nep-env New Economics Papers
on Environmental Economics
Issue of 2012‒03‒21
34 papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Unilateral Action and Negotiations about Climate Policy By Kai A. Konrad; Marcel Thum
  2. On the Obligation to Provide Environmental Information in the 21st Century – Empirical Evidence from Germany By Massier, Philipp; Römer, Daniel
  3. Second-best Climate Policy By Hoel, Michael
  4. Facing China's Coal Future: Prospects and Challenges for Carbon Capture and Storage By Dennis Best; Ellina Levina
  5. 'Green'growth,'green'jobs and labor markets By Bowen, Alex
  6. Costs and benefits of relaunching nuclear energy in Italy By Ivan Faiella; Luciano Lavecchia
  7. On the Environmental Effectiveness of the EU Marine Strategy Framework Directive By Christine Bertram, Katrin Rehdanz
  8. Designing emissions trading in practice general considerations and experiences from the EU Emissions Trading Scheme (EU ETS) By Heindl, Peter; Löschel, Andreas
  9. Information Disclosure Strategies for Green Industries By Venkatachalam Anbumozhi; Qwanruedee; Chotichanathawewong; Thirumalainambi Murugesh
  10. Policy options for climate policy in the residential building sector: The case of Germany By Schröer, Sebastian
  11. Banking of Surplus Emissions Allowances: Does the Volume Matter? By Karsten Neuhoff; Anne Schopp; Rodney Boyd; Kateryna Stelmakh; Alexander Vasa
  12. International trade and the adaptation to climate change and variability By Stephan, Gunter; Schenker, Oliver
  13. Dynamics in a environmental model with tourism taxation By Russu, Paolo
  14. Climatic factors as determinants of International Migration By Michel BEINE; Christopher PARSONS
  15. The economic impact of climate change on food security in Malaysia By Chuen Khee, Pek; Yet Mee, Lim; Chee Keong, Choong
  16. Developing economies in the current climate regime : new prospects for resilience and sustainability ? The case of CDM projects in Asia By Pauline Lacour; Jean-Christophe Simon
  17. Valuing Mortality-Risk Reductions: Progress and Challenges. By Cropper, Maureen; Hammitt, James K.; Robinson, Lisa A.
  18. The timeline of trading fricions in the European Carbon Market By Vicente Medina Martínez; Ángel Pardo Tornero; Roberto Pascual
  19. Environmental innovation and employment dynamics in different technology fields: An analysis based on the German community innovation survey 2009 By Horbach, Jens; Rennings, Klaus
  20. The Transitional Costs of Sectoral Reallocation: Evidence from the Clean Air Act and the Workforce By William Walker
  21. Climate and trade policies: from mutual destruction to mutual support. By Messerlin, Patrick
  22. The Political Economy of Green Growth: Illustrations from Southern Africa By Resnick, Danielle; Tarp, Finn; Thurlow, James
  23. Estimating the Impact on Efficiency of the Adoption of a Voluntary Environmental Standard: An Empirical Study of the Global Copper Mining Industry By Lise Tole; Gary Koop
  24. Estimating the Impact on Efficiency of the Adoption of a Voluntary Environmental Standard: An Empirical Study of the Global Copper Mining Industry By Lise Tole; Gary Koop
  25. Accessing economic and political impacts of Hydrological variability on treaties : case studies on the Zambezi and Mekong basins By Blankespoor, Brian; Basist, Alan; Dinar, Ariel; Dinar, Shlomi
  26. Cultural and Political Determinants of Air Quality By Francisca Guedes de Oliveira; Alexandra Leitão
  27. Water Conservation versus Soil Salinity Control By Alain Ayong Le Kama; Agnès Tomini
  28. Do Biofuel Mandates Raise Food Prices? By Ujjayant Chakravorty; Marie-Hélène Hubert; Michel Moreaux; Linda Nøstbakken
  29. Development from Below: Social Accountability in Natural Resource Management By Kishan Khoday; Leisa Perch
  30. Risk and Sustainability: Assessing Fisheries Management Strategies By Vincent Martinet; Michel De Lara; Julio Peña-Torres; Héctor Ramírez Cabrera
  31. Improving farmers'access to agricultural insurance in India By Mahul, Olivier; Verma, Niraj; Clarke, Daniel J.
  32. Resource curse: new evidence on the role of institutions By Sarmidi, Tamat; Siong Hook, Law; Jafari , Yaghoob
  33. Combating Deforestation? – Impacts of Improved Stove Dissemination on Charcoal Consumption in Urban Senegal By Gunther Bensch; Jörg Peters
  34. Thank you for not smoking: evidence from the Italian smoking ban By Paolo Buonanno; Marco Ranzani

  1. By: Kai A. Konrad; Marcel Thum
    Abstract: We analyze bargaining over international climate agreements in a setting with incomplete information about abatement costs. Unilateral commitment to high abatement reduces the gains from global cooperation. This reduces the probability of reaching efficient international environmental agreements.
    Keywords: mitigation, international climate agreements, bargaining, unilateral advances
    JEL: Q54 Q58 F53 H41
    Date: 2011–12
  2. By: Massier, Philipp; Römer, Daniel
    Abstract: In this paper, we study the effectiveness of environmental information disclosure as a regulatory instrument. In particular we analyze its impact when environmental regulation is already advanced. Using German stock market data, we are able to identify the impact of the European Pollutant Emission Register (EPER) on the market value of listed firms using a Multivariate Regression Model (MVRM). First, we show that the publication of EPER data leads to negative abnormal returns of the respective listed firms in Germany. Second, we study drivers of these abnormal returns. Here, we find that the firms' individual level of non-carbon emissions can explain the observed changes in market valuation, while carbon dioxide emissions do not seem to be punished by the market. Moreover, we include information on voluntarily provided environmental reports and find that these reports can serve as a substitute to the obligatory register.
    Keywords: information disclosure; EPER; event study; environmental reports
    JEL: L51 Q52 G14
    Date: 2012–03–09
  3. By: Hoel, Michael (Dept. of Economics, University of Oslo)
    Abstract: Countries with an active climate policy often use several other policy instruments in addition to a price on carbon emissions, such as subsidies to renewable energy. An obvious reason for subsidizing alternatives to carbon energy is that the price of carbon emissions is "too low". The paper derives implications for a second-best climate policy if for some reason the price of carbon emissions is lower than the Pigovian level, and also discusses reasons policy makers might have for setting the tax rate at an ine¢ ciently low level. Even if the current tax rate is optimally set, governments cannot commit to future tax rates. In some cases this inabilty to commit may justify subsidies to investments in renewable energy.
    Keywords: carbon tax; subsidies; commitment
    JEL: Q42 Q48 Q54 Q58
    Date: 2012–01–26
  4. By: Dennis Best; Ellina Levina
    Abstract: This paper is the first IEA analysis that focuses on country-specific trends, opportunities and challenges for carbon capture and storage (CCS). It follows previous IEA publications on CCS and studies on cleaner coal and advanced coal technologies. The paper benefitted from significant contributions and support from the China Coal Information Institute (CCII) of the State Administration of Work Safety (SAWS), and The Climate Group China. According to IEA analysis, if there are no major policy changes, carbon-intensive coal and other fossil fuels will continue to play a significant role in meeting future energy needs, both in China and globally. CCS is one technological option available to reduce carbon dioxide (CO2) emissions from the use of fossil fuels. CCS offers the opportunity to meet climate change objectives while providing energy security, as part of a portfolio of options including energy efficiency, renewable energy, nuclear energy, more efficient coal technologies and fuel switching from coal to gas. To meet global energy challenges associated with CO2 emissions, development and deployment of all available technologies will be necessary to achieve a more sustainable future. This paper discusses the status of CCS in China, providing updates on past activities in research and development (R&D), on current projects underway, and an overview of potential and challenges for CCS development in China. By exploring China’s energy and emission trends and pathways, this paper analyses China’s current CCS-related activities and policies, and options for financing CCS. The paper also provides perspectives on CCS from various Chinese stakeholders, and examples of key CCS activities with details on specific projects, and information on the regulatory and policy environment, as well as international co-operation related to CCS in China.
    Date: 2012–02–15
  5. By: Bowen, Alex
    Abstract: The term'green jobs'can refer to employment in a narrowly defined set of industries providing environmental services. But it is more useful for the policy-maker to focus on the broader issue of the employment consequences of policies to correct environmental externalities such as anthropogenic climate change. Most of the literature focuses on direct employment created, with more cursory treatment of indirect and induced job creation, especially that arising from macroeconomic effects of policies. The potential adverse impacts of green growth policies on labor productivity and the costs of employment tend to be overlooked. More attention also needs to be paid in this literature to how labor markets work in different types of economy. There may be wedges between the shadow wage and the actual wage, particularly in developing countries with segmented labor markets and after adverse aggregate demand shocks, warranting a bigger and longer-lasting boost to green projects with high labor content. In these circumstances, the transition to green growth and job creation can go hand in hand. But there are challenges, especially for countries that have built their industrial development strategies around cheap carbon-based energy. Induced structural change, green or otherwise, should be accompanied by active labor market policies.
    Keywords: Environmental Economics&Policies,Climate Change Mitigation and Green House Gases,Labor Markets,Climate Change Economics,Labor Policies
    Date: 2012–03–01
  6. By: Ivan Faiella (Banca d'Italia); Luciano Lavecchia (Banca d'Italia)
    Abstract: This paper supplies elements for assessing the costs and benefits of electronuclear energy in order to pursue three objectives: security of supply, cost reduction, and environmental sustainability. The study reached the following conclusions: 1) the use of nuclear energy increases the diversification of the energy mix and of energy suppliers, raising energy security levels, but it does not reduce Italy’s dependence on foreign energy; 2) the use of nuclear energy would not imply a reduction in power generation costs, but it would contain their volatility, with benefits in terms of decreasing uncertainty; 3) environmental impacts would differ depending on the time horizon considered: in the medium term, this technology would provide an important contribution to curbing greenhouse gas emissions; the long-term effects are more ambiguous and raise important intergenerational issues.
    Keywords: nuclear energy, energy security, environmental impact of energy use
    JEL: Q42 Q53 Q54
    Date: 2012–02
  7. By: Christine Bertram, Katrin Rehdanz
    Abstract: Marine and coastal ecosystems – and thus the benefits they create for humans – are subject to increasing pressures and competing usages. For this reason, the European Union (EU) adopted the Marine Strategy Framework Directive (MSFD), which is to guide future maritime policy in the EU and aims at achieving or maintaining a good environmental status (GES) of the European seas by 2020. To this end, the MSFD requires the development of improvement measures, which have to be assessed inter alia by examining their cost-effectiveness and by carrying out cost-benefit analysis (CBA) before their implementation. In this paper, we investigate the applicability of environmental CBA in the marine context and identify and discuss problems that may hamper the environmental effectiveness of the MSFD. For example, marine ecosystem services are much less tangible than terrestrial ecosystem services. This implies greater challenges for the quantification of societal benefits in a marine context. One finding is that the limitations of environmental valuation methods regarding their ability to capture the whole total economic value of improvement measures are a potential source of problems, as the MSFD allows countries to disregard measures with disproportionately high costs. The trans-boundary nature of the main European seas adds to the complexity of the valuation task, e.g. due to the danger that benefits that occur outside of national territories are neglected. Moreover, the current state of knowledge on the functioning of complex marine ecosystems and the links to socio-economic impacts and human well-being seems insufficient to meet the MSFD requirements
    Keywords: Cost-benefit analysis, ecosystem services, environmental valuation, EU Marine Strategy Framework Directive, Europe
    JEL: Q51 Q53 Q57 Q58
    Date: 2012–03
  8. By: Heindl, Peter; Löschel, Andreas
    Abstract: This paper deals with designing emissions trading in practice. After a short introduction to the general idea of emissions trading, practical requirements for the introduction of an emissions trading scheme are considered, including the temporal and spatial dimension as well as administrative requirements and the role of markets. Historical developments regarding emissions trading are discussed. Currently, the largest trading scheme is the EU Emissions Trading Scheme (EU ETS) that aims to reduce greenhouse gas emissions in the European industry by 21 percent until 2020 compared to 2005 levels. Because of its prominent role, the basic design and the process of introducing the EU scheme are reviewed in more detail. Finally, the impact of the EU ETS on the regulated entities is analyzed based on an annual survey among German companies regulated by the EU ETS which is conducted by the Centre for European Economic Research (ZEW) in a common project with KfW Bankengruppe. --
    Keywords: Emissions Trading,Low Carbon Economy,EU ETS
    JEL: Q48 Q53 Q58
    Date: 2012
  9. By: Venkatachalam Anbumozhi (Asian Development Bank Institute (ADBI)); Qwanruedee; Chotichanathawewong; Thirumalainambi Murugesh
    Abstract: Environmental information disclosure strategies, which involve corporate attempts to increase the availability of information on pollution and emissions, can become a basis for a new wave of environmental protection policy that follows and has the potential to complement traditional command and control and market-based approaches. Although a growing body of literature and operational programs suggest that publicly disclosing the information can motivate improved corporate environmental performance, this phenomenon remains poorly understood. This paper reviews the economic and legitimacy theory behind information disclosure and analyzes the current practice and programs adopted in industrialized and industrializing countries. Admittedly few in number, the cases studied reveal the advantages of such voluntary approaches, when the countries of developing Asia must deal with weak institutions, growing markets, and strong communities. Factors that contributed to widespread success of selected programs in the People’s Republic of China, India, Indonesia, the Philippines, and the United States are information quality, the dissemination mechanisms, provision of incentives for good performers, and public and private pressure.
    Keywords: Environmental information disclosure strategies, green industries, corporate environmental performance
    JEL: Q52 Q53 Q57 Q58
    Date: 2011–08
  10. By: Schröer, Sebastian
    Abstract: In order to achieve the climate protection goals in the building sector, a higher rate of building refurbishment is necessary to improve the energy standard of residential building stock in the European Union. Although subsidisation seems to be necessary, optimal measures concerning cost effectiveness are unclear. Using a stylised model of the German residential building stock, we analyse different refurbishment measures by simulating every relevant investment until 2030. In particular, we compare two different options that are relevant for political measures: first, comprehensive refurbishments that are expensive but achieve the greatest reductions in energy consumption and GHG emissions and second, partial refurbishments which include only low-cost improvements but can be achieved on a wide scale. We conclude that comprehensive refurbishments will require the least amount of investment costs per ton GHG emissions and provide the highest reductions in energy consumption in 2030. Hence, partial refurbishments are never optimal. However, in terms of cumulated GHG emissions in the period considered, the difference between both options is very small. This is due to their different dynamics: comprehensive refurbishments achieve fewer results in the first years but catch up quickly, which means that the higher the refurbishment rate the higher the advantage of comprehensive refurbishments. --
    Keywords: residential building sector,refurbishment,climate policy,energy saving,policy scenarios
    JEL: C60 H30 O33 Q40 Q58
    Date: 2012
  11. By: Karsten Neuhoff; Anne Schopp; Rodney Boyd; Kateryna Stelmakh; Alexander Vasa
    Abstract: In the European Emission Trading scheme the supply of allowances exceeds emissions - cumulating, according to our estimates, in a surplus of 2.7 billion tonnes by 2013/2014. We find that initially the surplus was acquired by power companies so as to hedge future carbon costs. As the surplus exceeds this hedging demand, additional allowances need to be acquired as speculative investment. This requires higher rates of return and implies that expected future carbon prices are highly discounted. This could explain the recent drop in carbon prices. The analysis shows that the volume of unused allowances matters for the discount applied to future carbon prices. We use our supply-demand framework to assess currently discussed policy options set-aside, reserve price for auctions and adjustments of emission targets.
    Keywords: European emission trading scheme, banking, discount rates
    JEL: G18 Q48
    Date: 2012
  12. By: Stephan, Gunter; Schenker, Oliver
    Abstract: This paper has three messages mainly, which are observed in a simple model of climate change, international trade and regional adaptation. First, trade can be viewed as a kind of adaptation to climate change and variability, as trade can help to reduce direct impacts of global climate change on a region's welfare. In particular, the less affected and the richer nations are, the more they can profit from moderating the impacts of global climate change through trade. Second, if regions are rich enough to adapt optimally to climate change, the resulting allocation of adaptation measures is Pareto-efficient. In this case funding of adaptation, which is an element of international climate policy, does not make sense from an economic perspective. Third, since the regions of the South typically lack the resources for adapting optimally to climate change, because of terms of trade effects, it might be in the selfinterest of the industrialized nations to fund adaptation in the developing part of the world. However, providing financial assistance for adaptation can be Pareto-improving only, if the benefits of funding, i.e., damages, which are moderated through adaptation, are big enough, and hence, if the recipient's own expenditure for adaptation is low. If not, the paradoxical effect of recipient immiserization through tied transfers can occur. --
    Keywords: Funding of adaptation,climate change,international trade
    JEL: F18 Q56 Q54
    Date: 2012
  13. By: Russu, Paolo
    Abstract: The purpose of this work is to analyze the dynamics of a model describing the interaction between tourists (T) and environmental resource (E) in the presence or absence of a tourist tax , used to protect the environmental resource. The model highlights how the introduction of tourist tax complicates the dynamics of the system, thus giving origin a new internal equilibrium that is a saddle point, which the stable manifold separates the basin attraction of the locally attractive internal positive point from the one equilibrium point (K; 0), which is also locally stable. Moreover, starting from a system with beta= 0, which has an unstable internal equilibrium, a suitable combination of tourist tax and defensive expenditures leads to a stabilization the protect system.
    Keywords: Words–tourism economics; tourism taxation; Hopf bifurcation; environmental quality; economic modelling
    JEL: Q5 C02 L83
    Date: 2012–03–07
  14. By: Michel BEINE (University of Luxembourg, UCL-IRES and CES-Ifo); Christopher PARSONS (University of Nottingham, UK)
    Abstract: In this paper, we examine environmental factors as potential determinants of international migration. We distinguish between unexpected short-run factors, captured by natural disasters, as well as long-run climate change and climate variability captured by deviations and volatilities of temperatures and rainfall from and around their long-run averages. We start from a simple neo-classical model, which is augmented to include environmental factors at origin in the form of amenities. We then test the model using a panel dataset of bilateral migration flows for the period 1960-2000, the time and dyadic dimensions of which additionally allow us to control for numerous time-varying and time invariant factors. Using our primary specification, having accounted for other well documented determinants of migration, we find no direct impact of climatic change on international migration in the medium to long run across our entire sample. These results are robust when further considering migrants returning home. Conditioning our regressions upon origin country characteristics, we find evidence that shortfalls in precipitation constrain migration to developing countries from those which rely more heavily upon agriculture and spur movements to developing countries from those with fewer groundwater reserves. We further use the rate of urbanization as a proxy for internal migration and find strong evidence that natural disasters beget greater flows of migrants to urban environs.
    Keywords: International Migration, Climate change, Natural disasters, Income Maximization
    JEL: F22 O15
    Date: 2012–03–12
  15. By: Chuen Khee, Pek; Yet Mee, Lim; Chee Keong, Choong
    Abstract: This study estimates the economic impact of climate change on food security in Malaysia. The contingent valuation technique is employed on 456 randomly selected households in the vicinities of Selangor Darul Ehsan. The study finds that climate change mitigation programmes to ensure food security are important. The public is willing to pay extra rice price in substitution of a rice subsidy reduction impact for the mitigation programmes. More specifically, the study ascertains that households on average are willing to pay 25% more for rice in replace of the subsidy reduction impact. This value conveys a total economic value of MYR557 million per annum, based on the total annual rice consumption of Malaysians who are willing to pay for the rice subsidy reduction impact. This substantial value may help give directions to the policy makers to draft more responsible food security and climate change mitigation bills in the future.
    Keywords: willingness-to-pay; climate change; food security; contingent valuation
    JEL: N5
    Date: 2011–12–01
  16. By: Pauline Lacour (CREG - Centre de recherche en économie de Grenoble - Université Pierre Mendès-France - Grenoble II : EA4625); Jean-Christophe Simon (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : FRE3389 - Université Pierre Mendès-France - Grenoble II)
    Abstract: This paper offers a review of the current position of developing countries in the climate regime and international negotiations based primarily on the analysis of implementation of Clean Development Mechanism (CDM). The paper will place emphasis on changes in national policies to accommodate CDM projects, focussing on the scope and rationale for bottom-up policies and measures as part of development strategies favouring more resilience and sustainability. Two issues are addressed more specifically: firstly regional specificity among developing areas and notably the pre-eminence of projects located in Asia, and secondly the relevance of CDM projects for both sustained growth and effective mitigation strategies. Regarding the latter, we consider that CDM project multiplication does question the relevance of national policies and the diversity of actors/stakeholders to foster upgraded domestic well targeted development strategies. Our research considers differences between developing countries and regions regarding selection and implementation of climate mitigation projects- with reference to their GHG emissions and national energy profiles (calculation from Enerdata source and IEA). It refers to selected cases of projects in East Asia - focus on China and Asean countries - showing particular sector selection patterns (differing between semi industrial economies and less developed countries) and diversification of stakeholders for development (role of regional actors within Asia). The analysis is based on international data base of CDM projects (United Nations) and secondary data from IGES (Japan) and Enerdata. The conclusion will examine prospects for CDM in a post 2012 climate régime for developing economies and the future relevance of CDM projects in the framework of Nationally Appropriate Mitigation Actions.
    Keywords: emerging countries ; development policy ; climate regime ; mitigation ; Clean Development Mechanism Projects ; sustainability ; national climate strategies ; South East Asia
    Date: 2011–09–19
  17. By: Cropper, Maureen; Hammitt, James K.; Robinson, Lisa A.
    Abstract: The value of mortality risk reduction is an important component of the benefits of environmental policies. In recent years, the number, scope, and quality of valuation studies have increased dramatically. Revealed-preference studies of wage compensation for occupational risks, on which analysts have primarily relied, have benefited from improved data and statistical methods. Stated-preference research has improved methodologically and expanded dramatically. Studies are now available for several health conditions associated with environmental causes, and researchers have explored many issues concerning the validity of the estimates.With the growing numbers of both types of studies, several meta-analyses have become available that provide insight into the results of both methods. Challenges remain, including better understanding of the persistently smaller estimates from statedpreference than from wage-differential studies and of how valuation depends on the individual’s age, health status, and characteristics of the illnesses most frequently associated with environmental causes.
    Date: 2011–06
  18. By: Vicente Medina Martínez (Facultad de Economía); Ángel Pardo Tornero (Dpto. Economía Financiera y Actuarial); Roberto Pascual (Universitat de les Illes Balears)
    Abstract: We evaluate the quality of prices of the EU-ETS, the most active European derivative market for greenhouse gas emissions allowances (EUAs). So far, this market has had two phases, a trial phase (from 2005 to 2007) and a commitment phase (from 2008 to 2012). The true value of a trial-phase EUA at the beginning of 2008 was inevitably zero because it could not be used in the commitment phase to cover emission targets. However, continued rumors of over-allocation of EUAs led to an early collapse of the market by May 2007. We study whether this market breakdown and the subsequent outbreak of the international financial crisis had a persistent effect on the quality of the commitment phase. We provide robust evidence of substantial improvements in terms of liquidity, adverse selection costs, and friction-related volatility from the trial phase to the commitment phase. However, price quality (the proportion of friction-unrelated price return volatility) during the commitment phase has been below the levels achieved before the 2007 collapse. Our findings suggest that the carbon market has not fully recovered from the negative effects of its 2007 breakdown and the subsequent financial crisis.
    Keywords: Greenhouse gas emissions, EUAs, European Union Emission Trading Scheme, trading frictions, price efficiency, liquidity, financial crisis, market breakdown, market microstructure.
    JEL: G1
    Date: 2012–02
  19. By: Horbach, Jens; Rennings, Klaus
    Abstract: The employment effects of environmental technologies are in the focus of politicians but there are only few studies analyzing these effects for different environmental innovation fields. We use the 2009 wave of the German part of the Community Innovation Panel (CIS) allowing for such an analysis at the firm level. The main focus of the paper lies on the analysis of the adaptation behavior of firms with respect to the relationship of employment and (environmental) innovation. We use an endogenous switching regression approach to take the simultaneous haracter of innovation activities and employment demand into consideration. Our econometric analysis shows that innovative firms in general are characterized by a significantly more dynamic employment development. Especially the realization of environmental process innovations leads to a higher employment within the firm. The theoretical background of this finding is that process innovation induced cost savings improve the competitiveness of firms. This has a positive effect on demand and thus also increases employment. A more detailed analysis by different environmental innovation fields shows that material and energy savings are positively correlated to employment because they especially help to increase the profitability and competitiveness of the firm. On the other side, air and water process innovations that are still dominated by end-of-pipe technologies have a negative impact on the employment development. --
    Keywords: Employment,Environmental Innovation,Innovation Behaviour
    JEL: Q52 Q55 J49 C25
    Date: 2012
  20. By: William Walker
    Abstract: New environmental regulations lead to a rearrangement of production away from polluting industries, and workers in those industries are adversely affected. This paper uses linked worker-firm data in the United States to estimate the transitional costs associated with reallocating workers from newly regulated industries to other sectors of the economy. The focus on workers rather than industries as the unit of analysis allows me to examine previously unobserved economic outcomes such as non-employment and long run earnings losses from job transitions, both of which are critical to understanding the reallocative costs associated with these policies. Using panel variation induced by the 1990 Clean Air Act Amendments (CAAA), I find that the reallocative costs of environmental policy are significant. Workers in newly regulated plants experienced, in aggregate, more than $9 billion inforegone earnings for the years after the change in policy. Most of these costs are driven by non-employment and lower earnings in future employment, while earnings of workers who remain with their firm change little. Relative to the estimated benefits of the 1990 CAAA, these one-time transitional costs are small. However, the estimated costs far exceed the workforce compensation policies designed to mitigate some of these earnings losses.
    Date: 2012–01
  21. By: Messerlin, Patrick (Groupe d'économie mondiale)
    Abstract: There is no doubt that trade and climate policies can be mutually destructive. But there are three strong reasons to suggest that they can also be mutually supportive: they have a common problem, common foes, and common friends. Mutual support would be much stronger if the world regimes for these two policies shared a few common principles. The climate community should feel at ease with the broad WTO principles of ‘national treatment’ and ‘most-favoured nation’, and rely on them in building its own treaty and institutions. The trade community should grasp the opportunity to benefit from the better disciplines on adjustment policies that it is hoped the climate community will design. These conclusions should put the many pending problems into a more positive perspective, and persuade negotiators to find pragmatic compromises, as was the case with the GATT. Using this perspective, the paper focuses on a few key issues, such as the definition of carbon border taxes and the reasons to ban carbon tariffs. Other cases of mutual support are examined. For instance, the climate community should not repeat the mistakes of the world trade regime in dealing with the developing and least developed countries.
    Keywords: Commerce international--Aspect de l'environnement;
    Date: 2012–01
  22. By: Resnick, Danielle; Tarp, Finn; Thurlow, James
    Abstract: The concept of â growthâ.. implies that a wide range of developmental objectives, such as job creation, economic prosperity and poverty alleviation, can be easily reconciled with environmental sustainability. This study, however, argues that rather than being win-win, green growth is similar to most types of policy reforms that advocate the acceptance of short-term adjustment costs in the expectation of long-term gains. In particular, green growth policies often encourage developing countries to redesign their national strategies in ways that might be inconsistent with natural comparative advantages and past investments. In turn, there are often sizeable anti-reform coalitions whose interests may conflict with a green growth agenda. We illustrate this argument using case studies of Malawi, Mozambique, and South Africa, which are engaged in development strategies that involve inorganic fertilizers, biofuels production, and coal-based energy, respectively. Each of these countries is pursuing an environmentally suboptimal strategy but nonetheless addressing critical development needs, including food security, fuel, and electricity. We show that adopting a green growth approach would not only be economically costly but also generate substantial domestic resistance, especially amongst the poor.
    Keywords: development policy, green growth, political economy, Southern Africa
    Date: 2012
  23. By: Lise Tole (Department of Economics, University of Strathclyde); Gary Koop (Department of Economics, University of Strathclyde)
    Abstract: This paper uses data on the worldÂ's copper mining industry to measure the impact on efficiency of the adoption of the ISO 14001 environmental standard. Anecdotal and case study literature suggests that fiÂ…rms are motivated to adopt this standard so as to achieve greater efficiency through changes in operating procedures and processes. Using plant level panel data from 1992-2007 on most of the worldÂ's industrial copper mines, the study uses stochastic frontier methods to investigate the e¤ects of ISO adoption. The variety of models used in this study fiÂ…nd that adoption either tends to improve efficiency or has no impact on efficiency, but no evidence is found that ISO adoption decreases efficiency.
    Keywords: ISO 14001 environmental standard; Â…firm performance; stochastic frontier cost function; copper mining industry
    Date: 2011–06
  24. By: Lise Tole (Department of Economics, University of Strathclyde); Gary Koop (Department of Economics, University of Strathclyde)
    Abstract: This paper uses data on the worldÂ's copper mining industry to measure the impact on efficiency of the adoption of the ISO 14001 environmental standard. Anecdotal and case study literature suggests that fiÂ…rms are motivated to adopt this standard so as to achieve greater efficiency through changes in operating procedures and processes. Using plant level panel data from 1992-2007 on most of the worldÂ's industrial copper mines, the study uses stochastic frontier methods to investigate the effects of ISO adoption. The variety of models used in this study Â…find that adoption either tends to improve efficiency or has no impact on efficiency, but no evidence is found that ISO adoption decreases efficiency.
    Keywords: ISO 14001 environmental standard; Â…firm performance; stochastic frontier cost function; copper mining industry
    JEL: C23 L72 Q52
    Date: 2011–06
  25. By: Blankespoor, Brian; Basist, Alan; Dinar, Ariel; Dinar, Shlomi
    Abstract: International river basins will likely face higher hydrologic variability due to climate change. Increased floods and droughts would have economic and political consequences. Riparians of transboundary basins governed by water treaties could experience non-compliance and inter-state tensions if flow falls below levels presumed in a treaty. Flow information is essential to cope with these challenges through water storage, allocation, and use. This paper demonstrates a simple yet robust method, which measures gauge station runoff with wetness values derived from satellite data (1988-2010), for expanding sub-basin stream flow information to the entire river basin where natural flow information is limited. It demonstrates the approach with flow level data that provide estimates of monthly runoff in near real time in two international river basins: Zambezi and Mekong. The paper includes an economic framework incorporating information on existing institutions to assess potential economic and political impacts and to inform policy on conflict and cooperation between riparians. The authors conclude that satellite data modeled with gauge station runoff reduce the uncertainty inherent in negotiating an international water agreement under increased hydrological variability, and thus can assist policy makers to devise more efficient institutional apparatus.
    Keywords: Wetlands,Water Supply and Systems,Water Supply and Sanitation Governance and Institutions,Water and Industry,Common Property Resource Development
    Date: 2012–03–01
  26. By: Francisca Guedes de Oliveira (Faculdade de Economia e Gestão - Universidade Católica Portuguesa, Porto); Alexandra Leitão (Faculdade de Economia e Gestão - Universidade Católica Portuguesa, Porto)
    Abstract: This paper investigates empirically the determinants of air quality in a large cross-section of countries. We assess air quality by sulfur emissions and, following the literature, we consider three different groups of determinants: economic, political and cultural. We confirm the existence of an EKC for sulfur (inverted-U shaped relation between wealth and pollution). Political determinants are proxied by ethnic or religious fractionalization indexes and the country’s legal origin (we consider five possible legal origins: English common law, French civil law, German civil law, Scandinavian legal system and Socialist legal system). Cultural determinants are assessed by the percentage of a country’s population that belongs to one of the three main religions (Catholic, Muslim or Protestant). Our goal is to establish the economic, political and cultural profile of a country that manages to be efficient in providing good air quality. We conclude that a country will provide higher air quality if it has one or more of the following characteristics: it is ethnic and/or religious homogeneous, it has a German or Scandinavian legal tradition; it is Protestant.
    Keywords: Air quality, political determinants, cultural determinants,environmental efficiency
    JEL: H40 H89 Q53 Q59
    Date: 2012–03
  27. By: Alain Ayong Le Kama; Agnès Tomini
    Abstract: This paper tackles the increasingly significant problem of irrigation-induced soil salinity within a groundwater management model. Irrigation can result not only in heavier salt concentrations, but also in the removal of salt from the soil through return flows. Given these contradictory observations, we are interested in the effects on soil salt concentration if irrigation efficiency is improved. We develop a model of salt concentration patterns in both soil and groundwater. We introduce a negative externality to the production process by assuming that soil degradation due to higher soil salinity affects total factor productivity. Within this framework, we show that in the presence of this externality, increasing irrigation efficiency can lead to higher or lower soil salt concentration, depending on the social cost of transferring salt from one reservoir to another.
    Keywords: Groundwater Management, Optimal Control of Water Consumption, Soil Salinity
    JEL: Q24 Q25 C61 D61
    Date: 2012
  28. By: Ujjayant Chakravorty (University of Alberta and Toulouse School of Economics (INRA, LERNA)); Marie-Hélène Hubert (University of Rennes 1 - CREM, (UMR 6211 CNRS)); Michel Moreaux (Toulouse School of Economics (IDEI, LERNA)); Linda Nøstbakken (Department of Marketing, Business Economics and Law, University of Alberta)
    Abstract: Biofuels have received a lot of attention as a substitute for gasoline in transportation. They have been blamed universally for recent increases in world food prices. Both the United States and the European Union have adopted mandatory blending policies that require a sharp increase in their use. Many studies have shown that these energy mandates may have a large (30-60%) impact on food prices. We develop a model that takes into account dietary preferences - the fact that with rising incomes, people in the developing world will consume more meat and dairy products, which are land-intensive relative to cereals. On the supply side, we allow for conversion of new lands to farming. We show that about half the increase in food prices can be attributed to population growth and dietary changes, and only the remaining come from biofuel policy. Moreover, with endogenous land supply, food price increases are likely to be much smaller than predicted by other studies. Finally, these biofuel policies do not lead to any reduction in carbon emissions.
    Keywords: Clean Energy, Food Demand, Land Quality, Renewable Fuel Standards, Transportation
    JEL: Q24 Q32 Q42
    Date: 2012–03
  29. By: Kishan Khoday (UNDP); Leisa Perch (International Policy Centre for Inclusive Growth)
    Abstract: We live in a time of transformational change, with society, economy, ecology and politics in a state of flux the world over. Of particular focus in this Working Paper are the implications for mineral-dependent economies of living in an increasingly resource-constrained world. Both countries for which growth depends on the extraction, refinement and export of such minerals, and those whose growth depends indirectly on the use of minerals in other resource-dependent industrial processes are considered. Attention is also placed on countries newly emerging as mineral-rich economies and for whom mineral exploitation will begin to play an increasing role in the structure and scale of growth. In the broader policy context, our focus is on the transition to a model of natural resource governance where goals of inclusion and sustainability are no longer secondary considerations but rather central ones. (?)
    Keywords: Development from Below: Social Accountability in Natural Resource Management
    Date: 2012–02
  30. By: Vincent Martinet; Michel De Lara; Julio Peña-Torres; Héctor Ramírez Cabrera
    Abstract: We develop a theoretical framework to assess sheries management strategies from a sustainability perspective, when the bioeconomic dynamics are marked by uncertainty. Using stochastic viability, management strategies are ranked according to their probability to satisfy economic and ecological constraints over time. The proposed framework is useful when it is not possible to dene a multiattribute utility function to represent the trade-offs between the several sustainability objectives. This framework is applied to a Chilean shery case-study, faced with El Niño uncertainty. We study the viability of effort and quota strategies, when a minimal catch level and a minimal biomass are required. For realistic sustainability objectives, effort-based management results in a better viability probability than quota-based management.
    Keywords: sustainability, risk, shery economics and management, viability, stochastic
    Date: 2012
  31. By: Mahul, Olivier; Verma, Niraj; Clarke, Daniel J.
    Abstract: India's crop insurance program is the world's largest with 25 million farmers insured. However, issues in design, particularly related to delays in claims settlement, have led to 95 million farmer households not being covered, despite significant government subsidy. To address this and other problems, the Government of India is piloting a modified National Agricultural Insurance Scheme, a market-based scheme with involvement from the private sector. Compared with the existing scheme, the new program has a design that can offer more timely, claim settlement, less distortion in the allocation of government subsidies and cross-subsidies between farmer groups, and reduced basis risk. Implementation and technical challenges lie ahead which can be addressed but will require a comprehensive strategy, innovative solutions, and timely roll out. This paper describes and analyzes both programs, and discusses lessons learned in developing and implementing the new program.
    Keywords: Climate Change Economics,Insurance&Risk Mitigation,Hazard Risk Management,Debt Markets,Emerging Markets
    Date: 2012–03–01
  32. By: Sarmidi, Tamat; Siong Hook, Law; Jafari , Yaghoob
    Abstract: This paper attempts to provide a probable answer to a longstanding resource curse puzzle; i.e., why resource-rich nations grow at a slower rate compared to less fortunate ones. Using an innovative threshold estimation technique, the empirical results reveal that there is a threshold effect in the natural resources – economic growth relationship. We find that the impact of natural resources is meaningful to economic growth only after a certain threshold point of institutional quality has been attained. The results also shed light on the fact that the nations that have low institutional quality depend heavily on natural resources while countries with high quality institutions are relatively less dependent on natural resources to generate growth.
    Keywords: Economic development; Natural resource curse; Institutions
    JEL: O11 Q32 O13
    Date: 2012–02
  33. By: Gunther Bensch; Jörg Peters
    Abstract: With 2.7 billion people relying on woodfuels for cooking in developing countries, the dissemination of improved cooking stoves (ICS) is frequently considered an effective instrument to combat deforestation particularly in arid countries. This paper evaluates the impacts of an ICS dissemination project in urban Senegal on charcoal consumption using data collected among 624 households. The virtue of our data is that it allows for rigorously estimating charcoal savings by accounting for both household characteristics and meal-specific cooking patterns. We find average savings of 25 percent per dish. In total, the intervention reduces the Senegalese charcoal consumption by around 1 percent.
    Keywords: Impact evaluation; energy access; cooking fuels; deforestation; Africa
    JEL: O13 O22 Q41 Q56
    Date: 2011–12
  34. By: Paolo Buonanno; Marco Ranzani
    Abstract: By 2030, tobacco is expected to be the cause of about 10 million deaths per year worldwide. In Italy tobacco smoking is still a pervasive and relevant phenomenon. Using data from a national health survey, we investigate how individuals react to the introduction of a public smoking ban in Italy. Our estimates suggest that the Italian smoking ban in private places open to the public reduced smoking prevalence by 1.3% and daily cigarettes consumption by 8%. We find heterogeneous effects by gender, marital status, and region of residence.
    Keywords: smoking, public smoking ban, quasi-natural experiment, individual behaviour
    JEL: I18 K32
    Date: 2012

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