|
on Environmental Economics |
| By: | Johannes Bollen; Corjan Brink (PBL) |
| Abstract: | <p>This paper (CPB/PBL) uses the computable general equilibrium model WorldScan to analyse interactions between EU’s air pollution and climate change policies.</p><p>Covering the entire world and seven EU countries, WorldScan simulates economic growth in a neo-classical recursive dynamic framework, including emissions and abatement of greenhouse gases (CO<sub>2</sub>, N2O and CH4) and air pollutants (SO2, NOx, NH3 and PM2.5). Abatement includes the possibility of using end-of-pipe control options that remove pollutants without affecting the emissionproducing activity itself. This paper analyses several variants of EU’s air pollution policies for the year 2020. Air pollution policy will depend on end-of-pipe controls for not more than 50%, thus also at least 50% of the required emission reduction will come from changes in the use of energy through efficiency improvements, fuel switching and other structural changes in the economy. Greenhouse gas emissions thereby decrease, which renders climate change policies less costly. Our results show that carbon prices will fall, but not more than 33%, although they could drop to zero when the EU agrees on a more stringent air pollution policy.</p> |
| JEL: | Q53 Q54 Q42 D58 H21 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:220&r=env |
| By: | Koslowski, Frank; Wilkes, Andreas; Moran, Dominic |
| Abstract: | ‘Climate-smart’ is the term coined to define agricultural systems that are resilient to climate change, and offer efficient emissions mitigation potential without compromising on productivity, food security and livelihoods. As part of the implementation of such systems, this study developed a Marginal Abatement Cost Curve (MACC) for greenhouse gas emission mitigation for a grassland system in Inner Mongolia, China. We identified two baseline emission scenarios and three abatement measures, namely, shorter lambing time, prohibited grazing, and reduced stocking rates. The study region showed a high and costefficient abatement potential of 62.5 and 32 Kilotonnes (Kt) of CO2eq for each baseline, respectively and each Abatement measure lead to cost savings for the herders. Reduced stocking rates provided the largest mitigation potential. Sensitivity analysis showed how increasing input and livestock product prices have consequences for measure adoption. |
| Keywords: | China, greenhouse gas, grassland, mitigation, marginal abatement cost curve, Environmental Economics and Policy, Q18, |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:135111&r=env |
| By: | Di Falco, Salvatore; Veronesi, Marcella |
| Abstract: | This study investigates the impact of climate change adaptation on farm households’ downside risk exposure in the Nile Basin of Ethiopia. The analysis relies on a moment-based specification of the stochastic production function. We use an empirical strategy that accounts for the heterogeneity in the decision on whether to adapt or not, and for unobservable characteristics of farmers and their farm. We find that (i) past adaptation to climate change adaptation reduces current downside risk exposure, and so the risk of crop failure; (ii) climate change adaptation would have been more beneficial to the nonadapters if they adapted, in terms of reduction in downside risk exposure; and (iii) climate change adaptation is a successful risk management strategy that makes the adapters’ more resilient to climatic conditions. |
| Keywords: | adaptation, climate change, downside risk exposure, environmental risk, Ethiopia, Environmental Economics and Policy, D80, Q18, Q54, |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:134775&r=env |
| By: | Chatzopoulos, Thomas; Schmidtner, Eva; Lippert, Christian |
| Keywords: | Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi12:133855&r=env |
| By: | Shumska, Svitlana; Stepanenko-Lypovyk, Bohdana |
| Abstract: | A transition from the extensive type of economic development to sustainable should provide the minimization of the non-renewable natural resources use and effective use of renewable ones, improvement of environmental quality and increase of the state’s ecological security and lead to stable economy growth. Such transition supposes to form new kinds of economic activity that make profit and have positive influence on environment. One of such activity is ‘green business’. The article defining this notion and describes theoretical and methodological principles of functioning of this type of activity. Also the basic aspects and main development stages of green business are marked out and the classification of green business enterprise is shown. |
| Keywords: | green business; sustainable development; environmental goods and services |
| JEL: | Q50 L26 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41616&r=env |
| By: | Masakazu Maezuru |
| Abstract: | This paper analyses the political economy of environmental policies in the presence of an eco-industry pressure group. Previous studies have dealt with two types of lobbies: capitalists and environmentalists. We introduce a third pressure group representing the eco-industry sector. Under this type of economy, the incumbent government maximizes its chances of being re-elected. Its objective functions include social welfare as well as political contributions. The introduction of the eco-industry lobby introduces a new political contribution and modifies the incentives of the traditional lobbies. Furthermore, we underline the conditions under which environmentalists and eco-industries can become political allies. We also explain that, considering the overall profit of a vertical structure, an industrial lobby group can be favourable to a more stringent environmental policy. Next, we assume an open economy. In two countries, two polluting sectors are subject to an environmental policy. Therefore, an eco-industry sector which supplies pollution abatement goods and services arises. Abatement goods and services are assumed to be internationally traded, creating the only industrial interaction between both countries. The pollution, which can be transboundary or purely local, affects consumers in both countries; we analyse both cases. Our main findings can be summarized as follows. First, eco-industries lobby in favour of more stringent environmental policies, except if the impact of foreign competition more than compensates the turnover increase induced by a tighter environmental policy. Polluting firms always lobby against tighter environmental policies. However, an industrial pressure group, representing the industry as a whole and considering upstream and downstream profits, can sometimes be favourable to an increase in the environmental policy, as it leads to increased profits. We also show that an environmental pressure group can ask for a decrease in the environmental policy at home to decrease pollution abroad. This result does not rely on interactions between countries within the polluting sector. Interaction within the eco-industry sector is a sufficient condition for demonstrating that environmentalists can be favourable to a decrease in the local environmental policy. The impact of lobbying activities on the politically optimal environmental policy is ambiguous and depends on the relative concentration of each pressure group. Keywords: political economy, eco-industry, pollution abatement subsidies JEL classification: F12, H23, Q58 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p700&r=env |
| By: | Agata Spaziante; Carlo Rega |
| Abstract: | In the EU, the Common Agricultural Policy (CAP) and its second pillar devoted to Rural Development, increasingly stress the importance of agriculture as a driver to support the environmental and the socio economic development of rural areas. Agriculture is ever more envisaged as a multifunctional activity aimed not only at producing food commodities, but also at delivering environmental services. The key challenges for European agriculture towards 2020, as outlined by the European Commission, include guaranteeing food security, preserving natural assets and rural landscape, contrasting climate change and pursuing territorial cohesion and balance (EC, 2011). By responding to these challenges, the new CAP will also contribute to implement the EU 2020 Strategy in terms of smart, sustainable and inclusive growth. In particular it is foreseen that CAP contribute to environmental sustainability by ensuring sustainable land management, providing environmental public goods, addressing biodiversity loss (EC, 2010: 6). However, achieving these ambitious objectives calls for a deeper integration between CAP and other regional territorial governance policies and instruments. Agricultural policies in fact have traditionally been designed and implemented with a sectoral approach, despite the deep interplay between agriculture, spatial development and environmental conservation policies. On the other hand, spatial planning at different scale has also traditionally paid low attention to agricultural areas, often considered as 'white areas', at most to be preserved from future urbanization, rather than considered as important drivers of socio-economic and environmental developments. In this paper we maintain that to enhance the effectiveness of agricultural policies in delivering environmental benefits, a deeper integration with Territorial and Landscape Plan must be pursued, both in the their design and during monitoring. We present the case study of Piedmont Region (north-west Italy) where new territorial planning instruments have been recently approved, to investigate the current degree of integration between Rural Development programs and the Regional Territorial and Landscape Plan. Results indicate that integration between these two instruments is still poor, and that this is hampering their effectiveness in delivering the environmental objectives outlined by both instruments. We discuss some critical points and put forward some suggestion to foster a deeper integration. In particular we show how the monitoring schemes of these instruments may be integrated to cover the full array of environmental aspects (including landscape), and identify which environmental performance indicators included in their monitoring frame may be sensitive to synergic effects deriving by their concurrent implementation. Keywords: Common agricultural policy, Rural development, Spatial Planning, Landscape Planning, monitoring JEL codes: Q15, Q18, R52 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p1001&r=env |
| By: | Dasgupta, Susmita; Hammer, Dan; Kraft, Robin; Wheeler, David |
| Abstract: | As the wild tiger population in tropical Asia dropped from about 100,000 to 3,500 in the last century, the need to conserve tiger habitats poses a challenge for the Global Tiger Recovery Program. This paper develops and uses a high-resolution monthly forest clearing database for 74 tiger habitat areas in ten countries to investigate habitat threats for Bengal, Indochinese, Malayan and Sumatran tigers. The econometric model links forest habitat loss and forest clearing to profitability calculations that are affected by market expectations, environmental conditions and evolving patterns of settlement, among others. It uses new spatial panel estimation methods that allow for temporal and spatial autocorrelation. The econometric results emphasize the role of short-run market variables, including the exchange rate, real interest rate and prices of agricultural products in forest clearing, with considerable variation in the estimated timing for response and impact elasticities across countries. The results highlight a critical message for the conservation policy community: Changes in world agricultural-product markets and national financial policies have significant, measurable effects on tropical forest clearing, with variable time lags and degrees of responsiveness across countries. Measuring these effects and pinpointing areas at risk can provide valuable guidance for policymakers, conservation managers, and donor institutions. |
| Keywords: | Wildlife Resources,Climate Change Mitigation and Green House Gases,Environmental Economics&Policies,Climate Change and Environment,Economic Theory&Research |
| Date: | 2012–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6212&r=env |
| By: | Peter Cramton (Economics Department, University of Maryland); Steven Stoft |
| Abstract: | Global cap and trade equalizes the price of emissions and leads to efficient abatement across countries, but sets the abatement level inefficiently low. It is set too low, because the global cap is the sum of individual country targets set on the basis of self-interest. The efficiency of a single price does not overcome the inefficiency of the public-goods problem inherent in global cap and trade. Fortunately, other policies lead to more cooperative and, hence, more efficient outcomes. Replacing the national quantity targets of global cap and trade with a global price target improves outcomes. To improve outcomes further, the price target is combined with a Green Fund. As we demonstrate by example, the Green Fund can induce cooperation between rich countries that want a high global price and poor countries that are more concerned with Green-Fund payments. |
| Keywords: | global warming, climate change, climate treaty, cap and trade, carbon tax, carbon price, public goods |
| JEL: | Q54 Q56 Q58 H41 D78 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pcc:pccumd:12cshtf&r=env |
| By: | Feng Xu; Nan Xiang; Yoshiro Higano |
| Abstract: | Recently, various environmental problems have been brought with the rapid economic development in China. Therefore, now it is important to enforce optimal environmental policies in order to achieve economic development as well as environmental improvement. In this study, we selected Jiaxing city as research area for its high water pollution problem combined with speedy economic growth, and we constructed integrated dynamic environmental-social economic system model to establish the optimization simulation. Through scenarios analysis, we can evaluate the efficiency of the environmental policies from the aspects of both environmental preservation and social economic development. This research will provide prediction on social-economic activities, such as production, finance and budget, endogenously in the social economic model, the water pollutants discharged from social economic activities in environmental system model in the region. The simulation results show a great improvement of the trade-off between environment improvement and economic development in Jianxing city, China. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p606&r=env |
| By: | NICOLA CONIGLIO; KENJI KONDOH |
| Abstract: | Differences in environmental regulation between rich and poor countries have caused a geographical relocation of polluting industry from the former to the latter. In several cases the reduction in domestic emissions is at least partly compensated by an increase in trans-boundary pollution which is detrimental to the productivity of environmental sensitive sectors (such as agriculture) industry in a developed country. Can a government in a rich country try to correct the negative consequences of trans-boundary pollution when mechanisms such as binding international agreements are difficult to implement? In this paper we build a simple North-South model of trade where the manufacturing plants are completely outsourced in a developing country and we analyze the effects of a subsidy program to pollution abatement industry located in the North. We find that, contrarily to common intuition, the subsidy to the pollution abatement equipment industry might reduce welfare in the North when the efficiency of the pollution abatement technology is already relatively high and when the wage gap between the North and South is high. In addition we find that international migration might have a positive impact on improving the environmental stock and welfare in the North and might be a more efficient and less distortive way to address the trans-boundary externality. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p74&r=env |
| By: | Huifang Tian; Xiaojun Shi; John Whalley |
| Abstract: | The UNFCCC process of negotiating multilateral carbon emissions reductions thus far has focused on approximately equiproportional cuts in annual carbon emissions by country along the lines of the Kyoto Protocol agreement. But now, with the objective of involving large developing countries such as China and India in a post 2012 regime, broader considerations imply alternative approaches to emissions reduction arrangements by countries be considered. Here we consider the implications of alternative cross country fairness considerations entering the global negotiation process using a numerical simulation model which captures the potential impacts of alternative emission reductions across major economies which in turn reflect different fairness arguments. We put other fairness considerations, such as intergenerational equity, on one side. We use a global equilibrium emissions and trade model with transfers which are calibrated to a 2005-2050 BAU scenario and treats damage from climate change as utility damage. It thus captures the benefit side of emissions reduction agreements as well as the implications of such considerations for financial transfers agreed as a part of the process. Our analyses consider four alternative justices formulations. One is equal per capita allocation of absorptive capacity of the atmosphere given a temperature change target for global emissions. Yet another is where cuts by countries yield equal benefits per capita to other countries. A third is where there are equal costs per capita to countries making cuts. Finally, we also consider financial transfers to developing countries to compensate them for the costs of meeting emission restraints. The impacts of alternative emissions reductions differ sharply from the equi-proportional cuts of annual emissions implied by a continuation of the Kyoto process. These impacts emphasize the large and ill defined bargaining set for a post Kyoto Process involving large developing countries in a significant way. |
| JEL: | F00 Q54 Q56 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18443&r=env |
| By: | Carolyn Fischer, Mads Greaker and Knut Einar Rosendahl (Statistics Norway) |
| Abstract: | Asymmetric regulation of a global pollutant between countries can alter the competitiveness of industries and lead to emissions leakage. For most types of pollution, abatement technologies are available for firms to produce with lower emissions. However, the suppliers of those technologies tend to be less than perfectly competitive, particularly when both emissions regulations and advanced technologies are new. In this context of twin market failures, we consider the relative effects and desirability of subsidies for abatement technology. We find a more robust recommendation for upstream subsidies than for downstream subsidies. Downstream subsidies tend to increase global abatement technology prices, reduce pollution abatement abroad and increase emission leakage. On the contrary, upstream subsidies reduce abatement technology prices, and hence also emissions leakage. |
| Keywords: | Emissions leakage; Abatement subsidies; Upstream technology market |
| JEL: | Q54 H23 L13 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:708&r=env |
| By: | Peter Cramton (Economics Department, University of Maryland); Steven Stoft |
| Abstract: | The international game of cap and trade begins when countries choose their quantity targets, which are largely selected according to self interest. The analogous public-goods game, in which countries choose their abatement levels, has an uncooperative outcome. Compared to that, the Nash equilibrium of the cap-and-trade game shows that abatement can increase but that trade provides opportunities for uncooperative behavior. By contrast, a game in which all countries vote for a global quantity target or a global price target can lead to a highly cooperative choice of target. However, the assignment of responsibilities for a global quantity target stymies implementation of a global cap. The global-price-target game largely overcomes this barrier because a uniform global price provides a focal point for cooperation. However low-emission countries apparently prefer a much lower global-price than more prosperous countries unless a Green Fund is implemented. A game that couples such a fund to the global price target can largely overcome this barrier to cooperation. We describe such a game along with its equilibrium outcome, which promises to be inexpensive and cooperative. |
| Keywords: | global warming, climate change, climate treaty, cap and trade, carbon tax, carbon price, public goods |
| JEL: | Q54 Q56 Q58 H41 D78 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pcc:pccumd:12csgcg&r=env |
| By: | Childs, Jack |
| Abstract: | Employing a recursive dynamic computable general equilibrium (CGE) model of the Spanish economy, this study explicitly aims to characterise the potential impact of Kyoto and European Union environmental policy targets on specific agricultural activities up to 2020. The model code is modified to characterise the emissions trading scheme (ETS), emissions quotas and carbon taxes, whilst emissions reductions are applied to all six registered greenhouse gases (GHGs). Compared to a ‘business-as-usual’ baseline scenario, by 2020, GDP and employment fall 2.1% and 2.4%, respectively, whilst the retail price index rises 3.4%. In agriculture, the indices of output (4.3% fall), and supply price (7.7% rise) perform relatively worse, whilst there is a concomitant cumulative fall in aggregate farm incomes of €1,510m by 2020. The more notable impact in agriculture is attributed to its relatively higher emissions intensity. Consequently, we record an agricultural marginal abatement cost estimate of €86/tonne of CO2 equivalent by 2020, which is consistent with other estimates in the literature. In addition, we find that the optimal mix of emissions reductions across specific agricultural sectors is a function of the degree of substitutability of their emitting activities. In light of estimated income losses within the strategically important farm sector, a final simulation contemplates an ‘agricultural cost-neutral’ emissions reduction policy akin to a cross compliance payment between 2013 and 2020. This is found to reduce food price rises, whilst altering the optimum mix of agricultural emissions reductions across specific agricultural activities. Empleando un modelo dinámico recursivo de equilibrio general computable (EGC) de la economía española, este estudio analiza el impacto de las políticas medioambientales de Kioto y de la Unión Europea (el acuerdo ‘20/20/20’), sobre distintas actividades agrarias hasta 2020. La estructura del modelo se modifica para caracterizar el comercio de los derechos, las cuotas sobre las emisiones y las tarifas de CO2. Además, se aplica la reducción en las emisiones de los seis gases de efecto invernadero. En comparación con el escenario de referencia, se pronostican caídas en el PIB y el empleo de un 2.1% y 2.4%, respectivamente, en 2020, mientras que el índice de precios al consumo sube un 3.4%. En agricultura, el índice de producción (cae un 4,3%), el de empleo (cae un 1.7%) y el de precios (aumenta un 7.7%), empeoran y además los ingresos acumulados de los agricultores bajan 1.510 millones de euros en 2020. El impacto más acusado en el sector agrario se atribuye a la mayor intensidad de sus emisiones. En consecuencia, se estima un coste marginal de reducción de 86€ por tonelada de CO2 equivalente para 2020, lo cual es consistente con las estimaciones existentes en la bibliografía. Además se observa que la combinación óptima de reducción de emisiones en los diferentes sectores agrarios depende del grado de sustitución de las actividades emisoras. A la vista de las pérdidas de ingresos observadas en el sector agrario, se contempla un escenario de mitigación de coste-cero para los agricultores, semejante a un pago de condicionalidad, entre 2013 y 2020. Los resultados señalan una mitigación en el incremento de los precios de los alimentos y una redistribución en la combinación óptima de las emisiones en los sectores agrarios. |
| Keywords: | Greenhouse Gas Emissions, Agriculture, Spain, Computable General Equilibrium, Gases de efecto invernadero, Agricultura, Espana, Modelo de Equilibrio General Computable, Environmental Economics and Policy, International Development, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:135074&r=env |
| By: | Stijn Reinhard; Vincetn Linderhof |
| Abstract: | This paper analyses the impact of agri-environmental measures (AEM), the most important measure of the EU Rural Development Program (RDP) measures. Of the total public RDP budget, almost a quarter is allocated to this measure (35 billion euro including EU and national contribution). The measure is offered in all 27 EU Member States. Highest farmer uptake is found in extensive agricultural regions (mountainous areas, grassland areas), whereas low implementation occurs in prime agricultural regions. AEM are contracts between farmers and the governing authority, in which farmers commit themselves to adopt environmentally friendly farming practices that go beyond usual good agricultural practice. EU-wide environmental impact indicators are not readily available therefore we constructed two indicators (i) High Natural Value (HNV) farmland indicator at NUTS2 level, (capturing agricultural biodiversity change) and (ii) nitrogen balance (capturing change in water quality). These indicators are used in a joint production function that resembles the joint production of agricultural produce and biodiversity/landscape, incorporating the environmentally detrimental emissions of nutrients. Data were collected from Eurostat and other sources. The spending on the agri-environmental measures is not uniformly distributed over the NUTS 2 regions in the EU. The spatial analyses of nitrogen surplus and HNV-farmland showed the presence of spatial dependencies. Based on the spatial dependency tests of the classical regression model, a spatial error model is estimated. In the current version we relate the entire array of AEM to one impact indicators. Data on spending disaggregated to the various activities would improve the econometric estimation. JEL codes: C21, L83, O18 Keywords: Rural Development Program, spatial data analyses, spatial econometrics, environmental economics, agriculture |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p1136&r=env |
| By: | Kelly, S.; Pollitt, M.; Crawford-Brown, D. |
| Abstract: | Improving the efficiency and performance of the UK residential sector is now necessary for meeting future energy and climate change targets. Building Performance Evaluation and Certification (BPEC) tools are vital for estimating and recommending cost effective improvements to building energy efficiency and lowering overall emissions. In the UK, building performance is estimated using the Standard Assessment Procedure (SAP) for new dwellings and Reduced SAP (RdSAP) for existing dwellings. Using a systems based approach we show there are many opportunities for improving the effectiveness of BPEC tools. In particular, if the building stock is going to meet future energy and climate change targets the system driving building energy efficiency will need to become more efficient. In order to achieve this goal, building performance standards across Europe are compared highlighting the most effective strategies where they are found. It is shown that the large variance between estimated and actual energy performance from dwellings in the UK may be preventing the adoption of bottom-up energy efficiency measures. We show that despite popular belief, SAP and RdSAP do not estimate building energy efficiency but instead attempt to estimate the cost-effective performance of a building and thus create perverse incentives that may lead to additional CO2 emissions. In this regard, the SAP standard confounds cost-effectiveness, energy efficiency and environmental performance giving an inadequate estimate of all three policy objectives. Important contributions for improving measurement, analysis, synthesis and certification of building performance characteristics are offered. |
| Keywords: | Dwellings; Building Stock; Buildings; SAP; Energy Performance Certificates; Efficiency, Energy Demand. |
| Date: | 2012–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1238&r=env |
| By: | Rabassa, Mariano; Skoufias, Emmanuel; Jacoby, Hanan G. |
| Abstract: | The effect of weather shocks on children's anthropometrics is investigated using the two most recent rounds of the Nigeria Demographic and Health Survey. For this purpose, climate data for each survey cluster are interpolated using daily weather-station records from the national network. The findings reveal that rainfall shocks have a statistically significant and robust impact on child health in the short run for both weight-for-height and height-for-age, and the incidence of diarrhea. The impacts of weather shocks on health are of considerable magnitude; however, children seem to catch up with their cohort rapidly after experiencing a shock. The paper does not find any evidence of nonlinear impacts of weather variability on children's health, suggesting that a moderate increase in future rainfall variability is not likely to bring additional health costs. Finally, it appears that the impact of these shocks is the same for young boys and girls, which suggests that there is no gender-based discrimination in the allocation of resources within households. |
| Keywords: | Health Monitoring&Evaluation,Science of Climate Change,Environmental Economics&Policies,Disease Control&Prevention,Climate Change Mitigation and Green House Gases |
| Date: | 2012–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6214&r=env |
| By: | Gawel, Erik; Strunz, Sebastian; Lehmann, Paul |
| Abstract: | The German energy transition repeatedly faces harsh critiques questioning its economic and environmental merit. This article defends the Energiewende and argues that Germany has chosen a rational and particularly forceful approach to securing sustainable energy supply. Though current expenditures are high, the long-run benefits of transforming the energy system to a renewables-based system are likely to outweigh present investment costs. Furthermore, support policies for renewables are not redundant - as some critics claim - but complement other policy instruments, such as the emissions trading scheme. The article also addresses the motives behind the discrediting attacks on the German energy policy regime. Defense actions by beneficiaries of the former energy market structure are only to be expected, but the attacks from liberal economists are astonishingly fierce. -- |
| Keywords: | energy supply,energy transition,externalities,Germany,renewable energy sources,support policies,sustainability |
| JEL: | D62 H54 Q42 Q48 Q53 Q54 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:152012&r=env |
| By: | Sauer, Johannes; Walsh, John; Zilberman, David |
| Abstract: | This empirical study investigates the effects of different agri-environmental schemes on individual producer behaviour. We consider the effects on production intensity, performance and structure for a sample of UK cereal farms for the period 2000 to 2009 and use the policy examples of the Environmental Stewardship Scheme (ESS) and the Nitrate Vulnerable Zones (NVZ). The econometric methodology is based on a directional distance function framework as well as the application of propensity score analysis by the use of matching estimators. We find that both schemes are effectively influencing production behaviour at individual farm level. However, agri-environmental schemes show only very minor effects on the technical and allocative efficiency of farms, hence, we can conclude that farms enrolled in agri-environmental schemes are efficiently adjusting their production decisions given the constraints by the respective scheme. Farms affected by these schemes indeed tend to become less specialised and more diversified with respect to their production structure. A voluntary type agrienvironmental scheme seems to signficantly influence producer behaviour at a far higher scale than a non-voluntary agri-environmental scheme. The methodological novelty of this research lies in the use of a sound production theory based multi-output multi-input approach to disentangle measures for production performance and structure which are then used as indicators for the robust treatment effects’ analyses. |
| Keywords: | Agri-Environmental Policy, PES, Distance Function, Propensity Score Matching, Environmental Economics and Policy, Q15, Q18, Q57, C23, |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:134783&r=env |
| By: | Albrecht, Ernst; Henning, Christian H.C.A. |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi12:133014&r=env |
| By: | Francesco Garibaldo; Nicole Orlando; Gianluca Parodi (Università di Bologna); giorgio.tassinari@unibo.it (Università di Bologna) |
| Abstract: | The aim of this work is to analyze the development of Green Economy in the Emilia-Romagna Region. Sustainability and efficiency are seen as springs of development to be pushed overall in a period of global economic crisis. Starting from the distinction of Green Production and Green Products, the authors have investigated the evolution of the sector in the last years, in particular analyzing the number of enterprises and products with environmental certifications and their economic performance. A special focus have been made regarding the production of Renewable Energy Sources and the EU objectives. Furthermore it has been explored the Agri-food sector, underlining its relationship with the environment and the threats given by Climate Change, and on the other side the opportunities linked to agro-energies and organic productions. The authors have made some on field interviews to operators and firms of different sector in order to better understand their perspective regarding Green Economy markets. Additionally to underline some strategic guidelines to be followed by governments to better implement structural changes to raise efficiency and to further green the economical production |
| Keywords: | Green Economy, Sviluppo Sostenibile, Produzioni Verdi, Prodotti Verdi, Fonti di Energia Rinnovabili, Settore Agroalimentare, Biologico Green Economy, Sustainable Development, Green Products, Green Production, Renewable Energy Sources, Agri-food sector, Organi |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bot:quadip:116&r=env |
| By: | Iskandar, Deden Dinar; Wuenscher, Tobias; Badhuri, Anik |
| Abstract: | This study is intended to provide the clue regarding the determinants of compliance with environmental tax under imperfect monitoring and the presence of bribery, motivated by the case of Indonesia. The study is expected to contribute on environmental policy and tax compliance literatures, particularly by examining the impact of financial reward under the presence of bribery, aside of others conventional compliance instruments such as tax rate, audit, and sanction. In addition to financial reward, this study also incorporates the bribe explicitly as a determinant of compliance. The study employs theoretical and experimental approaches. While theoretical analysis find that the compliance will decrease with tax rate and increase with audit, sanction, financial reward, and the bribe rate; the experiment findings indicate that the impact of each determinant are vary according to the existence of bribery. Despite the difference, both approaches show that the bribery indeed hampers the compliance on environmental tax. The bribery encourages the polluting firms to aggressively evade the environmental tax as the tax rate increase and curbs the positive impact of financial reward in enhancing the compliance. |
| Keywords: | Environmental Tax, Compliance, Theoretical Approach, Laboratory Experiment, Environmental Economics and Policy, |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:134977&r=env |
| By: | Randy A. Becker; Carl Pasurka, Jr.; Ronald J. Shadbegian |
| Abstract: | It remains an open question whether the impact of environmental regulations differs by the size of the business. Such differences might be expected because of statutory, enforcement, and/or compliance asymmetries. Here, we consider the net effect of these three asymmetries, by estimating the relationship between plant size and pollution abatement expenditures, using establishment-level data on U.S. manufacturers from the Census Bureau’s Pollution Abatement Costs and Expenditures (PACE) surveys of 1974-1982, 1984-1986, 1988-1994, 1999, and 2005, combined with data from the Annual Survey of Manufactures and Census of Manufactures. We model establishments’ PAOC intensity - that is, their pollution abatement operating costs per unit of economic activity - as a function of establishment size, industry, and year. Our results show that PAOC intensity increases with establishment size. We also find that larger firms spend more per unit of output than do smaller firms. |
| Keywords: | environmental regulation, costs, business size, U.S. manufacturing |
| JEL: | Q52 L51 L6 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:12-25&r=env |
| By: | Nicolas Quérou; Agnès Tomini |
| Abstract: | This paper addresses the management of multispecies sheries, and suggests the use of restricted shing policies as an interesting option for unassessed sheries (as is the case within developing countries). Specically, we consider a predator-prey system where agents compete to harvest from two interacting sh species. Two management policies are considered: an unrestricted regime where agents can harvest from both species, and a second one where only the predators can be harvested. The performance of both policies is compared from an ecological and an economic point of view. For a suciently large number of agents (or for strong biological interaction parameters) the restricted shing policy is shown to yield both higher long run stock levels and prots. Thus, this contribution suggests that such a policy would require very little monitoring while meeting environmental and economic objectives. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:12-32&r=env |
| By: | Mariam Camarero (Departamento de Economía. Universidad Jaume I, Spain); Andrés J. Picazo-Tadeo (Departamento de Economía Aplicada II. Universidad de Valencia, Spain); Cecilio Tamarit (Departamento de Economía Aplicada II. Universidad de Valencia, Spain) |
| Abstract: | This paper studies convergence in CO2 emission intensity (CO2 over GDP) among OECD countries over the period 1960-2008 based on its determinants, namely, energy intensity (energy consumption over GDP) and the so-called carbonisation index (CO2 emissions over energy consumption). We apply the Phillips and Sul (2007) methodology, which tests for the existence of convergence clubs. Our results highlight that differences in emission intensity convergence are more determined by differences in convergence of the carbonisation index rather than by differences in the dynamic convergence of energy intensity. |
| Keywords: | convergence; OECD; CO2 emission intensity; energy intensity; carbonisation index |
| JEL: | C15 C22 Q53 Q54 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1215&r=env |
| By: | de, Vries Frans; Franckx, Laurent |
| Abstract: | A multi task principal-agent model is employed to derive optimal environmental liability rules for risk neutral managers under two alternative organizational structures - a functional organization and a product-based organization. For a product-based organization it is shown that efficiency is independent of whether the firm or managers are liable for environmental damages. In a functional organization it is optimal either to hold the firm liable for environmental damages or, equivalently, not to hold the production managers liable for environmental damages. We derive conditions to obtain the first-best solution for a given organizational structure. Finally, the organizational form that induces the highest environmental effort induces the lowest production effort and vice versa. This suggests that production and environmental protection are substitutes rather than c omplements. |
| Keywords: | organizations; principal-agent; multi-task; vicarious liability; contr acts |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2012-09&r=env |
| By: | Purkus, Alexandra; Gawel, Erik; Thrän, Daniela |
| Abstract: | Bioenergy can play an important part in managing the transition towards a lowcarbon energy system. However, in many countries its rapid expansion increases pressures on agricultural land use and natural ecosystems, resulting in conflicts with conservation aims and food security. Establishing an effective governance framework for bioenergy, to safeguard against sustainability risks and promote the efficient use of scarce biomass resources, is of the utmost importance, but is complicated by the existence of multiple objectives, multiple market failures and the variety of possible value chains. In this situation, policy recommendations based on neoclassical assumptions prove too abstract to be of practical relevance. Using the case of European bioenergy policy, this paper explores how economic bioenergy policy recommendations could be improved by using a new institutional economics (NIE) perspective. Moving along the value chain, we discuss what implications the consideration of transaction costs, incomplete information, path dependencies, and political feasibility has for finding solutions to the governance challenges of bioenergy. We conclude that policy implications derived from NIE differ clearly both from neoclassical recommendations and current EU bioenergy policy, and that a NIE framework for the analysis of bioenergy governance, which takes not only market failures, but also the risks of government failures into account, could make a useful contribution to the development of realistic, second-best solutions to the allocative problems of bioenergy use. -- |
| Keywords: | bioenergy policy,renewable energy policy,climate change mitigation,new institutional economics |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:132012&r=env |
| By: | Electra Pitoska; Margarita Trikka |
| Abstract: | Environmental Education Centers have emerged more that thirty years ago. Preoccupation with the local environment can lead to a better understanding of universal problems, since local problems are always part of the universal. The trainees fully understand that their everyday choices and their general lifestyle influence the environment, even in very distant areas. The Ministry of Education in Greece included Environmental Education in the educational system, through various measures such as the establishment of Environmental Centers. The state allocated financial resources to the Environmental Centers and managed to form a small but very creative team of people to teach Environmental Education. Students’ participation in programs and activities of the Environmental Centers is assessed to be rather positive. Retrospection in the bibliography of Environmental Centers in Greece shows that they are still in the sideline of the everyday school life, that only few programs are realized in every prefecture and that when realized there is no consistency or continuity. There is also no essential evaluation of Environmental Education and it is unknown how it contributes to the promotion of sustainability in a personal and in a community level. In 2011, at the place Meliti in the prefecture of Florina, a field study was organized in order to explore the role of an Environmental Center in distant areas. The Environmental Educational Center in Meliti was established in 2003. The study was carried out by questionnaires that were filled in by personal interview. The questionnaires were addressed to three target groups: High School students, local residents and teachers who work at the Environmental Center. Through the analysis of the study’s findings many conclusions arise. Those conclusions concern the relation between the center and the local productive and economic fabric and also the relation between students and environment. Key words: Environmental Education Centers, Local communities, Meliti-Florina, Greece Gel code: I25 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p226&r=env |
| By: | Marcus Berliant; Shin-Kun Peng; Ping Wang |
| Abstract: | This paper demonstrates that a pollution tax with a fixed cost component may lead, by itself, to segregation between clean and dirty firms without heterogeneous preferences or increasing returns. We construct a simple model with two locations and two industries (clean and dirty) where pollution is a by-product of dirty good manufacturing. Under proper assumptions, a completely stratified configuration with all dirty firms clustering in one city emerges as the only equilibrium outcome when there is a fixed cost component of the pollution tax. Moreover, a stratified Pareto optimum can never be supported by a competitive spatial equilibrium with a linear pollution tax. To support such a stratified Pareto optimum, however, an effective but unconventional policy pre-scription is to redistribute the pollution tax revenue from the dirty to the clean city residents. JEL Classification: D62, H23, R13. Keywords: Pollution Tax, Agglomeration of Polluting Producers, Endogenous Stratification. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p94&r=env |
| By: | Krane, J. |
| Abstract: | In the midst of a shortage of natural gas, Abu Dhabi has launched an investment into renewable energy. Why? Will renewables allow the Persian Gulf sheikhdom to meet rising electricity demand without simultaneous increases in conventional power? No. Even in one of the world’s sunniest places – but not one of its windiest – conventional solar generation is unable to handle a demand peak that extends past sundown. Renewables offer an intermittent electricity supply at a much higher average cost than the existing gasfired system. Abu Dhabi will be neither able to forgo construction of a single conventional generating plant, nor reduce its reliance on gas imports from Qatar. The contribution to energy security will be negligible. This paper finds two main benefits, among several limitations. First, renewables may allow reduced fuel consumption in conventional power plants, which will cut carbon emissions and burning of expensive backup fuels. Second, the highly publicized investment has improved the regime’s international image, bringing acclaim as a leader in clean energy, despite its status as a key OPEC oil producer. In the political context of a rentier monarchy, such prestige is as an important source of domestic legitimacy. |
| Keywords: | renewables, natural gas, energy security, subsidies, Abu Dhabi, United Arab Emirates, Persian Gulf, GCC, OPEC, rentier state, monarchy |
| JEL: | P42 Q41 Q42 Q48 |
| Date: | 2012–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1237&r=env |
| By: | Heumesser, Christine; Morawetz, Ulrich B. |
| Abstract: | The Austrian agri-environment program (ÖPUL) from 2000-2006 introduced several measures to reduce nitrate concentration in groundwater. We apply spatial econometric methods on a country-wide panel dataset to assess the partial effects of ÖPUL and other determining factors on nitrate concentration in groundwater. Preliminary results reveal that organic farming and refraining from using inputs on arable land have a measurable negative effect on nitrate concentration. |
| Keywords: | Nitrate concentration, Groundwater, Agri-Environment Measures, Spatial Regression, Agricultural and Food Policy, Environmental Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi12:133044&r=env |
| By: | Burgess, Diane; Finney, Graham; Matthews, Dave; Patton, Myles |
| Abstract: | Landscapes represent the dynamic interaction of natural and cultural processes acting on the environment. Increasingly human impacts are dominating the natural processes resulting in landscape change and habitat loss. Due to the public good nature of landscapes, no market price exists to indicate their economic value and consequently impacts to the landscape are excluded from decision making processes. To include landscape change within the decision making process, valuation studies have been undertaken; primarily stated preference methods. In common with the valuation of many public goods, Choice Experiments (CE), have dominated the landscape valuation literature. However, CE makes the implicit assumption that the value of the good can be captured by the attributes of the the good. In CE a landscape would be described in terms of its features i.e. trees, field boundries. Drawing from psychology/cognitive research, we explore whether the spatial configuration of those landscape features has an impact on preferences. The findings of two surveys indicate that spatial configuration does have an impact on landscape preferences and therefore potentially on economic values. This would indicate that unless CE can incorporate spatial configuration, they may not be an appropriate method for valuing landscapes. |
| Keywords: | Landscapes, Stated Preference methods, Environmental Economics and Policy, Q24, Q51, Q57, |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:134984&r=env |
| By: | Georg Hirte; Stefan Tscharaktschiew |
| Abstract: | Many governments subsidize electric mobility (E-mobility) to increase the share of electric vehicles (EV) in the car fleet. This aims at reducing carbon emissions. Despite that there is not much research on the full economic costs and benefits of this measures. There are only a few Cost Benefit Analyses (CBA). They, however, do not take into account repercussion and substitution effects. We fill this gap in the literature and examine subsidies to EVs in a full spatial general equilibrium model. Since cities are the main area were EVs will be used, we focus on cities and apply a spatial approach. In particular, we ask whether it is optimal to subsidize or tax electric vehicles and, how large, the corresponding optimal rate is. We, first, derive analytically the optimal subsidy in a spatial partial equilibrium model of a city with two zones where commuting, carbon emissions, endogenous labor supply, fuel and power taxes are considered and where we distinguish between fuel vehicles and electric vehicles. There we find that the optimal subsidy rate is the sum of changes in externality costs (emissions + congestion), an opposite tax interaction effect, a redistribution effect between cities inhabitants and absentee landlords and a cost effect due to higher costs of producing travelling with power in comparison to fuel. The latter two effects are usually not considered in CBAs. Second, we extend the model to a full spatial general equilibrium model and employ simulations to calculate sign and size of the optimal subsidy or tax rate. This model is calibrated to a typical German metropolitan area. The results show that electric vehicles should not be subsidized but taxed. The results are robust with respect to changes in the willingness to adopt electric vehicles (EVs), changes in fix costs of EVs, and even if emission of EVs are zero. We change all these parameters to capture extreme and very unlikely behavior such as a very high demand elasticity of EVs with respect to the power tax rate, very low costs and the case that EVs have zero CO2 emissions. Concerning these variables we suggest that EVs should not be subsidized because welfare costs of achieving a small reduction in emissions are very high. We draw the conclusion that E-mobility might only be an efficient policy if it is considered as complement to other policies. This issue is left for future research. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p324&r=env |
| By: | Mireille Chiroleu-Assouline; Jean-Christophe Poudou; Sébastien Roussel |
| Abstract: | In this paper we aim at theoretically grounding the Reducing Emissions from Deforestation and Forest Degradation + (REDD+) scheme as a contractual relationship between countries in the light of the theory of incentives. Considering incomplete information about reference levels of deforestation as well as exogenous implementation and transaction costs, we compare two types of contracts: a deforestation performance-based contract and a conditional avoided deforestation-based contract. Because of the implementation and transaction costs, each kind of REDD+ contract implies a dramatically different information rent / effciency trade-off. If the contract is performance- based (resp. conditionality-based), information rents are awarded to countries with the ex ante lowest (resp. highest) deforestation. In a simple quadratic setting, there is a reference level threshold in terms of effciency towards less deforestation. In terms of expected welfare, conditional avoided deforestation-based schemes are preferred. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:12-31&r=env |
| By: | Timo Busch (ETH Zuerich, and Duisenberg school of finance); Nils Lehmann (ETH Zuerich); Volker H. Hoffmann (ETH Zuerich) |
| Abstract: | Certain types of corporate social responsibility (CSR) activities can generate an ‘insurance-like’ benefit for firms (Godfrey, 2005). Thus far, this risk management hypothesis has been verified for the effects of firm-specific negative events. We argue that this insurance-like benefit of CSR-activities can be equally expected in the context of long-term developments which threaten current business models. We develop our arguments for the incremental, long-term process of internalizing negative externalities. For this, we consider the negative externalities resulting from the emission of greenhouse gases (GHG) and perform a panel analysis of a sample of 1699 firms over a period of 7 years. Our results show that firms can reduce their market-based risk by curbing their GHG-emissions. We furthermore propose an opposing effect on accounting-based risk, but do not find empirical support for this. We conclude that CSR-activities aimed at reducing a firm’s exposure to specific long-term developments can be sound corporate risk management, even if such activities may not yet be profitable. |
| Keywords: | GHG-emissions; negative externalities; financial risk; corporate social responsibility; long-term developments |
| JEL: | G30 M14 L20 Q20 |
| Date: | 2012–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20120102&r=env |
| By: | Yasuhiro Takarada; Takeshi Ogawa; Weijia Dong |
| Abstract: | This paper examines the effects of international trade and resource management in a two-country model where each country controls domestic harvest to prevent over-exploitation of an internationally shared renewable resource (e.g., fishery resources). We show that contrary to conventional wisdom, an opening up of trade is likely to raise the steady state utility of a resource-good exporting country, even if it implements weak resource management standards, because the expansion of the resource sector which enjoys economic rent increases its total income. To maximize world welfare in a trading steady state, a resource-good importing country should implement stricter resource management after trade than under autarky but it will implement weak resource management to enjoy economic rent by mitigating the contraction of the resource sector (i.e., rent shifting). Thus, a resource-good exporting country should give some side payments to give a resource-good importing country an incentive to implement strict resource management standards. Keywords: Gains from trade; Shared renewable resource; Resource management JEL Classification: F11; Q27 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p72&r=env |
| By: | Cathrine Hagem, Bjart Holtsmark and Thomas Sterner (Statistics Norway) |
| Abstract: | We analyze two mechanism designs for refunding emission payments to polluting firms; Output Based (OB) and Expenditure Based (EB) refunding. In both instruments, emissions fees are returned to the polluting industry, possibly making the policy more easily accepted by policymakers than a standard tax. The crucial difference between OB and EB is that the fees are refunded in proportion to output in the former, but in proportion to the firms’ expenditure on abatement equipment in the latter. We show that to achieve a given abatement target, the fee level in the OB design exceeds the standard tax rate, whereas the fee level in the EB design is lower. Furthermore, the use of OB and EB refunding may lead to large differences in the distribution of costs across firms. Both designs do, strictly speaking, imply a cost-ineffective provision of abatement as firms put relatively too much effort into reducing emissions through abatement technology compared with emission reductions through reduced output. However, this may be seen as an advantage by policymakers if they seek to avoid activity reduction in the regulated sector. We provide some numerical illustrations based on abatement cost information from the Norwegian NOx fund. |
| Keywords: | Refunded charge; Output based; expenditure based; NOx; Tax-subsidy; policy design |
| JEL: | Q28 Q25 H2 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:705&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. Commercial drought insurance systems have the potential to introduce the necessary incentives to reduce overexploitation during drought events and the high costs of the drought indemnity paid by the government. This paper develops a methodology to obtain this socially desirable basic 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 basic premiums in a hypothetic commercial drought insurance market would be reasonable and the expected environmental outcomes significant. |
| Keywords: | Drought insurance, stochastic models, groundwater, agriculture, Drought Management Plan, Crop Production/Industries, Risk and Uncertainty, Q15, Q18, Q25, Q51, Q58, |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:135090&r=env |
| By: | Christophe Heyndrickx; Victoria Alexeeva - Talebi; Natalia Tourdyeva |
| Abstract: | The present paper studies the effect of an upward correction of the natural gas price on the Russian domestic market. Russia has the largest gas reserves in the world and currently produces around 550 billion cubic meters of gas each year. Sixty percent of the production is sold domestically at prices below long term marginal cost, for households and for industrial producers. The pricing of natural gas is currently a hot topic in Russia, as the Russian government proposes to liberalize the regulated domestic market price and decrease subsidies for natural gas products. This is claimed to fit in a policy promoting energy efficiency, increasing investments in natural gas production and bringing the natural gas price on the domestic market closer to long term cost recovery. We will approach the issue of gas pricing through taxation of intermediate and final use of natural gas for domestic industries and consumers. Considerable attention is given to economic impacts, environmental issues and social effects of gas pricing. We compare several scenarios of differential gas pricing, simulating increases in price for industrial and private consumers at different annual growth rates, with a time horizon from 2012 until 2020. Our results are based on an application of the SUSTRUS model, a novel computable general equilibrium model, which was developed in the same-named EU funded project. The SUSTRUS model belongs to the group of regional CGE models, applied to analyze policies with a strong social, economic and environmental dimension. The model is constructed as a regional model on federal level, where regions are linked by interregional trade flows, a federal government level and migration. The main data sources for the model are the public databases of Rosstat and the micro-level household data from the Russia Longitudinal Monitoring Survey (RLMS). Calibration of the model database was performed by a flexible cross-entropy minimization sub module and standard applied general equilibrium techniques. We find that deregulating natural gas pricing can lead to a significant improvement in energy efficiency, if prices are gradually increased for both consumers and industries alike. Differences in regional energy efficiency decrease, but are still significant. We show that increasing the consumer price of gas is indeed a regressive policy, but can be compensated for by the government. Keywords: Regional general equilibrium modeling, sustainability, energy, natural gas, pricing, policy JEL codes: R13,Q01,Q41,Q48,Q56 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p113&r=env |
| By: | VASILIS ANGELIS; Athanasios Angelis-Dimakis; Katerina Dimaki |
| Abstract: | The territorial organisation of economies and societies is undergoing a dramatic change. Globalisation, technological innovation, migration and population ageing make it increasingly difficult to predict the future of regions. Economic change tests the ability of all regions to compete and the gap between leading and lagging regions in terms of growth, income and employment is widening. Environmental factors test the ability of national and local governments to manage resources in a sustainable manner and to maintain and improve the quality and safety of life, in areas showing both economic growth (congestion, pollution, contamination, waste generation) or decline (abandoned land, degradation of the built heritage, lack of investment, etc.). These problems have led, step by step, to a modification of the targets of development and the acceptance that the concept of development has to embody the quality of economic growth, as well as its quantity and human well being alongside with economic growth. Sustainable development refers to the ability of our societies to meet the needs of the present without sacrificing the ability of future generations to meet their own needs. Measuring sustainable development means going beyond a purely economic description of human activities; requires integration of economic, social and environmental concerns. New techniques are required in order to benchmark performance, highlight leaders and laggards on various aspects of regional development and facilitate efforts to identify best practices. New tools have to be designed so as to make sustainability decision-making more objective, systematic and rigorous. Our aim is to outline the changing role of environment in a region’s development, present a measure of a region’s overall attractiveness and incorporate environmental factors into it. The present paper focuses on the environmental factors and its scope is to: Outline the changing role of environment in the process of an area’s development over time Present a measure of an area’s overall attractiveness Incorporate and quantify the effect of environment in the setting up of this measure Keywords: Region’s Image, Region’s Attractiveness, Regional Development, Sustainable Development, Economic Factors, Social Factors, Environmental Factors, Butterfly Catastrophe Model. JEL Classification: C02, C65, Q01, Q51, R58 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p1157&r=env |
| By: | Reiter, Karin; Sander, Achim |
| Abstract: | The paper presents the results of mid-term-evaluation of rural development plans of five German Federal States. It focuses on a comparative analysis of the implementation of Natura-2000-Payments (Code 213) and shows the relationship between voluntariness on one hand and administrative law in Natura-2000 areas and Cross Compliance Standards on the other hand. |
| Keywords: | European agri-environmental policy, Evaluation, Natura-2000 payment, dead weight effect, Agricultural and Food Policy, Community/Rural/Urban Development, Environmental Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi12:133131&r=env |
| By: | Gawel, Erik; Heuson, Clemens; Lehmann, Paul |
| Abstract: | Since numerous countries have already initiated a process of adaptation to climate change by drafting strategies or catalogues of measures, it is of particular importance to identify and overcome potential barriers to efficient public adap-tation from the beginning. A major source of barriers is given by self-interest driven behaviour of actors involved in the adaptation policy process. This is for the reason that several features of the adaptation option and the surrounding policy framework, such as the lacking of a clear-cut success-metric, are likely to boost such behaviour since they facilitate both the manipulation of the adaptation output and the exertion of influence through the various actor groups shaping the political system. Against this background, this paper provides a broad conceptual Public Choice theory framework serving both for raising the consciousness of potential barriers to efficient public adaptation and creating a sound basis for further in-depth research. Concerning the efficiency of public adaptation policies, we distinguish three dimensions, namely extent, structure (form and timing) and organisation (vertical and horizontal) of public adaptation. For either case, potential political biases are investigated taking into consideration the self-interests and influence of voters, pressure groups, bureaucrats and politi-cians in a representative democracy framework. -- |
| Keywords: | adaptation,barriers,climate change,climate policy,efficiency,public choice |
| JEL: | D78 Q54 Q58 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:142012&r=env |
| By: | Pedro Simões; Nuno Cruz; Rui Marques |
| Abstract: | The recycling of packaging waste is an objective of the Community with very ambitious recycling rate targets laid down in the European law. Research on the operations and on the financial and economic costs that resulted from this environmental policy is an ongoing effort. Currently, there is still no agreement on the ‘optimal’ recycling rates, and on whether the targets should be raised, lowered or preserved. While each member state has currently its own packaging waste management system, there is still a lack of data regarding the actual costs of recycling and on how these costs have been distributed among stakeholders. It is not clear that the packaging and packaging waste Directive is being implemented correctly (i.e. it is not clear that the industry is supporting 100% of the costs of recycling packaging waste). This paper illustrates the French framework and discusses the financial transfers undertaken by Eco-Emballages the entity that manages the Green Dot scheme in this country. For this purpose, we use data from a sample of 45 entities in charge of selective collection and sorting of household packaging waste for the year 2010, covering about 20% of the French population. We match the financial transfers of the Eco-Emballages Group with the costs incurred by the local authorities (which are in charge of selective collection and sorting) and provide a discussion on the rationality and fairness of the system. Keywords: France; green dot; packaging waste; recycling. JEL codes: H11; H21; H23; Q53; Q58. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p1011&r=env |
| By: | Juan Antonio Duro (Department of Economics, CREIP and XREAP, Rovira i Virgili University); Jordi Teixidó-Figueras (Department of Economics, CREIP and XREAP, Rovira i Virgili University) |
| Abstract: | Recently, White (2007) analysed the international inequalities in Ecological Footprints per capita (EF hereafter) based on a two-factor decomposition of an index from the Atkinson family (Atkinson (1970)). Specifically, this paper evaluated the separate role of environment intensity (EF/GDP) and average income as explanatory factors for these global inequalities. However, in addition to other comments on their appeal, this decomposition suffers from the serious limitation of the omission of the role exerted by probable factorial correlation (York et al. (2005)). This paper proposes, by way of an alternative, a decomposition of a conceptually similar index like Theil’s (Theil, 1967) which, in effect, permits clear decomposition in terms of the role of both factors plus an inter-factor correlation, in line with Duro and Padilla (2006). This decomposition might, in turn, be extended to group inequality components (Shorrocks, 1980), an analysis that cannot be conducted in the case of the Atkinson indices. The proposed methodology is implemented empirically with the aim of analysing the international inequalities in EF per capita for the 1980-2007 period and, amongst other results, we find that, indeed, the interactive component explains, to a significant extent, the apparent pattern of stability observed in overall international inequalities. |
| Keywords: | ecological footprint; international environmental distribution; inequality decomposition. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2012-17&r=env |
| By: | Kay, Adrian; Ackrill, Rob |
| Abstract: | The scale of the ambition to decouple emissions growth from energy consumption in the economy runs counter to several decades of debates and literatures on the limits of government. Transport biofuels are an early and influential case of the policy capacity challenge in the transition to low-carbon economies. The case stands analytically for the policy-maker’s dilemma of maintaining longer term policy goals as credible commitments, even though considerable flexibility and adaptability in policy-making is required to reach those far horizon goals in conditions of high technological and market uncertainty. In such terms, this paper compares US and EU biofuels policy processes, revealing an intertemporal choice which tests the capacity to account for the future benefits of a low carbon future in current policy processes; because if the pathway to their achievement is uncertain and politically contested in the implementation phase, then those future benefits may be heavily discounted, shortening policy-maker horizons and rendering the overall transition process politically vulnerable. |
| Keywords: | Biofuels, Policy Capacity, Policy Implementation, Policy Making, Crop Production/Industries, Q28, Q41, Q48, |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:135122&r=env |
| By: | Russell, Noel P.; Sauer, Johannes |
| Abstract: | The role of adverse selection in schemes for the procurement of ecosystem services has been investigated by many who suggest that efficiency of these schemes is impaired by problems arising from adverse selection. However recent research on the UK Environmental Stewardship Scheme suggests that these types of procurement system may not be characterised by adverse selection but by what might be more appropriately labelled as “beneficial selection”. These results are based on the analysis of a simple theoretical model and the empirical implications are confirmed using econometric analysis. However it is also suggested that, even with beneficial selection, there will still remain systemic inefficiency arising from a continuing need for the payment of informational rents to the farmers participating in the scheme. This paper presents the analysis of a model that focuses on the Principal- Agent characteristics of this problem and sets out to investigate the tradeoffs that arise in designing ecosystem procurement mechanisms where payment of informational rents to participants can be used to increase overall efficiency. The impact of beneficial selection is carefully explored here, and we suggest implications for policy makers and empirical propositions to be tested using a suitable data set. |
| Keywords: | Asymmetric Information, Beneficial Selection, Adverse Selection, Payment for Ecosystem Services, Environmental Economics and Policy, D82, Q57, |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:134988&r=env |
| By: | Blumenstein, Benjamin; Moller, Detlev |
| Abstract: | Da die extensive Grünlandbewirtschaftung aufgrund schwieriger Rahmenbedingungen zunehmend unter Druck gerät, sind neben der Optimierung herkömmlicher Landnutzungsverfahren Alternativen gefragt, die sowohl den Erhalt als auch eine ökonomisch tragfähige Nutzung von naturschutzfachlich wertvollen Extensivgrünlandstandorten sicherstellen können. Im vorliegenden Beitrag werden energetische und tierische Nutzungsverfahren sowie Maßnahmen zur Landschaftspflege auf der Grundlage dynamischer Investitionsrechnungen ökonomisch verglichen und bewertet. Die Modellrechnungen deuten darauf hin, dass optimierte Verfahren der Bioenergieerzeugung unter Berücksichtigung der unterstellten Rahmenbedingungen anderen Landnutzungsverfahren im Vergleich vorzuziehen sind. |
| Keywords: | Extensivgrünland, Bioenergie, IFBB, Biodiversität, Mutterkuhhaltung, Landschaftspflege, Agribusiness, Agricultural Finance, Environmental Economics and Policy, Land Economics/Use, Livestock Production/Industries, Resource /Energy Economics and Policy, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi12:133950&r=env |
| By: | Sassi, Maria; Cardaci, Alberto |
| Abstract: | The paper aims at analysing the impact of the likely change in rainfall on food availability and access to food in Sudan. The empirical investigation is based on an integrated approach consisting on a stochastic method and CGE model. The former provides the likely changes in sorghum, millet and wheat productivity and their probability of occurrence according to rainfall predictions based on historical data. These results are at the basis of the shocks simulated in a standard CGE model augmented with a stochastic component. Achievements underline the negative impact on the two dimensions of food security taken into consideration, mainly due to a reduction in cereal supply, a marked cereal inflation pressure and income contraction; the grater negative effect on the poorest households; and a deterioration of the economic performance of the country. In this context, the paper stresses a strong interconnection among climate change, poverty and food insecurity and thus the need for an integrated policy-making approach. |
| Keywords: | Climate change, Food Security, Stochastic approach, CGE, Sudan, Food Security and Poverty, C68, Q18, Q54, |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:134779&r=env |
| By: | Pedro Simões; Nuno Cruz; Rui Marques |
| Abstract: | All European Union (EU) member states have to comply with the demanding recycling rates targets that were set for the recovery of packaging waste in the Directive 94/62/EC. Nevertheless, each country has its own system for accomplishing these targets. Some already had national legislation when the Directive entered into force. Others had to “start from scratchâ€. Indeed, many countries have experienced massive improvements in the waste management systems in the last years; these include the closing of dumps and the construction of complying sanitary landfills. The “maturity levels†of the waste management frameworks are different for the diverse EU countries. Evidently, this has consequences for the efficiency and effectiveness of the recycling system. Moreover, one can observe very different approaches for managing household packaging waste, although there is still a lack of evidence regarding the outperformance (if one considers economic and environmental aspects altogether) of any approach over another. This paper presents and discusses the pros and cons of the recycling systems of household packaging waste for five EU countries, namely: France, Germany, Portugal, Romania and the UK. We compare institutional frameworks, recycling rates, green dot fees and, whenever possible, recycling costs and benefits (i.e. the costs of selective collection and sorting on the one hand, and the financial transfers performed by the industry along with the product of the sale of recyclables on the other). To provide a verdict on the overall performance of any system is not straightforward. We are, however, able to underline several of the national best practices. Keywords: France; Germany; green dot; packaging waste; Portugal; recycling; Romania; the United Kingdom. JEL codes: H11; H21; H23; Q53; Q58. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p1013&r=env |
| By: | Koundouri, Phoebe; Kountouris, Yannis; Stithou, Mavra |
| Abstract: | This paper presents the results of a Choice Experiment (CE) conducted to estimate the values derived from a highway construction project in Greece. To account for preference heterogeneity conditional logit with interactions and random parameter logit models are estimated. The results indicate that individuals have significant values for travel time savings, percentage decrease in traffic accidents, percentage decrease in traffic related emissions and landscape modifications. Models where the attributes are interacted with socioeconomic variables perform better and produce lower welfare estimates compared to models without interactions with important implications for cost benefit analysis. |
| Keywords: | Choice experiments; transport infrastructure;travel time savings; accidents; pollution reduction |
| JEL: | C9 N7 C93 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38274&r=env |
| By: | Di Falco, Salvatore |
| Abstract: | Crop biodiversity is very important for both the functioning of ecological systems and the generation of a vast array of ecosystem services. More agricultural biodiversity is associated with higher agriculture production and lower risk exposure. This article explores the recent contributions on the economics of agrobiodiversity. The focus is (mostly) on the empirical literature. Future issues are also highlighted. |
| Keywords: | agrobiodiversity, ecosystem services, food production, resilience, developing countries, Crop Production/Industries, |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:134734&r=env |
| By: | Jägemann, Cosima (Energiewirtschaftliches Institut an der Universitaet zu Koeln) |
| Abstract: | In this paper, the implications of alternative decarbonization pathways for Europe's power sector up until the year 2050 are analyzed. In speci fic, an electricity system optimization model is used to investigate the minimal costs of decarbonization under a stand-alone CO2 reduction target and to quantify the excess costs associated with renewable energy targets and politically implemented restrictions on alternative lowcarbon technologies, such as nuclear power. Our numerical simulations con firm the theoretical argumentation concerning counterproductive overlapping regulation. The decarbonization of Europe's power sector is found to be achieved at minimal costs under a stand-alone CO2 reduction target (171 bn €2010). Additionally implemented RES-E targets lead to signi cant excess costs of at least 237 bn €2010. Excess costs of a complete nuclear phase-out in Europe by 2050 are of the same order of magnitude (274 bn €2010). |
| Keywords: | Electricity; CO2 target; renewable target; excess costs; optimization model |
| JEL: | C61 Q40 Q50 |
| Date: | 2012–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2012_013&r=env |
| By: | Edwards, Jeffrey A.; Pumphrey, R. Gary; Barbato, Lucia; Kurkalova, Lyubov A.; Burkey, Mark L. |
| Abstract: | On the nation’s largest aquifer live 2.3 million people, most of whom depend on the Ogallala’s water for household consumption, as well as for agricultural and industrial use. As the Ogallala’s levels decline, policies need to be developed to encourage conservation of this resource that are a) efficient and effective and b) are politically feasible. Using results from a survey of nearly 3,000 residents, we reveal and elucidate community attitudes in the region regarding water use and various conservation policies. The results indicate an overall awareness of the problem and willingness to accept certain restrictions on water use and price changes, within limits. |
| Keywords: | water policy; water conservation |
| JEL: | L95 Q25 Q2 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41750&r=env |
| By: | Mehmet Kucukmehmetoglu; Abdurrahman Geymen |
| Abstract: | The literature on transboundary water resources allocation modeling is still short in encompassing and analyzing complex geographic multiparty nature of basins. This study elaborates Inter Temporal Euphrates and Tigris River Basin Model (ITETRBM)*, which is a linear programming based transboundary water resources allocation model maximizing net economic benefit from allocation of scarce water resources to energy generation, urban, and agricultural uses. The elaborations can be categorized in two dimensions: First, agricultural and urban demand nodes are spatially identified with their relative elevations and distances to water resources supplies (reservoirs). Digital elevation model (DEM) database are intensely processed in geographic information systems (GIS) environment. Second, the agricultural irrigable lands are restructured into a pixel based decision making units (DMUs) in order to be able to see the spatial extent of optimally irrigated land, and then optimization program is converted from linear programming (LP) to a mixed integer programming (MIP). The model applications are designed to cover a series of sensitivity analyses encompassing the various transboundary management, energy and agricultural use values, and transportation cost scenarios over the optimal uses of the Euphrates and Tigris Basin (ETRB) resources. The model results are visually presented via GIS in order to show the transboundary upstream and downstream spatial impacts of these selected parameters. The findings are i) system parameters significantly alter the spatial extent of water resources allocation in the ETRB, and ii) the magnitudes of the parameters also explains the tradeoffs between agriculture and energy sectors as much as upstream and downstream water uses of countries. * Kucukmehmetoglu, M. (2009). A game theoretic approach to assess the impacts of major investments on transboundary water resources: The case of the Euphrates and Tigris. Water Resources Management, 23(15): 3069-3099. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p613&r=env |
| By: | Patrick POINT (GREThA, CNRS, UMR 5113) |
| Abstract: | We all have become aware of the essential contribution of ecosystems to the human welfare. This is a strong driver for taking into account ecosystem services within decision processes. But the connection between ecosystems and theirs services is frequently neither readily apparent nor easy to measure. A lot of studies have been, and are always, dedicated to an evaluation of those services. Some are aiming a biophysical measure of the benefits, others try to reveal an economic value. Unfortunately, we find little evidence of ecosystem services based on clear economic or biophysical principles. This paper is a try to contribute to a better identification of arising problems and principles that should be adopted. |
| Keywords: | Wetlands, Valuation, ecosystem services |
| JEL: | Q51 Q57 H41 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2012-19&r=env |
| By: | Emilio Galdeano-Gómez; José A. Aznar-Sánchez; Juan C. Pérez-Mesa |
| Abstract: | Sustainable management not only constitutes the main challenge for agricultural systems, it is also becoming a driver of development in many regions of the world. As well as guaranteeing the production of food and other basic products, agriculture can foment social progress and economic growth while maintaining environmental quality. On a global scale, sustainable development can currently be said to be one of the main objectives of communities and societies. However, it is subject to different connotations due to the heterogeneous nature of productive systems and of the natural environment. In addition, it becomes difficult to achieve a balance between the three dimensions of sustainability due to a series of problems, including periods of recession, turbulent markets and changes in management policies on both a general and a sectorial level. Analyses of this issue must therefore strive to establish their results in practice and on holistic approaches. Particular emphasis should be placed on the generation of synergies and on the appropriate balance of the essential components that make up sustainable development. Along these lines, different practical experiences on an international level have illustrated the potential of agriculture to fulfil the above-mentioned aims. At the same time this sector currently encounters a series of challenges, among which we should mention growing internationalisation of the agrifood trade, increasing control of the distribution chains and varying strategies of agrarian policy. Indeed, in the context of European rural policy there has been considerable debate in recent years concerning the role of the agricultural sector and how it should face up to the following challenges: productivity-competitiveness, environmental protection and socio-economic development. This paper analyses how this sector in the province of AlmerÃa (Spain), based on small-scale horticultural farms, has risen to the above issues over recent decades. This case study provides some insights into the different synergies between sustainability dimensions. It is particularly interesting to observe how a highly social agrarian system has evolved thanks to the combination of certain factors: the basic structure of family-run concerns, the creation of commercial and financial structures/entities and the generation of endogenous auxiliary industries. An additional point of interest resides in the system’s manifest capacity to adapt and innovate in practices and technologies that are environmentally respectful. Finally, the fact that this sector, essentially without outside support, provides the basis for economic sustainability of the whole province makes it a paradigm of competitiveness in the European context. The integration of sustainability components observed in the development of AlmerÃa’s horticultural sector may prove useful in helping other regions to adapt and improve their agricultural systems, especially in cases where small-scale farming predominates. Keywords: Sustainability, development, family farms, environment-respectful practices, socio-economic dimension, synergies, AlmerÃa JEL: Q01, Q12, Q13 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p256&r=env |
| By: | Juana Castro Santa |
| Abstract: | Este documento presenta un modelo teórico para la decisión individual de reciclar. El modelo sugiere dos mecanismos para transformar los costos y beneficios asociados a esta decisión, basados en variables no pecuniarias. El primer mecanismo corresponde a valores y percepciones ecocéntricas, que de ser trasformados, cambian el beneficio individual asociado a la acción de reciclaje, transformando los costos fijos asociados ésta. El segundo mecanismo sugiere las normas sociales y el comportamiento agregado de los demás agentes como variables determinantes en las decisiones individuales hacia el medio ambiente. Los resultados del modelo se comparan con evidencia empírica de comportamientos ambientales tomados de la encuesta “New cross-cultural dataset” (Wesley Schultz, 2011) para Colombia, y de la encuesta World Values Survey (2005) para 80 países. |
| Date: | 2012–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:010020&r=env |
| By: | Hisa Morisugi; Shinichi Mutoh |
| Abstract: | This study proposes a consistent definition of natural disaster damage costs, i.e., equivalently, of natural disaster prevention benefits in accordance with general definition of benefits, Willingness to Pay, more concretely, Equivalent Variation, of any policy such as tax reforms, transportations, environments, infrastructures, etc. In order to formulate the damage cost it needs to model the economic behavior at and after the disaster periods given the disaster physical damages are measured by the equivalent labor loss and the equivalent capital stock loss. The model is composed of two stages. The first is the static general equilibrium given the labor loss and the equivalent capital stock loss measured above, for which this study will adopt the static computable general equilibrium (SCGE). The second is the dynamic macroeconomics which models the recovery process given the initial labor and capital stock for cases with and without disaster, for which this study will adopt the dynamic computable general equilibrium (DCGE). The damage cost or benefit of the disaster is defined as the present value of the time stream of Equivalent Valuation for the time stream of utility change due to the initial condition change. Then it will be shown that the conventional damage calculation by the reconstruction and/or replacement cost is assumes that the second stage immediately takes place at the disaster time, therefore, the first stage does not happens. Also sometimes the economic impacts on GDP of disaster capital stock loss are calculated but nothing is referred to the damage cost of disaster. This is because there is not yet clear definition of damage cost and lack of recognition of it is a work of only the first stage. Finally it will be discussed how to transform the disaster physical damages to the equivalent labor and capital stock loss. The physical damages are either private capital loss or labor loss or output loss or social overhead capital loss, each of which enters to CGE as private capital loss, labor force loss, efficiency parameter reduction due to both output loss and social overhead capital loss. Then assuming constant returns to scale the efficiency parameter change due to both output loss and social overhead capital loss can be transformed to the loss of labor and capital stock. Keywords: project evaluation, disaster damage cost, DCGE, cost benefit analysis. JEL code:H43 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p589&r=env |