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on Environmental Economics |
| By: | Kazuharu Kiyono; Jota Ishikawa |
| Abstract: | This paper studies environmental management policy when two fossil-fuel-consuming countries non-cooperatively regulate greenhouse-gas emissions through emission taxes or quotas. The presence of carbon leakage caused by fuel-price changes affects the tax-quota equivalence. We explore each country's incentive to choose an environment regulation instrument within a framework of a two-stage policy choice game and find subgame-perfect Nash equilibria. This sheds a new light on the question of why adopted policy instruments could be different among countries. We also analyze the welfare effect of creating an international market for emission permits. International trade in emission permits may not benefit the fuel-consuming countries. |
| Keywords: | Global Warming, Carbon Leakage, Emission Tax, Emission Quota, Tax-quota Equivalence, Emission Trading |
| JEL: | F18 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd11-204&r=env |
| By: | Valentina Bosetti (Fondazione Eni Enrico Mattei); Jeffrey Frankel (Kennedy School of Government, Harvard University) |
| Abstract: | We offer a framework to assign quantitative allocations of emissions of greenhouse gases (GHGs), across countries, one budget period at a time. Under the two-part plan: (i) China, India, and other developing countries accept targets at Business as Usual (BAU) in the coming budget period, the same period in which the US first agrees to cuts below BAU; and (ii) all countries are asked in the future to make further cuts in accordance with a common numerical formula to all. The formula is expressed as the sum of a Progressive Reductions Factor, a Latecomer Catch-up Factor, and a Gradual Equalization Factor. This paper builds on our previous work in many ways. First we update targets to reflect pledges made by governments after the Copenhagen Accord of December 2010 and confirmed at the Cancun meeting of December 2011. Second, the WITCH model, which we use to project economic and environmental effects of any given set of emission targets, has been refined and updated to reflect economic and technological developments. We include the possibility of emissions reduction from bio energy (BE), carbon capture and storage (CCS), and avoided deforestation and forest degradation (REDD+) which is an important component of pledges in several developing countries. Third, we use a Nash criterion for evaluating whether a country’s costs are too high to sustain cooperation. |
| Keywords: | Cancun, Climate, Concentrations, Cooperation, Copenhagen, Costs, Developing Countries, Development, Emissions, Equity, Global Climate, Global Warming, Greenhouse Gas, Human Development, International, Kyoto, Sustainable, Treaty, United Nations, WITCH |
| JEL: | Q54 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.66&r=env |
| By: | Greenstone, Michael (MIT); Hanna, Rema (Harvard University) |
| Abstract: | Using the most comprehensive data file ever compiled on air pollution, water pollution, environmental regulations, and infant mortality from a developing country, the paper examines the effectiveness of India's environmental regulations. The air pollution regulations were effective at reducing ambient concentrations of particulate matter, sulfur dioxide, and nitrogen dioxide. The most successful air pollution regulation is associated with a modest and statistically insignificant decline in infant mortality. However, the water pollution regulations had no observable effect. Overall, these results contradict the conventional wisdom that environmental quality is a deterministic function of income and underscore the role of institutions and politics. |
| JEL: | H20 O10 Q20 Q50 R50 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp11-034&r=env |
| By: | Alexandra Bibbee |
| Abstract: | New Zealand, as a resource-based economy anxious to protect and promote its clean-and-green image, appropriately sees green growth as a natural direction for future development. The country’s environment is of high quality, and depletion of its abundant natural resources is for the most part not a problem. Nevertheless, there are challenges. With little pricing of water resources, water scarcity is being felt increasingly acutely in some dairy-intensive regions prone to drought. Water-quality degradation is linked to leakage from farming by-products. Agricultural activity also gives rise to nearly half the country’s greenhouse gas (GHG) emissions, though electricity consumption and private transport are growing sources of pressure. New Zealand’s GHG intensity of output is the second highest in the OECD (after Australia’s), not surprising for a resource-rich country. Its unique emissions profile, however, makes for costly mitigation: an exceptionally high proportion of electricity generation is already renewable-based (mainly hydro), and no technology to significantly reduce methane from ruminant animals yet exists. New Zealand is a pioneer in implementing an emissions trading scheme (NZ ETS) covering all sectors and gases. Green growth could best be supported by the greater use of market mechanisms among a range of instruments in natural resource management and by strengthening price signals in the NZ ETS. This Working Paper relates to the 2011 OECD Economic Review of New Zealand (www.oecd.org/eco/surveys/NewZealand).<P>Politiques relatives à la croissance verte et au changement climatique en Nouvelle-Zélande<BR>La Nouvelle-Zélande, dont l’économie repose sur l’exploitation de ses ressources naturelles et qui a à coeur de protéger et de promouvoir son image de pays respectueux de l’environnement, voit à juste titre dans la croissance verte une orientation naturelle pour son développement futur. Le pays bénéficie d’un environnement de qualité et du fait de l’abondance de ses ressources naturelles il n’est guère menacé par le risque de leur épuisement. Néanmoins, des défis se profilent à l’horizon. La tarification des ressources en eau étant peu pratiquée, des pénuries d’eau se font sentir avec de plus en plus d’acuité dans certaines régions de production laitière exposées aux sécheresses. La qualité des eaux se dégrade en raison des infiltrations de sous-produits agricoles. L’activité agricole est par ailleurs responsable de près de la moitié des émissions de gaz à effet de serre (GES) du pays, tandis que la consommation d’électricité et le transport privé pèsent eux aussi de plus en plus. L’intensité de production de GES de la Nouvelle-Zélande est la deuxième plus élevée de l’OCDE (après l’Australie), ce qui n’est guère surprenant pour un pays richement doté en ressources. Son profil spécifique d’émissions, toutefois, rend coûteuses les mesures d’atténuation : une proportion exceptionnellement élevée de la production électrique est déjà basée sur les énergies renouvelables (essentiellement hydrauliques), et il n’existe pas encore de technologies permettant de sensiblement réduire les émissions de méthane des animaux ruminants. La Nouvelle-Zélande est pionnière dans la mise en oeuvre d’un système d’échange de quotas d’émission (ETS) couvrant l’ensemble des secteurs et des gaz. Le meilleur moyen de promouvoir une croissance verte serait d’utiliser plus largement les mécanismes de marché, entre autres instruments, pour la gestion des ressources naturelles et de renforcer les signaux donnés par les prix dans le cadre du système néo-zélandais d’échange de quotas d’émission. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Nouvelle-Zélande 2011 (www.oecd.org/eco/etudes/Nouvelle-Zéland e). |
| Keywords: | New Zealand, climate change, GHG emissions, emissions trading scheme, environmental policies, water use, carbon price, renewables, water pollution, waste management, resource management, agricultural emissions, Kyoto obligations, nutrient trading, mining, biodiversity, changement climatique, Nouvelle-Zélande, émissions de gaz à effet de serre (GES), énergies renouvelables, politiques environnementales, pollution de l'eau, gestion des déchets, gestion des resources, émissions du secteur agricole, échange de quotas sur les nutriments, industries minières, biodiversité |
| JEL: | H23 Q42 Q48 Q52 Q53 Q54 Q57 Q58 |
| Date: | 2011–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:893-en&r=env |
| By: | Ackerman, Frank; Stanton, Elizabeth A. |
| Abstract: | The social cost of carbon - or marginal damage caused by an additional ton of carbon dioxide emissions - has been estimated by a U.S. government working group at $21 in 2010. That calculation, however, omits many of the biggest risks associated with climate change, and downplays the impact of our current emissions on future generations. Our reanalysis explores the effects of uncertainty about climate sensitivity, the shape of the damage function, and the discount rate. We show that the social cost of carbon is uncertain across a broad range, and could be much higher than $21. In our worst case, it could be almost $900 in 2010, rising to $1,500 in 2050. The most ambitious scenarios for eliminating carbon dioxide emissions as rapidly as technologically feasible (reaching zero or negative net global emissions by the end of this century) require spending up to $150 to $500 per ton of reductions in carbon dioxide emissions by 2050. Using a reasonable set of alternative assumptions, therefore, the damages from a ton of carbon dioxide emissions in 2050 could exceed the cost of reducing emissions at the maximum technically feasible rate. Once this is the case, the exact value of the social cost of carbon loses importance: the clear policy prescription is to reduce emissions a rapidly as possible, and cost-effectiveness analysis offers better insights for climate policy than cost-benefit analysis. -- |
| Keywords: | Social cost of carbon,cost-benefit analysis,climate policy,climate economics |
| JEL: | Q54 Q58 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201140&r=env |
| By: | Tomasz Kozluk |
| Abstract: | The degradation of the environment due to climate change and pollution can harm living standards and damage growth prospects. In Belgium, one of the most densely populated OECD countries, pressure on the environment is particularly strong, and is reinforced by the high energy intensity of the economy and concentrated agriculture. Environmental policy backlogs accumulated over the years highlight the challenges of reducing greenhouse gas emissions and water pollution in a cost-efficient way. To achieve environmental goals at minimum cost across the economy the polluters should face the marginal costs of the externalities they impose, which should be achieved by increasing reliance on environmental taxation. Potential adverse effects on income distribution could then be addressed in the tax benefit system. Moreover, where environmental responsibilities are better dealt with at the regional level, regions should have the most efficient tools, such as taxation powers. Where, due to economies of scale and scope or important cross-regional effects, environmental issues are better dealt with at the national level (for instance in renewable energy sources and transport policies), better co-ordination among regions or a greater role of the federal level should be envisaged. This Working Paper relates to the 2011 OECD Economic Review of Belgium (www.oecd.org/eco/surveys/Belgium).<P>Une croissance plus verte en Belgique<BR>La dégradation de l’environnement due au changement climatique et à la pollution peut porter atteinte au niveau de vie et aux perspectives de croissance. En Belgique, l’un des pays de l’OCDE les plus densément peuplés, la pression sur l’environnement est particulièrement forte, et encore aggravée par la haute intensité énergétique de l’économie et la concentration de l’agriculture. Les retards accumulés par la politique environnementale au fil des années accentuent encore le défi qui consiste à réduire, avec un bon rapport coût-efficacité, les émissions de gaz à effet de serre et la pollution de l’eau. Pour que les objectifs environnementaux soient atteints pour un coût minimal dans l’ensemble de l’économie, les pollueurs devraient supporter le coût marginal des externalités qu’ils imposent, ce qui devrait être obtenu par un recours accru à la taxation environnementale. Les conséquences indésirables qui pourraient en découler pour la répartition des revenus pourraient alors trouver une solution dans le cadre du système de prélèvements et de prestations. De plus, dans les cas où les responsabilités environnementales sont mieux prises en charge au niveau régional, les régions devraient disposer des outils les plus efficaces, tels que le pouvoir de taxation. Lorsque, en raison d’économies d’échelle et de gamme ou de la présence d’importants effets transrégionaux, les questions d’environnement relèvent davantage de l’échelon national (par exemple, les sources d’énergie renouvelables et les politiques de transport), une meilleure coordination des régions ou un rôle accru des autorités fédérales devraient être envisagés. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Belgique 2011 (www.oecd.org/eco/etudes/Belgique). |
| Keywords: | Belgium, renewable energy, federalism, energy efficiency, road pricing, greenhouse gas emissions, environmental policies, green growth, pollution, transport policies, Belgique, fédéralisme, émissions de gaz à effet de serre, énergies renouvelables, efficacité énergétique, politiques environnementales, croissance verte, tarification des routes, pollution, politiques de transport |
| JEL: | Q28 Q48 Q53 Q54 Q58 R41 R48 |
| Date: | 2011–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:894-en&r=env |
| By: | ZhongXiang Zhang (East-West Center) |
| Abstract: | China’s capital-intensive, export-oriented, spectacular economic growth since launching its open-door policy and economic reforms in late 1978 not only has created jobs and has lifted millions of the Chinese people out of poverty, but also has given rise to unprecedented environmental pollution and CO2 emissions. While estimates of the embedded CO2 emissions in China’s trade differ, both single country studies for China and global studies show a hefty chunk of China’s CO2 emissions embedded in trade. This portion of CO2 emissions had helped to turn China into the world’s largest carbon emitter, and is further widening its gap with the second largest emitter. This raises the issue of who should be responsible for this portion of emissions and bearing the carbon cost of exports. China certainly wants importers to cover some, if not all, of those costs. While China’s stance is understandable, this paper has argued from a broad and balanced perspective that if this is pushed too far, it will not help to find solutions to this issue. On the contrary it can be to China’s disadvantage for a number of reasons. However, aligning this responsibility with China does not necessarily suggest the sole reliance on domestic actions. In that context, the paper recommends specific actions that need to be taken internationally as well as domestically in order to effectively control the embedded CO2 emissions in China’s trade. |
| Keywords: | Emissions Embodied In Trade, Consumption-Based Accounting, Production-Based Accounting, Processing Trade; Carbon Tariffs, Energy Policy |
| JEL: | F18 P28 Q42 Q43 Q48 Q53 Q54 Q56 Q58 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.71&r=env |
| By: | Carlo Orecchia (University of Rome II Tor Vergata); Maria Elisabetta Tessitore (University of Rome II Tor Vergata) |
| Abstract: | This paper aims to verify the existence of the Environmental Kuznets Curve (EKC) or inverted U-shaped relationship between economic growth and environmental degradation in the context of endogenous growth. An important feature of this study is that the EKC is examined in the presence of pollution as a by product of consumption activities; also, pollution is a stock variable rather than a flow and tends to accumulate over time. In order to highlight the role of consumption on the environment, consumers do not consider directly pollution in the maximization problem and are assumed to choose between two different consumption types, characterized by a different impact on the environment (i.e. dirty and clean consumption). We find that substitution of dirty consumption with clean consumption alone is not sufficient to reduce environmental pollution. The result depends on the product differentiation and the cost to achieve it. From a social welfare perspective, more environmental awareness is unambiguously desirable when it generates less pollution. However, it could be that more environmental awareness leads to a lower level of social welfare depending on the costs of product differentiation and social marginal damage of pollution. |
| Keywords: | Environmental Kuznets Curve, Economic Growth, Pollution, Consumption, Consumption behaviour |
| JEL: | C61 Q56 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.57&r=env |
| By: | Hope, Chris W. |
| Abstract: | A new version of the PAGE integrated assessment model, PAGE09, is introduced. The most important scientific, impact, emission and adaptation inputs in the latest default version of the model, PAGE09 v1.7 are described. The scientific and economic impact results are presented for a business as usual (BAU) emissions scenario, and for a low emissions scenario which aims to have a 50% chance of keeping the rise in global mean temperatures below 2 degC. Today's mean social cost of CO2 is about $100 per tonne of CO2 in the BAU scenario, and about $50 per tonne in the low emissions scenario. The major influences on the SCCO2 are found to be the transient climate response, the pure time preference rate, the elasticity of the marginal utility of consumption, the feedback response time of the earth and the weight on non-economic impacts. Less than 10% of the mean SCCO2 comes from impacts in annex 1 from annex 1 emissions, while over 45% comes from impacts in the rest of the world (RoW) from RoW emissions. About one third of the mean SCCO2 comes from impacts in the RoW caused by emissions in annex 1, while just over 10% comes from impacts in annex 1 caused by emissions in the RoW. -- |
| Keywords: | Climate change,integrated assessment modelling,uncertainty,social cost |
| JEL: | Q51 Q54 Q58 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201139&r=env |
| By: | Massimo Tavoni (Princeton Environmental Institute, Princeton University and Fondazione Eni Enrico Mattei); Shoibal Chakravarty (Princeton Environmental Institute, Princeton University); Robert Socolow (Princeton Environmental Institute, Princeton University and Department of Mechanical and Aerospace Engineering, Princeton University) |
| Abstract: | Global warming requires a response characterized by forward-looking management of atmospheric carbon and respect for ethical principles. Both safety and fairness must be pursued, and there are severe trade-offs as these are intertwined by the limited headroom for additional atmospheric CO2 emissions. This paper provides a simple numerical mapping at the aggregated level of developed vs. developing countries in which safety and fairness are formulated in terms of cumulative emissions and cumulative per capita emissions respectively. It becomes evident that safety and fairness cannot be achieved simultaneously for strict definitions of both. The paper further posits potential global trading in future cumulative emissions budgets in a world where financial transactions compensate for physical emissions: the safe vs. fair trade-off is less severe but remains formidable. Finally, we explore very large deployments of engineered carbon sinks and show that roughly 1000 GtCO2 of cumulative negative emissions over the century are required to have a significant effect, a remarkable scale of deployment. We also identify the unexplored issue of how such sinks might be treated in sub-global carbon accounting. |
| Keywords: | Climate Policy, Burden Sharing, Negative Emissions |
| JEL: | Q01 Q56 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.61&r=env |
| By: | X. D'HAULTFOEUILLE (Insee); P. GIVORD (Insee); X. BOUTIN (Commission européenne) |
| Abstract: | At the beginning of 2008 was introduced in France a feebate on the purchase of new cars called the Bonus/Malus. Since January 2008, less polluting cars benefit from a price reduction of up to 1,000 euros, while the most polluting ones are subject to a taxation of 2,600 euros. We estimate the impact of this policy on carbon dioxide emissions in the short and long run. These emissions depend on the market shares and the average emissions per kilometer of each car, but also on their manufacturing, car fleet size and the average number of kilometers travelled by their owners. We first develop a simple tractable model that relates car choice and mileage. We then estimate this model, using both the exhaustive dataset of car registrations and a recent transportation survey which provides information on individual journeys. We show that if the shift towards classes benefiting from rebates is spectacular, the environmental impact of the policy is negative. The reform has notably increased sales, leading to an important increase in manufacturing and travelling emissions. We thus stress that such policies may be efficient tool for reducing CO2 emissions since consumers do react to such financial incentives, but should be designed with care to achieve their primary goal. |
| Keywords: | environmental taxation, automobiles, carbon dioxide emissions, policy evaluation |
| JEL: | C25 L53 Q53 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpdeee:g2011-14&r=env |
| By: | Adolfo Albo; Juan Luis Ordaz Diaz |
| Abstract: | The June 2009 issue of Migration Watch Mexico by the BBVA Bancomer Foundation and BBVA Research mentioned the importance of environmental phenomena as factors of population expulsion or attraction. Expulsion occurs when in the communities of origin the environment begins to be detrimental to the life of human beings; for example, when there is environmental degradation and new risk zones appear, or when land is limited. In turn, the environment is a population attraction factor when the ecological quality of the environment is better compared to the zones of origin, thereby motivating migration. |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:bbv:wpaper:1128&r=env |
| By: | Francesco Bosello (University of Milan and Fondazione Eni Enrico Mattei); Carlo Carraro (University of Venice, CEPR, CESifo and Fondazione Eni Enrico Mattei); Enrica De Cian (University Ca’ Foscari of Venice and Fondazione Eni Enrico Mattei) |
| Abstract: | The latest round of international negotiations in Copenhagen led to a set of commitments on emission reductions which are unlikely to stabilise global warming below or around 2°C. As a consequence, in the absence of additional ambitious policy measures, adaptation will be needed to address climate-related damages. What is the role of adaptation in this setting? How is it optimally allocated across regions and time? To address these questions, this paper analyses the optimal mix of adaptation and mitigation expenditures in a cost-effective setting in which countries cooperate to achieve a long-term stabilisation target (550 CO2-eq). It uses an Integrated Assessment Model (AD-WITCH) that describes the relationships between different adaptation modes (reactive and anticipatory), mitigation, and capacity-building to analyse the optimal portfolio of adaptation measures. Results show the optimal intertemporal distribution of climate policy measures is characterised by early investments in mitigation followed by large adaptation expenditures a few decades later. Hence, the possibility to adapt does not justify postponing mitigation, although it reduces its costs. Mitigation and adaptation are thus shown to be complements rather than substitutes. |
| Keywords: | Climate Change Impacts, Mitigation, Adaptation, Integrated Assessment Model |
| JEL: | Q54 Q56 Q43 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.69&r=env |
| By: | Alessandro Antimiani; Valeria Costantini; Chiara Martini; Luca Salvatici |
| Abstract: | A modified version of the CGE GTAP-E model is developed for assessing the economic and carbon emissions effects related to alternative policy measures implemented with the aim of reducing carbon leakage. We explore a set of scenarios, comparing solutions where Annex I countries introduce exogenously or endogenously determined carbon border taxes in order to solve the carbon leakage problem unilaterally. Results provide evidence on the scarce effectiveness of carbon tariffs in reducing carbon leakage and enhancing economic competitiveness, while they have large negative welfare effects not only on the Non-Annex countries, but also on certain Annex I countries |
| Keywords: | Carbon Leakage, Carbon Border Tax, GTAP-E model |
| JEL: | Q43 Q54 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:136&r=env |
| By: | Ambec, Stefan (Toulouse School of Economics (INRA-LERNA) and University of Gothenburg); Coria, Jessica (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | We examine the choice of policy instrument price, quantity, or a mix of the two when two pollutants are regulated and firms’ abatement costs are private information. A key parameter that affects this choice is the technological externality between the abatement efforts involved, i.e., whether they are substitutes or complements. If they are complements, a mix policy instrument with a tax on one pollutant and a quota on the other is sometime preferable, even if the pollutants are identical in terms of benefits and costs of abatement. Yet, if they are substitutes, the mix policy is dominated by taxes or quotas.<p> |
| Keywords: | pollution; environmental regulation; policy mixes; tax; emission standard; asymmetric information |
| JEL: | D62 Q50 Q53 Q58 |
| Date: | 2011–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0517&r=env |
| By: | Donatella Baiardi (Department of Economics and Quantitative Methods, University of Pavia); Matteo Manera (Department of Statistics, University of Milano-Bicocca, Italy and Fondazione Eni Enrico Mattei); Mario Menegatti (Department of Economics, University of Parma) |
| Abstract: | This paper studies the empirical relationship between consumption and saving under two different sources of uncertainty: financial risk and environmental risk. The analysis is carried out using time series data for six advanced economies in the period 1965-2007. The results support the theoretical conclusions that both financial risk alone and the interaction between financial and environmental risks affect consumption. Moreover, we suggest a solution to some shortcomings which concern the empirical analysis performed with one-argument utility functions. Finally, we provide new estimates of indexes of relative risk aversion and relative prudence, and relative preference of environmental quality. |
| Keywords: | Consumption, Precautionary Saving, Financial Risk, Environmental Risk, Prudence, Relative Risk Aversion, Uncertainty |
| JEL: | D81 E21 Q50 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.62&r=env |
| By: | David A. Weisbach (University of Chicago) |
| Abstract: | The current pricing mechanism for carbon in the EU, the EU emissions trading system, only covers 40 percent of emissions. Carbon taxation currently plays no role. The Commission has recently proposed to revise the energy tax system in the EU to include a carbon tax component. This paper evaluates the Commission proposal and considers the possible expansion of the EU carbon pricing base either by expanding emissions trading to cover more sectors or by enacting a carbon tax. It concludes that there are strong arguments for expanding the carbon pricing base, as suggested by the Commission. Nevertheless, expanding the base should done through a unified system, such as expanding the coverage of the emissions trading system or enacting an economywide carbon tax rather than through having side-by-side taxes and trading, as in the Commission proposal. |
| Keywords: | Carbon Tax |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:btx:wpaper:1115&r=env |
| By: | Francesca Pongiglione (, Post-doctoral fellow, Università di Bologna, Visiting fellow, FEEM) |
| Abstract: | In this essay, three separate yet interconnected components of pro-environmental decision making are considered: (a) knowledge, in the form of basic scientific understanding and procedural knowledge, (b) risk perception, as it relates to an individual’s direct experience of climate change and (c) self-interest, either monetary or status-driven. Drawing on a variety of sources in public policy, psychology, and economics, I examine the role of these concepts in inducing or discouraging pro-environmental behavior. Past researches have often overemphasized the weight of just one of those variables in the decision making. I argue, instead, that none of them alone is capable of bringing about the behavioral change required by the environmental crisis. Evidence shows that increasing the public’s scientific knowledge of climate change cannot unilaterally bring about a strong behavioral change. The same can be noticed even when knowledge is joined by risk-perception: deep psychological mechanisms may steer people towards inaction and apathy, despite their direct experience of the detrimental effects of climate change on their lives. Focusing on self-interest alone is similarly unable to induce pro-environmental behavior, due to a host of psychological factors. Instead, in all of the above cases an important missing ingredient may be found in providing the public with locally contextualized procedural knowledge in order to translate its knowledge and concern into action. The importance of this kind of practical knowledge has solid empirical and theoretical underpinnings, and is often overlooked in the climate-change debate that tends to focus on more high-level issues. Yet, for all its essential simplicity, it may carry important public-policy implications. |
| Keywords: | Individual Behavior, Climate-Change, Psychology, Uncertainty |
| JEL: | D80 Q00 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.72&r=env |
| By: | Dietrich, Antje-Mareike; Sieg, Gernot |
| Abstract: | This article shows that in the presence of environmental externalities, it may be welfare enhancing to overcome a technological lock-in by a dead- end technology through governmental intervention. It is socially desirable to subsidize a dead-end technology if its environmental externality is small relative to the one of the established technology, if the installed base and/or the strength of the network effect is small and if future generations matter. Applying our results to the private transport sector, governments promoting alternatives to gasoline-driven vehicles have to be aware of these opposing welfare effects. |
| Keywords: | environmental externalities; network effects; private transport; technological change |
| JEL: | L92 Q55 O33 |
| Date: | 2011–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33780&r=env |
| By: | Lamia Kamal-Chaoui; Fabio Grazi; Jongwan Joo; Marissa Plouin |
| Abstract: | This report on the Korean Strategy for Green Growth and its implementation in urban areas assesses the contributions of sub-national governments to Korea's National Strategy for Green Growth and identifies the main challenges for effective implementation at the local level. Korea's economy, heavily reliant on foreign exports, was hard hit by the recent global financial crisis. Since the 1970s, Korea has become one of the most energy-intensive economies in the OECD area, thanks to higher living standards, rapid urbanisation and an expanding industrial sector. As a result, the country's greenhouse gas emissions almost doubled between 1990 and 2005, registering the highest growth rate in the OECD area. It is in this context of rapid urbanisation and unprecedented resource consumption and environmental pressures that the report focuses on the role of urban areas within Korea's National Strategy for Green Growth. The effectiveness of Korea's green growth agenda, which has been driven by a central government vision and strategy, will largely hinge on the contribution of urban areas toward more sustainable, greener growth. Through the lens of a multilevel governance framework, an assessment of green growth policies in Korean cities helps to identify concrete strategies for delivering a coherent policy message and improving governance across all levels of government, with particular recommendations in terms of policy, funding, technical capacity and information sharing. |
| Keywords: | sustainable development, development, government policy, planning, global warming, regional, regional economics, urban sustainability, territorial, cities, urban, green growth, climate |
| JEL: | Q2 Q3 Q4 Q5 R1 R4 R5 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2011/2-en&r=env |
| By: | Forslid, Rikard; Okubo, Toshihiro; Ulltveit-Moe, Karen-Helene |
| Abstract: | This paper develops a model of trade with heterogenous firms, where firms invest in abatement technology and thereby have an impact on their level of emissions. The model shows how firm productivity and firm exports are both positively related to investments in abatement technology. Emission intensity is, however, negatively related to firms' productivity and exports. The basic reason for these results is that a larger production scale supports more fixed investments in abatement technology and, in turn, lower emissions per output. In contrast to the standard models of heterogeneous firms, firms' productivity, and thus export performance, is not exogenous, but endogeneously determined by firms' investment in abatement technology. We derive closed form solutions for firm-level abatement investments and emissions per output, and test the empirical implications of the model using detailed Swedish firm-level data. The empirical results strongly support the model. |
| Keywords: | CO2-emissions; heterogeneous firms; international trade |
| JEL: | D21 F12 F15 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8583&r=env |
| By: | Kong, Jiehong (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration); Rönnqvist, Mikael (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration); Frisk, Mikael (Skogforsk) |
| Abstract: | Traditionally, most applications in the initial stage of forest supply chain deal with sawlogs to sawmills, pulpwood to pulp or paper mills and forest residues to heating plants. However, in the past decades, soaring prices of fossil fuel, global awareness about CO2 emission and increasing attention to domestic resource security have boosted the development of alternative renewable energy, among which forest bioenergy is the most promising and feasible choice for medium- and large-scale heating and electricity generation. Different subsidies and incentive policies for green energy further promote the utilization of forest bioenergy. As a result, there is a trend that pulpwood may be forwarded to heating plants as complementary forest bioenergy. Though pulpwood is more expensive than forest residues, it is more efficient to transport and has higher energy content. The competition between traditional forest industries and wood-energy facilities, expected to grow in the future, is very sensitive for the forest companies as they are involved in all activities. In this paper, we develop a model that all raw materials in the forest, i.e. sawlogs, pulpwood and forest residues, and byproducts from sawmills, i.e. wood chips and bark, exist in an integrated market where pulpwood can be sent to heating plants as bioenergy. It represents a multi-period multi-commodity network planning problem with multiple sources of supply, i.e. pre-selected harvest areas, and multiple kinds of destination, i.e. sawmills, pulp mills and heating plants. The decisions incorporate purchasing the raw materials in harvest areas, reassigning byproducts from sawmills, transporting those assortments to different points for chipping, storing, wood-processing or wood-fired, and replenishing fossil fuel when necessary. Moreover, different from the classic wood procurement problem, we take the unit purchasing costs of raw materials as variables, on which the corresponding supplies of different assortments linearly depend. With this price mechanism, the popularity of harvest areas can be distinguished. The objective of the problem is to minimize the total cost for the integrated market including the purchasing cost of raw materials. Therefore, the model is a quadratic programming (QP) problem with a quadratic objective function and linear constraints. A large case study in southern Sweden under different scenario assumptions is implemented to simulate the integrated market and to study how price restriction, market regulation, demand fluctuation, policy implementation and exogenous change in price for fossil fuel will influence the entire wood flows. Pair-wise comparisons show that in the integrated market, competition for raw materials between forest bioenergy facilities and traditional forest industries pushes up the purchasing costs of pulpwood. The results also demonstrate that resources can be effectively utilized with the price mechanism in supply market. The overall energy value of forest bioenergy delivered to heating plants is 23% more than the amount in the situation when volume and unit purchasing cost of raw materials are fixed. |
| Keywords: | Forest supply chain; integrated market; bioenergy; wood procurement; wood distribution; quadratic programming |
| JEL: | L70 L73 |
| Date: | 2011–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2011_011&r=env |
| By: | Mattia Cai (Department Land, Environment, Agriculture and Forestry, University of Padua, and The Mediterranean Science Commission – CIESM, Principauté de Monaco); Roberto Ferrise (CNR-IBIMET, National Research Council Institute of Biometeorology, Florence); Marco Moriondo (CNR-IBIMET, National Research Council Institute of Biometeorology, Florence); Paulo A.L.D. Nunes (The Mediterranean Science Commission – CIESM, Principauté de Monaco and Department Land, Environment, Agriculture and Forestry, University of Padua); Marco Bindi (Department of Plant, Soil and Environmental Science - University of Florence) |
| Abstract: | This paper investigates the empirical magnitude of climate conditions on tourist flows in Tuscany, exploring the use of a fine spatial scale analysis. In fact, we explore the use of an 8-year panel dataset of Tuscany’s 254 municipalities, examining how tourist inflows respond to variation in local weather conditions. In particular, as the area enjoys a fairly mild Mediterranean climate, our analysis focused on temperature extremes at key times of the tourist season, i.e., on maximum summer temperature and minimum winter temperature. Separate analyses are conducted for domestic and international tourists, so as to test the differences in the preferences among these distinct groups (or types of demand). Estimation results show the impact of climate change on tourist flows appears to vary significantly among destinations depending on the kind of attractions they offer, and those areas that host the main artistic and historical sights, affecting predominantly the domestic rather than the international tourists. |
| Keywords: | Domestic Tourists, International Tourists, Municipalities, Maximum And Minimum Daily Temperature, Dynamic Model, Temperature Demand Elasticity, GMM |
| JEL: | C23 D01 L83 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.67&r=env |
| By: | Caterina Gennaioli (Fondazione Eni Enrico Mattei); Massimo Tavoni (Fondazione Eni Enrico Mattei) |
| Abstract: | The aim of this paper is to provide an assessment of the potential for resource curse in the renewable energy sector. Taking a political economy approach, we analyze the link between public support schemes for renewable energy and the potential scope for rent seeking and corruption. The insights of a model of political influence by interest groups are tested empirically using a panel data of Italian provinces for the period 1990-2007. We find evidence that a curse exists in the case of wind energy, and specifically that: i) criminal association activity increased more in high-wind provinces and especially after the introduction of a more favourable public policy regime and, ii) the expansion of the wind energy sector has been driven by both the wind level and the quality of political institutions, through their effect on criminal association. The analysis points out that in the presence of poor institutions, efficient market-based policies can have an adverse impact. This has important normative implications especially for countries that are characterized by abundant renewable resources and weak institutions, and are thus more susceptible to the private exploitation of public incentives. |
| Keywords: | Corruption, Natural Resources Curse, Wind Energy, Political Economy |
| JEL: | D73 O13 P16 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.63&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 at 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 O19 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1113&r=env |
| By: | Hubert Stahn (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); Agnès Tomini (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) |
| Abstract: | This paper studies groundwater management in the presence of rainwater harvesting (RWH). We propose a two-state model that takes into account the standard dynamics of the aquifer and the dynamics of the storage capacity and we assume that the collection of rainwater reduces the natural recharge. We analyze the trade-off between these two water harvesting techniques in an optimal control model. In particular, we show that when these techniques are pure substitutes, the development of RWH leads in the long run to a depletion of the water table even if pumping is reduced. |
| Keywords: | Rainwater Harvesting; Conjunctive Use; Groundwater Management; Optimal Control; |
| Date: | 2011–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00626334&r=env |
| By: | Jürgen Blazejczak; Frauke G. Braun; Dietmar Edler; Wolf-Peter Schill |
| Abstract: | Increasing utilization of renewable energy sources (RES) is a priority worldwide. Germany has been a forerunner in the deployment of RES and has ambitious goals for the future. The support and use of renewables affects the economy: It creates business opportunities in sectors producing renewable energy facilities, but also comes along with costs for supporting the deployment of renewables. This paper analyses and quantifies the net balance of economic effects associated with renewable energy deployment in Germany until 2030. To this end, we use a novel model, the 'Sectoral Energy-Economic Econometric Model' (SEEEM). SEEEM is an econometric multi-country model which, for Germany, contains a detailed representation of industries, including 14 renewable energy technology sectors. Our results show that renewable energy expansion can be achieved without compromising growth or employment. The analysis reveals a positive net effect on economic growth in Germany. Net employment effects are positive. Their size depends strongly on labour market conditions and policies. Results at the industry level indicate the size and direction of the need for restructuring across the sectors of the Germany economy. |
| Keywords: | Renewable energy, Germany, net economic effects |
| JEL: | Q43 Q52 C5 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1156&r=env |
| By: | Marie-Christine Therrien; Juste Rajaonson; Georges A. Tanguay |
| Abstract: | Using sustainable tourism indicators (STI) creates many difficulties resulting mainly from the multiple interpretations of the concept of sustainable development, and by extension of the concept of sustainable tourism. To these difficulties are added an absence of a strong academic background, which is the result of incompatibilities between the needs and objectives of the academic versus the political world, which often challenges the need for indicators. We propose a parsimonious list of sustainable tourism indicators based on the application of a series of selection criteria. From the expert recognized indicators, all of these criteria help us choose the indicators, which cover the dimensions and issues of sustainable development for tourism. They are legitimized by existing experiences and sufficiently flexible to be useful for different destinations. In the end, the intersection of these conditions contributes to the scientific and political recognition of the indicators. We start by applying four general selection criteria to a 507 STI database. This allows us to reduce the list to 20 recognized STI. We end the selection process by applying three specific criteria in order to adjust the 20 STI to render them operational. We illustrate the selection procedure with an example of criteria application to the Gaspésie-Iles-de-la Madeleine region in Quebec. <P>L’utilisation d’indicateurs de tourisme durable (STI) pose de nombreux problèmes qui résultent principalement des multiples interprétations du développement durable et, de ce fait, du tourisme durable. S’y ajoute l’absence d’un cadre de référence établi résultant de l’incompatibilité entre les attentes et objectifs du milieu académique et du milieu politique et remettant souvent en cause la crédibilité et le bien-fondé des indicateurs. Pour y remédier, nous proposons une liste parcimonieuse d’indicateurs de tourisme durable (STI) basée sur l’application d’une série de critères de sélection. L’ensemble de ces critères permet de choisir, parmi les indicateurs reconnus par les experts, ceux qui couvrent largement les dimensions et les enjeux de développement durable dans le domaine du tourisme, qui sont légitimés par les expériences existantes et qui sont en même temps suffisamment flexibles pour être effectifs et utiles à différentes destinations. Nous croyons que le concours de ces conditions contribuera à la reconnaissance et à la légitimité scientifique et politique des indicateurs. Quatre critères de sélection généraux sont appliqués à une base de données de 507 STI pour en réduire le nombre à un effectif optimal de 20 STI. Ensuite, trois critères spécifiques permettent d’ajuster les 20 STI pour les rendre opérationnels. Nous illustrons cette démarche en appliquant ces critères à la région de la Gaspésie-Îles-de-la-Madeleine, Québec. |
| Keywords: | Indicators, Sustainable Tourism, Sustainable Development, Indicateurs, tourisme durable, développement durable |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2011s-60&r=env |