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on Environmental Economics |
| By: | Peroni, Chiara |
| Abstract: | This article analyses the link between environmental and productive efficiency in a group of EU member states and the US using data from the UN Framework Convention on Climate Change. Its main indicator, carbon intensity, is defined as the ratio of total greenhouse gases emissions to output. A non-parametric frontier approach enables modelling a multiple output technology in which greenhouse gas emissions are an undesirable outcome of a production process. A DEA method is used to compute environmental efficiency indices, which grade countries according to their ability to increase production while reducing pollutants, under minimal assumptions. The only assumptions are that bad outputs are costly to dispose of and that returns to scale are variable. The study shows that productive efficiency is considerably lowered when environmental degradation are taken into account. Only two (Luxembourg and Sweden) out of 16 countries are environmentally efficient. Malmquist indices, however, show that environmental performances improved over the period considered in nearly all countries. A decomposition of carbon intensity, which links emission performance to technical progress, is also presented; this highlights the positive contribution of labour productivity on the reduction in carbon intensity. Finally, no evidence of a DEA-based environmental Kuznet curve is found. |
| Keywords: | Carbon intensity; data envelopment analysis; Malmquist index; decomposition; Kuznet curve |
| JEL: | Q50 C44 Q56 O40 |
| Date: | 2012–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38671&r=env |
| By: | Andreas Lange (University of Hamburg, Germany); Andreas Ziegler (University of Kassel, Germany, and ETH Zurich, Switzerland) |
| Abstract: | This paper studies the voluntary provision of public goods that is partially driven by a desire to offset for individual polluting activities. We first extend existing theory and show that offsets allow a reduction in effective environmental pollution levels while not necessarily extending the consumption of a polluting good. We further show a nonmonotonic income-pollution relationship and derive comparative static results for the impact of an increasing environmental preference on purchases of offsets and mitigation activities. Several theoretical results are then econometrically tested using a novel data set on activities to reduce CO2 emissions for the case of vehicle purchases in the U.S. and Germany. We show that an increased environmental preference triggers the use of CO2 offsetting and mitigation channels in both countries. However, we find strong country differences for the purchase of CO2 offsets. While such activities are already triggered by a high general awareness of the climate change problem in the U.S., driver’s license holders in Germany need to additionally perceive road traffic as being responsible for CO2 emissions to a large extent. |
| Keywords: | public good, voluntary provision, climate change, CO2 offsetting, vehicle purchase, discrete choice models |
| JEL: | C25 C35 H41 Q54 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:12-161&r=env |
| By: | Luisito Bertinelli (CREA, University of Luxembourg); Carmen Camacho (CNRS, Centre d’Economie de la Sorbonne, Paris 1); Benteng Zou (CREA, University of Luxembourg) |
| Abstract: | We study the strategic behavior of two countries facing transboundary pollution under a differential game setting. In our model, the reduction of both pollution and CO2 concentration occur through the creation of pollution sinks, rather than through the adoption of cleaner technologies. To our knowledge, this is the first formal attempt to model carbon capture and storage. Furthermore, we provide the explicit short-run dynamics for this game with symmetric open-loop and a special Markovian Nash strategies. Furthermore, we analyze and compare these strategies and the games’ steady states along some balanced growth paths. Our results show that if the initial level of pollution is relatively high, state dependent emissions reductions can lead to higher overall environmental quality, hence, feedback strategy leads to less social waste. |
| Keywords: | Transboundary pollution, carbon capture and storage, differential game |
| JEL: | Q58 Q55 Q52 C73 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:11-17&r=env |
| By: | Thierry Bréchet (CORE and Louvain School of Management, Université catholique de Louvain); Yann Ménière (CERNA, Ecole des Mines de Paris); Pierre M. Picard (CREA, University of Luxembourg (Luxembourg), and CORE, Université catholique de Louvain (Belgium).) |
| Abstract: | This paper discusses the role of the Clean DevelopmentMechanisms (CDM) on the market for carbon quotas and countries' commitments to reduce their carbon emission levels. We show that the CDM contributes to an efficient funding of clean technology investments in least developed countries. How- ever, the CDM is not neutral on the global level of carbon emissions as it entices countries to raise their emission caps. The CDM may also make inap- propriate the inclusion of any country that makes no emission target commit- ment in the climate change protocol (like the Kyoto protocole). It can even make inefficient a country's decision to commit to an emission target. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:11-12&r=env |
| By: | Germani, Anna Rita; Morone, Piergiuseppe; Testa, Giuseppina |
| Abstract: | This paper provides an environmental justice empirical analysis on the relationship between income, demographic characteristics and concentrations of air industrial pollutants within the Italian provinces. Two general conclusions can be drawn from the empirical results. First, the estimates obtained are consistent with an inverse U-shaped environmental Kuznets curve: air pollution releases increase with income up to a turning point, where the relation reverts. Second, there is evidence that air releases tend to be higher in provinces with high concentration of females as households’ head and with high concentration of children. Since our findings do not point to environmental discrimination on the basis of ethnicity, this suggests that environmental justice issues in Italy are not likely to manifest themselves along racial and ethnic terms but instead in terms of social categories and gender composition. We also find that judicial inefficiency (a measure of the inefficiency of law enforcement) is associated with higher levels of pollution. In terms of policy implications, this result suggests the need to strengthen, all through the territory, the local enforcement of environmental laws in order to possibly reduce the negative effects on ambient air pollution. |
| Keywords: | Environmental justice; social inequalities; air pollution emissions |
| JEL: | K32 Q50 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38656&r=env |
| By: | Managi, Shunsuke |
| Abstract: | The literature on trade openness, economic development, and the environment is largely inconclusive about the environmental consequences of trade. This study review previous studies focusing on treating trade and income as endogenous and estimating the overall impact of trade openness on environmental quality using the instrumental variables technique. The results show that whether or not trade has a beneficial effect on the environment varies depending on the pollutant and the country. Trade is found to benefit the environment in OECD countries. It has detrimental effects, however, on sulfur dioxide (SO2) and carbon dioxide (CO2) emissions in non-OECD countries, although it does lower biochemical oxygen demand (BOD) emissions in these countries. The results also find the impact is large in the long term, after the dynamic adjustment process, although it is small in the short term. |
| Keywords: | Developed countries, Developing countries, International trade, Environmental problems, Economic development, Trade, Environment |
| JEL: | F13 F18 L50 L60 O13 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper342&r=env |
| By: | Federico Boffa (Università di Macerata & IEB); Amedeo Piolatto (Universitat de Barcelona & IEB); Giacomo A. M. Ponzetto (CREI, Universitat Pompeu Fabra & Barcelona GSE) |
| Abstract: | This paper studies fiscal federalism when voter information varies across regions. We develop a model of political agency with heterogeneously informed voters. Rent-seeking politicians provide public goods to win the votes of the informed. As a result, rent extraction is lower in regions with higher information. In equilibrium, electoral discipline has decreasing returns. Thus, political centralization efficiently reduces aggregate rent extraction. The model predicts that a region’s benefits from centralization are decreasing in its residents’ information. We test this prediction using panel data on pollutant emissions across U.S. states. The 1970 Clean Air Act centralized environmental policy at the federal level. In line with our theory, we find that centralization induced a differential decrease in pollution for uninformed relative to informed states. |
| Keywords: | Political centralization, government accountability, imperfect information, elections, environmental policy, air pollution |
| JEL: | D72 D82 H73 H77 Q58 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2012/5/doc2012-14&r=env |
| By: | Lehmann, Niklaus; Finger, Robert |
| Abstract: | We investigate impacts of climate change (CC) and likely increases in price risks on income, income variability, utility and on adaptation responses in crop production in Western Switzerland. To this end, a bio-economic model is used that combines a crop growth model with an economic decision model non-parametrically using genetic algorithms. Our analysis focuses on the farm-level, which enables us to integrate a much wider set of potential adaptation responses in our analysis. The model is applied to four scenarios that represent likely changes in environmental conditions due to CC as well as increasing price risks due to market liberalization, and combinations thereof. It shows that CC has the larger influence on farm-level income and utility as well as on management decisions. In contrast, the increasing price variability has only small impacts on input use. However, both CC and increasing price volatility contribute to an increasing farm-level income risk. |
| Keywords: | Genetic Algorithms, Agricultural Modeling, Climate Change, Price risks, Risk and Uncertainty, Q12, |
| Date: | 2012–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa123:122533&r=env |
| By: | Phoebe Koundouri (Dept. of International and European Economic Studies, Athens University of Economics and Business); Marva Stithou (University of Stirling, UK); Eva Kougea (Athens University of Economics and Business); Pertti Ala-Aho (University of Oulu, Department of Process and Environmental Engineering, Water Resources and Environmental Engineering Laboratory, P.O.Box 4300, 90014); Riku Eskelinen (University of Oulu, Department of Process and Environmental Engineering, Water Resources and Environmental Engineering Laboratory, P.O.Box 4300, 90014); Timo Karjalainen (Thule Institute, University of Oulu, P.O. Box 7300, 90014 University of Oulu, Finland); Bjorn Klove (University of Oulu, Finland); Manuel Pulido-Velazquez (Research Institute of Water and Environmental Engineering (IIAMA), Universitat Polit.cnica de Valencia, Camino de Vera s/n, 46022 Valencia, Spain); Kalle Reinikainen (Poyry Finland Oy, Tutkijantie 2 A-D, 90590 Oulu, Finland); Pekka Rossi (University of Oulu, Department of Process and Environmental Engineering, Water Resources and Environmental Engineering Laboratory, P.O.Box 4300, 90014) |
| Abstract: | Rokua in Northern Finland is a groundwater dependent ecosystem very sensitive to climate change and natural variability. As such, the water level of most of the lakes is a function of the level of the groundwater table of the esker which is naturally recharged. This chapter presents results from an application of a choice experiment and contingent valuation method regarding ground water quantity. General public�s elicited values highlight the importance of water management policy which contributes to the sustainability of groundwater dependent ecosystems. |
| Keywords: | Choice experiment, Contingent valuation, Climate change, Water quantity, Groundwater dependent ecosystems. |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:1213&r=env |
| By: | Jorge Fernandez; Sebastian Miller |
| Abstract: | This paper provides a rationale for developing countries to announce future credible commitments to reduce GHG emissions even if these are not to materialize in the short run, and for domestic reasons only. A simple framework is presented in which it is shown that it may be costly for an economy to transition from high to low emissions; and that, if climate policy eventually will be enacted, then it may be better for countries to commit earlier and therefore eliminate the uncertainty for the private sector to invest appropriately in clean technologies. In particular, conditions are shown under which the private investor prefers a pre-announced climate policy, and how this policy affects investment decisions and the deployment of clean technologies. |
| JEL: | D81 H23 Q54 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4755&r=env |
| By: | Rema Hanna; Esther Duflo; Michael Greenstone |
| Abstract: | It is conventional wisdom that it is possible to reduce exposure to indoor air pollution, improve health outcomes, and decrease greenhouse gas emissions in the rural areas of developing countries through the adoption of improved cooking stoves. This belief is largely supported by observational field studies and engineering or laboratory experiments. However, we provide new evidence, from a randomized control trial conducted in rural Orissa, India (one of the poorest places in India), on the benefits of a commonly used improved stove that laboratory tests showed to reduce indoor air pollution and require less fuel. We track households for up to four years after they received the stove. While we find a meaningful reduction in smoke inhalation in the first year, there is no effect over longer time horizons. We find no evidence of improvements in lung functioning or health and there is no change in fuel consumption (and presumably greenhouse gas emissions). The difference between the laboratory and field findings appear to result from households’ revealed low valuation of the stoves. Households failed to use the stoves regularly or appropriately, did not make the necessary investments to maintain them properly, and usage rates ultimately declined further over time. More broadly, this study underscores the need to test environmental and health technologies in real-world settings where behavior may temper impacts, and to test them over a long enough horizon to understand how this behavioral effect evolves over time. |
| JEL: | I15 I18 O10 O12 O13 Q0 Q23 Q3 Q51 Q53 Q56 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18033&r=env |
| By: | Quentin Grafton; Tom Kompas; Ngo Van Long |
| Abstract: | We show that (i) subsidies for renewable energy policies with the intention of encouraging substitution away from fossil fuels may accentuate climate change damages by hastening fossil fuel extraction, and that (ii) the opposite result holds under some specified conditions. We focus on the case of subsidies for renewable resources produced under increasing marginal costs, and assume that both the renewable resources and the fossil fuels are currently in use. Such subsidies have a direct effect and an indirect effect working in opposite directions. The direct effect is the reduction in demand for fossil fuels at any given price. The indirect effect is the reduction in the current equilibrium price for fossil fuels, which tends to increase the amount of fossil fuels demanded. Whether the sum of the two effects will actually result in an earlier or later date of exhaustion of the stock of fossil fuels depends on the curvature of the demand curve for energy and of the supply curve for the renewable substitute. <P>Nous montrons que (i) la subvention de la production d'énergie renouvelable avec l'intention d'encourager la substitution des combustibles fossiles pourrait accentuer les dommages du changement climatique en accélérant l'extraction des combustibles fossiles, et que (ii) ce résultat est renversé dans certaines conditions spécifiées. Nous nous concentrons sur le cas des subventions pour des ressources renouvelables produites dans le cadre des coûts marginaux croissants, et supposons que les ressources renouvelables et les carburants fossiles sont actuellement en cours d'utilisation. Ces subventions ont un effet direct et un effet indirect dans des directions opposées. L'effet direct est la réduction de la demande de combustibles fossiles à un prix donné. L'effet indirect est la réduction du prix d'équilibre actuelle de carburants fossiles, ce qui tend à augmenter la demande de combustibles fossiles. La somme des deux effets peut avancer ou retarder la date de l'épuisement du stock de ressources non-renouvelables selon la courbure de la courbe de la demande d'énergie et de la courbe d'offre pour le substitut renouvelable. |
| Keywords: | Subsidies of renewable energy; the Green Paradox; climate change., Subvention des ressources renouvelables; le Paradoxe Vert ; changements climatiques |
| JEL: | Q54 Q42 Q30 |
| Date: | 2012–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2012s-10&r=env |
| By: | Michel Beine (University of Luxembourg and IRES, CREAM and CES-Ifo); Christopher Parsons (University of Nottingham, UK) |
| Abstract: | In this paper, we examine environmental factors as potential determinants of inter- national 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 us- ing 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 precip- itation 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 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:12-01&r=env |
| By: | Savage, Jeff; Ribaudo, Marc |
| Abstract: | We use data from the ERS-NASS ARMS surveys to compare the use of best management practices on poultry and livestock farms inside the watershed and outside the watershed. Animal operations within the Chesapeake Bay States were found to be adopting some important manure management practices at a greater rate than operations outside the watershed. Adoption was taking place before the implementation of the TMDL, indicating that farmers may have been acting in response to building public pressure to reduce pollution. |
| Keywords: | Chesapeake Bay, confined animal operation, water quality, Environmental Economics and Policy, Livestock Production/Industries, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:123246&r=env |
| By: | Mohcine Bakhat (Economics for Energy); Jaume Roselló (University of the Balearic Islands) |
| Abstract: | During the last years, tourism has received increasing attention due to its environmental impacts. Particularly, the use of fossil energy has been considered as one of its major environmental problems and also one of the factors directly related to climatic change. Various studies have estimated the contribution of tourism to environmental damage using a sectorial perspective, evaluating the impact of air transport, the accommodation sector or other tourism-related economic sector. In this paper, the contribution of tourism to diesel oil and gasoline consumption is considered from a broader framework, taking advantage of monthly information collected from different sources. Considering the case study of the Balearic Islands (Spain) and using a conventional econometric model that includes data for monthly stocks of tourists, the influence of tourism on diesel oil and gasoline demand is estimated. |
| Keywords: | Diesel oil demand, gasoline demand, tourism contribution, environment impacts |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:efe:wpaper:05-2011&r=env |
| By: | Johanna Choumert (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Pascale Combes Motel (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); K. Herve DAKPO (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I) |
| Abstract: | Although widely studied, deforestation remains a topical and typical issue. The relationship between economic development and deforestation is still at stake. This paper presents a meta-analysis of Environmental Kuznets Curve (EKC) studies for deforestation. Using 71 studies, offering 631 estimations, we shed light on why EKC results differ. We investigate the incidence of choices made by authors (econometric strategy, deforestation measure, temporal coverage, geographical area, measure of economic development...) on the probability of finding an EKC. After a phase of work corroborating the EKC, we find a turning point after the year 2001. Building on our results, we conclude that the EKC story will not fade until theoretical alternatives will be provided. |
| Keywords: | Meta-Analysis; Environmental Kuznets Curve; Deforestation;development |
| Date: | 2012–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00691863&r=env |
| By: | Alain Ayong Le Kama (Université Paris-Ouest Nanterre La Défense, Chaire Economie du Climat) |
| Abstract: | We extend the Beltratti, Chichilnisky and Heal’s (1993) and (1998) continuoustime stochastic dynamic framework to analyze the optimal depletion of an environmental asset whose consumption is irreversible, in the face of an exogenous uncertainty about future preferences. We introduce an endogenous uncertainty about future preferences. The idea is that the ability of the future generations to change their preferences will depend on the state of the asset. More precisely, we assume that future generations may have a probability to change their preferences all the higher since the stock of the resource becomes low. We describe within this model more clearly the behavior of the central planner facing this type of uncertainty. |
| Keywords: | preservation of natural resources, uncertainty, preferences |
| JEL: | O4 Q2 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:1204&r=env |
| By: | Massimiliano Mazzanti; Antonio Musolesi |
| Abstract: | We investigate carbon Kuznets curves (CKC) relationships for advanced countries grouped in policy relevant groups - North America and Oceania, South Europe, North Europe - by means of various homogeneous, heterogeneous and shrinkage/Bayesian panel estimators. We try to provide an answer to the question "how sensitive are the CKC estimates to changes in the level of parameters-heterogeneity?". We do Â…nd that in coherence with their 'policy and economic' commitment to carbon reductions and environmental market based instruments implementation, bell shapes are present only for northern EU, that leads the group of advanced countries. The other two lag behind. We show for the Â…rst time that CKC shapes are present if we net out Europe of the southern and less developed countries. This is coherent with the Kuznets paradigm. The negative side of the tale is that they characterise a bunch of few countries. Other advanced countries lag behind and are far from reaching a CKC dynamics. Heterogeneous and Bayesian estimators clearly show this, with the latter presenting turning points closely around $13,000 per capita GDP. Heterogeneous panel estimates also show that in those two cases presumed bell shapes turn into linear relationships. The stability of outcomes across models is stronger when we compare heterogeneous rather than homogeneous models. If it is compared with other studies, our analysis highlights a relative lower variability across speciÂ…cations. |
| Keywords: | environmental Kuznets curves; advanced countries; heterogeneous panel estimators; Bayesian estimators; CO2; parameter heterogeneity |
| JEL: | C14 C23 Q53 |
| Date: | 2012–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:201206&r=env |
| By: | Michida, Etsuyo; Nabeshima, Kaoru |
| Abstract: | This paper shows some findings how product related environmental regulations, especially those that relate to management of chemical substances affect firms in Asia. Interviews were conducted for some firms in Vietnam that are part of global supply chains of electrical and electronic, furniture, and plastic industries. The global supply chains with MNC lead firms have helped local firms in developing countries to adopt technical PRERs overseas. On the other hand, indigenous firms that do not belong to global value chains might face hurdles to keep exporting to the regulated markets. PRERs could become a barrier for firms that attempt to the regulated markets without supports by MNC lead firms. |
| Keywords: | Vietnam, Environmental problems, International trade, Chemical industry, Economic development, Environment, Chemicals, Regulations, Firms, Trade |
| JEL: | F23 Q56 Q58 O44 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper343&r=env |
| By: | Denise Ravet (EA3713 - Centre de Recherche Magellan - Université de Lyon - Université Jean Moulin - Lyon III) |
| Abstract: | While there could be separate streams of established research on lean production, global supply chain and sustainable development, the idea is to address the intersection of these strategic initiatives. The aim of the mission is to explore the link between sustainable development, global supply chain and the lean paradigm in the international changing competitive environment. Lean has long been kinked to improve operational performance and environmental performance. The concern is to analyze how companies could manage the lean and sustainable principles through the global supply chain in order to take advantage of synergy and to strenghten their operational expertise in an international environment. |
| Keywords: | sustainable development ; global supply chain management ; lean production |
| Date: | 2011–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00691666&r=env |
| By: | Shrestha, Shailesh; Himics, Mihaly; van Doorslaer, Benjamin; Ciaian, Pavel |
| Abstract: | The current paper investigates the medium term impact of climate changes on EU agriculture. We employ CAPRI partial equilibrium modelling framework. The results indicate that within the EU, there will be both winners and losers, with some regions benefitting from climate change, while other regions suffering losses in production and welfare. In general, there are relatively small market effects at the EU aggregate. For example, the value of total agricultural income, land use and welfare change by approximately between -0.3% and 2%. However, there is a stronger impact at regional level with the effects increase by a factor higher than 10 relative to the aggregate EU impacts. The price adjustments reduce the response of agricultural sector to climate change in particular with respect to production and income changes. |
| Keywords: | climate change, regional impacts, CAPRI, market effects, Risk and Uncertainty, Q54, |
| Date: | 2012–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa123:122546&r=env |
| By: | Helming, John F.M.; Peerlings, Jack H.M. |
| Abstract: | The objective of this research is to give insights into the production, income and environmental effects of the introduction of an EU flat rate for Dutch agriculture. For this purpose, a detailed agri-environmental programming model for Dutch agriculture is used. Results of the EU flat rate scenario are compared to a reference scenario that describes agricultural production in the Netherlands in 2020. Results show that total gross margin in Dutch agriculture decreases because of the EU flat rate with 7%. The supply of starch potatoes and cow milk decreases most. Production of seed and consumption potatoes, vegetables and intensive livestock products increases slightly. This is largely due to a shift of farm payments from milk and starch potatoes production to arable crops and vegetable production. It was found that including risk aversion of income volatility amplifies these effects. The flat rate decreases the total emissions of nutrients to the environment from agricultural production. |
| Keywords: | EU flat rate, mathematical programming, income volatility, Agricultural and Food Policy, Risk and Uncertainty, Q1, D8, |
| Date: | 2012–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa123:122481&r=env |
| By: | Hallegatte, Stephane |
| Abstract: | In Europe, it can be estimated that hydro-meteorological information and early warning systems save several hundreds of lives per year, avoid between 460 million and 2.7 billion Euros of disaster asset losses per year, and produce between 3.4 and 34 billion of additional benefits per year through the optimization of economic production in weather-sensitive sectors (agriculture, energy, etc.). The potential for similar benefits in the developing world is not only proportional to population, but also to increased hazard risk due to climate and geography, as well as increased exposure to weather due to the state of infrastructure. This analysis estimates that the potential benefits from upgrading to developed-country standards the hydro-meteorological information production and early warning capacity in all developing countries include: (i) between 300 million and 2 billion USD per year of avoided asset losses due to natural disasters; (ii) an average of 23,000 saved lives per year, which is valued between 700 million and 3.5 billion USD per year using the Copenhagen Consensus guidelines; and (iii) between 3 and 30 billion USD per year of additional economic benefits. The total benefits would reach between 4 and 36 billion USD per year. Because some of the most expensive components of early warning systems have already been built (e.g., earth observation satellites, global weather forecasts), these investments are relatively modest, estimated here around 1 billion US per year, reaching benefit-cost ratios between 4 and 36. |
| Keywords: | Hazard Risk Management,Natural Disasters,Transport Economics Policy&Planning,Climate Change Economics,Climate Change Mitigation and Green House Gases |
| Date: | 2012–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6058&r=env |
| By: | Xavier Labandeira (Rede (Universidade de Vigo) and Economics for Energy); José M. Labeaga (Instituto de Estudios Fiscales and UNED); Xiral López-Otero (Rede (Universidade de Vigo) and Economics for Energy) |
| Abstract: | Household energy consumption, mostly due to residential heating, is a large component of energy demand in developed countries and thus a target for public policies aimed at reducing negative environmental effects and energy dependence. This paper uses detailed Spanish household micro data to model the related decisions on the type of heating energy source and on the amount of energy used for heating. This way, the article provides accurate estimates that may be used to assess the short and long term effects of public policies in this field. In particular, the relative prices of the three main energy sources for heating influence the discrete decision on the type of energy source in a sort of medium/long term effect. Moreover, the short-term demand reactions to energy price changes are found to be limited but variable across the different energy sources for heating in Spain. |
| Keywords: | Environment, energy, security, discrete, continuous, choice, taxes, prices |
| JEL: | C13 C14 C23 Q41 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:efe:wpaper:06-2011&r=env |
| By: | Honda, Keiichiro |
| Abstract: | In 2003 the Restriction of Hazardous Substances (RoHS) was established in the EU, which limited the trade of machinery, electrical and electronic equipment that have at least one of the substances considered hazardous under RoHS directive. Since countries trading with the EU must comply with this new regulation, it is expected a decrease in value of imports to the EU. In this paper, it is followed the procedures used in Heckman (1979), as well as the extended procedure suggested by Helpman, Melitz, and Rubinstein (2008) to ascertain the effects on the persistence of trade and values of trade. |
| Keywords: | Europe, Trade problem, International trade, Environmental protection, The RoHS directive, Harmonized standards, Gravity model, Intensive and extensive margin, Sample selection and firm heterogeneity |
| JEL: | F13 F18 Q56 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper341&r=env |
| By: | arnaud dragicevic (THEMA, Universite de Cergy-Pontoise) |
| Abstract: | The invasion of native species by exotic species is one of the most serious threats to biodiversity and ecosystem functioning. Despite a number of empirical and theoretical studies, there is still no general model about why or when settlement becomes invasion. The purpose of this work is to test a model of Bayesian population dynamics relying on best-response strategies that could help in resource management and bioeconomic modeling. Given the exotic species survival probability, our static game unveils a breaking-level probability in mixed-strategies, where it is in the interest of exotic species to invade and in the interest of native species to resist. In dynamic setting, we introduce a stochastic version of the balance equation based on conditional probabilities. When the exotic species survival probability and the availability of resources in the ecosystem are respectively high and low, the dynamics shows that the convergence of subpopulations toward steady-states operates at a high pace. |
| Keywords: | bioeconomics, best-responses, balance equation, Bayesian population dynamics, resource management, biodiversity, invasive species. |
| JEL: | C61 C62 C73 Q5 Q56 Q57 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2012-30&r=env |
| By: | Carlos de Miguel; Baltasar Manzano (Universidade de Vigo and Economics for Energy) |
| Abstract: | Green tax reforms have become an important tool not only in protecting the environment but also in bringing about a more efficient tax system. However, reforms often imply accepting sacrifices in the short-run and bring about the risk of potential political opposition. Within this framework, the debate on whether to implement green tax reforms in one-step or gradually becomes of great interest. In this paper we use a calibrated dynamic general equilibrium model to evaluate different reforms that consist in increasing energy taxes and adjusting capital taxation in a revenue-neutral framework. Our findings show that, although an environmental dividend is always granted, the efficiency dividend depends on the type of reform, its size and how gradually it is implemented. Thus, one-step reforms that produce an efficiency dividend would imply large efficiency costs in the short-run. In this case, the reform could only produce efficiency gains in the short-run if it is implemented gradually, although such gains would end up disappearing in the long-run. |
| Keywords: | Green Tax Reform, General Equilibrium |
| JEL: | E62 Q43 H23 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:efe:wpaper:04-2011&r=env |
| By: | Perez Blanco, Carlos Dionisio; Gomez Gomez, Carlos Mario |
| Abstract: | Water is a key input in the production of many goods and services and under certain conditions can become a critical limiting factor with significant impacts on regional development. This is the case of many agricultural European Mediterranean basins, where water deficit during drought events is partially covered by illegal abstractions, mostly from aquifers, which are tolerated by the authorities. Groundwater overexploitation for irrigation has created in these areas an unprecedented environmental catastrophe that threatens ecosystems sustainability, urban water supply and the current model of development. Market-based drought insurance systems have the potential to introduce the necessary incentives to reduce overexploitation during drought events and remove the high costs of the drought indemnity paid by the government. This paper develops a methodology to obtain the optimum risk premium based on concatenated stochastic models. The methodology is applied to the agricultural district of Campo de Cartagena (Segura River Basin, Spain). Results show that the prices in a hypothetic competitive private drought insurance market would be reasonable and the expected environmental outcomes significant. |
| Keywords: | Drought insurance, stochastic models, groundwater, agriculture, Risk and Uncertainty, Q15, Q18, Q25, Q51, Q58, |
| Date: | 2012–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa123:122453&r=env |
| By: | Giorgio Brosio |
| Abstract: | This paper address options for restructuring the revenue system of Bolivia’s subnational governments, particularly prefectures, emphasizing reduction of dependence on natural resources and strengthening of subnational tax autonomy. The paper additionally identifies tax instruments or tax bases that could be assigned exclusively to regional governments or shared with the central government, assessing their main advantages and disadvantages through a simulation of revenue generation. The results show that several options exist for increasing the tax autonomy of local governments. The tax instruments proposed in this paper carry relatively low administrative costs. In fact, the taxes proposed would not require the establishment of new agencies but could be collected by existing agencies and, in the case of energy and fuel taxes, by producing and distributing firms. |
| JEL: | H21 H23 H24 H25 H26 H71 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4770&r=env |
| By: | Tapio Palokangas |
| Abstract: | I consider the case where the conservation of land yields utility through biodiversity, firms improve their efficiency by in-house R&D and a large number of countries establish a self-interested government for biodiversity management. I compare the regulation of land use with direct subsidies for conserved land and obtain following results. Regulation promotes biodiversity and economic growth. Because revenue-rasing taxes hamper growth, the replacement of regulation by subsidies decreases biodiversity, growth and welfare. Applied to NATURA 2000 in the EU, this suggests that regulation without any budget may be an appropriate degree of authority for the Commission. |
| Keywords: | Biodiversity, conservation subsidies, in-house R&D, land-use regulation, lobbying, technical change |
| JEL: | O41 H23 F15 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:deg:conpap:c016_063&r=env |
| By: | Koc, R.; Kazantzis, N.K.; Nuttall, W.J.; Ma, Y.H |
| Abstract: | A detailed Net Present Value (NPV) model has been developed to evaluate the economic viability of an Integrated Gasification Combined Cycle – Membrane Reactor (IGCC-MR) power plant intended to provide an electricity generating and pure H2 (hydrogen) producing technology option with significantly lower air pollutants and CO2 (carbon dioxide) emission levels, where the membrane reactor module design conforms also to basic inherent safety principles. Sources of irreducible uncertainty (market, regulatory and technological) are explicitly recognized, such as the power plant capacity factor, Pd (palladium) price, membrane life-time and CO2 prices (taxes) due to future regulatory action/policies. The effect of the above uncertainty drivers on the project’s/plant’s value is elucidated using a Monte-Carlo simulation technique that enables the propagation of the above uncertain inputs through the NPV-model, and therefore, generate a more realistic distribution of the plant’s value rather than a single-point/estimate that overlooks these uncertainties. The simulation results derived suggest that in the presence of (operational, economic and regulatory) uncertainties, inherently safe membrane reactor technology options integrated into IGCC plants could become economically viable even in the absence of any valuation being placed on human life or quality of life by considering only equipment damage and interruption of business/lost production cost. Comparatively more attractive NPV distribution profiles are obtained when concrete safety risk-reducing measures are taken into account through pre-investment in process safety (equipment) in a pro-active manner, giving further credence to the thesis that process safety investments may result in enhanced economic performance in the presence of irreducible uncertainties. |
| Keywords: | Membrane reactors; IGCC; Hydrogen production; Process intensification; Process safety; Process economic analysis; Net Present Value; Uncertainty; Monte Carlo simulation. |
| JEL: | G11 G31 G32 |
| Date: | 2012–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1226&r=env |
| By: | O'Connor, Declan; Hennessy, D; Shalloo, Laurence; Hurtado-Uria, C |
| Abstract: | Grass production provides Irish dairy farmers with a competitive advantage over many of their mainland European counterparts by providing a cheap feed source. The temperate climate in Ireland favours the production of grass, however production is highly seasonal with little growth over the winter period. This seasonal pattern of grass production in turn has resulted in predominantly spring calving dairy herds and has limited the development of the dairy product portfolio in Ireland which has created a reliance on dairy commodities. As Ireland exports approximately 80% of its dairy output, recent substantial increases in market price volatility has resulted in increased price volatility at farm level. The increased price volatility at market and farm level has been well documented; however the volatility of farm inputs has received little attention to date. In this paper the seasonal and volatile nature of grass production is presented and compared with other Irish crops. As Irish dairy and beef farmers expand production in the post quota environment the optimal use of grass as a feed source will be central to their competitive position. The volatile nature of this resource will require improved pasture management along with improved risk management tools. A number of possible tools are discussed in the latter part of this paper. |
| Keywords: | Grass Production, Volatility, Risk Management, Risk Management Tools, Farm Management, Risk and Uncertainty, |
| Date: | 2012–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa123:122452&r=env |
| By: | de Jaeger, Simon (Hogeschool-Universiteit Brussel (HUB)) |
| Abstract: | In this paper we set up a stylized theoretical model of consumers’ preference regarding the price for residual municipal solid waste collection and processing services set by the local municipalities. As we are not sure about the information content taken into account by the electorate when judging the incumbents performance, we distinguish between three scenarios prevailing in the political economics literature. In the first scenario a representative consumer maximizes its utility subject to its waste balance equation and its budget constraint. Inspired by the median voter literature, the second scenario adds the local policy makers budget constraint to the basic consumers’ choice problem. In the third scenario we assume the representative consumer compares the price for residual municipal solid waste they pay with the price in neighbouring municipalities and use this price as a yardstick when judging the performance of their incumbent. The predictions from our models are tested using observation for all 308 municipalities in Flanders (Belgium) in 2006 and 2009. The results clearly indicate that consumers hold the local policy makers responsible for residual waste prices, but they do so without using prices in neighbouring municipalities as a yardstick. Political costs in terms of popularity scores rather seem to depend on absolute price levels and (recent) changes in the price levels. Our data also show that local policymakers engage in price mimicking, but apparently this has little influence on re-election chances |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:hub:wpecon:201219&r=env |
| By: | Banerjee, Chirantan; Berg, Ernst |
| Abstract: | International development organisations, through partnerships with local insurance companies, have been promoting weather index based insurance (WIBI) in developing countries. Due to lower operational costs, they expect shorter pay-off period, often overlooking high initial design costs. Experiences however show high post-pilot mortality of these programmes. Literatures report lack of insurance participation. We propose lack of push from insurance providers as an additional factor. To verify, cash flows of a Nicaraguan groundnut based WIBI and a comparable but hypothetical named peril insurance are simulated against 80 scenarios. Additionally, a test of stochastic dominance of their estimated Net Present Values show that WIBI take comparatively longer to pay-off yielding lower returns with considerable risk. WIBI, given its advantages is undoubtedly an efficient agricultural risk management tool. Therefore, to make it sustainable, long-term pilots and technical assistance is required until the product pays-off and yield profits for insurance providers. |
| Keywords: | Index based rainfall insurance, weather derivative, operational cost, Nicaragua, International Development, Risk and Uncertainty, |
| Date: | 2012–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa123:122448&r=env |
| By: | Alberto CARDONA LÓPEZ |
| Abstract: | Un nuevo pacto social que incluya la naturaleza y los derechos de los que están por nacer se hace cada vez más necesario ante la profundización de la crisis ambiental. En otras latitudes se han probado con relativo éxito las Reformas Tributarias Ecológicas para cambiar el paradigma tributario: de gravar bienes pasar a gravar males. Este poderoso principio abre la perspectiva para entender el dilema que representa para la gestión ambiental tener que atender problemas ambientales que van en ascenso, con recursos económicos cada vez más escasos y comprometidos. Para el caso colombiano, situaciones como frenar la deforestación e incentivar la conservación de valiosísimos recursos como el agua y los bosques, y más allá de eso, el aseguramiento de los servicios ambientales, pudieran financiarse con su adopción. Pero va a hacer falta un intenso trabajo para conseguir los consensos necesarios. |
| Date: | 2012–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:col:000118:009597&r=env |
| By: | Dinar, Ariel |
| Abstract: | Water is increasingly becoming a limiting factor for sustainable economic growth and development in many countries. Its allocation has significant impacts on overall economic efficiency, particularly with growing physical scarcity in certain regions. Greater water supply variability further increases vulnerability in affected regions. Water also has become a strategic resource involving conflicts among those who may be affected differently by various policies. This paper analyzes various policy interventions aimed at improving water allocation decisions, using a novel approach that incorporates macro and micro level considerations in a unified analytical framework. The framework facilitates assessment of various linkages among policies and their impacts within individual sectors and economy-wide. Drawing on country based studies in Morocco, South Africa, Turkey, and Mexico, the analysis reveals difficult tradeoffs among various policy objectives, including priorities placed on different sectors, regional advantages, and general economic efficiency gains versus broader social impacts. The comparison of policy impacts demonstrates the usefulness of the framework in information that policy makers can use to rank the policy interventions according to the emphasis placed on different policy objectives. The paper also compares approaches used in other studies that apply computable general equilibrium models in various contexts of water, environment and agriculture. |
| Keywords: | Water Supply and Sanitation Governance and Institutions,Town Water Supply and Sanitation,Water Supply and Systems,Water and Industry,Water Conservation |
| Date: | 2012–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6068&r=env |
| By: | Elena Rovenskaya |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:deg:conpap:c016_062&r=env |
| By: | Fuss, Sabine; Havlik, Petr; Szolgayova, Jana; Obersteiner, Michael; Schmid, Erwin |
| Abstract: | Agricultural price volatility has moved to the forefront of research efforts and political discussion, where much work is already being undertaken with respect to the impact of fluctuations in input prices (e.g. fertilizer, feed and energy). In this paper we also want to take into account the impact of climate change on prices via increased volatility in crop yields. In addition, we analyze the impact of having multiple objectives competing for the land on which crops are grown. In particular, we want to address the concerns that have been voiced about biofuel targets and calls for prioritization of food security. |
| Keywords: | energy, food security, food price volatility, optimization under uncertainty, Risk and Uncertainty, Q12, Q18, Q28, C61, D81, |
| Date: | 2012–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa123:122539&r=env |
| By: | Denise Ravet (EA3713 - Centre de Recherche Magellan - Université de Lyon - Université Jean Moulin - Lyon III) |
| Abstract: | While there could be separate streams of established research on lean production, agile organization and sustainable supply chain, the idea is to address the intersection of these strategic initiatives in order to find synergies and competitive advantage for companies. The goal of this mission is to explore the link between supply chains and sustainable development with the insights of the two main paradigms in the changing competitive environment : lean and agility. On the one side, the focus of the lean approach has essentially been on the elimination of waste and all non value activities. On the other side, a key characteristic of an agile organization is flexibility at different echelon. The concern is to analyze how companies could manage the lean and agility principles in the supply chain with sustainable development at the different stage of the supply chain. |
| Keywords: | Sustainable development, supply chain manufacturing, lean, agile, leagile |
| Date: | 2011–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00691694&r=env |
| By: | Tapan, Mitra (Department of Economics, Cornell University); Asheim, Geir B. (Dept. of Economics, University of Oslo); Buchholz, Wolfgang (Department of Economics, University of Regensburg); Withagen, Cees (Department of Economics, VU University Amsterdam) |
| Abstract: | The Dasgupta-Heal-Solow-Stiglitz model of capital accumulation and resource depletion poses the following sustainability problem: is it feasible to sustain indefinitely a level of consumption that is bounded away from zero? We provide a complete technological characterization of the sustainability problem in this model without reference to the time path. As a byproduct we show general existence of a maximin optimal path under weaker conditions that those employed in previous work. Our proofs yield new insights into the meaning and significance of Hartwick's reinvestment rule. |
| Keywords: | Sustainability; Maximin |
| JEL: | O10 Q32 |
| Date: | 2012–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2012_008&r=env |