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on Environmental Economics |
| By: | Venkatachalam Anbumozhi (Asian Development Bank Institute (ADBI)); Mari Kimura; Kumiko Isono |
| Abstract: | As an integral part of sustainable development, the impacts from climate change, including increasing water stress, more extreme weather events, the potential for high levels of migration and the disruption of international markets are critical challenges for all Asian countries. With rapid economic growth and modernization, the countries in the region are increasing production and consumption, calling for critical adaption measures. With the Asian countries and the energy sector exceedingly accounting for a large share of CO2 and GHG emissions, businesses in Asia need to increase efficiency in energy use, offset emissions, and use more low carbon or renewable energy resources. Businesses are no longer considered part of the environmental problem as they are progressively becoming part of the solutions, and if furthered by an ideal regulatory disposition this would encourage corporations to strive for zero emissions. To address these issues, this paper reviews selected initiatives taken by Asian countries to comply with emerging global sustainability standards, reporting, and management systems, and tracks the response of Asian businesses to global environmental concerns, examines market based innovations including new regulations that augmented corporate excellence, and identifies future directions for business that lead low carbon society. It recommends governments and business to join forces in supporting low carbon initiatives, drawing upon market mechanisms through reconfiguring national environmental policies and strategies. |
| Keywords: | sustainable development, Climate change, Asian countries, environmental policies, environmental strategies |
| JEL: | M19 Q3 Q48 Q56 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:23201&r=env |
| By: | Adamos Adamou; Sofronis Clerides; Theodoros Zachariadis |
| Abstract: | Vehicle taxation based on a car’s CO2 emission levels is increasingly adopted in countries around the world. This paper describes a model of oligopolistic competition in markets with differentiated products, simulating automobile demand and supply under alternative tax regimes. The objective is to perform simulations in order to evaluate policies that could shift consumer purchases towards low-CO2 cars and thus lead to the reduction of fuel use and CO2 emissions. Focusing on an analysis of the car market of Greece, we assess the environmental and economic implications of alternative carbon-based tax schemes. Our findings, which are relevant for other European countries as well, illustrate that careful policy design, supported by an appropriate model, can bring about substantial environmental benefits without losing control of economic parameters such as public finances or firm profits. In some cases vehicle taxation can have adverse (though unintended) environmental consequences. |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:04-2012&r=env |
| By: | Bruno Nkuiya; Walid Marrouch; Eric Bahel |
| Abstract: | This paper explores the implications of the possibility of a shift in environmental damages on the participation in environmental treaties. Using a two-period model where the probability of a regime shift increases with the first-period emissions, we examine the issue of coalition formation under both fixed and dynamic membership. Our analysis suggests that endogenous uncertainty may increase participation. Moreover, we find that full cooperation may be sustained, but only in the presence of endogenous uncertainty. Interestingly, when the shift in the environmental damage is large enough, the model provides a way to solve the "puzzle of small coalitions" found in the literature related to International Environmental Agreements (IEAs). |
| Keywords: | International Environmental Agreements; Endogenous Uncertainty; Emissions; Shift in Damage. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:vpi:wpaper:e07-32&r=env |
| By: | Midori Aoyagi (Asian Development Bank Institute (ADBI)); Eiko Suda; Tomomi Shinada |
| Keywords: | Climate change, gender inclusion, agricultural production, Natural Disasters |
| JEL: | J16 Q54 Q58 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:23227&r=env |
| By: | Ulrich Hoffmann |
| Abstract: | Many economists and policy makers advocate a fundamental shift towards “green growth” as the new, qualitatively-different growth paradigm, based on enhanced material/resource/energy efficiency and drastic changes in the energy mix. “Green growth” may work well in creating new growth impulses with reduced environmental load and facilitating related technological and structural change. But can it also mitigate climate change at the required scale (i.e. significant, absolute and permanent decline of GHG emissions at global level) and pace? This paper argues that growth, technological, population-expansion and governance constraints as well as some key systemic issues cast a very long shadow on the “green growth” hopes. One should not deceive oneself into believing that such evolutionary (and often reductionist) approach will be sufficient to cope with the complexities of climate change. It may rather give much false hope and excuses to do nothing really fundamental that can bring about a U-turn of global GHG emissions. The proponents of a resource efficiency revolution and a drastic change in the energy mix need to scrutinize the historical evidence, in particular the arithmetic of economic and population growth. Furthermore, they need to realize that the required transformation goes beyond innovation and structural changes to include democratization of the economy and cultural change. Climate change calls into question the global equality of opportunity for prosperity (i.e. ecological justice and development space) and is thus a huge developmental challenge for the South and a question of life and death for some developing countries (who increasingly resist the framing of climate protection versus equity). |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:unc:dispap:205&r=env |
| By: | Zhu, Jinshan |
| Abstract: | The Kyoto Protocol's Clean Development Mechanism (CDM) has experienced a rapid growth. Until 2010, 2763 projects have been registered, standing for about 433 million ton CO2 equivalent (CO2-eq.) of annual carbon credits. However, the performances of CDM host countries are remarkably unbalanced. Previous literatures suggested that economic and investment conditions, energy intensity, energy structure, the share of annual carbon credits from high Global Warming Potential (GWP) Green House Gas (GHG), capacity and institutional buildings of domestic CDM governance can play important roles in promoting CDM. This quantitative analysis shows that domestic economic and investment conditions are the most decisive factors determining the performance of the CDM host countries. Additionally, the influence of carbon intensity of energy consumption is relatively modest, and energy intensity of GDP as well as the share of annual carbon credits from high Global Warming Potential (GWP) Green House Gas (GHG) is less significant. Moreover, several leading CDM countries are not as successful as they seem to be, when the influences of their vast territories, distinguished economic and investment conditions are excluded. Therefore, to simply transplant the CDM governances of these countries can hardly guarantee other countries in boosting their carbon credits outputs. |
| Keywords: | clean development mechanism, kyoto protocol, environmental law and economics |
| JEL: | Q5 K32 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:uca:ucaiel:11&r=env |
| By: | King, Robert P. |
| Abstract: | Climate change has the potential to drive transformations in natural resource access, availability, and use that will have significant, farâreaching impacts worldwide, not only for those of us living today but also for future generations. As economists we are being called upon to assess the economic impacts of alternative climate change scenarios and the costs of efforts to mitigate and adapt to the adverse consequences of climate change. I classify these professional activities as âeconomic analysis,â and I cite John Quigginâs 2011 AAEA Fellows Address (Quiggin 2012) as one of many noteworthy contributions we have made. Equally important, we are being asked to design economic artifacts â institutions, markets, contractual relationships, measuring and monitoring procedures, and decision support systems â that will allow people to better respond to and adapt to changing circumstances. I classify these professional activities as âeconomic design.â In my AAEA Presidential Address (King 2012) I asserted that these two sets of activities, economic analysis and economic design, while closely related and highly complementary, are also distinct and different. I also asserted that, while we are familiar with and accustomed to the processes and methods of economic analysis, our shared understanding of economic design scholarship is less fully developed. This paper focuses on the general questions of how we do economic design and what constitutes good scholarship in economic design, with illustrations and examples related to the design of climate change policy. |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare12:121412&r=env |
| By: | Kaliappa Kalirajan, (Asian Development Bank Institute (ADBI)); Kanhaiya Singh; Shandre Thangavelu; Anbumozhi Venkatachalam; Kumidini Perera |
| Abstract: | There is an urgent need to mainstream the key challenges of climate change into sector and development planning and decision making processes to create sustainable long-term development. Mainstreaming is seen as making more efficient and effective use of financial and human resources. It is implementing and managing climate change policy holistically, which sustains development, rather than undertaking piecemeal activities. This involves building mitigation and adaptation capacity in both micro and macro economic development. Climate change is not only a national phenomenon but also a global phenomenon that requires the participation of both the public and private sectors. The importance of private sector participation is highlighted by the magnitude of the investment needed to manage climate change, and the fact that market mechanisms seem to be more effective in addressing climate change than does the public sector. Public sector involvement—such as grants, overseas development assistance (ODA), and funding from other countries—is equally important in mitigation and adaptation projects. Empirical results in this study emphasize that more caution is needed in directing ODA towards climate change mitigation and adaptation due to the links between various macroeconomic variables related to growth and poverty reduction. This implies that ODA given to other important causes related to achieving the Millennium Development Goals should not be reduced. The results show that energy efficient transfer of technology to developing countries should accompany any efforts towards directing ODA towards mitigation. Without that, ODA directed towards mitigation may have adverse effects on the pace of poverty reduction in developing countries. Thus, involvement of the private sector becomes crucial for energy efficient technological innovation and transfer. |
| Keywords: | Climate change, financing climate change mitigation and adaptation, ODA programming |
| JEL: | F35 P33 Q56 O19 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:eab:financ:23218&r=env |
| By: | C. R. Ranganathan (Asian Development Bank Institute (ADBI)); K. Palanisami; K. R. Kakumanu; A. Baulraj |
| Abstract: | Many rural poor people in developing countries depend on agriculture and are highly influenced by climatic change. Hence, sustainable livelihood approaches are used at both policy and project level to initiate new poverty reduction activities and modify existing activities to improve livelihood incomes. Practices relevant to climate change adaptation around the world are wideranging and include development of technology, management, infrastructure, livestock, groundwater, and knowledge. Both structural interventions (such as building flood embankments, dikes, or seawalls or enhancing the natural setting or landscape) and nonstructural interventions (policies, knowledge development, awareness, methods and operating practices, including participatory mechanisms) have helped to reduce the impact of climate change. Further, market-based instruments such as credits and crop insurance were also developed to help poor households in many developing countries to cope with the uncertainties. The uptake of such adaptation practices is lagging, however, but informal institutions are playing a key role as they rely on enforcement methods and are not supported by the government. Mainstreaming adaptation and enhancing adaptive capacity could be increased by encouraging partnerships between informal processes and formal interventions to facilitate adaptation by the poor. The cost of adaptation is also significantly higher in developing countries. Nonetheless, more attention is needed in addressing future climate scenarios through agricultural research and development, irrigation development, infrastructure, and improved irrigation efficiency. |
| Keywords: | Climate change, Adaptation, vulnerability, the poor, developing countries, climate change effects |
| JEL: | N55 O13 Q54 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:23203&r=env |
| By: | Amigues, Jean-Pierre (Toulouse School of Economics (INRA, IDEI and LERNA)); Moreaux, Michel (Toulouse School of Economics (IDEI and LERNA)) |
| Abstract: | Pollution accumulation may result in more or less severe losses of natural self-cleaning capacities. We study a polluting resource management problem submitted to a potential shift from a high to a low pollution self-regeneration regime be crossed some critical pollution stock threshold. We rst describe the optimal resource exploitation policy absent the threshold. When at the threshold, the society has two options: either stabilizing the pollution level to avoid the loss of natural self-cleaning capacity or deliberately cross the threshold and switch to the low regeneration regime. We show under fairly general assumptions that there exists a unique critical pollution stock level such that thresholds located below this level will induce a switch from the high to the low regeneration regime while thresholds located above it will imply maintaining the high regime forever. We characterize the optimal policies in these two scenarios and show that triggering the low regeneration regime requires an upward jump of the resource consumption rate at the optimal switching time. |
| JEL: | Q15 Q17 |
| Date: | 2012–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:25514&r=env |
| By: | Charalampos Konstantinidis (Universty of Massachusetts) |
| Abstract: | Although organic farming is considered the poster child of rural development in Europe, there is little empirical evidence assessing its success in achieving the ambitious environmental and socio-economic objectives that it is purported to assist. This paper presents empirical evidence from the growth of organic farming in Europe over the past two decades that questions the highly optimistic claims of policy makers. Although policies in support of organic impact have had an overall positive environmental impact, their social impact is ambiguous, as organic farming appears to have grown more in areas with larger average farm sizes. Additionally, contrary to what is often assumed, organic farms in Europe display larger average sizes and lower rates of labor intensity than their conventional counterparts, casting doubts on the efficacy of organic farms to allow family farmers to remain in the countryside as high-value producers. I assert that this development should be viewed as evidence of the \conventionalization" of organic farming, and suggest that policy makers take into account the transformations of the structures of production, which benefit from the support for organic farming. Treating the experience of organic farmers in the EU as a lesson for schemes paying for environmental services, I suggest that the success of organic farming should be evaluated by the numbers of participating farmers, rather than by area covered, as has been the predominant approach so far. Finally, I assert that strong agricultural cooperatives are necessary to secure a long-lasting passage of small farmers to organic methods of production. JEL Categories: Q1, Q58, O52 |
| Keywords: | Organic Farming, European Union, Environment |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2012-01&r=env |
| By: | Julien Daubanes; Pierre Lasserre |
| Abstract: | Optimum commodity taxation theory asks how to raise a given amount of tax revenue while minimizing distortions. We reexamine Ramsey's inverse elasticity rule in presence of Hotelling-type non-renewable natural resources. Under standard assumptions borrowed from the non-renewable-resource-extraction and from the optimum-commodity-taxation literatures, a non-renewable resource should be taxed in priority whatever its demand elasticity and whatever the demand elasticity of regular commodities. It should also be taxed at a higher rate than other commodities having the same demand elasticity and, while the tax on regular commodities should be constant, the resource tax should vary over time. When the generation of reserves by exploration is determined by the net-of-tax rents derived during the extraction phase, reserves become a conventional form of capital and royalties tax its income; our results contradict Chamley's conclusion that capital should not be taxed at all in the very long run. When the economy is autarkic, in the absence of any subsidy to reserve discoveries, the optimal tax rate on extraction obeys an inverse elasticity rule almost identical to that of a commodity whose supply is perfectly elastic. As a matter of fact, there is a continuum of optimal combinations of reserve subsidies and extraction taxes, irrespective of whether taxes are applied on consumption or on production. When the government cannot commit, extraction rents are completely expropriated and subsidies are maximum. In general the optimum Ramsey tax not only causes a distortion of the extraction path, as happens when reserves are given, but also distorts the level of reserves developed for extraction. When that distortion is the sole effect of the tax, it is determined by a rule reminiscent of the inverse elasticity rule applying to elastically-supplied commodities. In an open economy, Ramsey taxes further acquire an optimum-tariff dimension, capturing foreign resource rents. For countries that import the resource, the result that domestic resource consumption is to be taxed at a higher rate than conventional commodities having the same demand elasticity emerges reinforced. <P> |
| Keywords: | Optimum commodity taxation, inverse elasticity rule, non-renewable resources, hotelling resource, supply elasticity, demand elasticity, capital income taxation, |
| JEL: | Q31 Q38 H21 |
| Date: | 2012–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2012s-04&r=env |
| By: | Grogro, Ole |
| Abstract: | This paper introduces the computable partial equilibrium energy model 'Global Resource Extraction and Energy Transformation' (GREET), its structure, assumptions and the outcomes of two exemplary scenarios. GREET is characterized by a comprehensive modelling of constraints on the diffusion of renewable energy, where physical constraints on the regional deployment of renewable energy technologies are complemented by the need to provide storage capacities for renewable production of electricity. The consumption of conventional primary energy carriers, on the other hand, is constrained by regional resource endowments as well as the need for capacity investments in primary energy carrier extraction-, trade- and ransformation processes. In comparison to most contrastable global energy models, there is an explicit modelling of interregional trade flows in primary energy carriers, for which originating and destinating regions of the energy trades can clearly be specified. Thus, GREET, covering global primary energy trades for eleven world model regions, is very applicable for looking into future developments of energy trade flows. At the same time GREET doesn't miss to cover the point that predominantly renewable based energy systems of the future are confined by constraints on renewable energy production technologies, such as the need to provide electricity storage capacities. -- |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdok:1202&r=env |
| By: | Quaas, Martin F.; Requate, Till |
| Abstract: | We present a model of a multi-species fishery and show that (i) consumer preferences for seafood diversity may trigger a sequential collapse of fish stocks under open-access fishery, (ii) the stronger the preferences are for diversity the higher is the need for coordinated multi-species regulation, (iii) second-best optimal management of only one (or a few) species is less strict than socially optimal management of the same species. Finally, (iv) myopic regulation of one species, ignoring spill-overs to other species, may cause depletion of other stocks that would not be depleted under open access. -- |
| Keywords: | marine biodiversity,fishery economics,product differentiation |
| JEL: | Q22 Q57 Q21 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cauewp:201203&r=env |
| By: | Mumbunan, Sonny; Ring, Irene; Lenk, Thomas |
| Abstract: | A region of ecological importance which generates uncompensated cross-territorial positive spillovers has a comparatively higher fiscal need due to the direct and indirect costs it incurs for nature conservation. In order adequately to acknowledge fiscal needs relating to nature conservation, we propose an indicator based on protected area as a means of distributing general-purpose transfers and model the consequences of this for Indonesia's current system of fiscal transfer from the national to the provincial level. The results suggest that about a third of the country's provinces would benefit from the new transfer regime and that the equalizing effect of the transfers increases as the proportion of protected area increases. -- |
| Keywords: | ecological fiscal transfers,intergovernmental fiscal transfer,biodiversity conservation,protected areas,fiscal equalization,Indonesia |
| JEL: | H77 Q57 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:062012&r=env |
| By: | Joshua M.Duke (Department of Food and Resource Economics, University of Delaware); Steven J. Dundas (Department of Economics, North Carolina State University); Kent D. Messer (Department of Food and Resource Economics, University of Delaware) |
| Abstract: | Economists advocate that the billions of public dollars spent on conservation should be allocated to achieve the largest possible social benefit. This is what we term “cost-effective conservation”-- a process that incorporates both benefits and costs that are measured with money. This controversial proposition has been poorly understood and not implemented by conservation planners. Drawing from evidence from the largest conservation programs in the United States, this paper seeks to improve the communication between economists and planners and overcome resistance to cost-effective conservation by addressing the open questions that likely drive skepticism among non-economists and by identifying best practices for project selection. We first delineate project-selection strategies and compare them to optimization. Then we synthesize the body of established research findings from economics into 20 practical lessons. Based on theory, policy considerations, and empirical evidence, these lessons illustrate the potential gains from improving practices related to cost-effective selection and also address how to overcome landowner-incentive challenges that face programs. |
| Keywords: | conservation planning, cost-effectiveness, nonmarket valuation, benefit cost targeting, optimization, prioritization |
| JEL: | Q18 Q24 Q57 Q58 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:dlw:wpaper:12-01.&r=env |
| By: | Kenji Fujiwara; Ngo Van Long |
| Abstract: | Constructing a dynamic game model of trade of an exhaustible resource, this paper compares feedback Nash and Stackelberg equilibria when the exporting country sets quantity rather than price. We consider two different leadership scenarios: leadership by the importing country, and leadership by the exporting country. We numerically show that as compared to the Nash equilibrium, both countries are better off if the importing country is a leader, but that the follower is worse off if the exporting country is a leader. Consequently, the world welfare is highest under the importing country's leadership and lowest under the exporting country's leadership. <P>On construit un modèle d’un jeu dynamique d’échange en ressource non-renouvelable sous l’hypothèse que le pays exportateur détermine la quantité au lieu du prix. L’objectif est de comparer l’équilibre de Nash avec les équilibres de Stackelberg. Dans un premier temps, c’est le pays importateur qui est le leader. Dans un deuxième temps, le pays exportateur assume le leadership. On démontre numériquement que, par rapport à l’équilibre de Nash , le niveau de bien-être des deux pays est plus élevé sous l’équilibre de Stackelberg dans le cas où l’importateur est le leader. Dans le cas où le pays exportateur est le leader, le niveau de bien-être du pays importateur est moins élevé que celui de l’équilibre de Nash. Le bien-être du monde entier dans le cas du leadership du pays importateur est plus élevé que dans le cas opposé. |
| Keywords: | dynamic game, exhaustible resource, Stackelberg leadership., jeu dynamique, ressources non-renouvelables, leadership de Stackelberg. |
| JEL: | C73 L72 Q34 F18 |
| Date: | 2012–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2012s-02&r=env |
| By: | Gawel, Erik |
| Abstract: | Art. 9 der europäischen Wasserrahmenrichtlinie trägt den Mitgliedsstaaten auf, bis 2010 die nationalen Anforderungen an die Entgelte für Wasserdienstleistungen am Prinzip der Kosten-deckung einschließlich Umwelt- und Ressourcenkosten auszurichten, um effiziente Anreize für die Nutzung knapper Wasserressourcen zu setzen. Im Zuge der Implementation der Richtlinie wurden nahezu flächendeckend empirische Studien zur Erfassung der faktischen Kostendeckungsgrade der Trinkwasserver- und Abwasserentsorgung in Deutschland vorgelegt. Der nachfolgende Beitrag prüft kritisch, inwieweit die dabei zu Tage tretenden Ergebnisse und die eingesetzte Methodik die weithin vertretene These von der bereits gegebenen Kostendeckung in Deutschland stützen können. Es wird gezeigt, dass wesentliche Aspekte der Erfüllungs-pflichten aus Art. 9 zur Umsetzung erst noch anstehen. -- Art. 9 of the European Water Framework Directive requires of the Member States up to 2010 a national pricing policy for water-related services that ensures full cost-recovery including environmental and resource costs. The WFD's cost-recovery of water services aims at setting efficient incentives for the use of scarce water resources. In the course of the directive's implementation in Germany, several empirical studies concerning the revenue-to-cost ratio in the German water services sector have been conducted so far. Based on the empirical find-ings it has been argued that cost-recovery has already been achieved as far as water supply and sewage disposal in Germany are concerned. This paper critically discusses the results as well as the methodological avenues of the conducted surveys. Do they really reveal a satisfy-ing level of cost-recovery in practice? It is emphasised that relevant aspects of the obligations derived from Art. 9 are still to be met even in the German water utilities sector. |
| Keywords: | Wasserwirtschaft,Gebühren,Entgelte,Wasserrahmenrichtlinie,Kostendeckung,Lenkung,Kommunalabgabenrecht,water supply,sewerage,fees,water prices,Water Framework Directive,cost recovery,regu-latory charges,German law of municipal charges and levies |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:052012&r=env |
| By: | Ambec, Stefan; Dinar, Ariel; McKinney, Daene |
| Abstract: | By signing a fixed water sharing agreement (FWSA), countries voluntarily commit to release a fixed amount of river water in exchange for an agreed compensation. We examine the vulnerability of such commitments to reduced water ows. Among all FWSAs that are acceptable to riparian countries, we find out the one which is sustainable to the most severe drought scenarios. The so-called upstream incremental FWSA assigns to each country its marginal contribution to its followers in the river. Its mirror image, the downstream incremental FWSA, is not sustainable to reduced ow at the source. We apply our analysis to the Aral Sea basin agreement. |
| Keywords: | international river treaty, water, stability, core, compliance, Aral sea. |
| JEL: | D74 Q25 Q28 Q54 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:25459&r=env |