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on Environmental Economics |
| By: | Matthias Weitzel; Michael Hübler; Sonja Peterson |
| Abstract: | We carry out a detailed sensitivity analysis of border carbon adjustment (rates) by applying a global Computable General Equilibrium (CGE) GTAP7-based model. We find different incentives for the regions in the climate coalition to raise carbon-based border tax rates (BTAX) above the standard rate that mimics an equalisation of carbon prices across regions. Herein, the strategic use of BTAX (the manipulation of the terms of trade) is stronger for all coalition regions than the environmental use (the reduction of carbon emissions abroad). Higher BTAX can reduce carbon leakage but with a declining marginal effect. Furthermore, we find different incentives for regions outside the coalition to oppose high BTAX rates: Russia and the other energy exporters would oppose it, while the Low-Income Countries would not because of benefits from the trade diversion effect. Thus, BTAX encourages the former to join the coalition, while compensating transfers are necessary to encourage the other (developing) countries including China and India |
| Keywords: | climate policy, border tax adjustment, leakage, trade diversion, coalitions, general equilibrium mod |
| JEL: | F13 F18 Q54 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1792&r=env |
| By: | Yasunori Ouchida (Department of Economics, Hiroshima University); Daisaku Goto (Graduate School for International Development and Cooperation, Hiroshima University) |
| Abstract: | This paper reexamines the Poyago-Theotoky model and provides additional investigation that was conducted under a corrected environmental damage parameter. As new findings, we obtain the following. First, social welfare under a time-consistent emission tax (emission subsidy) policy is always welfare-enhancing rather than the case of laissez-faire. Second, if the environmental damage parameter is sufficiently small, then the equilibrium emission tax rate is invariably negative. It is therefore an emission subsidy. Moreover, total emissions under the emission subsidy become smaller than those under laissez-faire if the damage parameter is sufficiently small, and if the R&D cost is low. However, total emissions under the emission subsidy become greater than those under laissez-faire if the damage parameter is sufficiently small, and if the R&D cost is high. |
| Keywords: | Emission subsidy, Emission tax, Emission reduction, Environmental R&D, Cournot duopoly |
| JEL: | O32 L13 Q55 Q58 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:hir:idecdp:2-13&r=env |
| By: | L. Lambertini; A. Tampieri |
| Abstract: | We propose a model of environmental overcompliance in a duopoly setting where consumers are environmentally concerned and may patronise the product they buy, firms set their green investment to abate the impact of productivity on pollution and a government sets the environmental standard with the aim to maximise welfare. We show that, with no patronising consumers, overcompliance is unilateral by the firm with higher quality standard under Bertrand behaviour, whereas both firms may overcomply under Cournot competition if the environmental impact of production is sufficiently low. Conversely with patronising consumers, overcompliance is unilateral with low environmental impact of production under price competition, and both firm overcomply under quantity competition. |
| JEL: | L13 L51 Q50 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp847&r=env |
| By: | Suzi Kerr (Motu Economic and Public Policy Research); Simon Anastasiadis (Motu Economic and Public Policy Research); Alex Olssen (Motu Economic and Public Policy Research); William Power (GNS Science); Levente Tímár (Motu Economic and Public Policy Research and GNS Science); Wei Zhang (Ministry for Primary Industries) |
| Abstract: | We perform simulations using the integrated Land Use in Rural New Zealand (LURNZ) model to analyse the effect of various New Zealand emissions trading scheme (ETS) scenarios on land-use, emissions, and output in a temporally and spatially explicit manner. We compare the impact of afforestation to the impact of other land-use change on net greenhouse gas emissions, and evaluate the importance of the forestry component of the ETS relative to the agricultural component. We also examine the effect of land-use change on the time profile of net emissions from the forestry sector. Our projections for the mid-2020s suggest that under a comprehensive ETS, sequestration associated with new planting could be significant; it may approach 20 percent of national inventory agricultural emissions in 2008. Most of this is driven by the reward for forestry rather than a liability for agricultural emissions. Finally, we present projections of future agricultural output under various policy scenarios. |
| Keywords: | land use; land-use change; LURNZ; greenhouse-gas emissions; afforestation; forestry removals; New Zealand Emissions Trading Scheme; integrated modelling; agricultural production |
| JEL: | Q15 Q18 Q23 Q54 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:12_10&r=env |
| By: | Janne Niemi; Juha Honkatukia; Ville Kaitila; Markku Kotilainen |
| Abstract: | In this study we use the dynamic version of the GTAP model to analyse the effects of global trade policy changes and their interaction with different global climate policy regimes from Finland?s point of view, and in particular, implications for Finnish export sectors. Scenarios explore further trade liberalisation as well as effects of higher-than-current tariffs on world markets. As a complementary dimension we analyse the impact of a global climate agreement that will lead to an additional improvement in energy efficiency and impose limitations to GHG emissions.<br><br>We find a general trend towards a greater weight of services sector in Finland?s total exports volume, whilst the share of traditionally important heavy industry and electronics industries declines. These trends are amplified by further trade liberalisation and slowed down by new barriers for trade. The global coverage of climate policy is particularly significant for energy-intensive industries. |
| Keywords: | trade policy, climate policy, general equilibrium model |
| JEL: | Q58 C68 F13 |
| Date: | 2012–09–03 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:37&r=env |
| By: | Hallegatte, Stephane; Shah, Ankur; Lempert, Robert; Brown, Casey; Gill, Stuart |
| Abstract: | While agreeing on the choice of an optimal investment decision is already difficult for any diverse group of actors, priorities, and world views, the presence of deep uncertainties further challenges the decision-making framework by questioning the robustness of all purportedly optimal solutions. This paper summarizes the additional uncertainty that is created by climate change, and reviews the tools that are available to project climate change (including downscaling techniques) and to assess and quantify the corresponding uncertainty. Assuming that climate change and other deep uncertainties cannot be eliminated over the short term (and probably even over the longer term), it then summarizes existing decision-making methodologies that are able to deal with climate-related uncertainty, namely cost-benefit analysis under uncertainty, cost-benefit analysis with real options, robust decision making, and climate informed decision analysis. It also provides examples of applications of these methodologies, highlighting their pros and cons and their domain of applicability. The paper concludes that it is impossible to define the"best"solution or to prescribe any particular methodology in general. Instead, a menu of methodologies is required, together with some indications on which strategies are most appropriate in which contexts. This analysis is based on a set of interviews with decision-makers, in particular World Bank project leaders, and on a literature review on decision-making under uncertainty. It aims at helping decision-makers identify which method is more appropriate in a given context, as a function of the project's lifetime, cost, and vulnerability. |
| Keywords: | Climate Change Economics,Climate Change Mitigation and Green House Gases,Science of Climate Change,Global Environment Facility,Water Supply and Sanitation Governance and Institutions |
| Date: | 2012–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6193&r=env |
| By: | Timothy Simcoe (Boston University, School of Management); Michael W. Toffel (Harvard Business School, Technology and Operations Management Unit) |
| Abstract: | We measure the impact of municipal policies requiring governments to construct green buildings on private-sector adoption of the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) standard. Using matching methods, panel data, and instrumental variables, we find that government procurement rules produce spillover effects that stimulate both private-sector adoption of the LEED standard and supplier investments in green building expertise. Our findings suggest that government procurement policies can accelerate the diffusion of new environmental standards that require coordinated complementary investments by various types of private adopter. |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:13-030&r=env |
| By: | Marc Fleurbaey (Economic Theory Center - Princeton University, Le Collège d'études mondiales/FMSH - Fondation Maison des sciences de l'homme); Stéphane Zuber (Le Collège d'études mondiales/FMSH - Fondation Maison des sciences de l'homme, CERSES - Centre de recherche sens, ethique, société - CNRS : UMR8137 - Université Paris V - Paris Descartes) |
| Abstract: | We defend a methodology of discounting, for the evaluation of the long-term effects of climate policies, which relies on a social welfare objective, against the view that the market rate of return should be used for that purpose. We also show that in the long run, the discount rate for such policies should focus on the worst-case scenario for the most disadvantaged populations. As a consequence, it is likely that the appropriate discount rate for climate policies should be negative, implying a high priority for the future. |
| Keywords: | discounting; climate policy; intergenerational equity |
| Date: | 2012–07–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00728193&r=env |
| By: | Srinivasan, Raghavendra Guru |
| Abstract: | The paper analyses the food and water consumption, excessive consumption, consumption taxes like fat tax and brings out the business behaviour of tickling food consumption. In addition to taxing and regulating the excessive consumption & the tickling behaviour, it explores the preventive best practices that reinforce natural human ability of self-control over food consumption. It identifies the practices where there is purposeful or consequential reduction on food consumption i.e. weight loss treatment and yoga, proposes clean practice and suggests accounting for savings & carbon incentive. With the efforts to increase physical activity by subsidy proving to be less effective and with the taxes preventing consumption but not reducing temptation in short run the paper considers embedding the best practice in the education to bring the habit of physical activity. Recognising yoga and evaluating the practice for optimizing food consumption may operationalize wellbeing practice, stimulate economic growth, and may lead to completeness in conserving all forms of energy and to completeness in charging of consumption taxes. |
| Keywords: | Reduction in food consumption; tickle tax |
| JEL: | I12 D61 |
| Date: | 2012–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41062&r=env |
| By: | Timothy P. Hubbard (Department of Economics, Colby College); Justin Svec (Department of Economics, College of the Holy Cross) |
| Abstract: | Standard models of horizontal strategic capital tax competition predict that, in a Nash equilibrium, tax rates are inefficiently low due to externalities - capital infl ow to one state corresponds to capital out ow for another state. Researchers often suggest that the federal government impose Pigouvian taxes to correct for these effects and achieve efficiency. We propose an alternative incentive-based regulation: tradeable capital tax permits. Under this system, the federal government would require a state to hold a permit if it wanted to reduce its capital income tax rate from some pre-determined benchmark. These permits would be tradeable across states. We show that, if the federal government sets the correct number of total permits, then social efficiency is achieved. We discuss the advantages of this system relative to the canonical suggestion of Pigouvian taxes. |
| Keywords: | tax competition; marketable permits; asymmetric states |
| JEL: | H25 H42 H70 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:1202&r=env |