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on Environmental Economics |
| By: | Baker, Justin; Murray, Brian; McCarl, Bruce |
| Abstract: | Biofuel expansion efforts and climate mitigation policy could fundamentally alter land management trends in U.S. agriculture and forestry (AF) by mandating biofuel feedstock production and providing incentives for greenhouse gas (GHG) emissions reduction and carbon sequestration from terrestrial sources. Research has shown that biofuel expansion can alter commodity markets, induce agricultural land expansion, and intensify production. Meanwhile, GHG mitigation efforts could limit agricultural expansion, reduce current cultivation, and lower management intensity by incentivizing GHG emissions reduction and carbon sequestration within AF. To date, little work has attempted to quantify biofuel and climate policy-induced shifts together along the extensive and intensive agricultural production margins within a systems-based framework, though such shifts could have resounding implications on agricultural water consumption and quality. This study uses a comprehensive and detailed economic model of the U.S. AF sectors to simulate land management responses to biofuel expansion and GHG policies. While bioenergy production and altered AF management practices are found to significantly reduce GHG emissions, additional water consumption and nutrient use are possible policy outcomes. Specifically, we find that policies that influence shifts to the extensive margin will increase aggregate water use and nutrient application, but lead to lower intensity per-unit area. Conversely, when combined with biofuel mandates climate mitigation incentives lower agricultural land expansion, but lead to higher levels of management intensity. Somewhat contrary to expectations, GHG mitigation incentives cause water and nutrient use intensity to grow at an increasing rate due to the greater level of land use competition. Additionally, important regional trends emerge, as water use and quality concerns grow with the CO2 price in areas with limited GHG mitigation possibilities. This suggests that âwater leakageâ is possible whereby emissions reduction activities decrease output in one region and stimulate management intensity elsewhere. The potential indirect consequences of combined biofuel and climate mitigation incentives on water resource systems warrant further attention in policy design and future research. |
| Keywords: | Greenhouse gas mitigation, biofuels, water resource management, Environmental Economics and Policy, Production Economics, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:104912&r=env |
| By: | Timilsina, Govinda R.; Csordas, Stefan; Mevel, Simon |
| Abstract: | A carbon tax is an efficient economic instrument to reduce emissions of carbon dioxide released from fossil fuel burning. Its impacts on production of renewable energy depend on how it is designed -- particularly in the context of the penetration of biofuels into the energy supply mix for road transportation. Using a multi-sector, multi-country computable general equilibrium model, this study shows first that a carbon tax with the entire tax revenue recycled to households through a lump-sum transfer does not stimulate biofuel production significantly, even at relatively high tax rates. This reflects the high cost of carbon dioxide abatement through biofuels substitution, relative to other energy substitution alternatives; in addition, the carbon tax will have negative economy-wide consequences that reduce total demand for all fuels. A combined carbon tax and biofuel subsidy policy, where part of the carbon tax revenue is used to finance a biofuel subsidy, would significantly stimulate market penetration of biofuels. Although the carbon tax and biofuel subsidy policy would cause higher loss in global economic output compared with the carbon tax with lump sum revenue redistribution, the incremental output loss is relatively small. |
| Keywords: | Climate Change Mitigation and Green House Gases,Transport Economics Policy&Planning,Taxation&Subsidies,Environment and Energy Efficiency,Energy and Environment |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5678&r=env |
| By: | G. Cornelis van Kooten; Patrick Withey; Linda Wong |
| Keywords: | climate change, wetlands |
| JEL: | Q54 Q57 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:rep:wpaper:2011-03&r=env |
| By: | Xenarios, Stefanos; Sharma, Bharat R.; Singh, A. |
| Keywords: | Irrigation water / Water use / River basins / Environmental effects / Models / South Asia / India / Pakistan / Nepal / Indo-Gangetic Basin |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:iwt:bosers:h043780&r=env |
| By: | Xenarios, Stefanos; Sharma, Bharat R. |
| Keywords: | River basins / Irrigation water / Water use / Economic aspects / Environmental effects / Corporate culture / Valuation / Case studies / Water market / Wells / South Asia |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:iwt:bosers:h043779&r=env |
| By: | Itkonen, Juha |
| Abstract: | We bridge together the graph-theoretic and the econometric approach for defining causality in statistical models to consider model misspecification problems. By presenting a solution to disagreements between the existing frameworks, we build a causal framework that allows us to express causal implications of econometric model specifications. This allows us to reveal possible inconsistencies in models used for policy analysis. In particular, we show how a common practice of doing policy analysis with vector error-correction models fails. As an example, we apply these concepts to discover fundamental flaws in a resent strand of literature estimating the carbon Kuznetz curve, which postulates that carbon dioxide emissions initially increase with economic growth but that the relationship is eventually reversed. Due to a causal misspecification, the compatibility between climate and development policy goals is overstated. |
| Keywords: | Causality; Policy evaluations; Energy consumption; Carbon dioxide emissions; Economic growth; Environmental Kuznets curve. |
| JEL: | C50 Q54 Q43 |
| Date: | 2011–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31397&r=env |
| By: | Jonah Busch (Conservation International, Arlington, VA); Ruben Lubowski (Environmental Defense Fund, Washington, DC); Fabiano Godoy (Conservation International, Arlington, VA); Marc Steininger (Conservation International, Arlington, VA); Arief Anshory Yusuf (Department of Economics, Padjadjaran University); Kemen Austin (World Resources Institute, Washington, DC); Jenny Hewson (Conservation International, Arlington, VA); Daniel Juhn (Conservation International, Arlington, VA); Muhammad Farid (Conservation International, Jakarta, Indonesia); Frederick Boltz (Conservation International, Arlington, VA) |
| Abstract: | We estimate the impacts that alternative national and sub-national economic incentive structures for reducing emissions from deforestation (REDD+) in Indonesia would have had on greenhouse gas emissions and national and local revenue if they had been in place from 2000-2005. The impact of carbon payments on deforestation is calibrated econometrically from the pattern of observed deforestation and spatial variation in the benefits and costs of converting land to agriculture over that time period. We estimate that at an international carbon price of $10/tCO2e, a “basic voluntary incentive structure” modeled after a traditional payment-for-ecosystem-services (PES) program would have reduced emissions nationally by 62 MtCO2e/yr, or 8% below the without-REDD+ reference scenario (95% CI: 45-76 MtCO2e/yr; 6-9%), while generating a programmatic budget shortfall. By making four policy improvements—paying for net emission reductions at the scale of an entire district rather than site-by-site, paying for reductions relative to estimated business-as-usual levels rather than historical levels, sharing a portion of district-level revenues with the national government, and sharing a portion of the national government’s responsibility for costs with districts—an “improved voluntary incentive structure” would have reduced emissions by 175 MtCO2e/yr, or 22% below the reference scenario (95% CI: 136-207 MtCO2e/yr; 17-26%), while generating a programmatic budget surplus. A “regulatory incentive structure” such as a cap-and-trade or symmetric tax-and-subsidy program would have reduced emissions by 211/yr, or 26% below the reference scenario (95% CI: 163-247 MtCO2e/yr; 20-31%), and would not have required accurate predictions of business-as-usual emissions to guarantee a programmatic budget surplus. |
| Keywords: | Climate change, land-use change, REDD+, reference levels, economic incentives |
| JEL: | Q20 Q23 Q50 Q54 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:unp:wpaper:201105&r=env |
| By: | Patrick Withey; G. Cornelis van Kooten |
| Abstract: | This study examines the impact of climate change on land use in the Prairie Pothole Region of Western Canada, with particular emphasis on how climate change will impact wetlands. A multi-region Positive Mathematical Programming model calibrates land use in the area to observed acreage in 2006. Policy simulations for both climate effects as well as the effects of biofuel policies determine how climate change will affect land use and wetlands. Given that the model calibrates to observed acreage, the policies provide a realistic view of how land use might change from current levels, given the effects of climate change. Results indicate that climate change could decrease wetlands in this area by as much as 50 percent. The effect will be very different depending on whether or not the social benefits of wetlands are considered, and the effects of climate change on wetlands are heterogeneous across the Prairie Provinces. |
| Keywords: | Positive mathematical programming; wetlands conservation; land use change; climate change; biofuels; Prairie pothole region |
| JEL: | C02 C63 Q15 Q54 Q57 Q24 Q25 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:rep:wpaper:2011-04&r=env |
| By: | Fell, Harrison (Resources for the Future); Burtraw, Dallas (Resources for the Future); Morgenstern, Richard (Resources for the Future); Palmer, Karen (Resources for the Future) |
| Abstract: | Current and proposed greenhouse gas cap-and-trade systems allow regulated entities to offset abatement requirements by paying unregulated entities to abate. These offsets from unregulated entities are believed to contain system costs and stabilize allowance prices. However, the supply of offsets is highly uncertain and may be correlated with other sources of uncertainty in emissions trading systems. This paper presents a model that incorporates both uncertainties in the supply of offsets and in abatement costs. We numerically solve a dynamic stochastic model, with parameters relevant to the U.S. climate debate, under a variety of parameter settings, including a system that includes allowance price controls, risk aversion, and competitive offset purchasing. We find that as uncertainty in offsets and uncertainty in abatement costs become more negatively correlated, expected abatement plus offset purchase costs increase, as does the variability in allowance prices and emissions from the regulated sector. These results are amplified with risk sensitivity, larger annual offset limits, and competitive offset purchasing. Imposing an allowance price collar substantially mitigates cost increases as well as the variability in prices, while roughly maintaining expected environmental outcomes. In contrast with previous literature we find a collar may also mitigate emissions variability. |
| Keywords: | climate change, offsets, cap-and-trade, price collars, stochastic dynamic programming |
| JEL: | Q54 Q58 C61 |
| Date: | 2011–06–09 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-01-rev&r=env |
| By: | Karpas, Eric (Stanford University); Kerr, Suzi (Motu Economic and Public Policy Research) |
| Abstract: | New Zealand is the first country to implement a Greenhouse Gas Emissions Trading Scheme (ETS) that includes a forestry component as part of its contribution to global climate mitigation and as a strategy for compliance with the international climate change agreement the Kyoto Protocol. The goal of this paper is to provide information o forestry’s role in the New Zealand ETS such that a foreign policymaker will be able to understand the intricacies and issues of the New Zealand system and be able to apply this knowledge to the design of his or her own ETS. This paper also aims to provide useful documentation of the system as it stands in 2010 for the New Zealand Parliament to use in future reviews of the system. The paper first provides a brief outline of the role of forestry in New Zealand’s ETS, including the reasons for its inclusion in the greater system and the rules by which forestry operates within the system. This paper then analyses these rules, indicating the reasons behind the inclusion of certain provisions where the reasoning may not be immediately clear. Finally, this paper provides both quantitative and qualitative data on how well the system is working so far, whether the system is operating as predicted, and why any discrepancies between predicted and actual outcomes arise. |
| Keywords: | Forestry; emissions trading; carbon trading; climate change; climate change mitigation; government policy; New Zealand |
| JEL: | Q23 Q54 Q58 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:11_09&r=env |
| By: | Carsten Helm (Department of Economics, University of Oldenburg); Franz Wirl (University of Vienna, Center of Business Studies) |
| Abstract: | We consider how one party can induce another party to join an inter- national emission compact given private information. Due to multilateral externalities the principal uses her own emissions besides subsidies to in- centivize the agent. This leads to a number of non-standard features: Optimal contracts can include a boundary part, which is not a copy of the no contract outcome. Compared to this, a contract can increase emis- sions of the principal for ine¢ cient types, and reduce his payo¤ for e¢ cient types. Subsidies can be constant or even decreasing and turn negative, i.e., the agent reduces emissions and pays the principal. |
| Keywords: | private information, multilateral externalities, mecha- nism design, restricted contracts, environmental agreements |
| JEL: | D82 Q54 H87 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:old:wpaper:336&r=env |
| By: | Wilfried Rickels |
| Abstract: | I investigate the optimal role of carbon sequestration for mitigation in the presence of a ceiling on atmospheric carbon concentration and consider aspects that have so far only been analyzed in the context of a damage function to measure the consequences of climate change for society. I assume extraction costs to be stock-dependent, replace the proportional decay description of the global carbon cycle by a two-box model, investigate the differences resulting from linear versus convex sequestration costs, and consider oceanic instead of geological carbon storage. Using a two-box model allows the non-renewable aspects of the global carbon cycle to be accounted for and implies that carbon emissions have to decline at the ceiling due to the ongoing saturation of the ocean with respect to anthropogenic carbon. Convex sequestration costs result in a continuous use of such a technology and allow the ceiling to be reached later than without sequestration, whereas linear sequestration costs result in a discontinuous use of such a technology and earlier reaching of the ceiling. Consequently, taking into the account the uncertainties in defining an appropriate ceiling, the policy recommendations with respect to carbon sequestration differ crucially according to the underlying assumptions of sequestration costs. Furthermore, the ocean might be a storage option for captured carbon, but even though its storage capacity is probably not scarce by itself, the ongoing saturation of the complete carbon cycle has to be taken into account |
| Keywords: | atmospheric ceiling, global carbon cycle, ocean sequestration |
| JEL: | Q30 Q54 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1702&r=env |
| By: | Michael Keen (International Monetary Fund); Christos Kotsogiannis (Department of Economics, University of Exeter) |
| Abstract: | This paper explores the role of trade instruments in globally efficient climate policies, focusing on the central issue of whether border tax adjustment (BTA) is warranted when carbon prices differ internationally. It shows that tariff policy has a role in easing cross-country distributional concerns that can make non-uniform carbon pricing efficient, and that Pareto-efficiency requires a form of BTA when carbon taxes in some countries are constrained, a special case being identified in which this has the simple structure envisaged in practical policy discussion. It also stresses—a point that has been overlooked in the policy debate—that the case for BTA depends critically on whether climate policies are pursued by carbon taxation or by cap-and-trade. |
| Keywords: | Environmental taxation; cap-and-trade; international trade; Pareto efficiency; border tax adjustments. |
| JEL: | H20 F18 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:exe:wpaper:1106&r=env |
| By: | Mercedes Beltrán-Esteve (Departamento de Economía Aplicada II. Universidad de Valencia); José A. Gómez-Limón (Departamento de Economía Agraria. Instituto Andaluz de Investigación y Formación Agraria y Pesquera. Córdoba); Andrés J. Picazo-Tadeo (Departamento de Economía Aplicada II. Universidad de Valencia) |
| Abstract: | This paper analyses the impact of the Agri-environmental Extensification Scheme for the Protection of Flora and Fauna (F&F Scheme) on the eco-efficiency of a sample of dryland farms in the Spanish region of Castile and Leon. We explore whether or not the production technology of the farms included in the F&F Scheme is more eco-efficient than the technology used by farms that are not included in the Scheme, employing Data Envelopment Analysis (DEA) and the program decomposition proposed by Charnes et al. (1981) to do so. The results obtained confirm the foregoing hypothesis, providing evidence that environmental pressures could be reduced if all farms adopted the F&F Scheme technology. Furthermore, shadow prices are used to assess the monetary value of the potential reduction in environmental pressures that farms could achieve by adopting the F&F Scheme. The results show that the average opportunity cost of the decrease in environmental pressures (€55.65/ha) is similar to the compensation received by farms included in the F&F Scheme. Nevertheless, bearing in mind the great diversity of farms, we recommend agricultural policymakers to use an auction system to award such environmental contracts. |
| Keywords: | Data Envelopment Analysis; economic-ecological efficiency; shadow prices; agri-environmental policy |
| JEL: | C61 D21 Q18 Q57 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1115&r=env |
| By: | Chloe Duvivier (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Hang Xiong (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I) |
| Abstract: | In this paper we study whether or not transboundary pollution problems exist in China. To do so, we estimate whether, within Hebei province, polluting firms are more likely to set up in border counties than in interior ones. For this purpose, we use the lists of polluting firms published annually by the Ministry of Environmental Protection of China and by the Environmental Protection Bureau of Hebei province. To ensure the robustness of our results, several measures of the variable of interest are constructed from GIS data. The estimations of a count-data model allow us to conclude that border counties are more attractive destinations for polluting firms than counties located within the province. Moreover, it appears that this effect has strengthened over time. |
| Keywords: | Transboundary pollution;firm location choice;environmental regulations;China |
| Date: | 2011–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00598592&r=env |
| By: | Chloe DUVIVIER; Hang XIONG |
| Abstract: | In this paper we study whether or not transboundary pollution problems exist in China. To do so, we estimate whether, within Hebei province, polluting firms are more likely to set up in border counties than in interior ones. For this purpose, we use the lists of polluting firms published annually by the Ministry of Environmental Protection of China and by the Environmental Protection Bureau of Hebei province. To ensure the robustness of our results, several measures of the variable of interest are constructed from GIS data. The estimations of a count-data model allow us to conclude that border counties are more attractive destinations for polluting firms than counties located within the province. Moreover, it appears that this effect has strengthened over time. |
| Keywords: | Transboundary pollution, firm location choice, environmental regulations, China |
| JEL: | Q56 Q01 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1264&r=env |
| By: | Reinhilde Veugelers |
| Abstract: | Development and deployment of clean-energy technologies is crucial if climate targets are to be met cost-effectively. The European Union already has a plan that deals with these issues: the Strategic Energy Technology Plan, which has become central to the achievement of the EU's ambitions. In a period of constrained public finances, if governments want to leverage the necessary private innovation for clean-energy technologies, they will have to provide well-designed time-consistent policies, reducing commercial and financial risk through a combination of consistent carbon pricing, regulations and public funding, which will have to give a sizable and consistent push to early-stage clean-energy technologies, with a clear exit strategy. But first and foremost, governments should establish a sufficiently high and long-term predictable carbon price. The design of the EU emissions trading system and the distribution of carbon allowances should take into account more explicitly its power to leverage innovation. A move to a 30 percent EU emissions reduction target, which would involve a tighter emissions cap and fewer allowances being auctioned, would result would result in a higher carbon price and provide greater incentives for innovation. |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polcon:561&r=env |
| By: | Shahbaz, Muhammad |
| Abstract: | The present aims to explore the relationship between financial instability and environmental degradation within multivariate framework using time series data for the period1972-2009 in case of Pakistan. The long run relationship is investigated by ARDL bounds testing approach to cointegration, and error correction method is applied to examine short sun dynamics. The stationarity properties of the variables are tested by applying Saikkonen and Lütkepohl (2002) structural break unit root test. Empirical evidence confirms the existence of long run relationship while financial instability increases environmental pollution in the country. |
| Keywords: | Financial Instability; Environment; Cointegration |
| JEL: | B22 |
| Date: | 2010–12–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31360&r=env |
| By: | Greaker, Mads (Dept. of Economics, University of Oslo); Hoel, Michael (Dept. of Economics, University of Oslo) |
| Abstract: | Since governments can influence the demand for a new abatement technology through their environmental policy, they may be able to expropriate innovations in new abatement technology ex post. This suggests that incentives for environmental R&D may be lower than the incentives for market goods R&D. This in turn may be used as an argument for environmental R&D getting more public support than other R&D. In this paper we systematically compare the incentives for environmental R&D with the incentives for market goods R&D. We find that the relationship might be the opposite: When the innovator is able to commit to a licence fee before environmental policy is resolved, incentives are always higher for environmental R&D than for market goods R&D. When the government sets its policy before or simultaneously with the innovator's choice of licence fee, incentives for environmental R&D may be higher or lower than for market goods R&D. |
| Keywords: | R&D; environmental R&D; innovations; endogenous technological change |
| JEL: | H23 O30 Q55 Q58 |
| Date: | 2011–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2011_015&r=env |
| By: | Jun Li (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - AgroParisTech) |
| Abstract: | How to sustain rapid economic and urban growth with minimised detriment to environment is a key challenge for sustainable development and climate change mitigation in developing countries, which face constraints of technical and financial resources scarcity as well as dearth of infrastructure governance capacity. This paper attempts to address this question by investigating the driving forces of transport demand and relevant policy measures that facilitate mitigating GHG emissions in the urban transport sector in Indian cities based on a critical review of the literature. Our overview of existing literature and international experiences suggests that it is critical to improve urban governance in transport infrastructure quality and develop efficient public transport, coupled with integrated land use/transport planning as well as economic instruments. This will allow Indian cities to embark on a sustainable growth pathway by decoupling transport services demand of GHG emissions in the longer term. Appropriate policy instruments need to be selected to reconcile the imperatives of economic and urban growth, aspiration to higher quality of life, improvements in social welfare, urban transportrelated energy consumption and GHG emissions mitigation target in Indian cities. |
| Keywords: | India, Urban transport, GHG mitigation |
| Date: | 2011–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00596587&r=env |
| By: | Vicente Esteve (Universidad de Valencia and Universidad de La Laguna, Spain); Cecilio Tamarit (Universidad de Valencia, Spain) |
| Abstract: | In this paper we consider the possibility that a linear cointegrated regression model with multiples structural changes would provide a better empirical description of the Spanish environmental Kuznets curve during the period 1857-2007. Our methodology is based on instability tests recently proposed in Kejriwal and Perron (2008, 2010) as well as the cointegration test in Arai and Kurozumi (2007) and Kejriwal (2008) developed to allow for a single or multiple breaks under the null hypothesis of cointegration, respectively. Overall, the results of the Kejriwal-Perron tests suggest a model with two breaks estimated at 1941 and 1967 and three regimes. The coefficient estimated between per capita CO2 and per-capita income (or long-run elasticity) in a two breaks model show a tendency to decrease over time. This implies that even if per capita CO2 consumption is monotonically rising in income, the "income elasticity" is less than one. |
| Keywords: | Environmental Kuznets curve; CO2 emissions; Cointegration; Multiple Structural Breaks |
| JEL: | C32 Q43 Q53 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1114&r=env |
| By: | Andries Richter (Wageningen University); Paulo A.L.D. Nunes (Marine Economics Research Programme, The Mediterranean Science Commission – CIESM, Principauté de Monaco, and Department of Agriculture and Natural Resources Economics – TESAF, University of Padova) |
| Abstract: | The objectives pursued by governments managing fisheries may include maximizing profits, minimizing the impact on the marine ecosystem, or securing employment, which all require adjusting the composition of the fishing fleet. We develop a management plan that can be adapted to those objectives and allows the regulator to compare the long-run profits between the various management options. We apply the model to the case of Northeast Arctic cod, and estimate the cost and harvesting functions of various vessel types, the demand function, and a biological model to provide key insights regarding the optimal management of this valuable fish species. |
| Keywords: | Built Coastal Environment, Natural Coastal Environment, Ecosystem Service Valuation, Geographic Information Systems, Mapping Ecosystem Values, Marine Biodiversity, Scaling up, Spatial Analysis, Spatial Economic Valuation, Value Transfer |
| JEL: | C53 Q26 Q57 R12 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.40&r=env |
| By: | Massimiliano Mazzanti; Anna Montini; Giovanni Marin |
| Abstract: | We integrate input output and NAMEA tables for Spain and Italy in 1995, 2000 and 2005, in order to address the hot policy issue of sustainable consumption and production. A comparison of a production and consumption perspective may have relevant policy implications. We deal with the domestic technology assumption and primarily the aggregation bias that may result when calculating indirect emission using different sector aggregation in the analyses (e.g. 16, 32, 50). Extended Input output analysis provides analyses of the emissions embodied in domestic consumption and domestic production by considering the structure of intermediate inputs and environmental efficiency in each production sector. Our empirical findings show that different sectoral aggregation significantly biases the amount of emissions both for the consumption and the production perspective, though differently in the two countries. Italy surprisingly show consumption/production ratios around or lower than one, but in line with some major work at EU level. Our results thus suggest that special attention must be paid when interpreting the EE-IOA of country estimated amounts of embodied emissions, both in domestic final demand and those directly associated with the production sectors when the sectoral aggregation level has a low definition as considered in some recent similar studies. |
| Keywords: | NAMEA; extended input output; sustainable consumption and production; aggregation bias; final demand |
| JEL: | Q53 Q56 D57 F18 |
| Date: | 2011–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:201108&r=env |
| By: | Thomas Murray; David Maddison; Katrin Rehdanz |
| Abstract: | Accounting for socioeconomic and demographic variables as well as country specific effects, households’ willingness to pay for changes in climate is revealed using European data on reported life satisfaction. Individuals located in areas with lower average levels of sunshine and higher average levels of relative humidity are less satisfied as are individuals in locations subject to significant seasonal variation in monthly mean temperatures and rain days. Ranking regions according to the preferred climates households appear strongly to favour the Mediterranean climate over the climate of Northern Europe |
| Keywords: | Life Satisfaction, Europe, Willingness to Pay, Climate, Climate Change |
| JEL: | C21 I31 Q51 Q54 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1694&r=env |
| By: | William K. Jaeger (Oregon State University); Thorsten M. Egelkraut (Oregon State University) |
| Abstract: | This paper examines biofuels from an economic perspective and evaluates the merits of promoting biofuel production in the context of the policies’ multiple objectives, life-cycle implications, pecuniary externalities, and other unintended consequences. The policy goals most often cited are to reduce fossil fuel use and to lower greenhouse gas emissions. But the presence of multiple objectives and various indirect effects complicates normative evaluation. To address some of these complicating factors, we look at several combinations of policy alternatives that achieve the same set of incremental gains along the two primary targeted policy dimensions, making it possible to compare the costs and cost-effectiveness of each combination of policies. For example, when this approach is applied to U.S.-produced biofuels, they are found to be 14 to 31 times as costly as alternatives like raising the gas tax or promoting energy efficiency improvements. The analysis also finds the scale of the potential contributions of biofuels to be extremely small in both the U.S. and EU. Mandated U.S. corn ethanol production for 2025 reduces U.S. petroleum input use by 1.75%, and would have negligible net effects on CO2 emissions; and although EU imports of Brazilian ethanol may look better given the high costs of other alternatives, this option is equivalent, at most, to a 1.20% reduction in EU gasoline consumption. |
| Keywords: | Biofuel, Biodiesel, Cost-Effectiveness, Indirect Land Use Change Effects, Net Energy, Multiple Objectives, Ethanol, Ghg |
| JEL: | Q42 Q48 Q54 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.37&r=env |
| By: | Mariam Camarero (Dpto. Economía. Universidad Jaume I); Juana Castillo (Dpto. Economía Aplicada II. Universidad de Valencia); Andrés J. Picazo-Tadeo (Dpto. Economía Aplicada II. Universidad de Valencia); Cecilio Tamarit (Dpto. Economía Aplicada II. Universidad de Valencia) |
| Abstract: | This paper assesses the convergence in eco-efficiency of a group of 22 OECD countries over the period 1980-2005. In doing so, three air-pollutants representing the impact on the environment of economic activities are considered, namely, carbon dioxide (CO2), nitrogen oxides (NOX) and sulphur oxides (SOX); furthermore, eco-efficiency scores at both country and air-pollutant-specific levels are computed using Data Envelopment Analysis techniques. Then, convergence is evaluated using the recent approach by Phillips and Sul (2007), which allows testing for the existence of convergence groups. First, we find that, with the exception of NOX emissions, eco-efficiency has improved over the period, the greatest progress corresponding to CO2 emissions. Second, Switzerland is the most eco-efficient country, followed by some Scandinavian economies such as Sweden, Norway, Iceland and Denmark. In contrast, European Mediterranean countries such as Portugal, Spain and Greece, in addition to Hungary, Turkey, Canada or the US, are among the worst performers. Finally, we find that both the most eco-efficient countries and the worst-performing countries also tend to form clubs of convergence among them. |
| Keywords: | Eco-efficiency; Air pollutants; Convergence clubs; OECD |
| JEL: | C15 C22 C61 F15 Q56 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1116&r=env |
| By: | Manuel Frondel; Steffen Lohmann |
| Abstract: | Since September 2009, Regulation 244/2009 of the European Commission enforces the gradual phase-out of incandescent light bulbs. As of September 2012, only energyefficient lighting sources will be allowed for sale. Among these are halogen light bulbs, light-emitting diodes (LED), or compact fluorescent light bulbs? often referred to as energy-saving light bulbs. The Commission’s justification for the phase-out of conventional light bulbs maintains that a reduction in the electricity consumed will not only lead to lower energy cost for private households and industrial consumers, but at the same time lead to a decrease in greenhouse gas emissions. This article discusses possible reasons for the slow market diffusion of energy-saving light bulbs and shows that the investment in energy-efficient light bulbs does not necessarily lead to significant cost reductions. Drawing on some illustrative examples, we demonstrate that the use of cheaper incandescent bulbs instead of energy-saving light bulbs can be economically rational in cases of rather low usage times, in which the higher initial purchasing price might only pay off after very long time spans. Furthermore, due to the coexistence with the European Emissions Trading Scheme (ETS), this regulation attains no additional emission reductions beyond those achieved by the ETS alone. We thus conclude that the general ban of incandescent light bulbs is inappropriate and should be abolished by the Commission. |
| Keywords: | Energy efficiency; rebound effect |
| JEL: | D12 Q41 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0245&r=env |
| By: | G. Cornelis van Kooten |
| Keywords: | Feed-in tariffs, renewable energy |
| JEL: | Q20 Q40 Q42 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:rep:wpaper:2011-02&r=env |
| By: | Anca D. Cristea; David Hummels; Laura Puzzello; Misak G. Avetisyan |
| Abstract: | We collect extensive data on worldwide trade by transportation mode and use this to provide detailed comparisons of the greenhouse gas emissions associated with output versus international transportation of traded goods. International transport is responsible for 33 percent of world-wide trade-related emissions, and over 75 percent of emissions for major manufacturing categories like machinery, electronics and transport equipment. US exports intensively make use of air cargo; as a result two-thirds of its export-related emissions are due to international transport, and US exports by themselves generate a third of transport emissions worldwide. Inclusion of transport dramatically changes the ranking of countries by emission intensity. US production emissions per dollar of exports are 16 percent below the world average, but once we include transport US emissions per dollar exported are 59 percent above the world average. We use our data to systematically investigate whether trade inclusive of transport can lower emissions. In one-quarter of cases, the difference in output emissions is more than enough to compensate for the emissions cost of transport. Finally, we examine how likely patterns of trade growth will affect modal use and emissions. Full liberalization of tariffs and GDP growth concentrated in China and India lead to transport emissions growing much faster than the value of trade, due to trade shifting toward distant trading partners. Emissions growth from growing GDP dwarfs any growth from tariff liberalization. |
| JEL: | F17 F18 Q56 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17117&r=env |
| By: | Andrea Ghermandi (Department of Economics, Ca’ Foscari University of Venice); Paulo A.L.D. Nunes (Marine Economics Research Programme, The Mediterranean Science Commission – CIESM, Principauté de Monaco, and Department of Agriculture and Natural Resources Economics – TESAF, University of Padova) |
| Abstract: | The welfare dimension of the recreational services provided by global coastal ecosystems is examined through a meta-analytical regression-based valuation approach. First, we construct a global, state-of-the-art database of stated and revealed preference estimates on coastal recreation, which includes also the grey literature and with the latest entry updated to February 2010. Second, the profile of each of the 253 observations of our dataset, which correspond to individual value estimates, was further enriched with characteristics of the built coastal environment (site accessibility, anthropogenic pressure, level of human development), characteristics of the natural coastal environment (presence of protected area, type of ecosystem, and marine biodiversity richness), geo-climatic factors (temperature and precipitation), as well as sociopolitical characteristics, such as the political stability index. In this context, the proposed meta-analytical valuation exercise explores the spatially explicit dimension of the values building upon Geographic Information System (GIS) tools. GIS are relied upon for the spatial characterization of the valued ecosystems, the determination of the role of spatially explicit variables in the meta analytical value transfer model, as well as for the value transfer exercise. The GIS characterization is observed to be extremely significant in explaining the spatial diversity of the estimates values and underlying explanatory factors. The resulting integrated valuation framework constitutes a worldwide première and it results in the first global map of the recreational value of coastal ecosystems. We argue that the presented global map may play an important role in studying the prioritization for the conservation of coastal areas from a social perspective. |
| Keywords: | Built Coastal Environment, Natural Coastal Environment, Ecosystem Service Valuation, Geographic Information Systems, Mapping Ecosystem Values, Marine Biodiversity, Scaling up, Spatial Analysis, Spatial Economic Valuation, Value Transfer |
| JEL: | C53 Q26 Q57 R12 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.39&r=env |
| By: | Olga Kiuila (Faculty of Economic Sciences, University of Warsaw); Thomas F. Rutherford (Centre for Energy Policy and Economics, ETH Zurich) |
| Abstract: | Top-down models usually include piecewise-smooth functions to describe marginal cost curves, while bottom-up models describe those curves with a step function. When a bottom-up cost curve is available, we can explicitly represent this curve with a top-down model in order to replicate its shape instead of arbitrary assumptions. We propose methods to approximate a piecewise function from a step function using constant elasticity of substitution technologies. Specifically, we consider a pollution abatement sector and calibrate the parameters of the abatement function in order to be able properly to assess the economic effects of an environmental policy. Our methodology can be applied to any sector characterized by decreasing returns to scale technologies. We conclude that the elasticities of substitution need not be estimated only on the basis of historical data, but can be precisely calibrated on the basis of engineering estimates of technology potential. |
| Keywords: | elasticity of substitution, calibration, abatement, top-down and bottom-up modeling |
| JEL: | D24 Q53 C60 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2011-12&r=env |
| By: | Edgardo Sica |
| Abstract: | In the last 20 years, the concept of ‘Sustainable Development’ (SD) has become very popular and wide spread in the world. In particular, the environmental dimension of SD asks for new ways to accomplish enhanced quality of life with reduced environmental impact. As a consequence, innovations that contribute to sustainable path ways through an improved environmental quality (the so-called ‘Sustainable Innovations’ - SI s) are facing a growing interest. The present study aims at contributing to the debate about innovation and SD, by focusing on the analysis of SIs from, respectively, the neoclassical and the evolutionary perspective. Whereas neoclassical theorists neoclassical theorists focus on the ‘double externality problem’ of SIs, on the one hand, and on the factors that influence the irimplementation, on the other, evolutionary approach analyses mainly radical technological changes thus stressing the need for a consideration of additional aspects ( in particular social and institutional ones) in the analysis of SIs. |
| Keywords: | Innovations, Sustainable Development, Neoclassical Theory, Evolutionary Approach |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ufg:qdsems:08-2010&r=env |
| By: | Kyriaki Remoundou (Department of International and European Economic Studies, Athens University of Economics and Business); Fikret Adaman (Bogaziçi University); Phoebe Koundouri (Department of International and European Economic Studies, Athens University of Economics and Business); Paulo A.L.D. Nunes (The Mediterranean Science Commission – CIESM, and Department of Agriculture and Natural Resources Economics – TESAF, University of Padova) |
| Abstract: | This paper uses a non-market valuation study to elicit consumers’ preferences for a marine restoration programme in the Black Sea aiming to reduce the level of public health risk from bathing and improve water quality and the overall level of marine biodiversity. In this context, we administer a stated choice experiment in coastal settlements in Ukraine and Turkey and employ two tax revenue reallocation schemes as payment vehicles. One proposes the financing of the marine restoration programme by the reduction of the public budget for renewable energy and the second by the reduction of the public budget on training for civil servants. We examine the stated preferences and the subsequently derived economic value estimates in the two treatments with the aim to investigate whether the trade-off implied by the funding scheme has implications for the valuation outcome. Results reveal that preferences and marginal rates of substitution between the non-price attributes under consideration differ significantly. In the civil servants’ budget reallocation scheme, the reallocation coefficient is positive, implying that ceteris paribus redistribution of public financial resources from this source is utility-enhancing. The magnitude of the results differs in the two considered countries mirroring their heterogeneity in political and cultural dimensions. |
| Keywords: | Non-Market Valuation; Stated Choice Experiment, Payment Vehicle, Tax Revenues Reallocation, Marine Resources, Black Sea, Marine Biodiversity, Developing Countries |
| JEL: | Q22 Q28 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.38&r=env |
| By: | Chaudhuri, Sarbajit; Mukhopadhyay, Ujjaini |
| Abstract: | The paper examines the linkages between foreign direct investment, informal sector and transfer of environmentally sound technology (EST) in a developing economy in terms of a three-sector, full-employment general equilibrium model with an informal sector that produces a non-traded input for the formal final good producing sector. The same input is produced by another division of the formal sector, which generates less pollution than the informal sector since the former uses a different type of capital that embodies EST. The formal sector has to pay a penalty in the form of a production tax for using the output of the excessively polluting informal sector. In this scenario, the analysis finds that foreign capital inflow in the formal sector may accentuate pollution, even if it involves transfer of EST. Secondly, there might exist a positive relationship between pollution and national income in the economy both in the presence and absence of transfer of EST. These results can at least question the desirability of transfer of EST and also give theoretical explanations behind the existence of a positively sloped segment in the Environmental Kuznets Curve. |
| Keywords: | Pollution; foreign capital; environmentally sound technology; informal sector; formal sector; Environmental Kuznets Curve; general equilibrium |
| JEL: | F18 O17 Q56 O33 |
| Date: | 2011–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31447&r=env |
| By: | Frédéric Reynes (VU University Amsterdam, IVM - Institute for Environmental Studies); Yasser Yeddir-Tamsamani (Observatoire Français des Conjonctures Économiques); Gaël Callonec (Agence de l'environnement et de la maîtrise de l'énergie) |
| Abstract: | This paper presents the structure and the main properties of Three-ME. This new model of the French economy has been especially designed to evaluate the medium and long term impact of environmental and energy policies at the macroeconomic and sector levels. To do so Three-ME combines two important features. Firstly, it has the main characteristics of neo-Keynesian models by assuming a slow adjustment of effective quantities and prices to their notional level. Compared to standard multi-sectors CGEM, this has the advantage to allow for the existence of under-optimum equilibriums such as the presence of involuntary unemployment. Secondly, production and consumption structures are represented with a generalized CES function which allows for the elasticity of substitution to differ between each couple of inputs or goods. This is an improvement compared to the standard approach that uses nested CES functions which has the disadvantage to impose a common elasticity of substitution between the goods located in two different nested structures. |
| Keywords: | neo-Keynesian model, macroeconomic modeling, energy and environmental policy modeling |
| JEL: | E12 E17 E27 E37 E47 D57 D58 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1110&r=env |
| By: | Eckert, Heather (University of Alberta, Department of Economics); Eckert, Andrew (University of Alberta, Department of Economics) |
| Abstract: | The number of gasoline stations in Canada fell by 40 percent between 1989 and 2000. Many demand and competition related explanations have been offered for this rationalization, while industry sources cite stiffer environmental regulations as a factor in station closures. In the late 1980s and early 1990s most Canadian provinces adopted regulations requiring that unprotected petroleum storage tanks be upgraded or replaced according to a schedule based on the age of the tank and that nearby unprotected tanks also be upgraded or removed. In this paper, we exploit provincial differences in the timing of these regulations to examine the role of upgrade and removal regulations on the timing and degree of station shutdown in 12 cities across the country. |
| Keywords: | petroleum storage; rationalization; retail gasoline; underground storage tanks; environmental regulations |
| JEL: | K20 L81 Q58 |
| Date: | 2011–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2011_007&r=env |
| By: | Fletcher, Denise; Knol, Erik; Janicki, Marcin |
| Abstract: | The Energy2B Project is an EU funded innovation stimulating initiative that targets university students at five universities across Europe and encourages them to practice environmental entrepreneurship and turn energy innovation ideas into new business start-ups. The project is administered by a European consortium of commercial and academic co-ordinators through an online web platform. The web-platform is used to develop an energy infrastructure that connects diverse stakeholders (including industrial actors, energy bodies and field experts) through the administration of local idea challenges and energy innovation competitions at a local and European level. In this paper, we discuss how the project contributes to the practice of environmental entrepreneurship and explain the projects theoretical significance as a case of institutional entrepreneurship. We also outline the academic deliverables of the project in terms of individual case studies and a survey that measures the project’s effectiveness in accelerating the practice of environmental entrepreneurship. First results are available in the second quarter of 2011. |
| Keywords: | environmental entrepreneurship; sustainable entrepreneurship; institutional entrepreneurship |
| JEL: | I21 Q01 L26 |
| Date: | 2010–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31361&r=env |
| By: | Will Gans (AREC, University of Maryland); Anna Alberini (AREC, University of Maryland and Fondazione Eni Enrico Mattei); Alberto Longo (Gibson Institute for Land Food and Environment, UKCRC Centre of Excellence for Public Health (NI), School of Biological Sciences, Queen‘s University) |
| Abstract: | Using a unique set of data and exploiting a large-scale natural experiment, we estimate the effect of real-time usage information on residential electricity consumption in Northern Ireland. Starting in April 2002, the utility replaced prepayment meters with “smart” meters that allow the consumer to track usage in real-time. We rely on this event, account for the endogeneity of price and plan with consumption through a plan selection correction term, and find that the provision of information is associated with a decline in electricity consumption of up to 20%. We find that the reduction is robust to different specifications, selection-bias correction methods and subsamples of the original data. At £15-17 per tonne of CO2e (2009£), the smart meter program delivers cost-effective reductions in carbon dioxide emissions. |
| Keywords: | Residential Energy, Electricity Demand, Feedback, Smart Meter, Information |
| JEL: | Q40 Q41 D8 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.36&r=env |
| By: | Theophile Azomahou (Maastricht University - univ. Maastricht); Raouf Boucekkine (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579); Phu Nguyen-Van (BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université de Strasbourg - Université Nancy II) |
| Abstract: | We develop a general equilibrium vintage capital model with energy-saving technological progress and an explicit energy sector to study the impact of investment subsidies on equilibrium investment and output. Energy and capital are assumed to be complementary in the production process. New machines are less energy consuming and scrapping is endogenous. Two polar market structures are considered for the energy market, free entry and natural monopoly. First, it is shown that investment subsidies may induce a larger equilibrium investment into cleaner technologies either under free entry or natural monopoly. However in the latter case, this happens if and only if the average cost is decreasing fast enough. Second, larger diffusion rates do not necessarily mean lower energy consumption at equilibrium, which may explain certain empirical observations. |
| Keywords: | Energy-saving technological progress; vintage capital; market imperfections; natural monopoly; investment |
| Date: | 2011–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00599092&r=env |
| By: | Sébastien ROUILLON (GREThA) |
| Abstract: | We give a characterization, in feedback form, of the optimal extraction path of an exhaustible resource, which holds for a large class of models. |
| Keywords: | Hotelling rule; exhaustible resource; dynamic programming |
| JEL: | Q30 C61 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2011-19&r=env |
| By: | Manuel Frondel |
| Abstract: | Estimating the degree of substitution between energy and non-energy inputs is key for any evaluation of environmental and energy policies. Yet, given the large variety of substitution elasticities, the central question arises as to which measure would be most appropriate. Apparently, ALLEN’s elasticities of substitution have been the most-used measures in applied production analysis. In line with Frondel (2004), this paper argues that cross-price elasticities are preferable for many practical purposes. This conclusion is based on a survey of classical substitution measures, such as those from ALLEN, MORISHIMA, and MCFADDEN. The survey also highlights the fact that cross-price elasticities are their essential ingredients. |
| Keywords: | Cross-price elasticities; Allen partial elasticities; Morishima elasticities |
| JEL: | C3 D2 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0256&r=env |
| By: | Graziano Abrate (University of Eastern Piedmont); Fabrizio Erbetta (University of Eastern Piedmont); Giovanni Fraquelli (University of Eastern Piedmont); Davide Vannoni (Department of Economics and Public Finance "G. Prato", University of Torino) |
| Abstract: | The paper investigates the costs of waste disposal and recycling services by using a well-behaved Composite cost function model. Our estimates on a unique sample of more than 500 Italian municipalities highlight that the refuse collection technology exhibits constant returns to scale as well as scope economies between disposal and recycling. As far as the size of the municipality increases, scope economies rise up to 14%, but they are accompanied with overall diseconomies of scale. Our findings suggest that, on the one hand, joint management of disposal and recycling should be encouraged, and, on the other hand, that strategies aimed at increasing the share of waste sent for recycling would not imply a considerable increase in total costs. |
| Keywords: | Solid waste, recycling, cost functions |
| JEL: | D24 H42 L33 L99 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:tur:wpaper:20&r=env |
| By: | Jesús Fernández-Huertas Moraga (FEDEA and IAE (CSIC)); Hillel Rapoport (Center for International Development, Harvard University;Bar-Ilan University; and EQUIPPE, University of Lille) |
| Abstract: | International migration is maybe the single most effective way to alleviate poverty a global level. When a given host country allows more immigrants in, this creates costs and benefits for that particular country as well as a positive externality for all those (individuals and governments) who care about world poverty. This implies that the existing international migration regime is inefficient as it fails to internalize such externality. In addition, host countries quite often restrict immigration due to its apparently unbearable social and political costs. However these costs are never measured and made comparable across countries. In this paper we first discuss theoretically how tradable immigration quotas (TIQs) can reveal information on such costs and, once coupled with a matching mechanism taking into account migrants’preferences, generate substantial welfare gains for all the parties involved. We then propose two potential applications: a market for the resettlement of international (e.g., climate change) refugees, and an extension of the US diversity lottery to a larger set of host countries and other immigration targets. Both applications are seen as possible precursors to a full implementation of a TIQs system. |
| Keywords: | immigration, immigration policy, tradable quotas, refugees, climate change, international public goods |
| JEL: | F22 F5 H87 I3 K33 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:201113&r=env |