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on Environmental Economics |
| By: | Schenker, Oliver |
| Abstract: | China has becoming in 2006 the world’s largest emitter of greenhouse gases (GHG), responsible for one-fifth of world’s emissions from power generation. And further strong growth in this sector is to be expected. To provide these additional power generation capacities substantial investments in China’s energy infrastructure are necessary. But the potential investors are confronted with uncertainty in the design of China’s future climate policy, which might affect the profitability of GHG emitting power plants. It is the aim of this paper to investigate the role of uncertainty in China’s climate policy on investments in the electricity sector and its consequences for GHG emissions. We analyze the topic with a stochastic dynamic computable general equilibrium model with an extended energy sector and calibrated with Chinese data. The results show that uncertainty about the timing and extent of China’s climate policy lowers emissions compared to a world with perfect information. Uncertainty lowers the present value of coal-fired electricity in pre-policy periods and has so a positive effect for the environment. |
| Keywords: | China; Energy Policy; Climate Policy; Investment under Uncertainty; Stochastic and Dynamic CGE Model |
| JEL: | O41 C68 Q41 D58 D80 |
| Date: | 2011–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29591&r=env |
| By: | Atkinson, Robert D.; Hackler, Darrene |
| Abstract: | In climate change, as in all policy issues, economic philosophy has a significant influence on how people view both the problems and the solutions. For the first time, ITIF surveys four dominant schools of economic thought and analyzes how adherents approach policy options for climate change and energy policy. With climate change and major energy legislation stalled, maybe it is time to put aside fixed philosophical notions and take a practical look on ways to address climate change in an economically feasible way. The report reviews the principles and goals of each economic doctrine, and offers a critique of the advantages and limitations of each doctrine's contribution to addressing the challenge of climate change. |
| Keywords: | Innovation; Economics; Climate Change; Public Policy |
| JEL: | B50 A10 Q54 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29718&r=env |
| By: | Steve Gibbons; Susana Mourato; Guilherme Resende |
| Abstract: | Using a hedonic property value price approach, we estimate the amenity value associated with proximity to habitats, designated areas, domestic gardens and other natural amenities in England. There is a long tradition of studies looking at the effect of a wide range of environmental amenities and disamenities on property prices. But, to our knowledge, this is the first nationwide study of the value of proximity to a large number of natural amenities in England. We analysed 1 million housing transactions over 1996- 2008 and considered a large number of environmental characteristics. Results reveal that the effects of many of these environmental variables are highly statistically significant, and are quite large in economic magnitude. Gardens, green space and areas of water within the census ward all attract a considerable positive price premium. There is also a strong positive effect from freshwater and flood plain locations, broadleaved woodland, coniferous woodland and enclosed farmland. Increasing distance to natural amenities such as rivers, National parks and National Trust sites is unambiguously associated with a fall in house prices. Our preferred regression specifications control for unobserved labour market and other geographical factors using Travel to Work Area fixed effects, and the estimates are fairly insensitive to changes in specification and sample. This provides some reassurance that the hedonic price results provide a useful representation of the values attached to proximity to environmental amenities in England. Overall, we conclude that the house market in England reveals substantial amenity value attached to a number of habitats, designations, private gardens and local environmental amenities. |
| Keywords: | amenity value, hedonic price method (HPM), environmental amenities |
| JEL: | R11 R29 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0074&r=env |
| By: | Mariana Conte Grand; Vanesa V. D´Elía |
| Abstract: | At the time of Argentina´s greenhouse gases emissions reduction voluntary commitment, most of the articles on intensity targets had not been published. The aim of this paper is to (re)discuss briefly the proposal made by Argentina taking into account that literature. To justify the adopted target form and stringency, we compare fixed and dynamic targets in terms of the likelihood of “hot air”, the relationship between allowed emissions and GDP, the link between abatement and GDP, and outcomes´ dispersion. But, the assumptions implicit in the design of the target may change those properties. We show how the BAU scenario taken as reference and the level of emissions reduction affects targets´ design and characteristics. Finally, considering different emissions projections, we perform a comparison between allowed emissions and projected ones during the first half commitment period (2008-2010), concluding that compliance with the commitment depends on the data source used in the calculations. |
| Keywords: | climate change, intensity targets, uncertainty, Argentina |
| JEL: | Q28 Q54 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:444&r=env |
| By: | Adeline UGAGLIA (USC 2032 GAIA - INRA SAD/ENITAB); Bernard DEL’HOMME (USC 2032 GAIA - INRA SAD/ENITAB); Maryline FILIPPI (USC 2032 GAIA - INRA SAD/ENITAB) |
| Abstract: | An evolutionary framework is used here to study the issue of pesticide reduction in vineyards. After analyzing grape growers’ pesticide lock-in we show that, although Integrated Pest Management (IPM) could reduce pesticide use significantly, the lack of specific implementation know-how hampers its diffusion. Consequently, once the features of technological change for IPM have been scrutinized, we adopt a case analysis approach in which environmental regulation is envisaged as one possible way of promoting IPM diffusion. We also show that, however necessary such regulation is, it is insufficient: grape growers equally need extension services. |
| Keywords: | evolutionary framework, environmental innovation, IPM, pesticides, grape growing |
| JEL: | Q59 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2011-12&r=env |
| By: | Lopez-Feldman, Alejandro |
| Abstract: | While there is much interest by NGOs and environmental groups in the potential of non-timber forest products (NTFP) programs to si- multaneously achieve conservation and poverty alleviation, there is not a great deal of understanding of whether they work in practice, and how incentives and local management do, indeed affect poverty and local resource use. In this paper I propose a methodology to analyze the potential impacts that price increases can have on the income that extractors receive from NTFP extraction. The case study illustrates how one could evaluate the effectiveness of different price scenarios. It also shows the kind of biologic and socioeconomic information that is needed to apply the methodology suggested. The more accurate the information is the more confident one can be about the policy recommendations. This is an area of opportunity where applied research between economists and ecologists can lead to con- crete policy applications. |
| Keywords: | Non-timber forest products; poverty; resource extraction |
| JEL: | I30 Q20 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29696&r=env |
| By: | Jana, Sebak Kumar |
| Abstract: | Indian economy is still an agrarian economy more than 50% of people in India are still dependent on agriculture for their livelihood. Rainfed areas without any source of irrigation in the country still accounts for 60% of the cultivated area and these areas are home to majority of rural poor and marginal farmers. Food security of small and marginal farmers in these regions are greatly jeopardized by the lack of assured irrigation. In this backdrop, there is an urgent need to explore the possibilities of sustainable and innovative forms of irrigation. One such innovative experiment is happa experiment which is viewed as Integrated Natural Resource Management( INRM) emphasizing both water and soil management. A happa is a mud-excavated small water harvesting structure with the average size of 50ft× 45ft×12 ft. The programme is going on in some dry zones where the happa is being excavated in the private land of the farmer wherefrom the farmer can irrigate his own agricultural land with average command area of happa being 0.6 – 0.75 acres. The construction cost one happa is being funded from NREGS scheme, the flagship programme of Government of India for employment generation. After the construction of happa, it is managed by the farmer himself and all the operational expenditure is being incurred by the farmer for mainataining these. This model has got success in some dry zones. We have selected a village for our primary survey of households in the Bankura district which is located dry zone of West Bengal. There is specific geographical concentration of backwardness and poverty in these areas and these regions are affected by continuous degradation of natural resources. The main objectives of the study are as follows: (1) To judge the economic viability of the project using standard cost benefit analysis tools like NPV, BCR and IRR. (ii) Assessment of ecological and social impacts of the project, (iii) Identifying of different kinds of benefits accrued from the project, (iv) scope of upscaling of the project with the identification of problem areas in upscaling Our analysis reveals that the small irrigation program like happa has made a strong impact on the livelihood of rural people. The environmental impacts include soil and moisture conservation of the watershed area. The economic benefits include incremental production from paddy production and vegetable production through irrigation. The success and upscaling of the programme depends very much on the system of planning, application, execution, monitoring and fund-flow. |
| Keywords: | Happa; small scale irrigation; dry zones |
| JEL: | N50 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29553&r=env |
| By: | Ene, Corina-Maria; Gheorghiu, Anda; Gheorghiu, Anca |
| Abstract: | This article presents a theoretical model for a dynamic system based on sustainable development. Due to the relatively absence of theoretical studies and practical issues in the area of sustainable development, Romania aspires to the principles of sustainable development. Based on the concept as a process in which economic, social, political and natural environment are combined in order to sustain planet management, our goal is to promote an economic tool for Romanian decision-makers in order to evaluate scenarios and planning options. |
| Keywords: | sustainable development; economic system; economic development; economic welfare; resources scarcity; natural environment |
| JEL: | F18 Q56 O13 |
| Date: | 2011–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29215&r=env |
| By: | Helanya Fourie (Macro and Resource Economics, Western Cape Department of Agriculture); Martin de Wit (School of Public Leadership, University of Stellenbosch); Albert van der Merwe (Department of Economics, University of Stellenbosch) |
| Abstract: | The Agulhas Plain is a low-lying coastal area within the Cape Floristic Region classified as one of the six plant kingdoms of the world. The area is heavily invaded by alien vegetation that infringes upon the sustainable supply of ecosystem goods and services provided by the native fynbos vegetation. Natural capital restoration is expected to recover the supply of ecosystem goods and services, and in particular to increase the amount of water available for consumption. The study conducts cost-benefit analyses to assess whether alien clearing and restoration would add value to the Agulhas Plain. The analyses indicate that the cost of alien clearing and restoration in the area cannot be justified if the additional water released holds no benefit to the Plain. A brief assessment shows that the actual average value of water on the Agulhas Plain, as estimated by other studies, is higher than the economic cost of making the water available through alien clearing and restoration. Thus this would make alien clearing and restoration economically justified. |
| Keywords: | Cost-benefit analysis, Invasive vegetation, Natural capital restoration, Water |
| JEL: | Q56 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers131&r=env |
| By: | Santiago Moreno-Bromberg; Luca Taschini |
| Abstract: | This paper analyzes the dynamic incentives for technology adoption under a transferable permits system, which allows for strategic trading on the permit market. Initially, firms can invest both in low-emitting production technologies and trade permits. In the model, technology adoption and allowance price are generated endogenously and are inter-dependent. It is shown that the non-cooperative permit trading game possesses a pure-strategy Nash equilibrium, where the allowance value reflects the level of uncovered pollution (demand), the level of unused allowances (supply), and the technological status. These conditions are also satisfied when a price support instrument, which is contingent on the adoption of the new technology, is introduced. Numerical investigation confirms that this policy generates a floating price floor for the allowances, and it restores the dynamic incentives to invest. Given that this policy comes at a cost, a criterion for the selection of a self-financing policy (based on convex risk measures) is proposed and implemented. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1103.2914&r=env |
| By: | Ibrahim Abada; Vincent Briat; Steve A. Gabriel; Olivier Massol |
| Abstract: | This article presents a dynamic Generalized Nash-Cournot model to describe the evolution of the natural gas markets. The aim of this work is to provide a theoretical framework that would allow us to analyze future infrastructure and policy developments, while trying to answer some of the main criticisms addressed to Cournot-based models of natural gas markets. The major gas chain players are depicted including: producers, consumers, storage and pipeline operators, as well as intermediate local traders. Our economic structure description takes into account market power and the demand representation tries to capture the possible fuel substitution that can be made between the consumption of oil, coal and natural gas in the overall fossil energy consumption. We also take into account the long-term aspects inherent to some markets, in an endogenous way. This particularity of our description makes the model a Generalized Nash Equilibrium problem that needs to be solved using specialized mathematical techniques. Our model has been applied to represent the European natural gas market and forecast, until 2030, after a calibration process, consumption, prices, production and natural gas dependence. A comparison between our model, a more standard one that does not take into account energy substitution, and the European Commission natural gas forecasts is carried out to analyze our results. Finally, in order to illustrate the possible use of fuel substitution, we studied the evolution of the natural gas price as compared to the coal and oil prices. This paper mostly focuses on the model description. |
| Keywords: | Energy markets modeling, Game theory, Generalized Nash-Cournot equilibria, Quasi-Variational Inequality |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2011-8&r=env |
| By: | Cropper, Maureen (Resources for the Future); Hammitt, James K.; Robinson, Lisa A. |
| Abstract: | The value of mortality risk reduction is an important component of the benefits of environmental policies. In recent years, the number, scope, and quality of valuation studies have increased dramatically. Revealed preference studies of wage compensation for occupational risks, on which analysts have primarily relied, have benefited from improved data and statistical methods. Stated preference research has improved methodologically and expanded dramatically. Studies are now available for several health conditions associated with environmental causes, and researchers have explored many issues concerning the validity of the estimates. With the growing numbers of both types of studies, several meta-analyses have become available that provide insight into the results of both methods. Challenges remain, including better understanding of the persistently smaller estimates from stated preference than from wage differential studies and of how valuation depends on the individual’s age, health status, and characteristics of the illnesses most frequently associated with environmental causes. |
| Keywords: | value of a statistical life, mortality risk reduction, hedonic wage studies, stated preference studies |
| JEL: | Q50 Q51 Q58 |
| Date: | 2011–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-11-10&r=env |
| By: | Miguel Quiroga (Departamento de Economía, Universidad de Concepción, Chile); Mario Villatoro Martin Velasquez (Departamento de Economía, Universidad de Concepción, Chile); José Pablo Prado Córdova (Faculty of Agronomy, University of San Carlos de Guatemala, Guatemala) |
| Keywords: | : Abies guatemalensis; Pinabete; Cultivation; Conservation; Contribution, Participation |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:cnc:wpaper:06-2010&r=env |
| By: | Mark D., Partridge; M. Rose, Olfert |
| Abstract: | Throughout the second half of the 20th Century, urbanization, new technologies, rapid labor-saving productivity growth in primary industries, and improved highways combined to create large-scale rural-urban functionally integrated regions. These forces have raised the stakes for regions in their pursuit of economic development and growth, making successful regional policy even more important. Changes to the governance structures consistent with the increased interdependence within broad rural-urban regions will improve the region's competitiveness; adopting fad-based approaches and policies aimed at “picking winners” will be less fruitful. Going forward, continuing globalization and environmental sustainability have the potential to fundamentally reshape relative regional attractiveness. |
| Keywords: | Regional Policy; Rural Development |
| JEL: | R58 R10 H0 |
| Date: | 2010–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29646&r=env |
| By: | Nicola Doni (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Giorgio Ricchiuti (Università degli Studi di Firenze, Dipartimento di Scienze Economiche) |
| Abstract: | This paper analyzes how the interaction between green consumers and responsible firms affects the market equilibrium. The main result is that a higher responsibility by both producers and consumers can have different impacts on the efficiency of the firms' abatement activity, depending on the nature of the cleaning costs. When the abatement costs are fixed, the efficiency of the clean-up effort is always increasing in their degree of responsibility. On the other hand, when the abatement costs are variable, a higher level of responsibility may reduce social welfare. Finally, the first best allocation is never reached, even in the presence of the highest credible level of responsibility of both consumers and producers. |
| Keywords: | Green Consumers, Corporate Social Responsibility, Vertical Differentiation |
| JEL: | D62 L13 L21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2011_07.rdf&r=env |