis of household data from a contingent valuation survey conducted in Fuzhou in 2009 reveals that household income is the most important factor in determining respondents’ positions on water tariff increases as well as WTP under a PES scheme. Mean WTP varies from Yuan (CNY) –0.45 per cubic meter to CNY0.86 for different income groups. The overall mean WTP is estimated to be CNY0.21, which is equivalent to a 10% increase in the current tariff, with the 95% confidence interval at (CNY0.12, CNY0.31). The point estimate implies a total annual WTP of Fuzhou City equal to CNY22 million, which is 27% less than the contribution of Fuzhou to an ongoing government-financed PES. However, with continuous water tariff increases, affordability among low-income households might arise as an issue. This calls for subsidies targeting low-income households to be incorporated in water tariff reform.
    Keywords: water tariff; river pollution; upstream nonpoint source pollution; payment for environmental services; willingness to pay; Min River; Fuzhou City; China
    JEL: Q53 Q25
    Date: 2010–05
  17. By: Williams III, Roberton C.
    Abstract: In recent years, cases in which state governments chose to override federal environmental regulation with tighter regulations of their own have become increasingly common, even for pollutants that have substantial spillovers across states. This paper argues that this change arose at least in part because of a shift in the type of regulation used at the federal level, from command-and-control regulation toward more incentive-based regulation. Under an incentive based federal regulation, a state imposing a tighter regulation will bear only part of the additional cost, and thus has more incentive to tighten regulation than it does under federal command-and control. This difference helps to explain observed patterns of regulation. In addition, it has implications for the choice of regulatory instruments. For a pollutant that causes both local and spillover damage, a federal pollution tax is likely to yield a more efficient outcome than federal command-and-control policy or a federal system of tradable permits.
    Keywords: Regulatory Reform, Environment
    Date: 2010–07
  18. By: Grün, Carola; Grunewald, Nicole
    Abstract: We analyze the relationship between subjective well-being as a non-income welfare measure and climate variables such as temperature, precipitation rates or cloud covered days. Therewith, we estimate the effects from events related to climate change on subjective well-being and point out possible welfare losses and gains due to climate change. Even though that there is a growing number of research done on well-being in terms of income measures and climate change, there is only little research done on the effect of climate change and non-income measures such as subjective well-being. Further those studies lack some comparison. Except Rehdanz and Maddison (2005) all studies turn to national analyses when analyzing the influence of climate on subjective well-being. So far there are very few studies on middle- and none on low-income countries done, but at the same time extreme weather events may especially affect people in poorer countries. Therefore, we test this relationship for low and middle-income countries in Latin America and put the results in comparison to earlier studies. We apply survey data from the World Value Survey and Latinobarometro which cover the years 1985- 2008. In a panel study we estimate subjective well-being in Latin America and control for gender, age, marital status and income. Further we introduce climate variables such as the deviation from the mean temperature and precipitation rates as to analyze how the rising variance in climate affects subjective well being. --
    Keywords: Subjective Well Being,Climate Change
    JEL: I30 Q54
    Date: 2010
  19. By: John Rolfe (Faculty of Business and Informatics at Central Queensland University); Jill Windle (Faculty of Business and Informatics at Central Queensland University)
    Abstract: The focus of this report is to test if protection values at a particular GBR site may be easily transferred to other case studies of interest in the region. The research involved valuing three local case studies in the GBR and testing how values were consistent across site and population characteristics. The sites were chosen to reflect substantial heterogeneity in extent, ecological composition and condition, while values were assessed for both local and distant populations. The results are encouraging, indicating that although significant heterogeneity was identified with the mixed logit models, values were robust to various site and population differences. No significant difference in protection values between the three local case studies could be identified, and there was no significant difference in values between the local population and the Brisbane population. However, some evidence for distance effects was identified for the Brisbane population, with closer sites valued more highly. As well, potential losses were valued more highly (in absolute terms) than potential gains. The implication of these results is that protection values are likely to be higher for closer reef areas with risks of losses than these with opportunities for improvements
    Date: 2010–07
  20. By: Lewis Evans (Victoria University Of Wellington); Greame Guthrie; Andrea Lu
    Abstract: In this paper, we introduce an electricity market model and use it to explore the effect of climate change on electricity output and prices. It is calibrated to the New Zealand Electricity Market, and includes multiple generation fuels, uncertain fuel availability, and storage options. The model is formulated in continuous time, which mimics the many short trading periods that are common to electricity spot markets, while properly incorporating forward-looking generation decision making. Specifically, it is used to estimate the effects of changes that may arise in characteristics of fuels -water and gas- as a consequence of climate change and climate change policies. The model does this under the polar cases of a competitive market structure and monopoly. There are three key findings from the results. First, the results illustrate the importance of allowing for volatility and including management of storage in electricity market models. Second, they suggest that reductions in average hydro fuel availability will reduce welfare significantly. Increases in the volatility of hydro fuel availability will also affect welfare, but to a very small extent. Third, the value of reservoir expansion is sensitive to the distribution of hydro fuel availability. Finally, the effects of a carbon tax are also reported.
    Keywords: dynamic optimisation, electricity spot market performance, stochastic fuel availability, storage options, climate change
    JEL: D4 D9 L1 L5 L9
    Date: 2010–09
  21. By: Skribans, Valerijs
    Abstract: One of the most pressing problems in the Latvian economy is related to the energy sector. The most characteristic feature is coupled with the low efficiency of thermal energy consumption of households as a result of poor insulation of existing buildings in Latvia. Solving energy sector problems requires a comprehensive decision, both in energy production and consumption. It is therefore necessary to develop energy sector model to be able to evaluate not only the energy consumption growth and the factors affecting it directly, but also the feedback caused by the increase of the efficiency growth. The model shown in the article has been developed using system dynamic method. Latvian energy sector model consists of resources, production and consumption blocks. A separate place is taken by electricity generation hydroelectric power plants (HPP), net imports of electricity and so on. Resource blocks consist of primary energy resource blocks: petroleum products, solid fuel, wood and gas blocks. Primary energy resources are used for production of other energy forms, i.e. heat or electricity production, they are shown in the production blocks. Both the primary energy and produced energy (and electricity generated by HPP) are passed on to final consumers, who make consumer unit blocks. It consists of: transport, agriculture, households and other (industrial and services sectors) blocks. The model key role is to forecast energy consumption by separate groups, both consumers and energy resources groups; to estimate energy sector impact on environment. The model has been developed to estimate the impact of buildings thermo insulation program on Latvian economy.
    Keywords: energy efficiency; consumption; system dynamic; modelling and simulation; building warming and renovation; the CO2 emissions and quotas
    JEL: Q00 C68 Q41 C00 Q01 C60 Q30 C53 Q52 C50 Q40 C30 Q20
    Date: 2010
  22. By: Fukuya Iino; Alva Lim (Asian Development Bank Institute)
    Abstract: Right now, governments around the world are spending record amounts of money to kick- start their economies in response to the financial crisis. Fortunately, a great opportunity exists for this fiscal stimulus to be directed towards “green” economic growth, which can not only provide the new markets and jobs needed immediately for alleviating poverty, but also address the challenges of global warming. Working models already exist, proving that sustainable growth is possible. To achieve this will require social, technical and structural changes, as well as appropriate policies conducive to eco-innovation. For developing countries, there are lessons that can be learned from countries that have already gone through that process. The aim of this paper is to show what lessons can be learnt from the Japanese case. As the world's second largest economy, Japan is not only one of the most energy-efficient economies in the world; it also produces some of the world's leading green technologies. This paper focuses on current trends in the green product market and consumer behavior in Japan, which have been influenced by recent government policies, particularly the ¥15.4 trillion (more than US$100 billion) stimulus package. The aim of this paper is to provide some insight on, and present a repository of selected government policies promoting sustainable development. The scope of this paper will cover areas such as hybrid vehicles, renewable energy, energy efficient home appliances, and green certification schemes. It also provides a brief discussion on the environmental policies of the new Japanese government that came into power on 16 September 2009. The paper attempts to use the most recent data, from June to August 2009, however given the quickly- evolving global environment, these statistics may change drastically by the time this paper is presented.
    Keywords: green economic growth, sustainable growth, fiscal stimulus, Japan
    JEL: Q53 Q54 Q58
    Date: 2010
  23. By: Zabel, Astrid; Engel, Stefanie
    Abstract: Biodiversity, including wildlife, is globally decreasing at alarming rates. This development has evoked calls for innovative conservation policies. In the present paper we explore the novel conservation performance payment approach which for wildlife-livestock conflicts, so far, has only been implemented in Sweden. The contribution of the paper is twofold. A structural framework of performance payments design is developed and an empirical assessment of the approach to tiger-livestock conflicts at Bandhavgarh National Park in India, an example where conservation needs compete with humans increasing demand for land and resources, is presented. The framework focuses on issues of scheme design such as identifying performance indicators, targeting, payment amount and timing, considerations on making payments to groups vs. individuals, scheme duration, and inadvertent side effects. The assessment of the applicability of the performance payment approach to tiger (Panthera tigris) conservation is based on a high-profile policy workshop, an interview with the park management, and 305 household-level interviews conducted in 20 villages in the buffer zone of the park. --
    Keywords: Conservation performance payments,Payments for environmental services,Wildlife-livestock conflicts,India,Sweden
    JEL: Q20
    Date: 2010
  24. By: Bodas-Freitas, Isabel Maria (Grenoble Ecole de Management, and Politecnico di Torino); Dantas, Eva (German Development Institute, and Science and Technology Policy Research Unit(SPRU), University of Sussex); Iizuka, Michiko (UNU-MERIT)
    Abstract: This paper examines the role of the global institutional frameworks on the national processes of innovation diffusion. we focus on the influence of the Kyoto mechanisms on the diffusion of renewable energy technologies in the BRICS countries i.e. Brazil, China India, Russia and South Africa. Our preliminary analysis suggests that the Kyoto Mechanisms may support the diffusion of some simple, low cost and mature technologies which are already diffused in the host countries, rather than the diffusion of new renewable energy technologies. This observation raises questions about the extent to which the Kyoto Mechanisms at its present state create major incentives for the diffusion of new renewable energy technologies in the BRICS, in the absence of a indigenous technological efforts and capabilities in new renewable technologies and national policy initiatives to attract and leverage the implementation of Kyoto Mechanism projects to support technology diffusion. We analyse these issues theoretically as well as empirically making use of national aggregated data from the World Development Indicators, the International Energy Agency, the United Nations Framework Convention on Climate Change and secondary sources.
    Keywords: technology diffusion, renewable energy, global institutions, BRICS, Kyoto mechanisms
    JEL: O33 O19 O13
    Date: 2010
  25. By: Areal, Francisco J; Tiffin, Richard; Balcombe, Kelvin
    Abstract: This paper redefines technical efficiency by incorporating provision of environmental goods as one of the outputs of the farm within a multi-outptut distance function framework. Permanent and rough grassland area are used as a proxy for the provision of environmental goods. The multi-output distance function approach is used to estimate technical efficiency. A Bayesian procedure involving the use of a Gibbs sampler is used to estimate the farm specific efficiency as well as the coefficients of the distance function. In addition, a number of explanatory variables for the efficiency were introduced in the analysis and posterior distributions of those were obtained. The methodology is applied to panel data on 215 dairy farms in England and Wales from the Defra Farm Business Survey. Results show that both farm efficiency rankings and determinants of inefficiency change when provision of environmental outputs by farms is incorporated in the efficiency analysis, which may have important political implications.
    Keywords: Technical efficiency; environmental good; multi-output
    JEL: C51 C13 C23 Q12 C11
    Date: 2010
  26. By: John Rolfe (Faculty of Business and Informatics at Central Queensland University); Jill Windle (Faculty of Business and Informatics at Central Queensland University)
    Abstract: A number of studies have examined the effects of distance decay and the influence it might have on both use and non-use values. However, the relationship between environmental values and distance effects is less clear cut when iconic or special assets are involved. In this report, the effects of distance decay on protection values of the Great Barrier Reef in Australia are explored using two split sample choice experiments. The results suggest that the Townsville (local) population had larger use values than the Brisbane (distant) population. However, for iconic resources, where perceptions of responsibility, substitutes and information are reasonably consistent across population groups, non-use values remain constant across spatially different population groups.
    Date: 2010–05
  27. By: Lars Gårn Hansen (Institute of Food and Resource Economics, University of Copenhagen); Frank Jensen (Institute of Food and Resource Economics, University of Copenhagen); Linda Nøstbakken (University of Alberta School of Business)
    Abstract: Individual quotas are frequently used in the management of renewable resources. However, in many industries there is concern about the basic eectiveness of quotas due to non-compliance. We develop an enforcement model of a quota-regulated resource and focus on a situation with signicant non-compliance and exogenous constraints on nes and enforcement budget. We propose a new enforcement system based on self-reporting of excess extraction and explicit dierentiation of inspection rates based on compliance history. We show that such a system increases the eectiveness of quota management by allowing the regulator to implement a wider range of aggregate extraction targets than under the traditional enforcement system, while ensuring an ecient allocation of aggregate extraction.
    Keywords: Non-compliance, Self-reporting, Enforcement, Quota regulation, Renewable resource management
    JEL: D61 H0 Q20 Q22 Q28
    Date: 2010–09
  28. By: da Silva, Jorge Hargrave Gonçalves; Kis-Katos, Krisztina
    Abstract: We use newly launched and some never before analyzed datasets, to assess the recent economic and policy determinants of deforestation in the Brazilian Amazon. We estimate panel data models for the years between 2002 and 2007 for 368 municipalities in the region using municipality fixed effects and GMM. The results show that recent deforestation is driven by fluctuations in meat and soybean prices, it increases with rural credit availability, and with the size of rural reform settlements, while it decreases with protected areas. Moreover we find that higher presence of the Brazilian environmental police (IBAMA) was effective in reducing deforestation rates. --
    Keywords: Deforestation,Amazon,Economic causes,Brazil
    JEL: Q56
    Date: 2010
  29. By: Iftikhar Ahmad; Miraj ul Haq; Abdul Sattar (Pakistan Institute of Development Economics)
    Abstract: Overtime per capita water availability in the world as well as in Pakistan has been declining. Water sources have depleted and become polluted therefore, now water has become a scarce good. Resultantly, the inadequate water supply, sanitation, and hygiene are rooting major environmental degradation and health damages in the country. This study was undertaken to analyze the magnitude of awareness, perception, practices, and demand for safe drinking water. The study further elaborated HHs Willingness to Pay (WTP) for improved water quality and services in district Peshawar of NWFP, Pakistan. Primary data was collected from 315 HHs which consist 2455 HH members from district Peshawar. Schooling, exposure to mass media, HH income and occurrence of diarrhoeal diseases were used to measure the HHs’ response towards the health risks associated with contaminated water. Moreover, to find out public acceptability to government and private sector as service providers, HH’s were asked two separate questions regarding their maximum willingness to pay for an improved water system by either one. Out of the sample HHs, 78.4 percent were willing to accept improved water system provided by government while relatively less HHs (55.6 percent) were WTP in the case of private company as the service provider. It is worth mentioning that according to sample about 76 percent HHs were not using any method for water purification at their homes in district Peshawar. This study empirically proved that the role of awareness besides the income constraint is the key determinants of demand for safe drinking water.
    Keywords: Pakistan, water supply, environmental degradation, willingness to pay, water demand
    JEL: Q25 Q53 O10
    Date: 2010
  30. By: Wang, Hua; Fang, Ke; Shi, Yuyan
    Abstract: One of the major difficulties in doing cost-benefit analysis of a development project is to estimate the total economic value of project benefits, which are usually multi-dimensional andinclude goods and services that are not traded in the market. Challenges also arise in aggregating the values of different benefits, which may not be mutually exclusive. This paper uses a contingent valuation approach to estimate the economic value of a non-motorized transport project in Pune, India, across beneficiaries. The heads of households which are potentially affected by the project are presented with a detailed description of the project, and then are asked to vote on whether such a project should be undertaken given different specifications of costs to the households. The total value of the project is then derived from the survey answers. Econometric analysis indicates that the survey responses provide generally reasonable valuation estimates.
    Keywords: Transport Economics Policy&Planning,Environmental Economics&Policies,Roads&Highways,Housing&Human Habitats,Economic Theory&Research
    Date: 2010–09–01
  31. By: Engel, Stefanie; Palmer, Charles; Pfaff, Alex
    Abstract: Protected areas may be established and maintained at the expense of local communities ('fences & fines'), although attempts to block local land use can be fruitless ('paper tigers'). Innovation in protected area policy has led to the involvement of communities in protected-area management ('co-management'). This paper aims to predict and study the emergence of such negotiated agreements to share the management of as well as the benefits from forest. First, we develop a conceptual framework for understanding roles of co-management interventions. Second, we bring to our derived hypotheses unique panel data collected from a co-management policy implemented in Lore Lindu National Park, Indonesia. The results broadly support our model predictions, although there is mixed evidence in some cases, possibly due to the fact that our relatively rough data proxies often correlate with several model parameters. --
    Keywords: forest,protected area,park,community,property right,Indonesia
    Date: 2010
  32. By: Kley, Fabian; Wietschel, Martin; Dallinger, David
    Abstract: Electric vehicles can reduce carbon dioxide emissions, increase energy efficiency, and help to reduce the dependency on oil imports. However, today's technical and economic challenges are preventing mass-market adoption. In order to create an early market and support economies of scale in production, some European countries have already established support schemes. This research study aims to provide an overview of the existing support schemes in Europe and to assess them using four criteria: effectiveness, efficiency, practicability, and political acceptance. The study concludes with an impact analysis of today's economic support schemes which considers the total costs of ownership. While one-time support schemes help to reduce the large initial investments for EVs, recurring instruments are often more effective and efficient but also smaller in volume. The comparison of the different regional incentive schemes reveals that EVs today are only economically attractive in Denmark and Norway, but at relatively high prices. Thus, regulators need to increase the volume and efficiency of the support schemes, establish high scoring instruments, and align these on a European scale. In addition, non-monetary support, e.g. free-parking, can help to overcome technical or smaller economic hurdles. --
    Date: 2010
  33. By: Ibanez, Marcela
    Abstract: Agricultural production is an important source of income and employment for developing countries, yet it is the cause of serious environmental problems. Though ECO-labels appear as a promising alternative to control the negative effects of agriculture on the environment and to increase the income of rural poor, the proportion of agricultural land and exports certified as is quite small. We investigate the factors that affect the adoption of certified organic coffee in Colombia and in particular study the effect of economic incentives on adoption. We find that those who have lower cost of adoption are more likely to be certified as organic. Correcting for sample selection, we find that certified organic production is 40% less productive and 31% less costly than non-certified production. Given the price premium in 2007, certified organic production is 15% less profitable than non-organic production. We find that in order to make organic production attractive, the price premium of certified organic coffee should be about 5 times higher than in 2007. --
    Keywords: Technology adoption,Switching regression models,Organic Coffee,Colombia
    Date: 2010
  34. By: Muamba, Francis M.; Ulimwengu, John M.
    Abstract: The risk of food insecurity due to climate change in developing countries has encouraged development partners to seek new approaches to improve the resilience of subsistence agriculture to covariate shocks. Such innovative approaches include investment in safety nets such as rainfall insurance. However, a policy question remains: How does one determine the practicality of rainfall insurance for a particular district? This paper attempts to fill this gap by assessing the viability of rainfall insurance contracts for agricultural production in Ghana’s Northern Region. Using a stop-loss framework, an optimal contract is determined by choosing its parameters by maximizing the objective function in the form of covariance between crop loss and indemnity payment, the objective function given a predetermined fair premium rate. The theoretical contract is implemented using monthly rainfall and annual maize crop yield data from 1998 to 2004 from 12 districts in the Northern Region under varying premium rates. We conclude that rainfall insurance may not be viable for all districts in the Northern Region; however, the contracts are likely to be viable in districts that exhibit a positive Pearson correlation coefficient between maize yield loss and indemnity payments.
    Keywords: Climate change, maize yield, rainfall insurance,
    Date: 2010
  35. By: Martina, Vidovic; Neha, Khanna
    Abstract: Using previously unavailable data, we examine facility participation in the 33/50 Program and its effect on aggregate and toxicity weighted emissions between1991 and 1995 for a sample of facilities whose parent firms committed to the Program. By focusing on individual facilities we avoid the biases created by aggregating emissions across facilities. We find that while more polluting facilities within a firm were more likely to participate, even when we account for the toxicity of emissions, across firms there is no evidence of greater participation by facilities with higher emissions. Although emissions of the 33/50 chemicals fell over the years, we find that participation in the Program did not lead to the decline in the 33/50 releases generated by these facilities.
    Keywords: Toxic Release Inventory; program participation; program evaluation; GMM; dynamic panel
    JEL: Q53 Q58 L60
    Date: 2010–08–16
  36. By: Zhang, Qingfeng; Watanabe, Makiko; Lin, Tun
    Abstract: The developing world is looking for effective, creative ideas for upscaling clean, renewable energy. No place will gain more socially, economically, and environmentally from increased access to clean, reliable energy than poor, rural areas. Biomass energy, produced from animal and crop wastes, is a sensible renewable energy option for rural areas and it can be cost-effective at community and industry scales if guided effectively by governments. This publication explores the potential of biomass energy to close the urban–rural energy gap, raise farmer incomes, and mend the environment in the People’s Republic of China (PRC). Its findings are instructive for other developing and medium-income countries exploring energy-for-all strategies. The report examines the promises and limitations of leading biomass energy technologies and resources for various distribution scales, including but not limited to household biogas digesters. The information is based on lessons learned and experiences from the Asian Development Bank–financed Efficient Utilization of Agricultural Wastes Project in the PRC, as well as findings and conclusions from a technical assistance grant to assist the government draft a national strategy for developing rural biomass energy.
    Keywords: rural biomass energy; rural development; biomass resources; biomass technologies; China
    JEL: O1 O13 Q42 Q4
    Date: 2010–06

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