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on Environmental Economics |
| By: | Gregmar Galinato; Suzette Galinato (School of Economic Sciences, Washington State University) |
| Abstract: | This article formulates a structural empirical model that measures the short run and long run effect of economic growth, political stability and corruption control on carbon dioxide (CO2) emissions from deforestation. Income has a negative effect on forest cover in the short run but it does not have any long run effect. In contrast, political stability and corruption have relatively smaller effects on forest cover in the short run but they have lingering long run effects. We derive a U-shaped forest-income curve where political stability and corruption control do not significantly affect the income turning point but both variables shift the curve up or down. The resulting CO2 emission-income curve is downward sloping and is based on changes in the levels of variables affecting forest cover. Increased political stability flattens the CO2 emissions-income curve leading to smaller changes of CO2 emissions per unit change in income. |
| Keywords: | Deforestation, Environmental Kuznets Curve, Political stability |
| JEL: | O10 Q23 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:wsu:wpaper:galinato-5&r=env |
| By: | Sukanya Ghosh (Head of Management Science Department, Meghnad Saha Institute of Technology, Kolkata, India); Prof. Dr. P.P. Sengupta (Department of Humanities & Social Science, National Institute of Technology, Durgapur, India) |
| Abstract: | Energy is an important input for economic development, but world’s energy supply is still largely based on fossil fuels and nuclear power. These sources of energy will not last forever and have proved to be contributors to our environmental problems. India’s energy demand is increasing with the robust growth in economy. The country is heavily dependent on fossil sources of energy for most of its demand. However, power generation through fossil fuels raises serious concern due to the depletion of resources and environmental pollution. Hence the challenge is to meet the energy needs in a sustainable manner. In order to insulate itself from any future supply disruption and price shocks of fossil fuels and to achieve energy security and also to meet global climate change objectives, renewable energy appears to be the most plausible option for the country to rely on. This has necessitated the country to start aggressively pursuing alternative energy sources like, solar, wind, biofuels, small hydro and more. Unfortunately India does not appear to be prepared for change over to such alternative sources due to absence of requisite technology, equipment, knowledge & investment. Therefore, present researchers have developed a model based on Auto Regressive Integrated Moving Average (ARIMA) to depict the future prospects of Indian power sector and have tried to develop some strategic recommendations from Indian point of view for gradual change over of power generation from thermal to renewable energy production through generation and maximizing the utilisation of renewable energy for sustainable development in the perspective of global environmental crisis |
| Keywords: | Fossil fuels, Renewable energy, ARIMA, Sustainable development, Environmental crisis |
| JEL: | M0 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cms:1icm11:2011-002-091&r=env |
| By: | Jotzo, Frank |
| Abstract: | Following the Copenhagen climate Accord, developed and developing countries have pledged to cut their greenhouse gas emissions, emissions intensity or emissions relative to baseline. This analysis puts the targets for the major countries on a common footing, and compares them across different metrics. Targeted changes in absolute emissions differ markedly between countries, with continued strong increases in some developing countries but significant decreases in others including Indonesia, Brazil and South Africa, provided reasonable baseline projections are used. Differences are smaller when emissions are expressed in per capita terms. Reductions in emissions intensity of economies implicit in the targets are remarkably similar across developed and developing countries, with Chinaâs emissions intensity target spanning almost the same range as the implicit intensity reductions in the United States, EU, Japan, Australia and Canada. Targeted deviations from business-as-usual are also remarkably similar across countries, and the majority of total global reductions relative to baselines may originate from China and other developing countries. The findings suggest that targets for most major countries are broadly compatible in important metrics, and that while the overall global ambition falls short of a two degree trajectory, the targets by key developing countries including China can be considered commensurate in the context of what developed countries have pledged. |
| Keywords: | Copenhagen Accord, emissions targets, emissions intensity, business-as-usual, cross-country comparison., Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107577&r=env |
| By: | Ian W.H. Parry |
| Abstract: | Fiscal instruments are potentially among the most effective, and cost-effective, options for addressing externalities related to poor air quality, urban road congestion, and greenhouse gases. This paper takes a case study, focused on Mauritius (a pioneer in the use of green taxes) to illustrate how existing taxes, especially on fuels and vehicles, could be reformed to better address these externalities. We discuss, in particular, an explicit carbon tax; a variety of options for reforming vehicle taxes to meet environmental, equity, and revenue objectives; and a progressive transition to usage-based vehicle taxes to address congestion |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/124&r=env |
| By: | Dobes, Leo |
| Abstract: | A factor common to all adaptation measures is the uncertainty that is the hallmark of climate change. The timing, intensity and location of climate change impacts is not known to any degree of precision. Because most deterministic analyses and policy prescriptions ignore this uncertainty, their recommendations are likely to waste community resources. Except by chance, adaptation measures will either be over-engineered, or they will be inadequate and result in harm. Applying real options thinking allows an incremental and flexible approach. Adaptation measures are implemented only as better knowledge becomes available over time. Several examples are given of real options in the Mekong Delta, with a comparison of net present values of two housing alternatives. It is essential to undertake net present value calculations when comparing different projects to ensure that the value of any options is weighed against other costs and benefits. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107574&r=env |
| By: | Restiani, Phillia; Betz, Regina |
| Abstract: | This paper investigates the behavioural implications of penalty designs on market performance using an experimental method. Three penalty types and two penalty levels are enforced in a laboratory permit market with auctioning, including the Australian Carbon Pollution Reduction Scheme proposed design of tying the penalty rate to the auction price. Compliance strategies are limited to undertaking irreversible abatement investment decisions or buying permits. We aim to assess how penalty design under the presence of subjectsâ risk preferences might affect compliance incentives, permit price discovery, and efficiency. In contrast to theory, we find that penalty levels serve as a focal point that indicates compliance costs and affects compliance strategies. The make-good provision penalty provides stronger compliance incentives than the other penalty types. However, the theory holds with regard to permit price discovery, as we find no evidence of the effect of penalty design on auction price. Interestingly, risk preference does not directly affect compliance decision, but it does influence price discovery, which evidently is a significant factor in compliance decisions as well as efficiency. Most importantly, a trade-off between investment incentives and efficiency is observed. |
| Keywords: | emissions trading, penalty design, experiment, auction, irreversible investment, abatement, compliance, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107586&r=env |
| By: | Hans Gersbach (ETH Zurich, Switzerland); Noemi Hummel (ETH Zurich, Switzerland); Ralph Winkler (University of Bern, Switzerland) |
| Abstract: | We examine a global refunding scheme for mitigating climate change. Countries pay an initial fee into a global fund that is invested in long-run assets. In each period, part of the fund is distributed among the participating countries in relation to the emission reductions they have achieved in this period. We identify two possible types of sustainable treaty. A first-best sustainable treaty involves varying amounts of refunded wealth and a minimal amount of initial fees inducing socially desirable abatement efforts in each period. In a secondbest sustainable treaty with only two parameters – optimally selected initial fees and constant refunds equal to the interest earned on the fund – the stock of greenhouse gases converges to the socially optimal stock. Finally, we suggest ways for countries to raise money for the payment of initial fees that are neutral to tax payers and international capital markets. |
| Keywords: | climate change mitigation, refunding scheme, international agreements, sustainable treaty |
| JEL: | Q54 H23 H41 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:11-146&r=env |
| By: | Windle, Jill; Rolfe, John |
| Abstract: | Key policy issues relating to protection of the Great Barrier Reef from pollutants generated by agriculture are to identify when measures to improve water quality generate benefits to society that outweigh the costs of reducing pollutants. The research reported in this paper makes a key contribution in several key ways. First, it uses the improved science understanding about the links between management changes and reef health to bring together the analysis of costs and benefits of marginal changes, helping to demonstrate the appropriate way of addressing policy questions relating to reef protection. Second, it uses the scientific relationships to frame a choice experiment to value the benefits of improved reef health, and links improvements explicitly to changes in âwater quality unitsâ. Third, the research demonstrates how protection values are consistent across a broader population, with some limited evidence of distance effects. Fourth, the information on marginal costs and benefits that are reported provide policy makers with key information to help improve management decisions. The results indicate that while there is potential for water quality improvements to generate net benefits, high cost water quality improvements are generally uneconomic. One implication for policy makers is that cost thresholds for key pollutants should be set to avoid more expensive water quality proposals being selected |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107583&r=env |
| By: | Gillespie, Robert; Bennett, Jeff |
| Abstract: | Waste policy in Australia has a strong focus on kerbside recycling. This has a range of costs and benefits to the community, including non-market benefits. However, in Australia, there has been little investigation of household willingness to pay for kerbside recycling. This paper used mixed logit choice modelling to estimate the willingness to pay of households in Brisbane, Australia for kerbside waste collection services including kerbside recycling. It was found that households in Brisbane have a positive and significant willingness to pay of $131.49 per annum for fortnightly kerbside recycling and would be willing to pay an additional $18.30 to increase the frequency of this service to weekly. The utility of respondents was, however, found to decline by $34.18 per year if general waste collection increased from weekly to twice a week. Based on the assumptions used in this study it would appear that the willingness to pay for kerbside recycling exceeds the net financial costs of this service, suggesting that the scheme is economically efficient. However, the reported economic values for recycling may overstate the communityâs true willingness to pay if household responses to the choice questions were confounded by their underlying perceptions about the environmental and resource sustainability benefits of recycling. |
| Keywords: | Environmental Economics and Policy, Research Methods/ Statistical Methods, |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107805&r=env |
| By: | Greyling, Tertius; Bennett, Jeff |
| Abstract: | The Booroolong frog project in the Namoi Catchment represents an environmental investment to protect the species and around 10.7 kilometres of its habitat in the catchment. The projectâs benefit-cost ratio (BCR) of 8.6 indicates that the benefits outweigh the costs by a significant margin. The measures introduced by landholders, at relatively low cost, should therefore result in a significant return on investment upon project completion in 10 years time. The benefits are estimated using a choice modelling study which was recently developed for the valuation of investment in natural resource management in the Namoi Catchment. As this is a largely ex ante cost-benefit analysis, the BCR is subject to uncertainty associated with assumptions which had to be made for some variables. However, sensitivity analysis indicates that the project benefits outweigh the costs by a significant margin even under conservative conditions. |
| Keywords: | Cost-benefit analysis, Benefit-cost ratio, Choice modelling, Booroolong Frog, Namoi Catchment, Environmental Economics and Policy, Research Methods/ Statistical Methods, |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107851&r=env |
| By: | LanFen Chu (Institute of Economics, Academia Sinica, Taipei, Taiwan.); Michael McAleer (Econometrisch Instituut (Econometric Institute), Faculteit der Economische Wetenschappen (Erasmus School of Economics), Erasmus Universiteit, Tinbergen Instituut (Tinbergen Institute).); Chi-Chung Chen (Department of Applied Economics, National Chung Hsing University) |
| Abstract: | The El Niños Southern Oscillations (ENSO) is a periodical phenomenon of climatic interannual variability, which could be measured through either the Southern Oscillation Index (SOI) or the Sea Surface Temperature (SST) Index. The main purpose of this paper is to analyze these two indexes in order to capture the volatility inherent in ENSO. The empirical results show that both the ARMA(1,1)-GARCH(1,1) and ARMA(3,2)-GJR(1,1) models are suitable for modelling ENSO volatility accurately. The empirical results show that 1998 is a turning point, which indicates that the ENSO strength has increased since 1998. Moreover, the increasing ENSO strength is due to the increase in greenhouse gas emissions. The ENSO strengths for SST are predicted for the year 2030 to increase from 29.62% to 81.5% if global CO2 emissions increase by 40% to 110%, respectively. This indicates that we will be faced with an even stronger El Nino or La Nina in the future if global greenhouse gas emissions continue to increase unabated. |
| Keywords: | ENSO, SOI, SOT, Greenhouse Gas Emissions, Volatility, GARCH, GJR, EGARCH. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doicae:1121&r=env |
| By: | James Roumasset (Department of Economics, University of Hawaii at Manoa and University of Hawai‘i Economic Research Organization); Christopher Wada (University of Hawai‘i Economic Research Organization) |
| Abstract: | Optimal recycling of minerals can be thought of as an integral part of the theory of the mine. In this paper, we consider the role that wastewater recycling plays in the optimal extraction of groundwater, a renewable resource. We develop a two-sector dynamic optimization model to solve for the optimal trajectories of groundwater extraction and water recycling. For the case of spatially increasing recycling costs, recycled water serves as a supplemental resource in transition to the steady state. For constant unit recycling cost, recycled wastewater is eventually used as a sector-specific backstop for agricultural users, while desalination supplements household groundwater in the steady state. In both cases, recycling water increases welfare by shifting demand away from the aquifer, thus delaying implementation of costly desalination. The model provides guidance on when and how much to develop resource alternatives. |
| Keywords: | Renewable resources, dynamic optimization, groundwater allocation, wastewater reuse, recycling, reclamation, water quality |
| JEL: | Q25 Q28 C6 |
| Date: | 2011–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201105&r=env |
| By: | Gillespie, Robert; Bennett, Jeff |
| Abstract: | Australian governments are committed to the expansion of marine protected areas (MPAs) in Australian waters and have already established over 200 MPAs. However, this policy direction has a range of costs and benefits for the community which have largely remained unquantified. One of the main benefits of establishing MPAs are the non use values that the community for the protection of marine biodiversity. This study uses a dichotomous choice contingent valuation format with follow-up open-ended willingness to pay question to estimate these non use values for the establishment of MPAs in South-west Marine Region of Australia. It was found that on average Australian households would be WTP $104 for the establishment of MPAs that cover 10% of the South-west Marine Region. Aggregating this mean WTP estimate to 50% of the population of Australian households gives an aggregate WTP of $400M. However, whether the establishment of MPAs in the South-west Marine Region is economically efficient requires a consideration of all the potential costs and benefits. Other relevant costs and benefits for inclusion in a benefit cost analysis would include those associated with displacement of commercial and non-commercial uses, additional planning, compliance and monitoring costs as well as any predicted increases in commercial and non-commercial use values. If the net costs of establishing MPA over 10% of the South-west Marine Region are less than $400M, then the non-use benefits of establishing MPAs would exceed the other net costs and it would be considered to be economically efficient and desirable from a community welfare perspective. Given the difficulties of estimating precise WTP values from dichotomous choice data, any BCA of MPAs in the South-west Marine Region, incorporating the results of this study, should undertake sensitivity testing that includes the range of values reported including dichotomous choice and openended means to determine the robustness of BCA results to variations in the welfare estimate |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107582&r=env |
| By: | Restiani, Phillia; Betz, Regina |
| Abstract: | This paper employs a theoretical model to examine compliance incentives and market efficiency under three penalty types: the fixed penalty rate, which uses a constant marginal financial penalty; the make-good provision (quantity penalty), where each missing permit in the current period is to be offset with a ratio (restoration rate) in the following period; and a mixed penalty, which combines the two penalty types. Using a simple two-period model of firmâs profit maximisation, we analyse compliance decisions and the efficient penalty level under each penalty type. Firmsâ compliance strategies are modelled as an irreversible investment in abatement measures and permit buying in the market. Our findings indicate that the penalty type does not affect compliance decisions provided that the efficient penalty level is applied. Market efficiency is retained regardless of penalty types. Nevertheless, the mixed penalty design provides the strongest compliance incentives. Hence this finding supports the practice in which this penalty design is widely used in the existing and the proposed trading schemes. Furthermore, we discuss the policy implications of the findings with regard to permit price discovery process and the Australian proposal of tying the penalty level to the permit price |
| Keywords: | emissions trading, penalty design, compliance, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107585&r=env |
| By: | Scheufele, Gabriela; Bennett, Jeff |
| Abstract: | The concept of ecosystem resilience is being increasingly discussed as a driver of biodiversity values. It implies that marginal deteriorations in ecosystem conditions can abruptly result in non-marginal and irreversible changes in ecosystem functioning and the economic values that the ecosystem generates. This challenges the traditional approach to the valuation of biodiversity, which has focused on quantifying values attached to individual species or other elements of ecosystems. As yet, little is known about the value society attaches to changes in ecosystem resilience. This paper investigates this value. A discrete choice experiment is used to estimate implicit prices for attributes used to describe ecosystem resilience using the Border Ranges rainforests in Australia as an example. We find evidence that implicit prices for the attributes describing ecosystem resilience are positive and statistically significantly different from zero. |
| Keywords: | ecosystem resilience, discrete choice experiments, implicit prices, willingness to pay space, Environmental Economics and Policy, |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107806&r=env |
| By: | Greyling, Tertius; Bennett, Jeff |
| Abstract: | This study considers the costs and benefit of the Regent Honeyeater Project in the Capertee Valley over the past 10 years. The benefits are estimated using choice modelling and the costs are based on project expenditure and forgone agricultural production. A comparison of the benefits and costs yields a benefit-cost ratio (BCR) of 4.45, which implies that the benefits outweigh the costs. However, variation in the underlying assumptions reveal significant sensitivity to the uncertainty associated with the maturation of native tree plantings and the successful establishment of a significant population of birds within the native vegetation. The Cost Benefit Analysis (CBA) is dominated by the benefit derived from protection of the native species (i.e. the Regent Honeyeater) which in turn depends on these two uncertainties. By expanding the total area of land being revegetated and reducing the fragmentation amongst individual plantings these uncertainties can be reduced. This should deliver larger benefits and further improve the BCR. |
| Keywords: | Cost-benefit analysis, Benefit-cost ratio, Choice modelling, Regent Honeyeater, Capertee Valley, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107580&r=env |
| By: | Ward, Michael; Dent, Jared |
| Abstract: | The goal of this analysis is to predict the impacts of salinity on property values in the unirrigated, predominately cropping land in the south-west agricultural region of Western Australia. The method applied is statistical analysis of the relationship between salinity and property values in data from the recent past. Estimates suggest that if we can avoid salinisation of salt free cropping land holding other factors constant, we can avoid a reduction in land values of anywhere between 30% and 95%. In terms of dollar values and relative to the average land value per hectare in this study of approximately $1500, that amounts to savings of between $450 and $1425 per hectare. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107742&r=env |
| By: | Carlos Ordás Criado (ETH Zurich, Center for Energy Policy and Economics (CEPE).); Simone Valente (ETH Zurich, Center of Economic Research (CER).); Thanasis Stengos (University of Guelph.) |
| Abstract: | Stabilizing pollution levels in the long run is a pre-requisite for sustainable growth. We develop a neoclassical growth model with endogenous emission reduction predicting that, along optimal sustainable paths, pollution growth rates are (i) positively related to output growth (scale effect) and (ii) negatively related to emission levels (defensive effect). This dynamic law reduces to a convergence equation that is empirically tested for two major and regulated air pollutants - sulfur oxides and nitrogen oxides - with a panel of 25 European countries spanning the years 1980-2005. Traditional parametric models are rejected by the data. More flexible regression techniques confirm the existence of both the scale and the defensive effect, supporting the model predictions. |
| Keywords: | Air pollution, convergence, economic growth, nonparametric regressions. |
| JEL: | C14 C23 O13 Q53 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:gue:guelph:2011-06.&r=env |
| By: | Gillespie, Robert; Bennett, Jeff |
| Abstract: | Kerbside recycling in Australia has focused on paper, cardboard, plastics and bottles and in some areas green waste. Another area for potential kerbside recycling is organic waste. This study uses a dichotomous choice contingent valuation format with follow-up open-ended willingness to pay question to estimate the household willingness to pay for the introduction of a kerbside recycling scheme for kitchen waste. Two provision rules were used. The first sample split contained a majority decision rule while the second sample split contained a provision rule where participation is voluntary. Households across the Brisbane statistical sub-division currently pay in the order of $250 per annum for their kerbside waste collection scheme. This study indicates that on average Brisbane households would be WTP an additional $32 to $35 per year for a general waste bin where food waste is split from general waste. There was no significant difference in results between sample splits with majority or voluntary provision rules. Whether the provision of a food waste recycling scheme is economically efficient requires a consideration of all the potential costs and benefits. Other relevant costs and benefits for inclusion in a benefit cost analysis would include those associated with bin replacement, any additional collection and transport costs, composting costs, revenues from compost sales and avoided landfill costs. If a compulsory food waste recycling scheme could be provided to all households for less than $32 to $35 per household per annum then the benefits of the scheme would exceed the costs and would be considered to be economically efficient and desirable from a community welfare perspective. Given the difficulties of estimating precise WTP values from dichotomous choice data, any BCA of a compulsory scheme incorporating the results of this study should undertake sensitivity testing that includes the range of values reported including dichotomous choice and open-ended means to determine the robustness of BCA results to variations in the welfare estimate. Notwithstanding, the results of any BCA, decision-makers also need to be cognisant of the high proportion of respondents who did not support a kerbside food waste recycling scheme. The data from the study could also be used to undertake a BCA of a voluntary scheme. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107804&r=env |
| By: | Throsby, David; Deodhar, Vinita; Hanna, Bronwyn; Jewell, Bronwyn; OâConnor, Zena; Zednik, Anita |
| Abstract: | This research project on the valuation of cultural heritage is developing a methodology for a quantitative valuation study of the use and non-use values of historic heritage places. The methodology developed in this project will provide a template for subsequent empirical applications to generate data of use in the formulation of heritage policies and programs. The initial stages in reaching this larger objective have involved determining how historic heritage places are to be categorised for measurement, establishing the process by which heritage attributes will be determined for valuation, and developing and trialling an effective measurement framework. The principal techniques being developed for valuation assessment in the project are derived from choice-modelling (CM) and contingent-valuation methods (CVM). A particular focus of the project is on the systematic integration of cultural and economic value assessments within a consistent theoretical framework, reflecting the need for an economic perspective on the significance criteria currently in use in heritage policy in Australia. |
| Keywords: | Community/Rural/Urban Development, Environmental Economics and Policy, |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107584&r=env |
| By: | Norimichi Matsueda (Kwansei Gakuin University); Yoko Nagase (Oxford Brookes University) |
| Abstract: | In order to cope with the increasing scarcity of final dump sites for household wastes, the UK recently introduced an environmental policy targeted at the firms that produce and sell products that generate packaging wastes. This policy requires such businesses to hold predetermined numbers of tradable credits called gPackaging waste Recovery Notesh (PRNs). This article provides insights into the economic implications of such a policy through a simple analytical model of a recyclable product and the PRN markets. Our analysis yield two particularly interesting results. First, an increase in the required recycling rate dampens the output and landfill waste levels, while the effect on the level of recycling activities is ambiguous. Second, an increase in the landfill tax always leads to an increase in the landfill waste. We also discuss how the socially optimal landfill tax in the presence of the PRN market should be chosen. |
| Keywords: | PRNs, Recycling, Landfill Tax, Comparative Statics |
| JEL: | Q28 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:72&r=env |
| By: | de Chazal, Jacqueline |
| Abstract: | Whilst there has been progress in understanding the role that values play in determinations of vulnerability and resilience, I suggest some key points continue to be overlooked. I offer three propositions to describe how values underpin such concepts, summarised as âno fixed characterizationâ, âno fixed relationshipsâ and âno fixed trendsâ. These propositions are not new and have been made in other contexts. Based on a literature review of vulnerability and resilience in the global environmental change area, I elaborate on how these propositions are not adequately accommodated, in particular in relation to ideas of biophysical and social vulnerability, specified versus general resilience, and assignments of desired trend direction (increasing resilience or decreasing vulnerability). I conclude that irrespective of the concept label, characterisations and assessments of ecosystems and their attendant change are inescapably dependent on values. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107581&r=env |
| By: | Boerema, Nicholas; Kay, Merlinde; MacGill, Iain |
| Abstract: | This paper examines how key characteristics of the underlying wind and solar resources may impact on their energy value within the Australian National Electricity Market(NEM). Analysis has been performed for wind generation using half hour NEM data for South Australia over the 2008-9 financial year. The potential integration of large scale solar generation has been modelled using direct normal solar radiant energy measurements from the Bureau of Meteorology for six sites across the NEM. For wind energy, the level and variability of actual wind farm outputs in South Australia is analysed. High levels of wind generation in that State have been found to have a strong secondary effect on spot prices. Wind generationâs low operating costs will see it displacing higher operating cost fossil-fuel plant at times of high wind. At the same time, the increased variability of wind may impose additional challenges and costs on conventional plant which will also be reflected in wholesale spot market prices. It is shown that this is proving particularly important during high wind penetration periods, which are contributing to an increased frequency of low or even negative prices. The solar resource in South Australia is shown to be highly variable; however, as seen with wind power, geographical dispersion of generators can significantly reduce power variability, even with as few as six sites. The correlation of the solar resource with spot prices also appears to be superior to wind generation. Modelling using the Adelaide solar resource showed that, for electricity sold into the spot market, two-axis tracking solar generators would achieve an average price that is over twice that received by wind generators over the year 2008-9 analysed. Of course, significant solar generation deployment might drive similar price impacts as seen with wind generation, thereby reducing this advantage. Considering the potential implications of both major wind and solar generation within South Australia, the solar and wind resources within the State appear, on average, to be non-correlated for the magnitude, and the change in magnitude, across half an hour. The analysis shows that solar and wind resources within the NEM have key characteristics that can markedly impact on their energy value within the wholesale electricity market. High levels of renewable electricity are already affecting spot prices, highlighting the need for low bidding renewable generators to attain power purchase contracts and for developers to consider this effect when choosing a site location for renewable generators. Other generators within the NEM may also be significantly impacted by major renewable energy deployment. The long-term success of renewable generation will likely depend on maximising the energy value that it contributes to the electricity industry. |
| Keywords: | Energy value, Integration, NEM, Solar, Variability, Wind, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107740&r=env |
| By: | Rogers, Abbie; Cleland, Jonelle |
| Abstract: | This study uses choice modelling to investigate public and expert preference divergence through a valuation of the Kimberleyâs tropical waterways and wetlands in Western Australia. A sample of Australian tropical river scientists participated in an identical survey to the West Australian public. Within the public sample, a split survey design is utilised to examine the effects of information on preferences â a low information version provided sufficient information for respondents to participate in the survey, while a high information version provided a more thorough and detailed description of the attributes. Divergent preferences are apparent between the public and scientist samples. This is illustrated through two key results: first, an attempt to merge the data for each of the samples is rejected; and second, there are differences in conservation preferences. The scientists had stronger preferences to protect system based attributes and threatened species, and were generally not willing to pay to protect iconic attributes. The public, on the other hand, held positive and more evenly spread values for all attributes. Information had an impact on public preferences, particularly through the rejection of a combined low/high information model, but also with respect to the iconic species attribute, where there is a pattern of decreasing willingness to pay as information level increases. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107579&r=env |
| By: | Anthony J. Venables |
| Abstract: | This paper develops a model in which supply of a non-renewable resource can adjust through two margins: the rate of depletion and the rate of field opening. Faster depletion of existing fields means that less of the resource can ultimately be extracted, and optimal depletion of open fields follows a (modified) Hotelling rule. Opening a new field involves sinking a capital cost, and the timing of field opening is chosen to maximize the present value of the field. Output dynamics depend on both depletion and field opening, and supply responses to price changes are studied. In contrast to Hotelling, the long run equilibrium rate of growth of prices is independent of the rate of intereset, depending instead on characteristics of demand and geologically determined supply. |
| Keywords: | Natural resource, Depletion, Hotelling, Fossil fuel, Carbon tax |
| JEL: | Q3 Q5 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:554&r=env |
| By: | Chevallier, Julien |
| Abstract: | This paper deals with carbon price variations using a multi time scale decomposition based on the theory of wavelets. Our approach is based on wavelet packet transforms. This original approach enables us to identify that the periods which contribute the most to EUA spot, EUA futures, and CER futures price variations are February-April 2008, October-November 2008, and the recent 2009-2011 business cycle which correspond to major institutional uncertainties and changes in macroeconomic fundamentals. This wavelet decomposition therefore provides additional evidence on the drivers of carbon prices being institutional events and economic activity. |
| Keywords: | Carbon; price variations; wavelet decomposition; wavelet packet transforms; |
| JEL: | C02 E31 Q43 L72 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:ner:dauphi:urn:hdl:123456789/6515&r=env |
| By: | Cleland, Jonelle; Rogers, Abbie |
| Abstract: | Attributes definition is a crucial, yet neglected topic of critical inquiry in the choice modelling literature. In a policy context, attributes should reflect public interests. However, guidance on how to go about achieving this criterion is lacking. To address this concern, we offer a novel approach to attribute definition â the knowledge base approach. A knowledge base is the particular âlensâ through which a shared understanding of a topic is gained (i.e. different groups of people view the world in different ways). Knowledge bases have been used in evidence-based policy to account for different sources of information and perspectives in complex policy settings, with the intention of improving policy and program development. The knowledge base approach was applied to the design of a choice experiment, specifically looking at conservation priorities for the waterways and wetlands in the Kimberley region of Western Australia. We conclude that the approach is both comprehensive and expedient, and could improve the selection of attributes for choice experiments that value policy or program change. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107578&r=env |
| By: | Greyling, Tertius; Bennett, Jeff |
| Abstract: | A cost-benefit analysis (CBA) of an investment in the protection of malleefowl and associated native vegetation in the Lachlan Catchmentâs central-west yielded a benefitcost ratio of 1.4. The CBA is based on project expenditures over the past four years coupled with benefit estimates from a recent Choice Modelling study in the Lachlan Catchment. The project targets the protection of malleefowl on private land which has not yet been surveyed but where the species is known to be present. The CBA is subject to significant uncertainty due to a lack of available data. Nonetheless, sensitivity analysis indicates that the BCR is consistently larger than unity, if marginal in some cases. This suggests that the project is a worthwhile investment at this early stage. Furthermore, greater gains may be achieved by addressing the numerous threats facing the species and its habitat. The increased cost of such an investment may be more than offset by the gains in benefits due to relatively conservative assumptions associated with the benefit calculations in the BCA. |
| Keywords: | Cost-benefit analysis, Benefit-cost ratio, Choice modelling, Malleefowl, Lachlan Catchment, Environmental Economics and Policy, |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107849&r=env |
| By: | Rolfe, John; Brouwer, Roy |
| Abstract: | While meta-analysis is typically used to identify value estimates for benefit transfer, applications also provide insights into the potential influence of design, study and methodological factors on results of non-market valuation experiments. In this paper, a metaanalysis of sixteen separate choice modelling studies in Australia with 130 individual value estimates relating to river health are reported. The studies involved different measures and scales of river health, so consistency was generated by transforming implicit prices from each study into a common standard of WTP per kilometer of river in good health. Tobit models have been used to identify the relationships between the dependent variable (WTP/km) and a number of variables. The results demonstrate that values are sensitive to marginal effects, with lower WTP/km for larger catchments, and higher WTP/km when river health is in decline. Values are also lower when river health has been defined by a subset of benefit types, such as recreation uses, vegetation health, fish health or bird populations. While there is evidence that the framing of the choice sets and descriptions of attributes have systematic impacts on values, there is very little evidence that choice dimensions, collection methods, sample sizes, response rates, statistical methods or publication status have influenced value estimates. Tests of apparent author effects show that these become insignificant when other explanatory variables are included in the models. |
| Keywords: | non-market valuation, choice modelling, meta analysis, river health, Environmental Economics and Policy, |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107744&r=env |
| By: | Cleland, Jonelle; McCartney, Abbie |
| Abstract: | One of the key stages of designing a choice experiment is to define the attributes of interest. The attributes chosen essentially influence all subsequent activities carried out in a choice study. Surprisingly, the process of attribute definition is not the subject of critical and ongoing inquiry. In the context of informing policy, the choice modelling literature suggests that a given set of attributes should (1) reflect public interests, (2) have a sound scientific basis, and (3) provide useful information to end-users. Fulfilling all criteria presents a challenging task to researchers. Conflicts between criteria are possible, and there are currently no guidelines to assist researchers in negotiating their way through potentially competing sets of information and viewpoints. We investigated the potential for divergence between members of the public and scientific experts. The investigation was carried out across three environmental systems which differed according to their scale and institutional setting. The results showed that attribute definitions do indeed diverge. Critical points of divergence observed across all case studies included: the way in which the public and experts defined attributes that represented the biodiversity of the system; the publicâs inclusion of attributes that represented the terrestrial/marine interface; and the publicâs inclination to aggregate attributes when asked to choose their top picks. A number of additional points of divergence were observed, but these were case specific. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107576&r=env |
| By: | Scheufele, Gabriela; Bennett, Jeff |
| Abstract: | This study explores ordering effects and response strategies in repeated binary discrete choice experiments (DCE). Mechanism design theory and empirical evidence suggest that repeated choice tasks per respondent introduce strategic behavior. We find evidence that the order in which choice sets are presented to respondents may provide strategic opportunities that affect choice decisions (âstrategic responseâ). The findings propose that the âstrategic responseâ does not follow strong cost-minimization but other strategies such as weak cost-minimization or good deal/ bad deal heuristics. Evidence further suggests that participants, as they answer more choice questions, not only make more accurate choices (âinstitutional learningâ) but may also become increasingly aware of and learn to take advantage of the order in which choice sets are presented to them (âstrategic learningâ). |
| Keywords: | discrete choice experiments, incentive compatibility, mixed logit models, ordering effects, repeated binary choice task, response strategies, Environmental Economics and Policy, |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107743&r=env |
| By: | Arnaud Dragicevic; Bernard Sinclair-Desgagné |
| Abstract: | We propose a dynamic graph-theoretic model for ecosystem management as a control over networked system composed of target nodes and unmarked nodes. The network is represented by a complete graph, in which all vertices are connected by a unique edge. Target nodes are attracted by the objective function issued from the external ecosystem management. They pull the network towards the objective position, which is either non-null or stationary. The management policy is considered successful if the graph remains connected in time, that is, target nodes attain the objective and unmarked nodes stay in the convex hull. At the time of the ecosystem network transfer, the model yields an Impossibility Theorem as well as a Sustainability Criterion to maintain full connectivity of the network. The latter can be easily linked to the general definition of sustainability as ecosystem integrity preservation. At last, we identify three management rules to ensure the maintenance of connectivity in time, given the properties of the objective transposition function, the nature of connections and utility updating time-delays between the nodes <P>Nous proposons un modèle dynamique de gestion des écosystèmes par la théorie des graphes en tant que contrôle d’un système en réseau composé de nœuds cibles et de nœuds non identifiés. Le réseau est représenté par un graphe complet dans lequel tous les nœuds sont connectés par une arête unique. Les nœuds cibles sont attirés par une fonction objectif issue d’un processus externe de gestion des écosystèmes. Ils tirent le réseau vers la position de l’objectif qui peut être non-nulle ou stationnaire. La politique de gestion est considérée réussie si le graphe reste connecté dans le temps, c'est-à-dire que les nœuds cibles atteignent l’objectif et les nœuds non identifiés restent dans l’enveloppe convexe. Lors de la transposition du réseau écosystémique dans le temps, le modèle génère un Théorème de l’Impossibilité ainsi qu’un Critère de Durabilité qui maintient la pleine connectivité du réseau. Ce dernier peut aisément être relié à la définition générale de la durabilité comme la préservation de l’intégrité écologique. Enfin, nous identifions trois règles de gestion pour assurer le maintien de la connectivité dans le temps, sachant les propriétés de la fonction objectif de transposition, la nature des connexions, et les retards de réactualisation de l’utilité entre les nœuds. |
| Keywords: | bioeconomics, ecosystem management, graph theory, connectedness., bioéconomie, gestion des écosystèmes, théorie des graphes, connectivité |
| JEL: | Q2 Q5 |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2011s-51&r=env |
| By: | McCartney, Abbie; Cleland, Jonelle |
| Abstract: | The hypothetical nature of choice modelling surveys makes it difficult to enforce incentive compatible properties. It is thought that bias may result through strategic behaviour and untruthful responses, given that the hypothetical choice scenarios and payment structure are not binding. This study examines three methods of addressing incentive compatibility through survey framing: (1) a statement of consequence; (2) use of an âhonestyâ script that openly explains how the data are to be analysed and used; and (3) use of a provision rule that defines how survey outcomes relate to actual implementation. Focus groups, involving members of the public, were held to investigate participantsâ reactions to the three framing treatments. The provision rule emerged as the preferred treatment in terms of being more realistic than the alternatives. The rule did not need to be 100% binding to have the desired effect of inducing realism. However, the participants did not believe that their responses to the choice scenarios would have changed between framing treatments. Empirical testing is required to determine if this is actually the case. Other reassuring results were found in relation to how participants interpreted the general choice scenario instructions, particularly in terms of answering questions independently and as an individual consumer. This provides evidence that respondents make choices in response to the questions as they are intended by the researcher. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107575&r=env |
| By: | Boerema, Nicholas; MacGill, Ian |
| Abstract: | The impacts of transmission congestion and network investment on the development of the Australian wind energy industry have received growing attention from wind farm developers as well as relevant policy stakeholders such as the Australian Energy Market Commission (AEMC). There are many potential wind farm sites across the country with excellent wind regimes yet only limited transmission capacity. At least one wind farm in South Australia has spent a period following construction where its output was curtailed by transmission constraints (NEMMCO, 2009). Current market rules do not guarantee dispatch to an existing wind farm as more wind generation connects to the same transmission. Given the expense of transmission network extension and augmentation, there are interesting questions of what economic impacts such constraints might have for wind farm operators. This paper examines this issue in the context of the South Australian region of the Australian National Electricity Market (NEM). The State currently hosts almost half of total Australian wind generation capacity and has significant transmission capacity limitations for further development. Half hour wholesale electricity spot prices were used along with generation data from nine South Australian wind farms over the 2008-9 and 2009-10 financial years to assess the potential impact that transmission constraints might have had on wind farm revenue. Results showed that a number of the wind farms would have suffered only very limited revenue reductions from having significantly greater wind farm capacity than the rating of their transmission connection to the NEM. Importantly, some wind farms could be limited to a maximum power output of half their rated capacity and still achieve higher capacity factors then other already existing unconstrained wind farms. The key reasons for this are that wind farms do not generate at rated capacity for a great deal of the time over the year, periods of high wind generation appear to be associated with lower wholesale prices and there is significant variance between the wind farms capacity factors. Our findings suggest that there may be circumstances where wind farm developers might benefit from installing more wind turbines than the capacity of their transmission connection. |
| Keywords: | Integration, market price, NEM, South Australia, Wind, Environmental Economics and Policy, Farm Management, Resource /Energy Economics and Policy, |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107741&r=env |
| By: | Moalla, M.; Mollard, A. |
| Abstract: | Cet article présente une analyse de la différenciation des produits et services touristiques dans les espaces ruraux que nous appelons "différenciation cognitive". Il montre comment les cognitions environnementales sont à l’origine d’une interaction positive entre qualité de l’environnement et achat de produits et services touristiques de qualité. Cet ancrage environnemental crée une demande rigide pour ces produits et services liés, qui favorise l’émergence de différentiels de prix élevés, source de rentes.. La première partie montre comment la relation entre activités touristiques et services environnementaux se construit à travers les cognitions environnementales (attitude, croyances, vécu affectif). La deuxième partie met en évidence la valorisation conjointe des services environnementaux et des produits de qualité terroir dans le cas du tourisme rural dans les Baronnies à partir d’une enquête réalisée auprès de locataires et propriétaires de gîtes durant l'été 2003. |
| Keywords: | TOURISME;CONSOMMATION;ENVIRONNEMENT;PRODUIT DE QUALITE;TERROIR;TERRITOIRE;SCIENCE COGNITIVE; TOURISM;CONSUMPTION;ENVIRONMENT;LOCAL QUALITY PRODUCT;TERRITORY;COGNITIVE SCIENCE |
| JEL: | Q26 Q51 R12 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:gbl:wpaper:201102&r=env |