nep-env New Economics Papers
on Environmental Economics
Issue of 2013‒01‒19
forty papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. The political economy of Australia’s climate change and clean energy legislation: lessons learned By Spencer, Thomas; Carole-Anne , Senit; Anna, Drutschinin
  2. The Climate Justice Discourse in Brazil: Potential and Perspective By Bruno Milanez; Igor F. Fonseca
  3. Which compensation for whom ? By Pascal Gastineau; Emmanuelle Taugourdeau
  4. International Environmental Agreements, Fiscal Federalism, and Constitutional Design By Wolfgang Buchholz; Alexander Haupt; Wolfgang Peters
  5. Interactions Between Emission Trading Systems and Other Overlapping Policy Instruments By Nils Axel Braathen
  6. Locating the Policy Space for Inclusive Green Growth within the SADC Extractive Sector By Michael MacLennan
  7. Investment Incentives under Emission Trading: An Experimental Study By Eva Camacho-Cuena; Till Requate; Israel Waichman
  8. Moving Forward with Incorporating "Catastrophic" Climate Change into Policy Analysis By Elizabeth Kopits; Alex L. Marten; Ann Wolverton
  9. Vulnerability of Brazilian Megacities to Climate Change: The São Paulo Metropolitan Region By Carlos Afonso Nobre; Andrea Ferraz Young; Paulo Hilário Nascimento Saldiva; José Antônio Marengo Orsini; Antonio Donato Nobre; Agostinho Tadashi Ogura; Osório Thomaz; Guillermo Oswaldo Obregón Párraga; Gustavo Costa M. da Silva; Maria Valverde; André Carvalho Silveira; Grasiela de Oliveira Rodrigues
  10. How Volatile is ENSO for Global Greenhouse Gas Emissions and the Global Economy? By Lan-Fen Chu; Michael McAleer; Chi-Chung Chen
  11. Indicators for Assessing the Vulnerability of Smallholder Farming to Climate Change: the Case of Brazil?s Semi-Arid Northeastern Region By Diego Pereira Lindoso; Juliana Dalboni Rocha; Nathan Debortoli; Izabel Cavalcanti I. Parente; Flávio Eiró; Marcel Bursztyn; Saulo Rodrigues Filho
  12. Trade Barriers in Policies that Regulate Greenhouse Gases By Ronaldo Seroa da Motta
  13. Cost?benefit Analyses of Climate Change By Jorge Hargrave; Ronaldo Seroa da Motta; Gustavo Luedemann
  14. Food Security, Women Smallholders and Climate Change in Caribbean SIDS By Nidhi Tandon
  15. Climate Change Negotiations from an Industry Perspective By Paula Bennati
  16. Environmental Policy and the Energy Eficiency of Vertically Differentiated Consumer Products By Magdalena Stadejek; Alexander Haupt
  17. Evaluation Mechanisms for Climate Finance By Olga Kovalchuk
  18. China and The World: South-South Cooperation for Inclusive Green Growth By Kishan Khoday; Leisa Perch
  19. Which mode of funding developing countries’ climate policies under the post-Kyoto framework? By Clemens Heuson; Wolfgang Peters; Reimund Schwarze; Anna-Katharina Topp
  20. Adapting to Climate Change: The Remarkable Decline in the U.S. Temperature-Mortality Relationship over the 20th Century By Alan Barreca; Karen Clay; Olivier Deschenes; Michael Greenstone; Joseph S. Shapiro
  21. Dams, Development and Displacement: Towards More Inclusive and Social Futures By Tanya Wragg-Morris
  22. Potentially Harmful International Cooperation on Global Public Good Provision By Wolfgang Buchholz; Richard Cornes; Dirk Rübbelke
  23. South-South Cooperation for Inclusive Green Growth By Kishan Khoday; Leisa Perch
  24. Environmental Claims: Findings and Conclusions of the OECD Committee on Consumer Policy By OECD
  25. Analysis on Conflicts of China’s Coal Tax Reform By Wang, Dong
  26. Using Supervised Environmental Composites in Production and Efficiency Analyses: An Application to Norwegian Electricity Networks By Orea, Luis; Growitsch, Christian; Jamasb, Tooraj
  27. Does the Effect of Pollution on Infant Mortality Differ between Developing and Developed Countries? Evidence from Mexico City By Arceo, Eva; Hanna, Rema; Oliva, Paulina
  28. Evaluation of long-dated investments under uncertain growth trend, volatility and catastrophes By Gollier, Christian
  29. Valuation of Human Health: An Integrated Model of Willingness to Pay for Mortality and Morbidity Risk Reductions By Shelby Gerking; Mark Dickie; Marcella Veronesi
  30. Greening the Economy and Increasing Economic Equity for Women Farmers in Madagascar By Zo Randriamaro
  31. The Role of South-South Cooperation in Inclusive and Sustainable Agricultural Development: Focus on Africa By Leisa Perch; Ammad Bahalim; Lidia Cabral; Alex Shankland
  32. Do Housing Prices Reflect Environmental Health Risks? Evidence from More than 1600 Toxic Plant Openings and Closings By Janet Currie; Lucas Davis; Michael Greenstone; Reed Walker
  33. Optimal policies for international recycling between developed and developing countries By Honma, Satoshi
  34. Market Development for Green Cars By Andrea Beltramello
  35. China’s Coal Chemical Industry: In the View of Governance Challenges By Xu, Xiaoran; Wang, Dong
  36. Does Subsidizing Investments in Energy Efficiency Reduce Energy Consumption?: Evidence from Germany By Caroline Dieckhöner
  37. Financing Green Urban Infrastructure By Olaf Merk; Stéphane Saussier; Carine Staropoli; Enid Slack; Jay-Hyung Kim
  38. The Targets of the Copenhagen Accord and the Cancun and Durban Agreements By Ronaldo Seroa da Motta; Jorge Hargrave; Gustavo Luedemann
  39. Disregarded inefficiency may dominate sustainability policies By Bazhanov, Andrei
  40. Recursos Naturales y Crecimiento Económico en Colombia: ¿Maldición de los Recursos? By Jacobo Campo Robledo; W. Andrés Sanabria Parrado

  1. By: Spencer, Thomas; Carole-Anne , Senit; Anna, Drutschinin
    Abstract: In November 2011, Australia adopted a highly innovative, ambitious and comprehensive climate change policy, the Clean Energy Legislative Package(CELP). This outcome was not self-evident.The CELP embeds an innovative carbon pricing mechanism in a comprehensive and highly generous package of complementary measures designed to increase its public acceptability, and environmental and economic efficiency. It is combined with progressive income tax cuts, increases in government transfer payments, and measures to shield emissions and trade-intensive industry and promote investment in renewable energy, energy efficiency and R&D. In addition, the package contains innovative governance mechanisms to shield it from the vagaries of the political cycle, and increase the political and administrative costs of dismantling it. In all, these measures increase the CELP’s chances of survival and provide an example of policy innovation for other countries to follow, keeping in mind their particular national circumstances.
    Keywords: Carbon pricing; political economy of climate policy; Australian climate policy
    JEL: Q52 Q40 Q54
    Date: 2012
  2. By: Bruno Milanez (Universidade Federal de Juiz de Fora); Igor F. Fonseca (IPEA)
    Abstract: Milanez and Fonseca (2011) argue that the climate justice discourse has not been adopted by the media, society or the communities affected by extreme climate events in Brazil. The climate justice discourse has been adapted from the concept of environmental justice and created from the idea that the impacts of climate change affect different social groups in various ways and intensities. (?)
    Keywords: The Climate Justice Discourse in Brazil: Potential and Perspective
    Date: 2012–05
  3. By: Pascal Gastineau (IFSTTAR - LTE - Laboratoire Transport et Environnement, EconomiX - CNRS : UMR7166 - Université Paris X - Paris Ouest Nanterre La Défense); Emmanuelle Taugourdeau (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne)
    Abstract: This paper examines a situation where a decision-maker determines the appropriate compensation that should be implemented for a given ecological damage. The compensation can be either or both in monetary and environmental units to meet three goals : i) no aggregate welfare loss, ii) minimization of the cost associated with the compensation, iii) minimal environmental compensation requirement. The findings suggest that - in some cases - providing both monetary and environmental compensation can be the best option. We also emphasize the impact of implementing a minimal environmental compensation constraint especially in terms of equity and cost efficiency.
    Keywords: Environmental damage; compensation; welfare, inequity
    Date: 2012–11
  4. By: Wolfgang Buchholz (Department of Economics, University of Regensburg); Alexander Haupt (School of Management (Plymouth Business School)); Wolfgang Peters (Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder))
    Abstract: In this paper, we analyse how the prospect of international negotiations over transboundary pollution shapes intra-country transfer schemes when the governments of the countries' polluting regions are in charge of environmental policy and negotiations. Federal governments can implement compensation payments between domestic regions and matching grants prior to the international negotiations between the polluting regions. The subgame-perfect transfer schemes fail to fully internalise the environmental externality, leading to an inefficient international environmental agreement. As the international spillover increases, the intra-country compensation rates increase, while the matching rates decline, distorting the incentives for the regional governments in opposing directions. We also show that decentralisation of environmental decision making can arise endogenously.
    Keywords: Fiscal federalism, transboundary pollution, international environmental agreement, constitutional design, matching grants
    JEL: H77 F51 Q58 H41
    Date: 2012–03
  5. By: Nils Axel Braathen
    Abstract: Well designed emission trading systems are environmentally effective and economically efficient instruments to address emissions of CO2 and other greenhouse gases. This paper discusses interactions that can occur when a cap-and-trade based emission trading system is combined with overlapping policy instruments (environmentally related taxes, subsidies, ‘command-and-control regulations, information instruments, etc.), addressing emissions stemming from the same sources.
    Date: 2011–06
  6. By: Michael MacLennan (IPC-IG)
    Abstract: The economic lens, through which development has been viewed for over 250 years, has often promoted growth at the expense of the environment. However, today, harm to the environment in the pursuit of economic growth has begun to threaten both growth itself and indicators of social progress (World Bank, 2012). The argument for greener growth in this context thus places a greater focus on maximising the ?socio-economic? development synergies alongside minimising pollution, environmental degradation and socio-environmental harms. This focus is of particular importance for sectors of acute economic importance and high growth that serve as catalysts for social, economic or environmental problems. Extractive industries (EIs) of the Southern African Development Community (SADC) are such a sector (ibid.). (?)
    Keywords: Locating the Policy Space for Inclusive Green Growth within the SADC Extractive Sector
    Date: 2012–12
  7. By: Eva Camacho-Cuena (LEE & Economics Department, Universitat Jaume I, Castellón, Spain); Till Requate (Economics Department, University of Kiel, Germany); Israel Waichman (Department of Economics, University of Heidelberg, Germany)
    Abstract: This paper presents the results of an experimental investigation on incentives to adopt advanced abatement technology under emissions trading. Our experimental design mimics an industry with small asymmetric polluting firms regulated by different schemes of tradable permits. We consider three allocation/auction policies: auctioning off (costly) permits through an ascending clock auction, grandfathering permits with re-allocation through a single-unit double auction, and grandfathering with reallocation through an ascending clock auction. Our results confirm both dynamic and static theoretical equivalence of auctioning and grandfathering. We nevertheless find that although the market institution used to reallocate permits does not impact the dynamic efficiency from investment, it affects the static efficiency from permit trading.
    Keywords: Environmental policy, abatement technology, taxes, permit trading, auctions opportunity, Ultimatum Game
    JEL: C92 D44 L51 Q28 Q55
    Date: 2012
  8. By: Elizabeth Kopits; Alex L. Marten; Ann Wolverton
    Abstract: It has often been stated that current studies aimed at understanding the magnitude of optimal climate policy fail to adequately capture the potential for “catastrophic” impacts of climate change. While economic modeling exercises to date do provide evidence that potential climate catastrophes might significantly influence the optimal path of abatement, there is a need to move beyond experiments which are abstracted from important details of the climate problem in order to substantively inform the policy debate. This paper provides a foundation for improving the economic modeling of potential large scale impacts of climate change in order to understand their influence on estimates of socially efficient climate policy. We begin by considering how the term “catastrophic impacts” has been used in the scientific literature to describe changes in the climate system and carefully review the characteristics of the events that have been discussed in this context. We contrast those findings with a review of the way in which the economic literature has modeled the potential economic and human welfare impacts of events of this nature. We find that the uniform way in which the economic literature has typically modeled such impacts along with the failure to understand differences in the end points and timescales examined by the natural science literature has resulted in the modeling of events that do not resemble those of concern. Based on this finding and our review of the scientific literature we provide a path forward for better incorporating these events into integrated assessment modeling, identifying areas where modeling could be improved even within current modeling frameworks and others where additional work is needed.
    Keywords: climate change, catastrophes, integrated assessment model
    JEL: Q54 Q58
    Date: 2013–01
  9. By: Carlos Afonso Nobre (Senior Researcher at the Center for Earth System Science (CCST/INPE)); Andrea Ferraz Young (Researcher at State University of Campinas (UNICAMP)); Paulo Hilário Nascimento Saldiva (Professor at the Medicine Faculty at University of São Paulo (FMUSP)); José Antônio Marengo Orsini (Senior Researcher at CCST/INPE); Antonio Donato Nobre (Researcher at the National Institute for Research in Amazon (INPA)); Agostinho Tadashi Ogura (Researcher at the Institute for Technological Research (IPT)); Osório Thomaz (Researcher at the Institute for Technological Research (IPT)); Guillermo Oswaldo Obregón Párraga (Researcher at the National Institute for Space Research (INPE)); Gustavo Costa M. da Silva (INPE); Maria Valverde (INPE); André Carvalho Silveira (INPE); Grasiela de Oliveira Rodrigues (INPE)
    Abstract: A major concern of contemporary society in relation to future climate projections relates to possible changes in the frequencies and intensities of extreme weather events. Megacities such as São Paulo have numerous social and environmental problems associated with patterns of development and transformation of space, which have been aggravated by increases in temperature and intensification of extreme weather events. (?)
    Keywords: Vulnerability of Brazilian Megacities to Climate Change: The São Paulo Metropolitan Region
    Date: 2012–05
  10. By: Lan-Fen Chu (National Science and Technology Center for Disaster, Taiwan); Michael McAleer (Erasmus University Rotterdam, Kyoto University, Complutense University of Madrid); Chi-Chung Chen (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.
    JEL: Q51 Q52 Q53 Q54
    Date: 2013–01–08
  11. By: Diego Pereira Lindoso (University of Brasilia); Juliana Dalboni Rocha (University of Brasilia); Nathan Debortoli (University of Brasilia); Izabel Cavalcanti I. Parente (University of Brasilia); Flávio Eiró (University of Brasilia); Marcel Bursztyn (University of Brasilia); Saulo Rodrigues Filho (University of Brasilia)
    Abstract: Political uncertainties about the global capacity to keep greenhouse gases within safe concentration limits along with new evidence from science showing that some degree of climate change is unavoidable have drawn international attention to the urgency of considering adaptation measures as important as mitigation actions. As a result, many efforts have been made to provide decision-makers with integrated systems of vulnerability assessment that can guide policy action towards mainstreaming adaptation on the governmental development agenda. (?)
    Keywords: Indicators for Assessing the Vulnerability of Smallholder Farming to Climate Change: the Case of Brazil?s Semi-Arid Northeastern Region
    Date: 2012–05
  12. By: Ronaldo Seroa da Motta (IPEA)
    Abstract: The Durban and Copenhagen Accords are not a treaty. Thus, the national commitments reported therein to achieve the 2°C trajectory, even if sufficient, will not be mandatory or binding under the United Nations Framework Convention on Climate Change (UNFCCC). In brief, there is no new global agreement in which national mitigation efforts are recognised by the UNFCCC and that points to an effective reduction of emissions in line with what science recommends as necessary. (?)
    Keywords: Trade Barriers in Policies that Regulate Greenhouse Gases
    Date: 2012–05
  13. By: Jorge Hargrave (IPEA); Ronaldo Seroa da Motta (IPEA); Gustavo Luedemann (IPEA)
    Abstract: The United Nations Environment Programme (UNEP) estimated that the world would need to reduce greenhouse gas (GHG) emissions by 50?60 per cent from 1990 levels by 2050, with a future downward trajectory that is even more drastic, to have a probable chance of limiting a global temperature increase to 2ºC. It was also estimated that a 2ºC warming could lead to overall global losses of about 1 per cent of the world?s gross domestic product (GDP). Models predict however that losses will be distributed in an unbalanced way. While countries in Africa and South Asia may experience losses of around 4?5 per cent of their GDP, models predict minimal short term GDP losses in rich countries (Nordhaus, 2007; Stern, 2007). (?)
    Keywords: Cost?benefit Analyses of Climate Change
    Date: 2012–05
  14. By: Nidhi Tandon (Researcher)
    Abstract: Two waves of change?long-term climate change and immediate-term economic crises?are bringing the issue of food security into sharper relief?particularly in those Caribbean countries where food security is already volatile and faces a series of risks and challenges. Climate change adds urgency and the need for renewed focus and prioritisation as well as ensuring that adaptation is wholly integrated into natural resource management, land use policies and, especially, into broader long-term macro-economic frameworks. (?)
    Keywords: Food Security, Women Smallholders and Climate Change in Caribbean SIDS
    Date: 2012–11
  15. By: Paula Bennati (Climate Change Senior Advisor in the Environment and Sustainability Department of the Confederação Nacional da Indústria (CNI? Brazilian Confederation of Industry))
    Abstract: The negotiations within the United Nations Framework Convention on Climate Change (UNFCCC) have had an increasing impact on domestic policies in developing countries, especially the largest emitters among them, such as India, China, South Africa and Brazil (member countries of the so-called BASIC group). (?)
    Keywords: Climate Change Negotiations from an Industry Perspective
    Date: 2012–05
  16. By: Magdalena Stadejek (Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder)); Alexander Haupt (School of Management (Plymouth Business School))
    Abstract: We analyse optimal environmental policies in a market that is vertically differentiated in terms of the energy efficiency of products. Considering energy taxes, subsidies to firms for investment in more eco-friendly products, and product standards, we are particularly interested in how distributional goals in addition to environmental goals shape the choice of policy instruments. We Önd that an industry-friendly government levies an energy tax to supplement a lax product standard, but shies away from subsidies to firms. By contrast, a consumer-friendly government relies heavily on a strict product standard and additionally implements a moderate subsidy to firms, but avoids energy taxes.
    Keywords: Energy tax, energy efficiency standard, subsidy, vertically differentiated markets, product quality
    JEL: Q58 Q48 L13
    Date: 2012–07
  17. By: Olga Kovalchuk (Europa-Universität Viadrina Frankfurt (Oder))
    Date: 2012–04
  18. By: Kishan Khoday (UNDP); Leisa Perch (International Policy Centre for Inclusive Growth)
    Abstract: World leaders convened for the UN Conference on Sustainable Development (Rio+20) in June 2012, marking 20 years since the 1992 Rio Earth Summit, and at a time of rapidly increasing pressures on the planet?s ecosystems and impacts on the poor and vulnerable members of society. Rio+20 focused on two closely related solutions to the world?s challenges ? new institutional frameworks for sustainable development, and the drive to a green economy defined as an economy ?that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities? (UNEP, 2012). (...)
    Keywords: China and The World: South-South Cooperation for Inclusive Green Growth
    Date: 2012–11
  19. By: Clemens Heuson; Wolfgang Peters (Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder)); Reimund Schwarze; Anna-Katharina Topp (Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder))
    Abstract: Funding developing countries’ climate policies after Cancun (COP16) has a dual goal: firstly, to support mitigation of developing countries in order to sustain the two-degree pathway of stabilising the global mean temperature; secondly, to empower the vulnerable countries in lowincome regions to adapt to and recover from the most adverse impacts of climate change. So far, the political and scientific discussion has mainly concentrated on the appropriate level of funding. Referring to the newly emerging climate finance architecture under the post-Kyoto framework, this paper argues that a stronger focus must be put on the question: which mode of funding to choose? This is for the reason that the currently discussed funding instruments, such as earmarking of industrialised countries’ transfer payments to developing countries for reducing loss and damages, mitigation, or adaptation costs, may cause fundamental changes in the countries’ strategic behaviour concerning mitigation and adaptation efforts. Moreover, some of the instruments fall short of a minimum requirement for the donors to voluntarily provide means, and thus cannot guarantee sustained funding. We develop our results in a non-cooperative two-country framework in which donor and recipient decide on mitigation in the first, and on adaptation in the second stage of the game.
    Keywords: adaptation, climate policy, funding, mitigation, non-cooperative behaviour
    JEL: C72 D61 F35 Q54
    Date: 2012–07
  20. By: Alan Barreca; Karen Clay; Olivier Deschenes; Michael Greenstone; Joseph S. Shapiro
    Abstract: Adaptation is the only strategy that is guaranteed to be part of the world's climate strategy. Using the most comprehensive set of data files ever compiled on mortality and its determinants over the course of the 20th century, this paper makes two primary discoveries. First, we find that the mortality effect of an extremely hot day declined by about 80% between 1900-1959 and 1960-2004. As a consequence, days with temperatures exceeding 90°F were responsible for about 600 premature fatalities annually in the 1960-2004 period, compared to the approximately 3,600 premature fatalities that would have occurred if the temperature-mortality relationship from before 1960 still prevailed. Second, the adoption of residential air conditioning (AC) explains essentially the entire decline in the temperature-mortality relationship. In contrast, increased access to electricity and health care seem not to affect mortality on extremely hot days. Residential AC appears to be both the most promising technology to help poor countries mitigate the temperature related mortality impacts of climate change and, because fossil fuels are the least expensive source of energy, a technology whose proliferation will speed up the rate of climate change.
    JEL: I10 I12 I18 Q54
    Date: 2013–01
  21. By: Tanya Wragg-Morris (IPC-IG)
    Abstract: As we move toward ?The Future We Want? (United Nations, 2012), broader awareness and concerns that link social, environmental and economic sustainability have become significantly more influential, at least politically. While there are clear linkages between these factors, they also have the potential individually to negate the other(s), and thus it cannot be assumed that this is still sustainable development. To be considered also are issues of social and environmental justice and, critically, the potential socio-economic costs to be borne by those targeted as beneficiaries whose lives are to bettered by taking such action. (?)
    Keywords: Dams, Development and Displacement: Towards More Inclusive and Social Futures
    Date: 2012–12
  22. By: Wolfgang Buchholz (Department of Economics, University of Regensburg); Richard Cornes; Dirk Rübbelke
    Abstract: Recent international climate negotiations suggest that complete agreements are unlikely to materialize. Instead, partial cooperation between like-minded countries appears a more likely outcome. In this paper we analyze the effects of such partial cooperation between like-minded countries. In doing so, we link the literature on partial cooperation with so-called matching approaches. Matching schemes are regarded as providing a promising approach to overcome undersupply of public goods like climate protection. The functioning of matching mechanisms in a setting with an incomplete agreement, i.e. a contract where only a subset of the players participates, has however not been investigated yet. This paper fills this research gap by analyzing incomplete matching agreements in the context of international climate protection. We analyse their effect on both welfare and the global climate protection level. We show that matching coalitions may bring about a decline in global public good provision and a reduction in the welfare of outsiders.
    Keywords: Coalition formation, public goods, matching, Pareto optimality, partial cooperation
    JEL: C78 H41 Q54
    Date: 2012–07
  23. By: Kishan Khoday (UNDP); Leisa Perch (International Policy Centre for Inclusive Growth)
    Abstract: Two critical megatrends are of central importance in implementing the green economy agenda launched at the recent Rio+20 Summit on Sustainable Development: the rise of emerging economies across the South, and the global challenges of resource security and ecological change. At the converging point of these trends are surging levels of outward investments by emerging economies, bringing social and ecological risks to resource-rich, vulnerable communities around the world, but also bringing opportunities for achieving global goals for inclusive, green growth. (?)
    Keywords: South-South Cooperation for Inclusive Green Growth
    Date: 2012–11
  24. By: OECD
    Abstract: The Committee on Consumer Policy launched a project to examine ways to enhance the value and effectiveness of green claims in April 2009. In support of the work, a workshop with representatives from government, business and civil society was held in April 2010. This report presents the findings and conclusions of the Committee’s work.
    Date: 2011–03
  25. By: Wang, Dong
    Abstract: This paper investigates the conflicts which are resulted from coal tax reform in China from economic and public policy perspectives. An analytical framework involving actors, values, interests and institution has been applied. China’s central government eagers to achieve fiscal revenue increase, environmental protection and energy conversation goals by a good governance of coal system. As a traditional and feasible policy instrument, taxation is regarded for dealing with energy issues in politics and governance. However, coal tax reform proposal has induced many controversies in China. The causes of that include value conflicts of all actors, competing interests of all parties and institutional barriers of economic, politics and legislation. Therefore, the government cannot regulate coal issues only through taxation. The case reveals that good governance on coal cannot be achieved only by economic tools as the coal system contains so high stake and involves so many players.
    Keywords: energy tax; coal tax regime; policy instrument; energy conflicts
    JEL: Q38 Q32 H20 Q48
    Date: 2012–10–23
  26. By: Orea, Luis (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Growitsch, Christian (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Jamasb, Tooraj (Energiewirtschaftliches Institut an der Universitaet zu Koeln)
    Abstract: Supervised dimension reduction methods have been extensively applied in different scientific fields like biology and medicine in recent years. However, they have hardly ever been used in micro economics, and in particular cost function modeling. Nonetheless, these methods can also be useful in regulation of natural monopolies such as gas, water, and electricity networks, where firms’ cost and performance can be affected by a large number of environmental factors. In order to deal with this ‘dimensionality’ problem we propose using a supervised dimension reduction approach that aims to reduce the dimension of data without loss of information. Economic theory suggests that in the presence of other relevant production (cost) drivers, the traditional all-inclusive assumption is not satisfied and, hence, production or cost predictions (and efficiency estimates) might be biased. This paper shows that purging the data using a partial regression approach allows us to address this issue when analyzing the effect of weather and geography on cost efficiency in the context of the Norwegian electricity distribution networks.
    Keywords: supervised composites; environmental conditions; electricity networks
    JEL: L15 L51 L94
    Date: 2012–12–02
  27. By: Arceo, Eva (CIDE, Mexico City); Hanna, Rema (Harvard University); Oliva, Paulina (University of CA, Santa Barbara)
    Abstract: Much of what we know about the marginal effect of pollution on infant mortality is derived from developed country data. However, given the lower levels of air pollution in developed countries, these estimates may not be externally valid to the developing country context if there is a nonlinear dose relationship between pollution and mortality or if the costs of avoidance behavior differs considerably between the two contexts. In this paper, we estimate the relationship between pollution and infant mortality using data from Mexico. We find that an increase of 1 parts per billion in carbon monoxide (CO) over the last week results in 0.0032 deaths per 100,000 births, while a 1 (mu)g/m[superscript 3] increase in particulate matter (PM[subscript 10]) results in 0.24 infant deaths per 100,000 births. Our estimates for PM[subscript 10] tend to be similar (or even smaller) than the U.S. estimates, while our findings on CO tend to be larger than those derived from the U.S. context. We provide suggestive evidence that a non-linearity in the relationship between CO and health explains this difference.
    Date: 2012–11
  28. By: Gollier, Christian (TSE(LERNA, University of Toulouse))
    Abstract: Because of the uncertainty about how to model the growth process of our economy, there is still much confusion about which discount rates should be used to evaluate actions having long-lasting impacts, as in the contexts of climate change, social security reforms or large public infrastructures for example. We characterize efficient discount rates when the growth of log consumption follows a random walk with uncertain parameters. We examine different models in which the parametric uncertainty affects the trend and the volatility of growth, or the frequency of catastrophes. This uncertainty implies that the term structures of the risk free discount rate and of the aggregate risk premium are respectively decreasing and increasing. It also implies that the discount rate is increasing with maturity if the beta of the investment is larger than half of relative risk aversion. Another important consequence of parametric uncertainty is that the risk premium is not proportional to the beta of the investment. Finally, we apply our findings to the evaluation of climate change policy. We argue in particular that the beta of actions to mitigate climate change is relatively large, so that the term structure of the associated discount rates should be increasing.
    Keywords: asset prices, term structure, risk premium, decreasing discount rates, parametric uncertainty, CO2 beta, rare events, macroeconomic catastrophes.
    JEL: E43 G11 G12 Q54
    Date: 2012–11
  29. By: Shelby Gerking; Mark Dickie; Marcella Veronesi
    Abstract: This paper develops and applies an integrated model of human mortality and morbidity valuation that is consistent with principles of welfare economics. The standard expected utility model of one person facing two health states (alive and dead) is extended to a setting in which two family members (a parent and a child) face three health states (healthy, sick, and dead). A key finding is that total health benefits of public programs equate to the sum of willingness to pay for reduced mortality risk plus a fraction of the willingness to pay for reduced morbidity risk. Implications of the integrated model are tested using two field data sets from the U.S. on skin cancer and leukemia risk reductions. Results obtained show how the integrated model can be used to increase the accuracy of health benefit estimation for benefit-cost analyses as well as for the design of public hazard reduction programs.
    Keywords: willingness to pay, children, environmental hazards, health, integrated analysis, morbidity, mortality, value of statistical life, cancer, stated preference
    JEL: Q51
    Date: 2012–10
  30. By: Zo Randriamaro (Researcher)
    Abstract: Although gender considerations are relatively new in the climate change discourse, it is hardly surprising that they have been at the heart of recent activism and policy advocacy efforts by multiple actors. Socio-economic research and evaluations of development effectiveness both confirm that access to resources and the agency to use them are influenced by gender roles, responsibilities and differential access to opportunities and influence (World Bank, 2010; UNFPA, 2009; Lipper, 2001; Kabeer, 1999). (...)
    Keywords: Greening the Economy and Increasing Economic Equity for Women Farmers in Madagascar
    Date: 2012–11
  31. By: Leisa Perch (International Policy Centre for Inclusive Growth); Ammad Bahalim (ICTSD/IPC-IG); Lidia Cabral (ODI); Alex Shankland (IDS)
    Abstract: Focus on Africa: Making South-South Cooperation on Agricultural development more inclusive and sustainable With Rio+20 only a week away, the theme of this Poverty in Focus resonates clearly with the broader discourse on sustainable development, in particular the expanded efforts to mainstream inclusion and equity and to improve institutional frameworks for sustainable development. The United Nations Development Programme?s first Africa Human Development Report, launched on 15 May 2012, highlights the extent to which recent growth in Africa has neither sufficiently reduced extreme poverty and hunger nor provided the number and scope of opportunities envisioned. One of its key messages is a call for more investment in agriculture to ensure both sustained growth and poverty reduction. The evidence is clear. We need new mechanisms, approaches and tools to address an ever-increasing combination of deeply embedded inequalities and new variations of instability and unsustainability. The international seminar on the Role of South-South Cooperation in Agricultural Development in Africa held on 17 May in Brasília served as an important space for dialogue to explore some of these issues, specifically in the context of agricultural futures and in the broader context of development. Emerging clearly was the conviction that South-South cooperation, as a mechanism, could be catalytic, if well designed and harnessed, effectively shaped and defined within a context of exchange, mutual benefits and learning. With the increasing attention on both the inclusivity of growth and its environmental sustainability, now being framed in the context of inclusive green growth, more reliance is also likely to be placed on South-South cooperation in defining a number of answers to the ?how?. As the Government of Brazil hosts Rio+20, attention also falls on the country?s role as a broker for such forms of South-South exchange, particularly on models which can deliver triple wins for the economy, society and the environment. A number of successes in reducing inequality, enhancing both social and productive inclusion and, in particular, engaging smallholder farmers in the growth process while also maintaining a successful commercial agriculture sector are among the important lessons/entry points for Brazil-Africa exchange in this context. At the same time, successes and innovations are also emerging from sub-Saharan Africa, in discrete flagship programmes, policies and in sectors. Thus far, there has been less discussion about bi-directional flows of good practice, lessons learned and technology transfers than the current reality merits. This Poverty in Focus, designed as a value-added output of the May 17 seminar, gives specific voice to the above, as well as some of the challenges and opportunities facing South-South cooperation as a tool for ?development? and not just development cooperation. This opportunity to discuss agriculture not just as a sector but as a force for development, for poverty reduction, food security, for greater cooperation within the South, and for greater lessons from the South to emerge on the international landscape builds on other similar efforts and discussions in 2012. It resonates with a key motto of one of our coordinating partners?agriculture is a key pathway out of poverty. Looking forward, the nexus between agriculture and development highlights two key issues: eliminating hunger and rethinking agriculture, in light of sustainability and equity. Climate change, livelihoods and food security, in particular, represent both challenges and opportunities for achieving these two objectives, and many questions do remain. It is the role of knowledge-based institutions, such as IPC-IG, the Futures Agricultural Consortium, CIRAD, Articulação Sul, with the support of DFID and UN Women, and in partnership with the World Food Programme (WFP), the Food and Agriculture Organization of the United Nations (FAO) and the African Climate Policy Centre (ACPC), to probe and critically assess towards a greater understanding of both the potential and limits of South-South cooperation and to identify potential answers to urgent policy questions. It is our hope that the approach taken in the seminar and this Poverty in Focus defines a new scope for critical and inclusive policy dialogue, while shining a brighter light on some of the underlying development questions of our time, including how to maximise Africa?s incredible natural, social and cultural wealth into a source of sustainable growth for all its citizens. by Jorge Chediek, Interim Director, IPC-IG
    Keywords: The Role of South-South Cooperation in Inclusive and Sustainable Agricultural Development: Focus on Africa
    Date: 2012–06
  32. By: Janet Currie; Lucas Davis; Michael Greenstone; Reed Walker
    Abstract: A ubiquitous and largely unquestioned assumption in studies of housing markets is that there is perfect information about local amenities. This paper measures the housing market and health impacts of 1,600 openings and closings of industrial plants that emit toxic pollutants. We find that housing values within one mile decrease by 1.5 percent when plants open, and increase by 1.5 percent when plants close. This implies an aggregate loss in housing values per plant of about $1.5 million. While the housing value impacts are concentrated within 1/2 mile, we find statistically significant infant health impacts up to one mile away.
    JEL: D62 I18 Q51 Q53
    Date: 2013–01
  33. By: Honma, Satoshi
    Abstract: This paper presents a model of waste product trade between a developed and a developing country. North firms produce products that are consumed exclusively in North. After consumption, parts of them are exported from North to South. This export may be illegal. The remaining portion of the waste products are collected and recycled by firms in North. Firms in South engage exclusively only in recycling. The South government is unable to find illegal dumping of recycled waste products because of an inadequate governance capacity. Therefore, we assume that the South government subsidizes recycled material. The model addresses five scenarios: closed economy, the first best, strategic government, selfish North government and inactive South government, and benevolent North government and inactive South government. Among these scenarios, only the first best outcome needs a negative tariff for waste-product import to South. A limitation of the strategic government case is that the South government must finance the subsidy. In the selfish North government case, North benefits by avoiding collection and recycling costs by outflow of waste into South. The South environment, however, would enormously deteriorate due to the absence of a policy. If the North government is benevolent, it imposes an export tax on waste products to South to curb it.
    Keywords: Recycling: International trade; Strategic trade policy
    JEL: F18 Q53 H23
    Date: 2013–01
  34. By: Andrea Beltramello
    Abstract: This report presents and analyses policies, programmes and approaches for the development, market introduction and diffusion of green cars. It reviews government policies in a number of OECD countries as well as a selection of non-OECD economies. The report attempts to provide: i) a better understanding of the growing market for green vehicles; ii) new analytical instruments to identify policies and approaches that could be designed and put in place, notably with the aim of fostering the uptake of green cars; and iii) to the extent possible, insights into the efficiency and effectiveness of existing policies, as well as guidance on how to assess the impact of future measures.
    Date: 2012–09
  35. By: Xu, Xiaoran; Wang, Dong
    Abstract: This paper examines the China’s coal chemical strategy. As a part of national energy strategy, China’s coal chemical industry induces conflicts on technical level, economic level and policy level. The analysis of this paper is under the policy framework and discusses the causes and effects of these conflicts and also proposes some possible solutions.
    Keywords: Coal chemical industry; low carbon; renewable energy
    JEL: L5 Q42 P28 Q43 L88
    Date: 2013–01–14
  36. By: Caroline Dieckhöner
    Abstract: Improving energy efficiency is one of the three pillars of the European energy and climate targets for 2020 and has led to the introduction of several policy measures to promote energy efficiency. The paper analyzes the effectiveness of subsidies in increasing energy efficiency in residential dwellings. An empirical analysis is conducted in which the effectiveness of subsidies on the number of dwelling modernizations is investigated. Next, the impact of renovations on energy consumption is analyzed using a differences-in-differences-in-differences approach for modernizations made in given subsidy program periods, as well as for ownership status and household types for more than 5000 German households between 1992 and 2010. By controlling for socio-economic status, dwelling characteristics and macro-indicators, it becomes apparent that homeowners invest significantly more and have significantly lower heating expenditures than their tenant counterparts. Thus, the landlord-tenant problem tends to broaden the energy efficiency gap. It is also found that the number of modernizations made by landlords does not increase with higher subsidies. However, the renovations made during the subsidy periods decrease the heating consumption of tenants. Given the conditions that homeowners already invest more in energy efficiency, they increase modernizations only slightly with increasing subsides. However, these modernizations during subsidy periods do not further decrease homeowners' energy consumption. Thus, the large part of the overall subsidies received by homeowners can be identified as windfall profits.
    Keywords: ousehold behavior, econometric analysis, energy effciency, demand modelling
    Date: 2012
  37. By: Olaf Merk; Stéphane Saussier; Carine Staropoli; Enid Slack; Jay-Hyung Kim
    Abstract: This paper presents an overview of practices and challenges related to financing green sustainable cities. Cities are essential actors in stimulating green infrastructure; and urban finance is one of the promising ways in which this can be achieved. Cities are key investors in infrastructure with green potential, such as buildings, transport, water and waste. Their main revenue sources, such as property taxes, transport fees and other charges, are based on these same sectors; cities thus have great potential to ?green? their financial instruments. At the same time, increased public constraints call for a mobilisation of new sources of finance and partnerships with the private sector. This working paper analyses several of these sources: public-private partnerships, tax-increment financing, development charges, value-capture taxes, loans, bonds and carbon finance. The challenge in mobilising these instruments is to design them in a green way, while building capacity to engage in real co-operative and flexible arrangements with the private sector.
    Keywords: public private partnerships, private finance, green growth, infrastructure finance, urban infrastructure, urban development, urban finance
    Date: 2012–09–24
  38. By: Ronaldo Seroa da Motta (IPEA); Jorge Hargrave (IPEA); Gustavo Luedemann (IPEA)
    Abstract: Adopted in 1992, the United Nations Framework Convention on Climate Change (UNFCCC)?or simply the Convention ?today has nearly universal membership, with 195 parties. However, it was only after 1997, when the Kyoto Protocol was approved, that its implementation started. Foreseeing the end of the first commitment period of the Kyoto Protocol, in 2005 the Convention agreed on a new negotiation platform, the Bali Action Plan, which should go beyond the first commitment period. (?)
    Keywords: The Targets of the Copenhagen Accord and the Cancun and Durban Agreements
    Date: 2012–05
  39. By: Bazhanov, Andrei
    Abstract: This paper examines the effects of ignored inefficiencies on the reliability of sustainability indicators and effectiveness of investment in resource-based economies. A model of a social planner does not include some phenomena that may influence the path of utility. These unspecified phenomena may cause inefficiency of the economy. In order to simulate this natural discrepancy between theory and real life, this study assumes that the planner applies the policies developed for an efficient (undistorted) model, whereas the real economy is distorted by some neglected effects that can influence utility, production, the balance equation, and the dynamics of the reserve. The resulting inefficiency affects the dependence of current utility change on investment. The analysis shows that, for sustainability in the presence of inefficiency, first, institutional and resource policies may become more important than investments; and secondly, it is preferable to underextract a natural resource under uncertainties in production possibilities and damages from economic activities. An inadequate accounting system, underestimated production possibilities, and insecure property rights are considered as examples of disregarded inefficiencies.
    Keywords: Dynamic inefficiency; Investment; Natural resource; Sustainability
    JEL: Q32 Q38 O47 O13
    Date: 2012–10–08
  40. By: Jacobo Campo Robledo; W. Andrés Sanabria Parrado
    Abstract: La “maldición de los recursos naturales” es un término acuñado por Auty (1993) y reforzado por los resultados de Sachs y Warner (1995, 1999) para explicar por qué países con una mayor riqueza relativa de recursos naturales tienden a crecer a tasas inferiores que los países que tienen menos recursos naturales. Este documento estudia de manera empírica la existencia de una “maldición de los recursos” en la economía colombiana, para tal efecto, se aplica análisis de series de tiempo, encontrando evidencia para afirmar la paradoja, explicada por la exportación de café, petróleo y área de tierra destinada a la agricultura para el periodo comprendido entre 1970 – 2010.
    Date: 2012–12–30

This nep-env issue is ©2013 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.