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on Environmental Economics |
| By: | Baez, Javier E.; Kronick, Dorothy; Mason, Andrew D. |
| Abstract: | This paper argues that climate change poses two distinct, if related, sets of challenges for poor rural households: challenges related to the increasing frequency and severity of weather shocks and challenges related to long-term shifts in temperature, rainfall patterns, water availability, and other environmental factors. Within this framework, the paper examines evidence from existing empirical literature to compose an initial picture of household-level strategies for adapting to climate change in rural settings. The authors find that although households possess numerous strategies for managing climate shocks and shifts, their adaptive capacity is insufficient for the task of maintaining -- let alone improving -- household welfare. They describe the role of public policy in fortifying the ability of rural households to adapt to a changing climate. |
| Keywords: | Rural Poverty Reduction,Climate Change Economics,Regional Economic Development,Science of Climate Change,Climate Change Mitigation and Green House Gases |
| Date: | 2013–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6326&r=env |
| By: | Andrés J. Picazo-Tadeo (Departamento de Economía Aplicada II. Universidad de Valencia); Juana Castillo (Departamento de Economía Aplicada II. Universidad de Valencia); Mercedes Beltrán-Esteve (Departamento de Economía Aplicada II. Universidad de Valencia) |
| Abstract: | The impact of economic activity on the environment is a matter of growing concern for firm managers, policymakers, researchers and society as a whole. Building on previous work by Kortelainen [Kortelainen, M., 2008. Dynamic environmental performance analysis: A Malmquist index approach. Ecological Economics 64, 701-715], we contribute an approach to assessing dynamic ecological- economic performance, or simply dynamic eco-performance, and its two determinants, ecologicaleconomic efficiency change and technical change, at specific-environmental-pressure level. In doing so, we use Data Envelopment Analysis techniques, directional distance functions and Luenberger indices. Our approach is employed to assess dynamic eco-performance in the emission of greenhouse gases in the European Union-27 over the period 1990-2010. The main result is that eco-performance has been boosted by technical change rather than by increases in eco-efficiency. Accordingly, policy measures aimed at enhancing eco-efficiency are recommended to improve eco-performance in European countries regarding greenhouse gas emissions. |
| Keywords: | Dynamic eco-performance; directional distance functions; Data Envelopment Analysis; greenhouse gases emissions; European Union |
| JEL: | C61 O44 Q01 Q54 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1304&r=env |
| By: | Yongyang Cai; Kenneth L. Judd; Thomas S. Lontzek |
| Abstract: | There is great uncertainty about the impact of anthropogenic carbon on future economic wellbeing. We use DSICE, a DSGE extension of the DICE2007 model of William Nordhaus, which incorporates beliefs about the uncertain economic impact of possible climate tipping events and uses empirically plausible parameterizations of Epstein-Zin preferences to represent attitudes towards risk. We find that the uncertainty associated with anthropogenic climate change imply carbon taxes much higher than implied by deterministic models. This analysis indicates that the absence of uncertainty in DICE2007 and similar models may result in substantial understatement of the potential benefits of policies to reduce GHG emissions. |
| JEL: | C63 D81 Q54 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18704&r=env |
| By: | Torben Klarl (University of Augsburg, Department of Economics) |
| Abstract: | In the recent last years, in particular in the aftermath of the global financial and economic crisis, many countries initiated economic recovery plans with a major focus on stimulating green entrepreneurial activities to revive economic growth. Further, the recovery plans intend to improve a country's awareness for a direct orientation towards (strong) sustainability and green growth. Before discussing strategies towards green growth, in this paper we propose a novel framework to increase our understanding of the interplay of process R&D activities, the strategic price and environmental quality setting of heterogeneous entrepreneurs in a market where consumers feel up to paying for environmental quality improvement of a vertically differentiated good. In the paper we decompose an entrepreneur's incentive conducting process R&D in four parts. In particular we show that an entrepreneur's incentive of conducting own process R&D is reduced due to the existence of knowledge-spillovers. Moreover, due to the strategic complementarities, both in prices as well as in environmental quality, a strategic effect reinforces the negative consequences of the spillover-effect. We show that the externalities in the model require corrections based upon a mixture of fiscal policies and a process R&D subvention scheme establishing a first-best solution. We further thoroughly discuss the implementation of a second-best solution and derive environmental policy implications. |
| Keywords: | Technological change, Process R&D, Green consumerism, Vertical differentiation, Emission tax, Environmental quality, Environmental policy |
| JEL: | Q55 Q58 O31 O33 D43 L13 L15 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:aug:augsbe:0321&r=env |
| By: | Zayeda Sharmin (Department of Political Studies, Shahjalal University of Science and Technology (SUST)); Mohammad Samiul Islam (Department of Public Administration, Shahjalal University of Science and Technology (SUST)) |
| Abstract: | Bangladesh’s geographic location and geo-morphological conditions have made the country one of the most vulnerable to weather and climate induced changes. Bangladesh is a land of wetlands, which occupy around 50 percent of the country. Wetlands play a crucial role in maintaining the ecological balance of ecosystems, but wetland habitats of Bangladesh are under constant threats due to climate induced changes and anthropogenic activities. Climate change is causing a rise in sea levels, which already now put wetlands at risk of excessive calamities. Seasonal irregularities and extremes are the main threats to the wetland ecosystem. Anyway, there are important gender perspectives in all aspects of climate change. Women make up a large number of the poor in communities that are highly dependent on local natural resources for their livelihood and are disproportionately vulnerable to and affected by climate change. Moreover, women’s limited access to resources and decision-making processes increases their vulnerability to climate change. |
| Keywords: | climate Change, gender, gender vulnerability, Bangladesh |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:bnr:wpaper:16&r=env |
| By: | Lion Hirth (Potsdam-Institute for Climate Impact Research, Vattenfall GmbH); Falko Ueckerdt (Potsdam-Institute for Climate Impact Research) |
| Abstract: | Energy and climate policies are usually seen as measures to internalize externalities. However, as a side effect, these policies redistribute wealth between consumers and producers, and within these groups. While redistribution is seldom the focus of the academic literature in energy economics, it plays a central role in real world policy debates. This paper compares the redistribution effects of two major electricity policies: support schemes for renewable energy sources, and CO2 pricing. We find that the redistribution effects of both policies are large, and they work in opposed directions: while renewables support transfers wealth from producers to consumers, carbon pricing does the opposite. More specifically, we show that moderate amounts of wind subsidies leave consumers better off even if they bear the costs of subsidies. In the case of CO2 pricing, we find that while suppliers as a whole benefit even without free allocation of emission certificates, large amounts of producer surplus are redistributed between different types of producers. These findings are derived from an analytical model of electricity markets, and a calibrated numerical model of the Northwestern European integrated power system. Our findings imply that a society with a preference for avoiding large redistribution might prefer a mix of policies, even if CO2 pricing alone is the first best climate policy in terms of allocative efficiency. |
| Keywords: | Carbon Tax, Emission Trading, Redistribution, Consumer Surplus, Producer Surplus, Wind Power Generation, Electricity Market Modelling |
| JEL: | Q42 Q48 L94 H23 D61 D62 C61 C63 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.82&r=env |
| By: | López, Ramón; Yoon, Sang Won |
| Abstract: | The standard theoretical literature has shown that environmental sustainability and positive economic growth are not incompatible as long as environmental policies are optimal. However, in showing this result earlier studies have relied on strong assumptions that may appear to charge the dice in favor of such result. Here we show that once the role of the consumption composition effect is recognized, environmentally sustainable economic growth may exist even if some of the most questionable assumptions used by the canonical models are relaxed. In particular, we show that sustainable growth is possible even if environmental and man-made factors of production are complement rather than highly substitutable as has been invariably assumed by the literature and even if technological change is entirely pollution-augmenting. |
| Keywords: | Environmental Economics and Policy, International Development, O44, Q01, Q56, |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umdrwp:142561&r=env |
| By: | Oskar Lecuyer (CNRS, UMR 8568 CIRED, Nogent-sur-Marne and EDF R&D, Clamart); Philippe Quirion (CNRS, UMR 8568 CIRED, Nogent-sur-Marne, France) |
| Abstract: | This article constitutes a new contribution to the analysis of overlapping instruments to cover the same emission sources. Using both an analytical and a numerical model, we show that when the risk that the CO2 price drops to zero and the political unavailability of a CO2 tax (at least in the European Union) are taken into account, it can be socially optimal to implement an additional instrument encouraging the reduction of emissions, for instance a renewable energy subsidy. Our analysis has both a practical and a theoretical purpose. It aims at giving economic insight to policymakers in a context of increased uncertainty concerning the future stringency of the European Emission Trading Scheme. It also gives another rationale for the use of several instruments to cover the same emission sources, and shows the importance of accounting for corner solutions in the definition of the optimal policy mix. |
| Keywords: | Uncertainty, Policy Overlapping, Mitigation Policy, Energy policy, EU-ETS, Renewable Energy, Corner Solutions, Nil CO2 Price |
| JEL: | Q28 Q41 Q48 Q58 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.91&r=env |
| By: | Hermine Mitter (Institute for Sustainable Economic Development, Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna); Mathias Kirchner (Institute for Sustainable Economic Development, Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna); Erwin Schmid (Institute for Sustainable Economic Development, Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna); Martin Schönhart (Institute for Sustainable Economic Development, Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna) |
| Abstract: | Climate change affects agriculture differently due to the heterogeneity in bio-physical and economic conditions in Austria. Therefore, stakeholder and expert knowledge is required in regional vulnerability assessments to address region specific challenges and develop compatible adaptation strategies. In a transdisciplinary research project, a working group consisting of regional stakeholders and agricultural experts identified the effects of uncertain future precipitation on soil water erosion as well as the effectiveness of selected soil conservation measures as the most crucial knowledge gap. Consequently, potential sediment losses on cropland have been simulated with the RUSLE (Revised Universal Soil Loss Equation) methodology for several climate change scenarios using the bio-physical process model EPIC (Environmental Policy Integrated Climate) in an Austrian alpine foreland region. The model predicts an increase in sediment yield with higher precipitation sums for 2040 on average. However, reduced tillage and cultivating winter cover crops have been identified as effective adaptation options. The stakeholders have provided local knowledge in crop management and validated the model results according to their clarity, comprehensiveness, and meaningfulness. They confirmed its usefulness to inform farmers and support the public debate on regional climate change adaptation in agriculture. |
| Keywords: | transdisciplinary regional vulnerability assessment, soil water erosion, EPIC, soil conservation measures, Austria |
| JEL: | Q18 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:sed:wpaper:542013&r=env |
| By: | Marcella Veronesi (Department of Economics (University of Verona)); Fabienne Chawla (Eawag: Swiss Federal Institute of Aquatic Science and Technology); Max Maurer (Eawag: Swiss Federal Institute of Aquatic Science and Technology); Judit Lienert (Eawag: Swiss Federal Institute of Aquatic Science and Technology) |
| Abstract: | Climate change scenarios predict an increase of extreme rain events, which will increase the risk of wastewater flooding and of missing legal water quality targets. This study elicits the willingness to pay to reduce ecological and health risks from combined sewer overflows in rivers and lakes, and wastewater flooding of residential and commercial zones under the uncertainty of climate change. We implement a discrete choice experiment on a large representative sample of the Swiss population. Swiss households strongly value the protection of water bodies, and mostly, the avoidance of high ecological risks and health risks for children related to combined sewer overflows in rivers and lakes. Our findings also show that climate change perception has a significant effect on the willingness to pay to reduce these risks. These results are important to support policy makers’ decisions on how to deal with emerging risks of climate change in the water sector and where to set priorities. |
| Keywords: | choice experiment; climate change; ecological risk; health risk; wastewater |
| JEL: | D61 D81 I10 Q25 Q51 Q54 Q57 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:01/2013&r=env |
| By: | Steven Van Passel (Hasselt University, Faculty of Business Economics, Centre for Environmental Sciences, Agoralaan, Yale University, School of Forestry and Environmental Studies); Emanuele Massetti (Yale University, School of Forestry and Environmental Studies, Fondazione Eni Enrico Mattei); Robert Mendelsohn (Yale University, School of Forestry and Environmental Studies) |
| Abstract: | This research estimates the impact of climate on European agriculture using a continental scale Ricardian analysis. Data on climate, soil, geography and regional socio-economic characteristics were matched for 37 612 individual farms across the EU-15. Farmland values across Europe are sensitive to climate. Even with the adaptation captured by the Ricardian technique, farms in Southern Europe are predicted to suffer sizeable losses (8% -13% per degree Celsius) from warming. In contrast, agriculture in the rest of Europe is likely to see only mixed impacts. Increases (decreases) in rain will increase (decrease) average farm values by 3% per centiliter of precipitation. Aggregate impacts by 2100 vary depending on the climate model scenario from a loss of 8% in a mild scenario to a loss of 44% in a harsh scenario. |
| Keywords: | Ricardian Analysis, Climate Change, European Agriculture, Climate Change Economics |
| JEL: | Q54 Q51 Q15 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.83&r=env |
| By: | Lionel Nesta (SciencesPo, OFCE-DRIC); Francesco Vona (SciencesPo, OFCE-DRIC); Francesco Nicolli (University of Ferrara) |
| Abstract: | We investigate the effectiveness of policies in favor of innovation in renewable energy under different levels of competition. Using information regarding renewable energy policies, product market regulation and high-quality green patents for OECD countries since the late 1970s, we develop a pre-sample mean count-data econometric specification that also accounts for the endogeneity of policies. We find that renewable energy policies are significantly more effective in fostering green innovation in countries with deregulated energy markets. We also find that public support for renewable energy is crucial only in the generation of high-quality green patents, whereas competition enhances the generation of green patents irrespective of their quality. |
| Keywords: | Renewable Energy Technology, Patents, Environmental Policies, Product Market Regulation, Policy Complementarity |
| JEL: | Q55 Q58 Q42 Q48 O34 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.90&r=env |
| By: | Carlo Carraro (Ca’ Foscari University of Venice, FEEM and CMCC); Lorenza Campagnolo (Ca’ Foscari University of Venice, FEEM and CMCC); Fabio Eboli (FEEM and CMCC); Elisa Lanzi (FEEM and CMCC); Ramiro Parrado (FEEM and CMCC); Elisa Portale (World Bank) |
| Abstract: | This paper proposes a new tool to assess sustainability and make the concept of sustainable development operational. It considers its multi-dimensional structure combining the information deriving from a selection of relevant sustainability indicators belonging to economic, social and environmental pillars. It reproduces the dynamics of these indicators over time and countries. Then, it aggregates these indicators using a new approach based on Choquet’s integrals. The main novelties of this approach are indeed: (i) the modelling framework, a recursive-dynamic computable general equilibrium used to calculate the evolution of all indicators over time throughout the world, and (ii) the aggregation methodology to reconcile them in one aggregate index to measure overall sustainability. The former allows capturing the sector and regional interactions and higher-order effects driven by background assumptions on relevant variables to depict future scenarios. The latter makes it possible to compare sustainability performances, under alternative scenarios, across countries and over time. Main results show that the current sustainability at world level differs from what the traditional measure of well-being, the GDP, depicts, highlighting the trade-offs among different components of sustainability. Moreover, in the next decade a slight decrease in world sustainability may occur, in spite of an expected increase in world domestic product. Finally, dedicated policies increase overall sustainability, showing that social and environmental benefits may be greater than the correlated economic costs. |
| Keywords: | Sustainable Development, Sustainable Indicators, Computable General Equilibrium, Millennium Development Goals, Climate Change |
| JEL: | Q54 Q56 C68 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.94&r=env |
| By: | Angelo Antoci (University of Sassari); Simone Borghesi (University of Siena); Mauro Sodini (University of Pisa) |
| Abstract: | The present paper investigates the functioning of an Emission Trading System (ETS) and its impact on the diffusion of environmental-friendly technological innovation in the presence of firms’ strategic behaviours and sanctions to non-compliant firms. For this purpose, we study an evolutionary game model with random matching, namely, a context in which a population of firms interact through pairwise random matchings. We assume that each firm has to decide whether to adopt a new clean technology or keep on using the old technology that requires pollution permits to operate and that the strategy whose expected payoff is greater than the average payoff spreads within the population at the expense of the alternative strategy (the so-called replicator dynamics). We investigate the technological dynamics and the stationary states that emerge from the model. From the analysis of the model, we show that by properly modifying the penalty on non-compliant firms, it is possible to shift from one dynamic regime to another and that an increase in permits trade can promote the diffusion of innovative pollution-free technologies. |
| Keywords: | Emissions Trading, Technological Innovation, Random Matching, Evolutionary Game, Penalty System, Strategic Behaviour |
| JEL: | C62 C63 C73 C78 O33 Q55 Q58 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.79&r=env |
| By: | Mireille Chiroleu-Assouline (Paris School of Economics (PSE) - Université Paris 1 Panthéon-Sorbonne, Centre d'Economie de la Sorbonne); Jean-Christophe Poudou (Université Montpellier 1, UMR5474 LAMETA); Sébastien Roussel (Université Montpellier 3 Paul Valéry & Université Montpellier 1, UMR5474 LAMETA) |
| 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: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.89&r=env |
| By: | Sridhar, Kala S.; Kumar, Surender |
| Abstract: | This paper focuses on air and water pollution in India’s cities, provides empirical evidence to demonstrate the seriousness of the challenges, discusses the relevant policies of national and local government that are used to address the challenges, discusses relevant political economy issues related to introducing pollution taxes or other policies which are aimed at “green” cities. |
| Keywords: | Urbanisation; Environment; Air pollution; Water pollution; Fiscal instruments |
| JEL: | R0 Q53 N95 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43810&r=env |
| By: | Ye, Liming; Tang, Huajun; Wu, Wenbin; Yang, Peng; Nelson, Gerald C.; Mason-D'Croz, Daniel; Palazzo, Amanda |
| Abstract: | Food security in China affects the livelihood and well-being of one-fifth of the world population. Climate change is now affecting agriculture and food production in every country of the world. Here the authors present the IMPACT model results on yield, production, and net trade of major crops (wheat, rice, and maize) in China, and on daily calorie availability as an overall indicator of food security under climate change scenarios and socio-economic pathways in 2050. The obtained results show that wheat, maize, and rice yields will increase by 17%, 45%, and 15%, alongside price increases of 60%, 100%, and 40%, respectively, during 2010-2050. Crop production is projected to increase by 23%, 70%, and 3% reaching 123, 240, and 125 million tons for wheat, maize, and rice, respectively, in 2050. The results also show that China will remain a major importer of maize at 20 million tons per year, but turn from a net importer of rice (5 million tons per year in 2010) to a net exporter in 2020 (5-9 million tons per year by 2050), while becoming a self-sufficient consumer of wheat by 2050. The outcomes of calorie availability suggest that China will be able to maintain a level of at least 3,000 kilocalories per day through 2010-2050. Climate change has relatively little effect on calorie availability within a pathway scenario.The authors conclude that Chinese agriculture is relatively resilient to climate change. Chinese food security by 2050 will unlikely be compromised in the context of climate change. The major challenge to food security, however, will rise from increasing demand coupled with regional disparities in the adaptive capacity to climate change. -- |
| Keywords: | Climate change,food security,scenario,adaptation,mitigation,policy |
| JEL: | Q56 Q18 Q54 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20132&r=env |
| By: | Blanco Orozco, Napoleon Vicente; Zuniga Gonzalez, Carlos Alberto |
| Abstract: | Scientific paper for dissertation in the Ph.D. program in Natural Sciences for Development Emphasis: Environmental and Culture Management |
| Keywords: | Productivity, Malmquist index, Biomass, Bio Economy, Oil fuel, Energy, Environmental Economics and Policy, Productivity Analysis, O14, Q43, |
| Date: | 2013–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nauntg:142465&r=env |
| By: | Simon Dietz (Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science, Department of Geography and Environment, London School of Economics and Political Science); Carmen Marchiori (Department of Geography and Environment, London School of Economics and Political Science); Alessandro Tavoni (Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science) |
| Abstract: | The theory of international environmental agreements overwhelmingly assumes that governments engage as unitary agents. Each government makes choices based on benefits and costs that are simple national aggregates, and similarly on a single set of national-level motivations, together drawing a strong analogy with the behaviour of an individual or firm in other strategic contexts. In reality, however, various domestic special interests shape environmental policy, including how national governments cooperate on cross-border issues. Therefore in this paper we introduce to a classic model of international environmental cooperation the phenomenon of domestic political competition, whereby lobby groups seek to influence policy by offering to fund political campaigning. We use the model to establish some general conditions for the effects of lobbying on the stringency of policy and the size of coalitions cooperating to provide an environmental good. Using specific functional forms, we obtain a range of further results, including circumstances in which the omission of lobbying results in environmental protection being underestimated. |
| Keywords: | Game Theory, International Environmental Agreements, Lobbying, Special-Interest Groups, Strategic Cooperation |
| JEL: | C7 H41 K33 Q2 Q54 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.76&r=env |
| By: | Traeger, Christian |
| Abstract: | We introduce a version of the DICE-2007 model designed for uncertaintyanalysis. DICE is a wide-spread deterministic integrated assessment model of climatechange. However, climate change, long-term economic development, and theirinteractions are highly uncertain. A thorough empirical analysis of the effects ofuncertainty requires a recursive dynamic programming implementation of integratedassessment models. Such implementations are subject to the curse of dimensionality.Every increase in the dimension of the state space is paid for by a combinationof (exponentially) increasing processor time, lower quality of the value function andcontrol rules approximations, and reductions of the uncertainty domain. The paperpromotes a four stated recursive dynamic programming implementation of the DICEmodel. Our implementation solves the infinite planning horizon problem for an arbitrarytime step. Moreover, we present a closed form continuous time approximationto the exogenous (discretely and inductively defined) processes in DICE and presenta Bellman equation for DICE that disentangles risk attitude from the propensity tosmooth consumption over time. |
| Keywords: | Natural Resources and Conservation, climate change, uncertainty, integrated assessment, intergrated assessment, DICE, dynamic programming, risk aversion, interemporal substitution, recursive utility |
| Date: | 2012–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:agrebk:qt6jx2p7fv&r=env |
| By: | Emmanuelle AUGERAUD-VERON; Marc LEANDRI |
| Abstract: | We present a model of optimal stock pollution control with distributed delays in the stock accumulation dynamics. Using generic functional forms and a distribution structure that covers a wide range of distributions, we solve analytically the complex dynamic system that arises from the introduction of these distributed delays. Our contribution extends the dynamic optimization literature that focused on the single discrete delay case and develops an original method to address control problems with mixed type functional differential equations. Our results show the qualitative impact of acknowledging these distributed delays on the optimal pollution paths dynamics and identify the occurrence of limit cycles and the stability conditions of such a model that can be used to design efficient environmental policies. |
| Keywords: | Optimal Pollution Control, Distributed Delays, Mixed Type Functional Differential Equations, Hopf Bifurcation |
| JEL: | C61 Q5 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2013-03&r=env |
| By: | Enrico Saltari (Department of Economics and Law, Università "La Sapienza" Roma); Giuseppe Travaglini (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo") |
| Abstract: | In this paper we address the control problem of a social optimum in presence of waste and capital stocks. We address this problem in two stages. In the first, we suppose that output is fixed; next, we endogenize output allowing for growth. The analytical framework is simple. Consumption is assumed to generate an undesirable residue. Society can control waste accumulation using abatement capital, and rise output using productive capital which accumulates over time. We have three main results. (1) On the analytical ground we are able to find a closed form solution to the optimal consumption with waste, abatement and productive capital stocks. (2) For the case of fixed output, we get a solution where stocks and flows affect the dynamics of the system. Environmental policies may have permanent effects on the level of variables. Then, (3) when waste and abatement capital are embedded in a classical growth model, we obtain an Environmental Keynes-Ramsey rule which states that the growth rate of the productive capital is positive if and only if its net marginal productivity is greater than the net social cost it generates, given by the marginal disutility of waste weighted by its shadow cost. |
| Keywords: | Abatement capital, waste accumulation, optimal control, Pigouvian taxes and subsidies, output growth |
| JEL: | E22 L51 H23 Q28 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:13_01&r=env |
| By: | Chawla, M.; Pollitt, M.G. |
| Abstract: | The paper examines the financial costs of energy-efficiency and environmental policies that directly affect domestic electricity and gas bills in the UK over time. It also attempts for the first time to work out the current distributional impacts of these policies and others that act as income supplements thereby presenting a consistent picture across time and income deciles. Figures suggest that during 2000-11, the percentage share of policy costs in typical domestic electricity and gas bills rose by 14% and 4%, respectively. This reflects a growing share of policy costs in bills which is relatively small for gas customers but significant for electricity customers. Moreover, distributional impacts of the energy-policy mix highlight the issue of imperfect targeting of low-income households during 2009-10. The study also indicates that during 2010-11, 76% of the funds for energy-efficiency schemes were handled by the private sector. Given that a long-term solution to fuel poverty lies in improving thermal efficiency of houses; this research draws attention towards the need for definitive evidence on the ways in which energy suppliers charge policy costs from their domestic customers. This would facilitate in making the future policies more empirically grounded. In time, a clearer understanding of official statistics on energy bills will go a long way in restoring consumers’ trust in the pricing mechanism of the energy market. |
| Keywords: | Energy-efficiency and environmental policy; income supplements; distributional impact; policy costs; targeting |
| JEL: | Q48 |
| Date: | 2012–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1256&r=env |
| By: | George van Leeuwen; Pierre Mohnen |
| Abstract: | Almost all empirical research that has attempted to assess the validity of the Porter Hypothesis has started from reduced-form models, e.g. by using single-equation models for estimating the contribution of environmental regulation (ER) to productivity. This paper addresses the Porter Hypothesis within a structural approach that allows us to test what is known in the literature as the “weak” and the “strong” version of the Porter hypothesis. Our “Green Innovation” model includes three types of eco investments and non-eco R&D to explain differences in the incidence of innovation. Besides product and process innovations we recognize eco-innovation as a separate type of innovation output. We explicitly model the potential synergies of introducing the three types of innovations simultaneously and their synergy in affecting total factor productivity (TFP) performance. Using a comprehensive panel of firm-level data built from four surveys we aim to estimate the relative importance of energy price incentives as a market based type of ER and the direct effect of environmental regulation on eco investment and firms’ decisions regarding the introduction of several types of innovations. The results of our analysis show a strong corroboration of the weak version of the Porter hypothesis but not of the strong version of the PH, in this case on TFP performance. <P>Presque toutes les études empiriques qui se sont penchées sur l’hypothèse de Porter ont utilisé un modèle à forme réduite, en d’autres termes un modèle qui régresse la productivité sur la réglementation environnementale. Notre étude utilise un modèle à forme structurelle qui permet de tester les versions faible et forte de l’hypothèse de Porter. Notre modèle d’innovation verte comporte trois types d’investissement environnementaux en plus de la R-D non-environnementale, qui ensemble expliquent l’occurrence d’innovations, qui sont au nombre de trois : innovation de produit, de procédé et éco-innovation. Nous testons la présence de synergie dans l’introduction de ces trois types d’innovation et dans leurs effets sur la productivité totale des facteurs. À l’aide de données de firmes en panel provenant de quatre enquêtes différentes, nous estimons l’importance des prix de l’énergie et des réglementations environnementales sur les investissements verts et les différents types d’innovation. Nos résultats corroborant la version faible mais pas la version forte de l’hypothèse de Porter. |
| Keywords: | Porter Hypothesis, green innovation, environmental regulation, innovation complementarities, productivity, |
| Date: | 2013–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2013s-02&r=env |
| By: | Mare Sarr and Mintewab Bezabih |
| Abstract: | To the extent that diversifying income portfolio is used as a strategy for shielding against production risk, both individual risk preferences and weather uncertainty could affect crop diversification decisions. This paper is concerned with empirically assessing the effects of risk preferences and rainfall variability on farm level diversity. Unique panel data from Ethiopia consisting of experimentally generated risk preference measures combined with rainfall data are employed in the analysis. The major contribution of this study is its explicit treatment of individual risk preferences in the decision to diversify, simultaneously controlling for environmental risk in the form of rainfall variability. Covariate shocks from rainfall variability are found to positively contribute to an increased level of diversity with individual risk aversion having a positive but less significant role. We find that rainfall variability in spring has a greater effect than rainfall variability summer—the major rainy season. This finding is in line with similar agronomic-meteorological studies. These results imply that in situ biodiversity conservation could be effective in areas with high rainfall variability. However, reduction in risk aversion, which is associated with poverty reduction, is likely to reduce in situ conservation. |
| Keywords: | Crop diversity, Experimental risk preferences, Rainfall, Uncertainty |
| JEL: | Q57 Q56 C33 C35 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:322&r=env |
| By: | Raffaele Lagravinese; Lee Habin; Francesco Moscone; Eliza Tosetti |
| Abstract: | In this paper we examine the relationship between air pollution and hospital admissions for chronic obstructive pulmonary disease in Italy, at province level, over the period 2004- 2009. To this end, we use information on annual mean concentrations of carbon monoxide, nitrogen dioxide, particulate matter, and ozone measured at monitoring station level to build province-level indicators. In our model for hospital admissions, we allow pollution measures to be subject to measurement error and possibly correlated with the error term. By adopting an instrumental variables approach, we find that higher levels of particulate matter and carbon monoxide are associated with higher hospitalisation for children, while ozone has an influence on hospital admissions of the elderly. Other factors that appear to have an important role are the rainfall and the level of education. |
| Keywords: | airborne pollutants; hospital admission; instrumental variables. |
| JEL: | I12 I18 Q53 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0170&r=env |
| By: | Moussa Diaby (University of Caen Basse-Normandie - CREM UMR CNRS 6211, France); Hélène Ferrer (University of Caen Basse-Normandie - CREM UMR CNRS 6211, France); Fabrice Valognes (University of Caen Basse-Normandie - CREM UMR CNRS 6211, France) |
| Abstract: | We consider in the present paper an original approach to a decision making problem related to the management of a primary resource, namely the rubber tree. By using the social choice theory through the approval voting, we show that it is possible to improve the return of the crop. Hence, by selecting the best varieties to be plant with respect to some environmental constraints, we demonstrate that approval voting can be easily used (opposed to classical operation research methods) by the african rubber tree planters in order to get a plantation at peak performance. |
| Keywords: | Natural Resource Management, Rubber Tree, Social Choice, Group Decision Making |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201305&r=env |
| By: | Saraly Andrade de Sá (ETH Zurich, Switzerland); Charles Palmer (London School of Economics); Salvatore Di Falco (Universite de Geneve, Switzerland) |
| Abstract: | The expansion of a given land use may affect deforestation directly if forests are cleared to free land for this use, or indirectly, via the displacement of other land-use activities from non-forest areas towards the forest frontier. Unlike direct land conversion, indirect land-use changes affecting deforestation are not immediately observable. They require the linking of changes occurring in different regions. This paper empirically assesses the possible indirect effects of sugarcane expansion in Brazil’s state of São Paulo, on forest conversion decisions in the country’s Amazon region. Further, it examines the evidence for a mechanism through which these effects might materialize, namely a displacement of cattle ranching activities from São Paulo state to the Amazon. The results suggest a positive relationship between sugarcane expansion and deforestation. This indirect land-use effect is shown to be a dynamic process materializing over 10 to 15 years. |
| Keywords: | Indirect land-use changes; Dynamic effects; Biofuels; Deforestation |
| JEL: | Q15 Q24 Q42 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:13-170&r=env |
| By: | Ilievska Kremer, Jannika Sjostrand |
| Abstract: | The objective of this research is to examine changes made to harmonize the Macedonian waste and recycling regulatory framework with the European regulatory framework; from a behavioral and policy perspective examine how the General Public in Skopje, Macedonia, perceives these changes on the ground; and uncover behavioral and structural barriers and opportunities for implementing the Law on Packaging and Packaging Waste and the Law on Batteries and Accumulators. In order to answer these questions I carried out a comparative survey to study environmental behavior and norms (and the factors affecting it) of Macedonian professionals working with waste and/or recycling and general public living in Skopje, Macedonia. The outcome of the survey, accompanying interviews, and literary review suggest among others things that there is a strong personal norm yet no strong descriptive norm of recycling among people in Skopje. Moreover, there appears to be a lack of communication and collaboration between official stakeholders, which has resulted in confusion over who should implement and how to implement recycling reforms. There is also little made to address unintentional competition between informal and formal collectors of waste or to include the informal sector in the official decision process. |
| Keywords: | Natural Resources Management and Policy |
| Date: | 2013–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:bineur:qt3hz6k7vv&r=env |
| By: | Stephens, Heather; Partridge, Mark |
| Abstract: | Regional migration and growth are increasingly associated with high-quality in situ natural amenities. However, most of the previous U.S. research has focused on the natural amenities of the Mountain West or the South. The Great Lakes, with their abundant fresh water and natural amenities, would also appear well-positioned to provide the foundation for this type of economic growth. Yet, while some parts of the western Great Lakes region are prime examples of amenity-led growth, other areas in the eastern Great Lakes may not have capitalized on their natural amenities, perhaps because of their strong industrial legacy. Using a unique county-level dataset for the Great Lakes region (including Indiana, Illinois, Michigan, Minnesota, New York, Ohio, Pennsylvania, and Wisconsin), we test whether growth in the region is associated with proximity to lake amenities and whether there are offsetting industrial legacy or pollution effects. We also examine whether amenities have additional attraction value for those with high levels of human capital. Consistent with theory that suggests that natural amenities are normal or superior goods, we find that coastal areas in the region are positively associated with increases in shares of college graduates. However, we find little evidence that lake amenities contribute to broader household migration, especially after 2000. Based on these results, there may be opportunities to leverage Great Lake amenities to support economic growth in terms of attracting individuals with high levels of human capital who are most likely to make quality of life migration decisions. |
| Keywords: | Regional growth; natural amenities |
| JEL: | O18 |
| Date: | 2012–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43903&r=env |