nep-env New Economics Papers
on Environmental Economics
Issue of 2012‒11‒03
48 papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Green industrial policy : trade and theory By Karp, Larry; Stevenson, Megan
  2. AGRICULTURAL TRADE AND ITS IMPACT ON THE ENVIRONMENT By Schmitz, Christoph; Lotze-Campen, Hermann
  3. US Status on Climate Change Mitigation By Burtraw, Dallas; Woerman, Matt
  5. The role of technological change in green growth By Popp, David
  6. Tax Evasion and Optimal Environmental Taxes By Liu, Antung Anthony
  7. Tools for assessing the costs and benefits of green growth : the U.S. and Mexico By Harrington, Winston; Morgenstern, Richard; Velez-Lopez. Daniel
  8. Psychology and behavioral economics lessons for the design of a green growth strategy By Weber, Elke U.; Johnson, Eric J.
  10. The cost of adjustment to green growth policies : lessons from trade adjustment costs By Porto, Guido
  11. Development of biofuels in China : technologies, economics and policies By Shiyan, Chang; Lili, Zhao; Timilsina, Govinda R.; Xiliang, Zhang
  12. Pollution, mortality and optimal environmental policy By Goenka, A.; Jafarey, S.; Pouliot, W.
  13. How Volatile is ENSO for Global Greenhouse Gas Emissions and the Global Economy? By Lan-Fen Chu; Michael McAleer; Chi-Chung Chen
  14. The SO2 Allowance Trading System: The Ironic History of a Grand Policy Experiment By Richard Schmalensee; Robert N. Stavins
  15. Environmental standards and Cournot duopoly: a stability analysis. By Luciano Fanti
  16. Deviations in Kilometres Travelled: The Impact of Different Mobility Futures on Energy Use and Climate By Thomas Longden
  17. The “Doomsday” Effect in Climate Policies. Why is the Present Decade so Crucial to Tackling the Climate Challenge? By Baptiste Perrissin Fabert; Etienne Espagne; Antonin Pottier; Patrice Dumas
  18. Disentangling the Stern/Nordhaus Controversy: Beyond the Discounting Clash By Etienne Espagne; Baptiste Perrissin Fabert; Antonin Pottier; Franck Nadaud; Patrice Dumas
  19. The Large Scale Roll-Out of Electric Vehicles: The Effect on the Electricity Sector and CO2 Emissions By Talaei, A.; Begg, K.; Jamasb, T.
  21. Relaxing Constraints as a Conservation Policy By Ben Groom; Charles Palmer
  22. North / South Contractual Design through the REDD+ Scheme. By Mireille Chiroleu-Assouline; Jean-Christophe Poudou; Sébastien Roussel
  23. Art und Ausmaß der Inanspruchnahme landwirtschaftlicher Flächen für außerlandwirtschaftliche Zwecke und Ausgleichsmaßnahmen By Tietz, Andreas; Bathke, Manfred; Osterburg, Bernhard
  24. Impact of Climate Change on the Indian Economy-Evidence from Foodgrain Yields By SHREEKANT GUPTA; PARTHA SEN; SUCHITA SRINIVASAN
  25. Integrating Water Resources into Computable General Equilibrium Models - A Survey By Roberto Ponce; Francesco Bosello; Carlo Giupponi
  26. Private Externalities and Environmental Public Goods: Politico-economic Consequences By Timothy Kam; Yingying Lu
  27. Environmental and Social Values from Plantation Forests: A Study in New Zealand with Focus on the Hawke’s Bay Region By Rivas Palma, Rosa Maria; Manley, Bruce; Kerr, Geoffrey N.
  28. Examination of Intense Climate-related Disasters in the Asia-Pacific By Thomas, Vinod; Albert, Jose Ramon G.; Perez, Rosa T.
  29. Singular Forward-Backward Stochastic Differential Equations and Emissions Derivatives By Rene Carmona; Francois Delarue; Gilles-Edouard Espinosa; Nizar Touzi
  30. Property Rights and Natural Resources: Socio-Economic Heterogeneity and Distributional Implications of Common Property Resource Management By Bhim Adhikari
  31. THE INFLUENCE OF CLIMATE CHANGE ON SHORT-TERM FARM MANAGEMENT - AN INTERDISCIPLINARY MODELLING APPROACH By Aurbacher, Joachim; Reinmuth, Evelyn; Parker, Phillip; Calberto, German; Steinbach, Jennifer; Ingwersen, Joachim; Dabbert, Stephan
  32. Impact of behavioral issues on green growth policies and weather-related disaster reduction in developing countries By Kunreuther, Howard; Michel-Kerjan, Erwann
  33. Fiscal Incentives and Environmental Infrastructure in China By Liu, Antung Anthony; Zhang, Junjie
  34. Food for fuel: The price of ethanol By Dominic K. Albino; Karla Z. Bertrand; Yaneer Bar-Yam
  35. Weather Variability and Agriculture-Implications for Long and Short-term Migration in India By K.S. Kavi Kumar; BRINDA VISWANATHAN
  36. Did people "buy" what was "sold"? A qualitative evaluation a Contingent Valuation survey information set for gains in life expectancy By Rachel Baker; Anna Bartczak; Susan Chilton; Hugh Metcalf
  37. Can Numerical Models Estimate Indirect Land-use Change? By Thierry Brunelle; Patrice Dumas
  38. The use of contingent valuation in assessing marine and coastal ecosystems’ water quality: A review By Halkos, George
  39. Drivers of entrepreneurship and post-entry performance : microeconomic evidence from advanced and developing countries By Vivarelli, Marco
  40. Les émissions de CO2 du Brésil- L’impact du secteur UTCATF (usage des terres, changement d’affectation des terres et foresterie) By Jérôme Trotignon
  41. Is better information always good news ? international corporate strategy and regulation By Kitzmuller, Markus
  42. Analyse der Vorschläge der EU-Kommission vom 12. Oktober 2011 zur künftigen Gestaltung der Direktzahlungen im Rahmen der GAP nach 2013 By Forstner, Bernhard; Deblitz, Claus; Kleinhanss, Werner; Nieberg, Hiltrud; Offermann, Frank; Roder, Norbert; Salamon, Petra; Sanders, Jurn; Weingarten, Peter
  43. Mapping Ecosystem Services’ Values: Current Practice and Future Prospects By Jan Philipp Schägner; Luke Brander; Joachim Maes; Volkmar Hartje
  44. Do natural resources condition the aidgovernance relationship? Evidence from Africa. By Audrey Menard
  45. Weather Shocks, Spot and Futures Agricultural Commodity Prices- An Analysis for India By N. R. BHANUMURTHY; PAMI DUA; LOKENDRA KUMAWAT
  47. Pollution abatement and reservation prices in a market game By Halkos, George; Papageorgiou, George
  48. Poverty, Private Property and Common Pool Resource Management: The Case of Irrigation Tanks in South India By R. Balasubramanian; K.N. Selvaraj

  1. By: Karp, Larry; Stevenson, Megan
    Abstract: This paper studies the reality and the potential for green industrial policy. It provides a summary of the green industrial policies, broadly understood, for five countries. It then considers the relation between green industrial policies and trade disputes, emphasizing the Brazil-United States dispute involving ethanol and the broader United States-China dispute. The theory of public policy provides many lessons for green industrial policy. The authors highlight four of these lessons, involving the Green Paradox, the choice of quantities versus prices with endogenous investment, the coordination issues arising from emissions control, and the ability of green industrial policies to promote cooperation in reducing a global public bad like carbon emissions.
    Keywords: Climate Change Economics,Environmental Economics&Policies,Climate Change Mitigation and Green House Gases,Energy Production and Transportation,Economic Theory&Research
    Date: 2012–10–01
  2. By: Schmitz, Christoph; Lotze-Campen, Hermann
    Abstract: International trade in agricultural goods has increased tremendously throughout the past decades, thereby affecting environment and climate. Since this trend in agricultural trade is likely to be continued in the future, questions regarding global and local environmental impacts arise. We analyse linkages between trade liberalisation and environmental outcomes using a spatially explicit economic land-use model coupled to a biophysical vegetation model. Our reference case assumes constant trade patterns, whereas the two trade scenarios consider a path of increasing trade liberalisation and differ according to their assumed carbon price policy. Results indicate that increased trade liberalisation leads to further deforestation in Amazonia due to comparative advantages of agriculture in South America. In contrast, less deforestation takes place in Pacific countries, like Malaysia and Indonesia. Globally, around 40 million ha of forest would be cleared additionally due to trade liberalisation, causing around 26 Gt additional CO2 emissions until 2050. On the other hand, water scarcity decreases with increasing liberalization, foremost in South-, South-East Asia, and the Middle East. Although the inclusion of a carbon prices would increase water scarcity in some regions, it would lead to a considerable reduction in tropical deforestation. In general, additional demand from developed and transition countries through trade should be compensated by investments in technological change and more international efforts to protect natural resources.
    Keywords: land use modelling, international trade, land use change, GHG emissions, water scarcity, International Relations/Trade, Land Economics/Use,
    Date: 2012
  3. By: Burtraw, Dallas (Resources for the Future); Woerman, Matt (Resources for the Future)
    Abstract: In 2009, President Obama pledged that, by 2020, the United States would achieve reductions in greenhouse gas emissions of 17 percent from 2005 levels. With the failure of Congress to adopt comprehensive climate legislation in 2010, the feasibility of the pledge was put in doubt. However, we find that the United States is near to reaching this goal; currently, the country is on course to achieve reductions of 16.3 percent from 2005 levels in 2020. Three factors contribute to this outcome: greenhouse gas regulations under the Clean Air Act, secular trends including changes in relative fuel prices and energy efficiency, and subnational efforts. Perhaps even more surprising, domestic emissions are probably less than would have occurred if the Waxman–Markey cap-and-trade proposal had become law in 2010. However, at this point the United States is expected to fail to meet its financing commitments under the Copenhagen Accord for 2020.
    Keywords: greenhouse gases, additionality, emissions cap and trade, Clean Air Act, carbon dioxide
    JEL: Q54 Q58 H77
    Date: 2012–10–16
  4. By: Weber, Anja Michaela
    Keywords: Agri-Environmental Schemes, Transaction Costs, CAP, Hesse, Agricultural and Food Policy, Environmental Economics and Policy,
    Date: 2012
  5. By: Popp, David
    Abstract: By reducing the costs of environmental protection, technological change is important for promoting green growth. This entails both the creation of new technologies and more widespread deployment of existing green technologies. This paper reviews the literature on environmentally friendly technological change, with a focus on lessons relevant to developing countries. It begins with a discussion of the data available for measuring the various steps of technological change. It continues with a discussion of sources of environmental innovation. Given that most innovation is concentrated in a few rich countries, this leads to a discussion of the remaining role for lower-income countries, followed by a discussion of technology transfer. Because of the importance of market failures, the paper discusses the role of both technology policy and environmental policy for promoting environmentally friendly technological change. The review concludes with a discussion of what environmental economists can learn from other fields.
    Keywords: Environmental Economics&Policies,ICT Policy and Strategies,Technology Industry,E-Business,Climate Change Mitigation and Green House Gases
    Date: 2012–10–01
  6. By: Liu, Antung Anthony (Resources for the Future)
    Abstract: This paper introduces a new argument to the debate about the role of environmental taxes in modern tax systems. Some environmental taxes, particularly taxes on gasoline or electricity, are more difficult to evade than taxes on labor or income. When the tax base is shifted in a revenue-neutral manner toward these environmental taxes, the result is a net reduction in the amount of tax evasion. Using a carbon tax as a motivating example, the "tax evasion effect" is shown to sharply reduce the welfare cost of controlling emissions. A simple computable general equilibrium model suggests that the impact of considering tax evasion can be large: costs are lowered by 28 percent in the United States, by 89 percent in China, and by 97 percent in India. In countries with high levels of pre-existing tax evasion, a carbon tax will pay for itself through improvements in the efficiency of the tax system.
    Keywords: environmental regulation, Pigouvian tax, tax evasion, green tax swap, tax interactions
    JEL: H21 H26 Q53 Q54
    Date: 2012–09–14
  7. By: Harrington, Winston; Morgenstern, Richard; Velez-Lopez. Daniel
    Abstract: This paper examines the processes used in the United States and Mexico to assess the economic costs and benefits of environmental improvement, the kinds of information obtained from these procedures, and the additional knowledge that is needed about both elements to improve understanding of the problems and prospects of advancing a green growth agenda. Because environmental and other development needs are large and resources are limited, it is important to choose the best projects, those with the highest returns on both public investments and private resources harnessed by regulation. The United States is well-established as a world leader in the use of quantitative methods to evaluate options for environmental regulation and policy. Mexico represents a case where a developing country has made clear advances in reforming its economy and in introducing transparency in its regulatory processes for environmental and other policy areas.
    Keywords: Environmental Economics&Policies,Regulatory Regimes,Public Sector Regulation,Transport Economics Policy&Planning,Climate Change Economics
    Date: 2012–10–01
  8. By: Weber, Elke U.; Johnson, Eric J.
    Abstract: A green growth agenda requires policy makers, from local to supranational levels, to examine and influence behavior that impacts economic, social, and environmental outcomes on multiple scales. Behavioral and social change, in addition or conjunction with technological change, is thus a crucial component of any green growth strategy. A better understanding of how and why people consume, preserve, or exploit resources or otherwise make choices that collectively impact the environment has important and far-reaching consequences for the predictive accuracy of more sophisticated models, both of future states of the world and of the likely impact of different growth strategies and potential risk management strategies. The prevailing characterization of human decision making in policy circles is a rational economic one. Reliance on the assumptions of rational choice excludes from consideration a wide range of factors that affect how people make decisions and therefore need to be considered in predictions of human reactions to environmental conditions or proposed policy initiatives. In addition, a more complete and more fully descriptive understanding of decision processes provide powerful tools for policy design that complement legal or economic instruments or may lead to more effective implementation of such policy instruments.
    Keywords: Environmental Economics&Policies,Economic Theory&Research,Knowledge for Development,Climate Change Economics,Climate Change Mitigation and Green House Gases
    Date: 2012–10–01
  9. By: Kirchner, Mathias; Schmid, Erwin
    Abstract: It is still difficult to derive general findings and conclusions from either economic theory or empirical studies on the relationship between trade and environment. Consequently, we aim to analyse environmental effects of agricultural trade policies in the Austrian Marchfeld region by applying an integrated modelling framework that accounts for heterogeneity in agricultural production and emission. Monte-Carlo simulations have been performed in order to assess the uncertainty of model parameters and policy impacts. The model results indicate that changes in trade policies have statistically significant but small effects on the environment in Marchfeld. Policy makers should rather concentrate on identifying efficient domestic environmental policies, which are in accordance with WTO trade rules.
    Keywords: Agricultural trade policies, agri-environmental payments, integrated assessment modelling, Monte-Carlo simulations, nitrate pollution, soil organic carbon, Agrarhandelspolitik, Agrarumweltmaßnahmen, Integrierte Modelanalyse, Monte-Carlo- Simulationen, Nitratverschmutzung, Organischer Bodenkohlenstoff, Agricultural and Food Policy, Environmental Economics and Policy,
    Date: 2012
  10. By: Porto, Guido
    Abstract: Green growth policies confront firms and workers with adjustments that may create welfare costs for different segments of the population and cause reductions in near-term actual versus potential gross domestic product. There is little evidence on the cost of adjustment to climate change measures, and only limited evidence for more general environmental policies, especially in developing countries. Therefore, this paper canvasses the research on adjustment costs to trade policies to draw analogies and highlight differences compared with the potential impacts of green growth policies. Trade policies affect prices and work directly on technology choice. In the presence of adjustment costs, firms may experience impacts on wages, employment, and incentives to adopt alternative technologies. Both types of trade policy impacts may be amplified by technology availability and credit constraints. Many green growth policies are likely to work via the same mechanisms, that is, taxes on emissions or changes in technology requirements. However, trade liberalization is typically seen as offering higher total incomes, albeit with winners and losers. Green growth policies are thought of as welfare-enhancing at the collective level but may not be income-enhancing at the individual level. This implies much more difficulty in measuring the potential gains associated with green growth policies.
    Keywords: Economic Theory&Research,Environmental Economics&Policies,Labor Markets,Labor Policies,Emerging Markets
    Date: 2012–10–01
  11. By: Shiyan, Chang; Lili, Zhao; Timilsina, Govinda R.; Xiliang, Zhang
    Abstract: China promulgated the Medium and Long-Term Development Plan for Renewable Energy in 2007, which included targets of 2010 and 2020 for various renewable energy technologies including biofuels. The 2010 biofuel targets were met and even surpassed except for non-grain fuel ethanol; however, there is debate on whether and how the country will be able to meet the 2020 biofuels target. This paper provides a resource and technological assessment of biofuel feedstocks, compares biofuel production costs from various feddstocks and technologies, and evaluates policies introduced in the country for the development of biofuels. The paper also presents the projections on the production of biofuels under various policy scenarios. The study shows that China can potentially satisfy its non-grain fuel ethanol target by 2020 from the technology perspective. But it will probably fall far short of this target without additional fiscal incentives as production costs of non-grain feedstock based biofuels are expected to remain relatively high. By contrast, the 2020 target of biodiesel production has a high probability of being achieved because the target itself is relatively small. With additional support policies, it could develop even further.
    Keywords: Energy Production and Transportation,Renewable Energy,Climate Change Mitigation and Green House Gases,Energy and Environment,Environment and Energy Efficiency
    Date: 2012–10–01
  12. By: Goenka, A.; Jafarey, S.; Pouliot, W.
    Abstract: We study an overlapping generations economy in which environmental degradation results from economic activity and affects agents' uncertain lifetimes. Life expectancy depends positively on economic activity and negatively on the stock of pollution. This can make the growth-survival relationship convex over some region and lead to two non-trivial steady states, with one a poverty trap. Uniform abatement taxes can cause the poverty trap to widen while increasing incomes at the high steady state. We also study the properties and dynamics of an optimal second-best abatement tax. It is non-homogeneous and increasing in the capital stock, and leads to a variety of dynamic possibilities, including non-existence and multiplicity of steady states, and cycles around some of the steady states, where there were none under exogenous taxes. Thus, optimal taxes can be an independent source of non-linearities.
    Keywords: Overlapping generations model; poverty traps; non-convexities; multiple steady states; pollution; optimal environmental policy; optimal abatement tax
    Date: 2012
  13. By: Lan-Fen Chu (National Science and Technology Center for Disaster Taiwan); Michael McAleer (Econometric Institute, Erasmus School of Economics, Erasmus University Rotterdam.); Chi-Chung Chen (Department of Applied Economics National Chung Hsing University Taiwan.)
    Abstract: This paper analyzes two indexes in order to capture the volatility inherent in El Niños Southern Oscillations (ENSO), develops the relationship between the strength of ENSO and greenhouse gas emissions, which increase as the economy grows, with carbon dioxide being the major greenhouse gas, and examines how these gases affect the frequency and strength of El Niño on the global economy. The empirical results show that both the ARMA(1,1)-GARCH(1,1) and ARMA(3,2)-GJR(1,1) models are suitable for modelling ENSO volatility accurately, and that 1998 is a turning point, which indicates that the ENSO strength has increased since 1998. Moreover, the increasing ENSO strength is due to the increase in greenhouse gas emissions. The ENSO strengths for Sea Surface Temperature (SST) are predicted for the year 2030 to increase from 29.62% to 81.5% if global CO2 emissions increase by 40% to 110%, respectively. This indicates that we will be faced with even stronger El Nino or La Nina effects in the future if global greenhouse gas emissions continue to increase unabated.
    Keywords: El Niños Southern Oscillations (ENSO), Greenhouse Gas Emissions, Global Economy, Southern Oscillation Index (SOI), Sea Surface Temperature (SST), Volatility.
    Date: 2012
  14. By: Richard Schmalensee (Howard W. Johnson Professor of Economics and Management, Emeritus at the Massachusetts Institute of Technology, and a Research Associate of the National Bureau of Economic Research); Robert N. Stavins (Albert Pratt Professor of Business and Government at the Harvard Kennedy School, a University Fellow of Resources for the Future, and a Research Associate of the National Bureau of Economic Research)
    Abstract: Two decades have passed since the Clean Air Act Amendments of 1990 launched a grand experiment in market-based environmental policy: the SO2 cap-and-trade system. That system performed well but created four striking ironies. First, by creating this system to reduce SO2 emissions to curb acid rain, the government did the right thing for the wrong reason. Second, a substantial source of this system’s cost-effectiveness was an unanticipated consequence of earlier railroad deregulation. Third, it is ironic that cap-and-trade has come to be demonized by conservative politicians in recent years, since this market-based, cost-effective policy innovation was initially championed and implemented by Republican administrations. Fourth, court decisions and subsequent regulatory responses have led to the collapse of the SO2 market, demonstrating that what the government gives, the government can take away.
    Keywords: Market-based Instruments, Cap-and-trade, Clean Air Act Amendments of 1990, Sulfur Dioxide, Acid Rain
    JEL: Q54 Q58 Q40 Q48
    Date: 2012–09
  15. By: Luciano Fanti
    Abstract: In this paper the dynamical effects of public environmental policies are investigated in a Cournot duopoly with heterogeneous expectations in a context of limited rationality. It is shown that the introduction of upper limits to emissions always tends to destabilise and generate a chaotic market dynamics. By contrast the role played by the cost of the abatement technology is more complicated: although in most cases higher costs imply a higher likelihood of stability loss, in some cases increases of such costs when their level is sufficiently low tends to stabilise and in such cases if the market is stable either a decrease or an increase of such costs may lead to a stability loss. The policy implications of these results suggest caution in the use of environmental policies from a market stability point of view.
    Keywords: Environmental policies; Bifurcation; Chaos; Cournot; Oligopoly;
    JEL: Q52 C62 D43 L13
    Date: 2012–09–01
  16. By: Thomas Longden (Fondazione Eni Enrico Mattei, Euro-Mediterranean Center for Climate Change)
    Abstract: The importance of a focus on mobility and the kilometres travelled using light duty vehicles is reflected in the persistence of strong demand for personal mobility and emissions that tend to be linked with population and economic growth. Simulation results using the WITCH model show that changes in the kilometres driven per year using light duty vehicles have a notable impact on investments in alternate transport options. As a result, different mobility futures have notably different optimal vehicle fleet compositions. As climate policy becomes more stringent, achieving abatement with increased mobility implies large investments in battery related technologies and less investments in technologies related to the conversion of biofuel from biomass. Climate policy consistent with a 2°C temperature increase above pre-industrial levels in 2100 leads to a quick transition to plug-in hybrid drive vehicles. Without decreases in mobility trends the cost effective achievement of such a target results in the electrification of passenger vehicles commencing between 2020 and 2035.
    Keywords: Light Duty Vehicles, Transportation, Mobility, Climate Change Policy, Electric Drive Vehicles, Research and Development
    JEL: Q54 R41 O3
    Date: 2012–10
  17. By: Baptiste Perrissin Fabert (Centre International de Recherche Agronomique pour le Développement); Etienne Espagne (CIRED); Antonin Pottier (CIRED); Patrice Dumas (Centre International de Recherche Agronomique pour le Développement)
    Abstract: Despite growing scientific evidence that passing a 2°C temperature increase may trigger tipping points in climate dynamics, most Integrated Assessment Models (IAM) based on Cost Benefit Analysis (CBA) with smooth quadratic damage functions are unable to account for the possibility of strong increase in climate damage. Our IAM RESPONSE makes it possible to bridge this gap by integrating a threshold effect damage function which sets a threshold of temperature increase from which climate damages increase significantly. To fit with on-going climate negotiations, this threshold is set at 2°C. Regardless of the bleak prospect of passing the threshold, it turns out that among a broad set of scenarios accounting for the diversity of worldviews in the climate debate, overshooting the 2°C target and then facing the resulting damage may become an optimal strategy for many economic agents who are struck by what we call a “doomsday effect”. We show that this effect happens for any level of jump in damage and dramatically increases if the beginning of mitigation efforts is postponed till the decade 2010-2020 on. In light of these results, we believe that any further delay in reaching a clear international agreement will close the window of opportunity for meeting the 2°C target with a reasonable chance of diplomatic success.
    Keywords: Integrated Assessment Model, Non Linear Effect, Doomsday Effect, 2°C Target
    JEL: C61 Q54 Q58
    Date: 2012–09
  18. By: Etienne Espagne (Centre International de Recherche sur l’Environnement et le Développement (CIRED)); Baptiste Perrissin Fabert (CIRED); Antonin Pottier (CIRED); Franck Nadaud (CIRED); Patrice Dumas
    Abstract: The Stern/Nordhaus controversy has polarized the widely disparate beliefs about what to do in order to tackle the climate challenge. To explain differences in results and policy recommendations, comments following the publication of the Stern Review have mainly focused on the role played by the discount rate. A closer look at the actual drivers of the controversy reveals however that Stern and Nordhaus also disagree on two other parameters: technical progress on abatement costs and the climate sensitivity. This paper aims at appraising the relative impacts of such key drivers of the controversy on the social cost of carbon and climate policy recommendations. To this end, we use the flexible integrated assessment model RESPONSE which allows us to compare very diverse worldviews, including Stern and Nordhaus’ ones within the same modelling framework and map the relative impacts of beliefs on the three key drivers of the controversy. Furthermore we appraise quantitatively, by means of a linear statistical model, the impacts on results of an extended set of core parameters of RESPONSE. We show that beliefs on long term economic growth, technical progress, the form of the climate damage function and the climate sensitivity have an impact as important as beliefs on pure time preference. Hence, we can qualify the role played by the discount rate in the Stern/Nordhaus controversy and more broadly in the definition of climate policies.
    Keywords: Integrated Assessment Model, Discount Rate, Social Cost of Carbon, Abatement Policy, Worldview
    JEL: Q54 Q58 C61
    Date: 2012–09
  19. By: Talaei, A.; Begg, K.; Jamasb, T.
    Abstract: The UK government has set the ambitious targets of 20 and 50% reduction in greenhouse gas emissions by 2020 and 2050 respectively. The transport sector accounts for 21% of total CO2 emissions in the UK and can, therefore, be important for achieving the emissions reduction targets. Within the transport sector, electric vehicles (EV) are considered as one of the important mitigation options. However the effect of EVs on emissions and the electricity sector is subject to debate. We use scenario analysis to investigate the emission reduction potential of EVs and their interaction with electricity sector. We show that managing the charging patterns could reduce adverse effects of EVs on the electricity sector while the number of EVs remains the factor affecting the mitigation potential. Our findings indicate that in the UK, by 2030, EVs could result in up to 32% emissions reduction compared to advanced internal combustion engines. We also found that the need for new electricity generation and distribution capacity to meet the conventional electricity demand and demand from EVs could be reduced by up to 12% from 70.6 to 61.8 GW if the EV’s electricity demand is managed.
    Keywords: Electric Vehicles, CO2 Emissions, Electricity Demand Management
    Date: 2012–10–26
  20. By: Heinrich, Barbara
    Abstract: The European Union’s Common Agricultural Policy is currently undergoing a reform process which inter alia aims to achieve a higher environmental standard in agricultural production by binding direct payments to practices beneficial for the climate and the environment (the so-called ‘greening’). Some experts as well as some farmers doubt the effectiveness of the proposed measures. I simulate how farms would respond to these measures using a case study farm modeling approach and data for different farm types in Germany. I find that the currently envisaged ‘greening’ measures can be expected to function in general due to the linkage to the direct payments, which provide a strong disincentive to forego participation. The individual economic outcome strongly depends on the current intensity of the farm in question and on the implementation details of the introduced measures. However, farms with very high gross margins per hectare will forego the support scheme.
    Keywords: Greening, Common Agricultural Policy, reform of the CAP, direct payments, ecological focus area, Agricultural and Food Policy, Environmental Economics and Policy,
    Date: 2012
  21. By: Ben Groom (Senior Lecturer in Economics, Department of Economics, School of Oriental and African Studies, UK); Charles Palmer (Lecturer in Environment and Development, Department of Geography and Environment, London School of Economics, UK)
    Abstract: Eco-entrepreneurs in developing countries are often subject to market or institutional constraints, e.g. via credit rationing or missing markets. Conservation interventions which relax constraints may be both cost-effective and poverty reducing. A simulation using data from an intervention in Madagascar to relax the technological constraints of forest honey production investigates this possibility. Cost-effectively achieving dual environment-development goals is shown to depend on the severity of constraints, relative prices and, importantly, the nature of technology. Success is more likely for technologies exhibiting close to constant returns to scale or high input complementarity. Forest honey does not meet these requirements, whereas sustainable forest management may well do. Ultimately, where market or institutional constraints are present, knowledge of the recipient technology is required for more informed, efficient and perhaps, more politically-acceptable conservation policy.
    Keywords: Payments for Environmental Services (PES), Market Constraints, Cost-Effectiveness, Efficiency
    JEL: H21 Q28
    Date: 2012–09
  22. By: Mireille Chiroleu-Assouline (Centre d'Economie de la Sorbonne - Paris School of Economics); Jean-Christophe Poudou (LAMETA - Université Montpellier 1); Sébastien Roussel (Université Montpellier 3 Paul Valéry & LAMETA - Université Montpellier 1)
    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 / efficiency 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 efficiency towards less deforestation. In terms of expected welfare, conditional avoided deforestation-based schemes are preferred.
    Keywords: Conditionality, contract, deforestation, hidden information, incentives, performance, Reducing Emissions from Deforestation and forest Degradation+ (REDD+).
    JEL: D82 O13 Q23 Q54
    Date: 2012–09
  23. By: Tietz, Andreas; Bathke, Manfred; Osterburg, Bernhard
    Abstract: Zusammenfassung: Diese Studie stellt Hintergründe zu Art und Ausmaß der Inanspruchnahme landwirtschaftlicher Nutzfläche durch außerlandwirtschaftliche Nutzungen einschließlich der naturschutzrechtlichen Ausgleichs- und Ersatzmaßnahmen dar. Im ersten Teil werden anhand statistischer Daten der letzten zwei Jahrzehnte Aussagen zu Flächenbilanzen der verschiedenen Nutzungsarten abgeleitet. Aufgrund der unsicheren Datenlage kann das Verhältnis zwischen dem Verlust an Landwirtschaftsfläche für Siedlungs- und Verkehrszwecke und dem korrespondierenden Verlust durch Ausgleichs- und Ersatzmaßnahmen nicht verlässlich abgeschätzt werden. Im zweiten Teil werden mögliche Optionen eines sparsameren Umgangs mit landwirtschaftlicher Fläche thematisiert. Dazu wird zunächst ein kurzer Überblick über die Berücksichtigung landwirtschaftlicher Belange im Planungs- und Naturschutzrecht gegeben. Abschließend stehen Ansätze zur Reduzierung der Flächeninanspruchnahme im Rahmen der Eingriffsregelung im Mittelpunkt. Sofern ein öffentliches Interesse daran besteht, landwirtschaftliche Nutzflächen als solche zu erhalten, sind verbindlichere Vorgaben zu einer entsprechenden Umsetzung der Eingriffsregelung unverzichtbar. -------------------------------------------------------------------------- ------------------------------------------------------------- Summary: In this study, background information regarding the nature and the extent of the usage of agricultural land for non-agricultural purposes including environmental compensation measures is given. In the first part, statistical data of the past two decades is analysed in order to derive balances on different land use types. Due to uncertain data, the relation between the losses of agricultural area for settlement and traffic purposes and the corresponding losses for environmental compensation cannot be reliably estimated. In the second part, possible options of a more economical use of agricultural land are discussed. First, an overview on the consideration of agricultural concerns in planning and conservation laws is given. Finally, approaches to reduce the consumption of agricultural land in environmental compensation measures are presented. If there is a public interest in maintaining agricultural land as such, more binding rules for the adequate implementation of the environmental impact regulation are essential.
    Keywords: Landnutzungsarten, Flächeninanspruchnahme, Eingriffsregelung, land use types, land consumption, environmental impact regulation, Environmental Economics and Policy, Land Economics/Use, K32, Q15, R14,
    Date: 2012–07
  24. By: SHREEKANT GUPTA (Department of Economics, Delhi School of Economics, Delhi, India & LKY School of Public Policy (NUS)); PARTHA SEN (South Asian University); SUCHITA SRINIVASAN (American Express)
    Abstract: This paper estimates the impact of climate change on foodgrain yields in India, namely riceand millets. We estimate a crop-specific agricultural production function with exogenous climate variables, namely, precipitation and temperature and control for key inputs such as irrigation, fertilizer and labour. Our analysis is at the district level using a panel dataset for physical yield (output per hectare – gross cropped area) for the period 1966-99. Thus, we eschew crop simulation approaches that rely on experimental data. We do not also estimate reduced form relationships between economic variables such as profits or the monetary value of yield and weather measures. Consistent with other studies at the district and state level we find significant impacts of climate change (temperature and precipitation) on Indian agriculture. The implication of our results for inter-state disparities and corrective measures is elaborated.
    Keywords: Climate Change; Agricultural Impacts; Developing Countries
    JEL: O13 Q54 R11
    Date: 2012–09
  25. By: Roberto Ponce (Department of Economics, Ca’ Foscari University, Italy); Francesco Bosello (Fondazione Eni Enrico Mattei, Italy); Carlo Giupponi (Department of Economics, Ca’ Foscari University, Italy)
    Abstract: Water resources are facing several stresses in terms of quantity and quality. These pressures are closely related to the human interventions in fields like: agriculture, land-use/land use change, construction/management of reservoirs, pollutant emissions, and water /wastewater treatment, among others. Considering the critical role that water plays for agricultural production, any shock in water availability will have great implications for agricultural production, and through agricultural markets these impacts will reach the whole economy with economy-wide consequences. The aim of this report is to present a literature review about the state of the art methodology regarding the study of water issues using the CGE approach at global and national scale. The analysis of the different studies confirms the economy wide consequences of changes in water allocation, irrigation policies, and climate change, among others water related issues.
    Keywords: Computable General Equilibrium Models, Water, Irrigation, Agricultural Policy, Water Allocation
    JEL: C68 Q18 Q25 Q54
    Date: 2012–09
  26. By: Timothy Kam; Yingying Lu
    Abstract: We study an overlapping-generations model with private externalities on a public good (e.g. the environment). Emergent politico-economic equilibria, depending on model primitives (e.g. the degree of externality), imply that average income and environmental outcomes may be related positively or negatively, or not at all. Qualitatively, these equilibria provide a cross-country interpretation for existing disagreements in empirical findings on average income and environment. Normatively, inefficiently excessive environmental outcomes may emerge. These are partly explained by a politico-economic redistributive tension along a taxation Laffer curve. However, with externalities, this tension is further modified, resulting in these excesses being non-monotonic in the degree of externality.
    JEL: D72 D78 E62 H21 H23
    Date: 2012–10
  27. By: Rivas Palma, Rosa Maria; Manley, Bruce; Kerr, Geoffrey N.
    Abstract: There is a need for better understanding and estimating forests non-market values. This study aimed to investigate the environmental and social values of plantation forests in New Zealand focusing in Hawke’s Bay. Identified stakeholder groups considered Erosion control, Water quality and quantity, Employment, Increased living standard, and Recreation as the most relevant values. These became the focus of the study. The environmental value of plantation forests was estimated through choice modelling. The results indicated that respondents with higher education levels and positive attitude towards community values were more willing to pay for improved levels of land stabilisation and water quality.
    Keywords: plantation forests, non-market values, stakeholders, choice modelling, Crop Production/Industries, Demand and Price Analysis, Environmental Economics and Policy, Land Economics/Use,
    Date: 2012–08
  28. By: Thomas, Vinod; Albert, Jose Ramon G.; Perez, Rosa T.
    Abstract: The frequency of intense floods and storms is increasing globally, particularly in Asia-Pacific, amid the specter of climate change. Associated with these natural disasters are more variable and extreme rainfall and temperatures as recorded in publicly available databases for the world, Asia-Pacific, and the Philippines, the case examined in detail. The risks of these events are resulting from a confluence of three factors: rising exposure of populations, increasing vulnerabilities, and the changing nature of the hazards themselves. All three factors are contributing to increasingly turn hazards of nature into intense natural disasters. The economies along coastal areas in South, Southeast (for example the Philippines), and East Asia are at the greatest risk, with the heaviest toll on low- and lower-middle-income economies. These catastrophes threaten the otherwise dramatic progress on poverty reduction of the past three decades in Asia-Pacific. This outlook points to the urgent need for economies not only to adapt their exposure and capacity in relation to natural disasters, but also to mitigate climate change that seems to underlie the new trends.
    Keywords: vulnerability, risk, Philippines, climate change, disasters
    Date: 2012
  29. By: Rene Carmona; Francois Delarue; Gilles-Edouard Espinosa; Nizar Touzi
    Abstract: We introduce two simple models of forward-backward stochastic differential equations with a singular terminal condition and we explain how and why they appear naturally as models for the valuation of CO2 emission allowances. Single phase cap-and-trade schemes lead readily to terminal conditions given by indicator functions of the forward component, and using fine partial differential equations estimates, we show that the existence theory of these equations, as well as the properties of the candidates for solution, depend strongly upon the characteristics of the forward dynamics. Finally, we give a first order Taylor expansion and show how to numerically calibrate some of these models for the purpose of CO2 option pricing.
    Date: 2012–10
  30. By: Bhim Adhikari
    Abstract: Poverty, property rights and distributional implications of community-based resource management havebecome major topics of discussion and debate in recent years. This study tries to examine the contributionof community forestry to household-level income with particular emphasis on group heterogeneity andequity in benefit distribution. The assessment of household level benefits suggests that poorer householdsare currently benefiting less in absolute terms from community forestry than less poor households. Interms of the contribution of forests to household income, the study results suggest that the poor are notnecessarily more dependent than the rich, a finding that contradicts results from other similar studies.Econometric analysis suggests that income from community forests is related to socio-economic attributesand private resource endowments of households. Households with land and livestock assets, as well asupper caste households gain more from the commons, while better educated households depend less onforest resources. Female-headed households benefit less from community forests, further aggravatingthe inequity in distribution of benefits. The study makes a number of recommendations to improvecommunity forest management in Nepal, which include, due consideration for community needs inselecting species for community forestry, transferability of user rights, which would allow less endowedhouseholds to benefit more, and more and equitable representation of women and disadvantaged groupsin forest management committees (JEL Q2, Q23 ).
    Keywords: Property rights, common property resources, heterogeneity, community forestry, forest user groups, equity, distribution, forest income.
    JEL: Q2 Q23
  31. By: Aurbacher, Joachim; Reinmuth, Evelyn; Parker, Phillip; Calberto, German; Steinbach, Jennifer; Ingwersen, Joachim; Dabbert, Stephan
    Keywords: Agribusiness, Farm Management,
    Date: 2012
  32. By: Kunreuther, Howard; Michel-Kerjan, Erwann
    Abstract: This paper focuses on how developing countries can change the way they prepare for disasters so they are better equipped to sustain economic growth. It discusses the importance of considering the goals of key decision makers and the need to understand the perceptions, systematics biases, and heuristics used by the relevant interested parties (the affected public, private and public sector organizations, and nongovernmental organizations) in choosing between alternatives. The paper highlights the importance of undertaking benefit-cost analysis to evaluate disaster risk reduction measures, recognizing that decision makers might not make meaningful use of this policy tool given their behavioral biases and simplified heuristics. To address these issues, the authors propose green growth strategies that involve multi-year contracts coupled with short-term incentives that have a chance of being implemented. The strategies focus on the role of multi-year micro-insurance, long-term loans, and multi-year catastrophe bonds that reflect the institutional arrangements in the developing country. The paper illustrates this proposal in the case of farmers'agricultural practices and investment decisions that reduce losses to property from catastrophic disasters such as drought.
    Keywords: Hazard Risk Management,Debt Markets,Climate Change Economics,Insurance&Risk Mitigation,Banks&Banking Reform
    Date: 2012–10–01
  33. By: Liu, Antung Anthony (Resources for the Future); Zhang, Junjie
    Abstract: This paper provides evidence that China's system of tax revenue sharing is an important explanation for differences in the rate of sewage treatment plant construction among its cities. As a result of the 1994 tax reform, Chinese cities retained different shares of their value-added tax (VAT). Exploiting the persistence of this sharing system, we use the VAT share in 1995 as an instrument for the present fiscal incentives. We find that a 10 percentage point increase in the VAT sharing rate resulted in a 13.8 percent increase in the construction of sewage treatment capacity. This result suggests that fiscal incentives can play an important role in the provision of pollution-reducing infrastructure.
    Keywords: sewage, water pollution, China pollution, fiscal federalism, tax sharing, tax federalism, China VAT sharing
    JEL: H4 H54 H77 Q53 Q56
    Date: 2012–09–21
  34. By: Dominic K. Albino; Karla Z. Bertrand; Yaneer Bar-Yam
    Abstract: Conversion of corn to ethanol in the US since 2005 has been a major cause of global food price increases during that time and has been shown to be ineffective in achieving US energy independence and reducing environmental impact. We make three key statements to enhance understanding and communication about ethanol production's impact on the food and fuel markets: (1) The amount of corn used to produce the ethanol in a gallon of regular gas would feed a person for a day, (2) The production of ethanol is so energy intensive that it uses only 20% less fossil fuel than gasoline, and (3) The cost of gas made with ethanol is actually higher per mile because ethanol reduces gasoline's energy per gallon.
    Date: 2012–10
  35. By: K.S. Kavi Kumar (Madras School of Economics,Chennai); BRINDA VISWANATHAN (Madras School of Economics,Chennai)
    Abstract: While a wide range of factors influence rural-rural and rural-urban migration in developing countries, there is significant interest in analyzing the role of agricultural distress and growing inter-regional differences in fuelling such movement. Given climate sensitivity of agriculture, there is also interest in exploring three-way linkage between agriculture, migration and weather anomalies. This strand of research acquires importance in the context of climate change adaptation. In the Indian context this analysis gets further complicated due to significant presence of short-term migration. Acknowledging the specific features of migration in India and with evidence from multiple data sources, this paper, (a) analyses the role of weather variability in inducing short-term migration using NSS (2007-08) data; and (b) estimates elasticity of long-term migration with respect to weather variability using Census data over the period 1981-2001. The results suggest that weather variability has an important role to play in both long-term and short-term migration in India.
    Keywords: Climate Change; Agricultural Impacts; Migration; Developing Countries
    JEL: O15 Q54 R11
    Date: 2012–09
  36. By: Rachel Baker (Yunus Centre for Social Business and Health, Glasgow Caledonian University); Anna Bartczak (Warsaw Ecological Economics Center, Faculty of Economic Sciences, University of Warsaw); Susan Chilton (Newcastle University Business School); Hugh Metcalf (Newcastle University Business School)
    Abstract: A number of stated preferences studies have quantified the value of gains in life expectancy from pollution control and use a Value of a Life Year (VOLY) approach to calculate the value placed on avoiding premature mortality following exposure to such pollution. However, life expectancy gains are a complex concept and no attempt has been made, to date, to investigate peoples’ understanding of what it is they are being asked to value. This paper uses a structured debriefing exercise to qualitatively investigate an approach which explicitly emphasises how this gain is delivered. We find that, for the majority of respondents, the approach is effective in communicating the ongoing nature of the gain and reduces the use of the (incorrect) heuristic that it is an ‘add-on’ at the end of life, in poor health. Further refinements are required, however, to communicate the cumulative nature of these risk reductions and the lack of impact on quality of life.
    Keywords: air pollution reduction, contingent valuation, gain in life expectancy, information set and provision, qualitative debriefing survey, quality of life, Value of a Life Year (VOLY)
    JEL: I15 I18 Q51 Q53 Q56
    Date: 2012
  37. By: Thierry Brunelle (Centre International de Recherche sur l'Environnement et le Développement); Patrice Dumas (Centre International de Recherche sur l'Environnement et le Développement and Centre de Coopération Internationale en Recherche Agronomique pour le Développement)
    Abstract: Motivated by the conclusions from various modelling studies, modifications to the bioenergy sector regulations are under way in Europe and in the USA to account for emissions from indirect land-use change (ILUC). Despite their influence on the policy-making, evaluations of the capacity of numerical models to estimate ILUC are sparse. To address this void, this paper reviews recent developments in land-use modelling, with a particular focus on the solutions adopted to estimate ILUC due to biofuel production. As indirect effects of bioenergy result from the interplay of various mechanisms, their modelling is a major challenge for land-use science. In recent years, numerical models have been significantly upgraded to provide a more comprehensive vision of the agricultural system. This has been performed by improving the representation of land supply and the biofuel production process in general equilibrium models (e.g., GTAP, MIRAGE, DART). At the same time, modelling systems coupling partial equilibrium models with CGE (e.g., KLUM@GTAP) or economic modules with spatially explicit models (e.g., MAgPIE, GLOBIOM, LEITAP), and modelling architecture combining land-use and life-cycle assessment models (e.g., FASOM/FAPRI/GREET) have been developed. In spite of these advances, some limitations remain and uncertainties are still numerous.
    Keywords: Indirect, Land-Use Change, Modelling, Biofuel
    JEL: O13 Q15 Q16 Q17 Q18 D58
    Date: 2012–09
  38. By: Halkos, George
    Abstract: Marine and coastal ecosystems are of high importance owing to the mankind dependence on the goods and services provided. As water quality is one perspective of healthy marine and coastal ecosystems, the aim of this study is to review as more as possible surveys conducted worldwide and in Greece. Due to the lack of an official market to valuate non-marketed goods and services, contingent valuation is applied intensively in order to provide the policy makers and the society generally with the specific values derived by a developed hypothetical market. In addition, this study reviews the crucial but debatable notion of value, the theoretical framework in accordance with the existing statistical models to estimate the welfare measures and the numerous disadvantages that have to be taken into account in order to implement a reliable contingent valuation survey.
    Keywords: Contingent valuation; willingness to pay; willingness to accept; marine and coastal ecosystems
    JEL: Q28 D12 Q51 Q25 C80 Q57
    Date: 2012–10
  39. By: Vivarelli, Marco
    Abstract: The aim of this study is to provide a microeconomic investigation of the concept of entrepreneurship; in particular, it discusses the following issues: 1) the alternative ways of looking at entrepreneurship, distinguishing"creative destruction"from simple"turbulence"; 2) the different microeconomic determinants of new firm formation, distinguishing"progressive"from"regressive"drivers; 3) the relationship between ex-ante characteristics (of the founder) and post-entry performance (of the new firm); and 4) the possible scope for an economic policy aimed at maximizing the impact of entrepreneurship on economic growth. Where possible and appropriate, the paper devotes particular attention to the specific features characterizing entrepreneurship in developing countries.
    Keywords: Microfinance,Access to Finance,Environmental Economics&Policies,Small Scale Enterprise,Banks&Banking Reform
    Date: 2012–10–01
  40. By: Jérôme Trotignon (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France)
    Abstract: L’Equation de Kaya exprime les émissions de CO2 d’un pays en fonction de facteurs économique, démographique et énergétique. Plusieurs travaux décomposent par période, à partir de cette équation, les effets sur les émissions brésiliennes des variables de population, de PIB par tête, d’intensité énergétique (contenu en énergie du PIB) et d’intensité carbonique (contenu en carbone de l’énergie). Mais ils ne tiennent pas compte des émanations de CO2 engendrées par le secteur UTCATF. Pour pallier cet inconvénient et mieux éclairer les enjeux des politiques climatiques, nous proposons une analyse de décomposition des facteurs d’évolution des émissions qui inclut les statistiques du secteur UTCATF. Son influence dans la variation des émissions totales s’avère prédominante, aussi bien comme stimulant sur la période de déforestation massive de 1994-2000, que comme modérateur de 2000 à 2005, année où s’ébauche le programme de déforestation évitée.
    Keywords: analyse de décomposition, Brésil, déforestation, équation de Kaya, facteurs d’émission de CO2, intensité carbonique, intensité énergétique, secteur UTCATF
    JEL: O54 Q23 Q54
    Date: 2012
  41. By: Kitzmuller, Markus
    Abstract: This paper develops a simple model to analyze the interaction between strategic corporate public good provision, international firm location and national regulation. An information-based strategic corporate public good provision mechanism is proposed to shed light on recent firm behavior within different regulatory environments. The main insight derived is that in the presence of firms with geographic flexibility (multinational enterprises) and market provision of an international public credence good, unilateral (non-cooperative) regulatory scope depends on (1) the absolute probabilities to verify firms'corporate public good provision levels within different geographic and institutional environments, and (2) the differential between these probabilities across countries. The relative information asymmetry determines not only the market levels of the public good produced under autarky, but also the relocation incentives of multinational enterprises. A firm trades off lower production costs, which increase its competitiveness in pricing, with higher expected informational price premiums, which decrease its competitiveness. A government's ability to regulate above market (corporate public good provision) levels decreases with the absolute level of foreign transparency, while it increases in the relative (positive) difference between the same transparency at home and abroad. This may not only explain mixed empirical evidence of theoretic propositions such as the Pollution Haven Hypothesis and Regulatory Race to the Bottom dynamics, but also open up interesting policy implications as the international information playing field becomes leveled through development, while existing regulations are rather rigid, and policy coordination remains limited.
    Keywords: Environmental Economics&Policies,Economic Theory&Research,Labor Policies,Debt Markets,Markets and Market Access
    Date: 2012–10–01
  42. By: Forstner, Bernhard; Deblitz, Claus; Kleinhanss, Werner; Nieberg, Hiltrud; Offermann, Frank; Roder, Norbert; Salamon, Petra; Sanders, Jurn; Weingarten, Peter
    Abstract: Zusammenfassung: Dieser Arbeitsbericht analysiert und bewertet die Auswirkungen der Vorschläge der EU-Kommission zur künftigen Gestaltung der Direktzahlungen an landwirtschaftliche Betriebe ab 2014. Im Mittelpunkt der auf Deutschland bezogenen Analysen stehen die Vorschläge zum sogenannten Greening, das neue Anforderungen hinsichtlich der Anbaudiversifizierung, der Bereitstellung ökologischer Vorrangflächen und des Erhalts von Dauergrünland vorsieht. Darüber hinaus werden zentrale weitere Vorschläge, wie zum Beispiel die allgemeine Kürzung der Direktzahlungen, deren mögliche Umverteilung in die 2. Säule der GAP sowie die Degression und Kappung der Zahlungen behandelt. Neben eher kurzfristig und auf das Machbare orientierten Empfehlungen betonen die Autoren der Studie, dass sie die 2. Säule der GAP für zielgerichtete Maßnahmen geeigneter halten als die 1. Säule. Daher sollten langfristig für Direktzahlungen vorgesehene Mittel zunehmend in die 2. Säule verlagert werden und dort möglichst gezielt eingesetzt werden. In der Förderperiode 2014 bis 2020 sollte Deutschland die Optionen zur Stärkung der 2. Säule ausschöpfen. -------------------------------------------------------------------------- ------------------------------------------------------------- Summary: This working paper presents recently published proposals of the European Commission for direct payments to farmers as of 2014, and both analyses and assesses their impacts. The focus lies on the so called greening measures with regard to Germany which include new requirements regarding crop rotation, the provision of ecologically favoured areas and a conservation of permanent pastures. Furthermore, the analyses deal with other important proposals, e.g. a general reduction of direct payments in Germany, their optional reallocation towards the 2. pillar of the CAP and the degression and capping of the payments. In addition to a number of feasible short term recommendations, the authors of the study stress that in the long run direct payments should be more focused on goods that are desired by society. During the funding period 2014 to 2020 Germany should fully utilize the options to strengthen the 2. pillar.
    Keywords: GAP-Reform, Politikanalyse, Direktzahlungen, Greening, Deutschland, reform, policy analysis, direct payments, greening, Germany, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Community/Rural/Urban Development, Crop Production/Industries, Demand and Price Analysis, Environmental Economics and Policy, Farm Management, Land Economics/Use, Livestock Production/Industries, Political Economy, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods, Teaching/Communication/Extension/Profession, Q11, Q12, Q18, Q58,
    Date: 2012–07
  43. By: Jan Philipp Schägner (Institute for Environment and Sustainability (IES), Joint Research Centre (JRC), European Commission, Italy); Luke Brander (Institute for Environmental Studies (IVM), VU University Amsterdam,The Netherlands); Joachim Maes (Institute for Environment and Sustainability (IES), Joint Research Centre (JRC), European Commission, Italy); Volkmar Hartje (Technische Universität Berlin, Institute of Landscape Architecture and Environmental Planning, Germany)
    Abstract: Mapping of ecosystem services’ (ESS) values means valuing ESS in monetary terms across a relatively large geographical area and assessing how values vary across space. Thereby, mapping of ESS values reveals additional information as compared to traditional site-specific ESS valuation, which is beneficial for designing land use policies for maintaining ESS supply. Since the well-known article by Costanza et al. (1997), who mapped global ESS values, the number of publications mapping ESS values has grown exponentially, with almost 60% being published after 2007. Within this paper, we analyse and review articles that map ESS values. Our findings show that methodologies, in particular how spatial variations of ESS values are estimated, their spatial scope, rational and ESS focus differ widely. Still, most case studies rely on relatively simplistic approaches using land use/cover data as a proxy for ESS supply and its values. However, a tendency exists towards more sophisticated methodologies using ESS models and value functions, which integrate a variety of spatial variables and which are validated against primary data. Based on our findings, we identify current practices and developments in the mapping of ESS values and provide guidelines and recommendations for future applications and research.
    Keywords: Ecosystem Service Assessment, Ecosystem Service Mapping, Ecosystem Service Valuation, Ecosystem Service Modelling, Value Transfer, Land use Policy Assessment
    JEL: Q5
    Date: 2012–09
  44. By: Audrey Menard
    Abstract: This paper offers some evidence on why the governance effect of foreign aid is shadowy in African countries. The evidence suggests that the aid-governance linkages can be robust if the type of aid is differentiated between bilateral and multilateral aid and if the governance effect of aid is conditioned on the size of natural resources rents. A dynamic panel data analysis over the period 1997 – 2008 reveals that (i) foreign aid improves governance if and only if aid is allocated by multilateral agencies; and (ii) the effect of multilateral aid is the stronger the less the recipient country is dependent on natural resources, in particular on oil resources. The combination of multilateral aid and oil rents independence favour the development of good governance in Africa.
    Keywords: Governance, Natural resources, Oil, Multilateral aid.
    JEL: F35 D73 Q30 O11 C33
    Date: 2012
  45. By: N. R. BHANUMURTHY (National Institute of Public Finance and Policy); PAMI DUA (Department of Economics, Delhi School of Economics, Delhi, India); LOKENDRA KUMAWAT (Ramjas College, University of Delhi)
    Abstract: We analyze the impact of climate shocks on price formation in spot and futures market for food in India where until the recent introduction of commodity futures markets in 2005, the transmission of these shocks on short-term (spot) price movements was unclear. The existence of a futures market is expected to reduce risk, a major component in agricultural production as well as in price formation. Hitherto, the price discovery mechanism was weak and end price was expected to be different (mostly higher unless if some product prices are administered) from equilibrium price. In addition, this weak mechanism was expected to result in higher price volatility. Though the commodity futures market in India is nascent, we model transmission of weather shocks to future and spot prices using monthly data. Based on cointegration analysis, our results suggest strong cointegration between futures prices (based on MCX AGRI-future index) and spot prices (MCX AGRI-spot index) for commodities traded in futures markets. Our causality and impulse response results show futures prices Granger cause spot prices--a shock in futures prices appears to have an impact on spot prices at least for a five month period with maximum impact with a lag of one month. Changes in rainfall affect both futures and spot prices with different lags. Although there could be other factors that affect the futures prices, after controlling for fuel prices our results clearly show the transmission mechanism of weather shocks to prices. Further, with the help of smooth transition models, the study finds that the bivariate relationship between rainfall and prices of rice, wheat and pulses show some non-linearity with the structural change happening after the introduction of futures market. Also, this relation is found to be much stronger with the introduction futures market.
    Keywords: Weather shock, spot prices, futures prices, smooth transition models, India
    JEL: G14 Q10 E30
    Date: 2012–09
  46. By: Knierim, Andrea; Siart, Sonja; Müller, Kathrin; Bokelmann, Wolfgang
    Abstract: Das Innovationsnetzwerk Klimaanpassung Brandenburg Berlin (INKA BB) hat das Ziel, die Nachhaltigkeit der Land- und Wassernutzung in der Region auch unter veränderten Klimabedingungen zu sichern. Um die transdisziplinäre Zusammenarbeit systematisch umzusetzen und auszuwerten, verfolgt das Verbundvorhaben einen Aktionsforschungsansatz. Der vorliegende Beitrag verdeutlicht die theoretischen Grundlagen und konzeptionellen Annahmen des sozialwissenschaftlichen Forschungsansatzes und leitet daraus eine methodische Herangehensweise ab. Eine besondere Herausforderung besteht in der Operationalisierung des Veränderungsprozesses anhand sinnhafter Beobachtungskategorien und Indikatoren Am Beispiel von INKA BB werden methodischen Interventionen zur Entwicklung von Anpassungsstrategien und zur Förderung der Netzwerkentwicklung durch Feedback und Reflexionsprozesse präsentiert und einer Auswertung unterzogen. Dabei lassen sich die forschungstechnischen Möglichkeiten und Grenzen dieser Vorgehensweise ansatzweise abschätzen. Abschließend erfolgt eine Einordnung des integrativen Forschungsansatzes als sozialwissenschaftliche Methodik für eine systemorientierte, agrarwissenschaftliche Forschung.
    Keywords: Anpassung an den Klimawandel, Aktionsforschung, Netzwerkentwicklung, transdisziplinär, climate change adaptation, action research, network development, transdisciplinary approach, Research Methods/ Statistical Methods,
    Date: 2012
  47. By: Halkos, George; Papageorgiou, George
    Abstract: In this paper we set up an oligopolistic market model, where firms invest in pollution abatement in order to increase the whole market size via an increase in the consumers’ reservation price. Moreover, we suppose that the demand function is not a linear one and the resulting game is not a usual linear quadratic one. In the considered model we investigate the open loop, the memory less closed-loop and the collusive patterns equilibrium. Additionally, we examine the social planning perspective. In the case of a convex demand we found the surprising result that the control and state variables have higher values in the open-loop steady state equilibrium than in the closed loop, while in a linear demand case the equilibrium is undetermined. In all cases we find that only if the market demand has concave curvature are the conclusions clear. A number of propositions and remarks are provided.
    Keywords: Oligopoly Game; non-linear demand; pollution abatement; reservation price
    JEL: Q52 C61 D43 C62 Q58
    Date: 2012–10
  48. By: R. Balasubramanian; K.N. Selvaraj
    Abstract: Irrigation tanks are one of the oldest and most important common property water resources in the resource-poor regions of South India. Tanks are also important from an ecological perspective because they serve as a geographically well-distributed mechanism for the conservation of soil, water and bio-diversity. Unfortunately, tank irrigation has undergone a process of rapid decline in the recent past, much of which can be attributed to the disintegration of traditional irrigation institutions. In response, people adopt various coping strategies such as migration, non-agricultural employment, and private tube-wells. Adoption of private coping mechanisms has serious implications for community coping mechanisms, i.e., for collective conservation efforts. Against this background, this study tries to understand the main causes of tank degradation and the complex interrelationships among poverty, private coping mechanisms and community coping mechanisms that affect tank performance. Primary and secondary data are used to estimate three regressions models: a macro model on tank degradation, a household-level model on collective action, and a production function incorporating collective action as an input. In general, poor people are more dependent on tanks for various livelihood needs and hence they contribute more towards tank management compared to non-poor households. The analysis of tank degradation shows that there has been a decline in the performance of tanks. Population pressure is found to have accelerated the process of tank degradation. Though the emergence of private tube-wells contributes towards mitigating tank degradation within a narrow range, a continuous increase in the number of wells beyond limits exacerbates the process of tank degradation. This result is further validated by the micro-level econometric model of collective action towards tank management, which indicates that the increase in the number of private wells has a strong negative effect on the participation of rural communities in tank management. The size of the user group has a negative impact on cooperation, while the existence of traditional governance structures, such as rules for water allocation, promotes collective action. Wealth inequality is found to have a U-shaped relationship with collective action. The production function analysis shows that collective action has a positive and significant impact on the rice yields. Therefore, collective action is important for higher productivity and income. The study proposes several policy measures to revive and sustain tanks so as to provide livelihood security to the poor, who are the most affected by resource degradation. 
    Keywords: Irrigation tanks, collective action, coping mechanisms, poverty, common pool resources, South India

This nep-env issue is ©2012 by Francisco S.Ramos. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.