nep-env New Economics Papers
on Environmental Economics
Issue of 2013‒05‒05
24 papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Climate Change and Carbon Capture and Storage By Moreaux, Michel; Withagen, Cees
  2. Supply Side Climate Policy and the Green Paradox By Hoel, Michael
  3. Des modes de capture du carbone et de la compétitivité relative des énergies primaires By Amigues, Jean-Pierre; Lafforgue, Gilles; Moreaux, Michel
  4. Four Changes to Trade Rules to Facilitate Climate Change Action By Aaditya Mattoo; Arvind Subramanian
  5. Revisiting the Environmental Kuznets Curve in a Global Economy By Shahbaz, Muhammad; Ozturk, Ilhan; Afza, Talat; Ali, Amjad
  6. Macroeconomic Impacts of the EU 30% GHG Mitigation Target By Francesco Bosello; Lorenza Campagnolo; Carlo Carraro; Fabio Eboli; Ramiro Parrado; Elisa Portale
  7. Managing Ecosystem Services for Human Benefit: Economic and Environmental Policy Challenges By Tisdell, Clement A.; Xue, Dayuan
  8. The EU decarbonisation roadmap 2050: What way to walk? By Hübler, Michael; Löschel, Andreas
  9. Carbon Prices and Incentives for Technological Development By Lundgren, Tommy; Marklund, Per-Olov; Samakovlis, Eva; Zhou, Wenchao
  10. Technology Agreements with Heterogeneous Countries By Hoel, Michael; de Zeeuw, Aart
  11. Climate Change and Adaptation: The Case of Nigerian Agriculture By Francesco Bosello; Lorenza Campagnolo; Fabio Eboli
  12. Geoengineering and Abatement: A “flat” Relationship under Uncertainty By Johannes Emmerling; Massimo Tavoni
  13. The Economics of Land Degradation By von Braun, Joachim; Gerber, Nicolas; Mirzabaev, Alisher; Nkonya, Ephraim M.
  14. Linking Price and Quantity Pollution Controls under Uncertainty By Peter J. Wood; Peter Heindl; Frank Jotzo; Andreas Löschel
  16. How market-based water allocation can improve water use efficiency in the Aral Sea basin? By Bekchanov, Maksud; Bhaduri, Anik; Ringler, Claudia
  17. Directing Technical Change from Fossil-Fuel to Renewable Energy Innovation: An Empirical Application Using Firm-Level Patent Data By Joëlle Noailly; Roger Smeets
  18. Cost-Reducing R&D in the Presence of an Appropriation Alternative: An Application to the Natural Resource Curse By Klarizze Anne Martin Puzon
  19. Effect of soil heterogeneity on the welfare economics of biofuel policies By Vincent Martinet
  20. Coping with Fuelwood Scarcity: Household Responses in Rural Ethiopia By Damte, Abebe; Koch, Steven F.; Mekonnen, Alemu
  21. Fishery Resources and Trade Openness: Evidence from Turkey By Basak Bayramoglu; Jean-François Jacques
  22. Water, sanitation and hygiene: The missing link with agriculture By Tsegai, Daniel W.; McBain, Florence; Tischbein, Bernhard
  23. Contagious Cooperation, Temptation, and Ecosystem Collapse By Andries Richter; Daan van Soest; Johan Grasman
  24. Commercializing clean technology innovations – the emergence of new business in an agency-structure perspective By Avdeitchikova , Sofia; Coenen, Lars

  1. By: Moreaux, Michel; Withagen, Cees
    Date: 2013–04
  2. By: Hoel, Michael (Dept. of Economics, University of Oslo)
    Abstract: The focus of the green paradox literature has been either on demand-side climate policies or on effects of technological changes. The present paper addresses the question of whether there also might be some kind of green paradox related to supply-side policies, i.e. policies that permanently remove some of the carbon resources. The conclusion is that there will no green paradox if supply-side climate policies are aimed at high-cost carbon reserves. If instead low-cost reserves are removed, the possibility that both early and total emissions increase cannot be ruled out. Hence, "wrong" supply-side climate policies may give a supply-side green paradox.
    Keywords: Climate; Green paradox
    JEL: Q30 Q38 Q54 Q58
    Date: 2013–04–23
  3. By: Amigues, Jean-Pierre; Lafforgue, Gilles; Moreaux, Michel
    Abstract: We characterize the optimal exploitation paths of two perfect substitute primary energy resources, a non-renewable polluting resource and a carbon-free renewable one. Both resources can supply the energy needs of two sectors. Sector 1 is able to reduce its carbon footprint at a reasonable cost owing to a CCS device. Sector 2 has only access to the air capture technology, but at a significantly higher cost. We assume that the atmospheric carbon stock cannot exceed some given ceiling. We show that it is optimal to begin by fully capturing the sector 1's emissions before the ceiling is reached and next, to deploy the air capture in order to partially abate sector 2’s emissions. The optimal carbon tax is first increasing during the pre-ceiling phase and next, it declines in stages down to 0.
    Keywords: Climate change, carbon capture and storage, non-renewable resources
    JEL: Q32 Q42 Q54 Q58
    Date: 2013–04
  4. By: Aaditya Mattoo (World Bank); Arvind Subramanian (Peterson Institute for International Economics)
    Abstract: Generating technological progress requires deploying the full range of policy instruments, including those related to trade policy. The authors consider four areas: subsidization of green goods and technologies; border-tax adjustments (BTAs) related to carbon content; restrictions on the export of fossil fuels, especially natural gas; and intellectual property protection of new technologies and products related to climate change. They propose changes to trade rules that would promote climate change goals. The proposed changes have an underlying political economy logic and consistency. Changes would allow global environmental "bads" to be penalized (by permitting border taxes on less clean imports), global environmental goods and technologies to be promoted (by relaxing the constraints on the use of production and export subsidies and strengthening IPR protection), and prevent global environmental "goods" being penalized (by eliminating the export restrictions on natural gas).
    Date: 2013–04
  5. By: Shahbaz, Muhammad; Ozturk, Ilhan; Afza, Talat; Ali, Amjad
    Abstract: The present study deals with an empirical investigation between CO2 emissions, energy intensity, economic growth and globalization using annual data over the period of 1970-2010 for Turkish economy. We applied unit root test and cointegration approach in the presence of structural breaks. The direction of causality between the variables is investigated by applying the VECM Granger causality approach. Our results confirmed the existence of cointegration between the series. The empirical evidence reported that energy intensity, economic growth (globalization) increase (condense) CO2 emissions. The results also validated the presence of Environmental Kuznets curve (EKC). The causality analysis shows bidirectional causality between economic growth and CO2 emissions. This implies that economic growth can be boosted at the cost of environment.
    Keywords: Carbon dioxide emissions, EKC, economic growth
    JEL: Q5 Q56
    Date: 2013–04–05
  6. By: Francesco Bosello (University of Milan, Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Italy); Lorenza Campagnolo (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Ca’ Foscari University of Venice, Italy); Carlo Carraro (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Ca’ Foscari University of Venice, Italy); Fabio Eboli (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Italy); Ramiro Parrado (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Italy); Elisa Portale (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Italy)
    Abstract: The reduction of GHG emissions is one of the most important policy objectives worldwide. Nonetheless, concrete and effective measures to reduce them are hardly implemented. One of the main reasons for this deadlock is the fear that unilateral actions will reduce a country’s competitiveness, and will benefit those countries where no GHG mitigation measures are implemented. This kind of argument is also often used to explain why some governments and many business leaders are not in favour of the EU 30% GHG mitigation target that has been proposed to replace the previous 20% GHG emission reduction objective approved by the EU within the well-known 20-20-20 climate and energy package. By developing and applying a recursive, dynamic, very detailed CGE model with energy generation from both fossil fuel and renewable sources, we address this issue by estimating the cost for different EU countries and industries of the EU climate and energy package under a set of alternative international scenarios on global GHG mitigation efforts. Results show that, thanks to the EU economic recession, achieving a 20% GHG emission reduction entails a moderate cost for the European Union - about 0.5% of EU GDP – even in the case of EU unilateral action. This cost could be reduced to almost zero if not only the European Union, but also the other major world economies, comply with the “low pledge” Copenhagen Accord. A 30% GHG emission reduction target would certainly be more costly: the total loss in the European Union would be 1.26% of EU GDP in the case of EU unilateral action, whereas the total cost would be 0.55% of EU GDP if all major economies reduce their own GHG emissions according to the “low pledge” Copenhagen Accord. Both border tax adjustments and free allocation of carbon permits are shown to be successful in reducing some adverse competitiveness effects of the EU GHG mitigation policy into energy intensive sectors, but at the expenses of the other economic sectors.
    Keywords: EU Climate Package, UNFCCC Conference of Parties, Kyoto Protocol, Computable General Equilibrium Analysis
    JEL: C68 Q43 Q48 Q54
    Date: 2013–03
  7. By: Tisdell, Clement A.; Xue, Dayuan
    Abstract: In the Millennium Ecosystem Assessment (2005), ecologists identified and pointed out a multitude of environmental and other benefits obtained by human-beings from ecosystem services. Frequently, these benefits are not fully recognized and they are not adequately taken into account in decision-making in contemporary economic and political systems for reasons outlined in this contribution. In particular, this adversely affects the optimal conservation of natural, near natural and unmanaged ecosystems. The human benefits from ecosystem services as set out in the Millennium Ecosystem Assessment are summarized and this assessment is examined critically. Economic views about the economic value of different types of ecosystems and forms of biosphere use are outlined and assessed. Determining the economic value of alternative forms of land-use (more generally biosphere-use) is extremely difficult because of knowledge constraints. Often the biophysical consequences, that is, variations in the supply of ecosystems services resulting from alterations in ecosystems, are poorly known. The economic valuation of changes in ecosystems (alterations in biosphere-use) is also hampered by poor information about the demand for these services (for example, the willingness of beneficiaries to pay for their supply) and the cost of replacing these services if they are lost (or diminished in availability) as a result of ecosystem change. While this limits the scope for economic valuation, it does not mean the rational valuation of biosphere use is impossible. It has been suggested that the supply of ecosystem services can be managed optimally, in some cases, if private landholders are paid for supplying these services. The benefits and drawbacks of this approach are discussed. China’s policies to restore the supply of particular ecosystem services, for example, its Grain-for-Green program, are used to illustrate some of these matters.
    Keywords: ecosystem services, China, Millennium Ecosystem Assessment, Environmental Economics and Policy, Q57,
    Date: 2013–04
  8. By: Hübler, Michael; Löschel, Andreas
    Abstract: We carry out a detailed CGE (Computable General Equilibrium) analysis of the EU Decarbonisation Roadmap 2050 on a macroeconomic and on a sectoral level. Herein, we study a Reference scenario that implements existing EU policies as well as 3 unilateral and 3 global climate action scenarios. We identify global climate action with international emissions trading and the ful l equalization of CO2 prices across all (EU) sectors as a reasonable policy option to avoid additional costs of the Decarbonisation Roadmap to a large extent. This policy option may include CDM (Clean Development Mechanism in the sense of 'where'-flexibility) in an extended form if there are countries without emissions caps. Moreover, we identify diverse sectoral effects in terms of output, investment, emissions and international competitiveness. We conclude that the successful realization of the EU Decarbonisation Roadmap probably requires a wise and joint consideration of technology, policy design and sectoral aspects. --
    Keywords: EU,Decarbonisation Roadmap,Copenhagen Pledges,post Kyoto,energy-intensive sectors,competitiveness,leakage
    JEL: C68 F18 Q43 Q54
    Date: 2013
  9. By: Lundgren, Tommy (CERE, Centre for Environmental and Resource Economics); Marklund, Per-Olov (CERUM, Centre for Regional Science); Samakovlis, Eva (National Institute of Economic Research); Zhou, Wenchao (CERUM, Centre for Regional Science)
    Abstract: How to significantly decrease carbon dioxide emissions has become one of the largest challenges faced by modern society. The standard recipe prescribed by most economists is to put a price on carbon, either through a tax or through emissions trading. Such measures can reduce emissions cost-effectively and create incentives for technological development. There is, however, a growing concern that the carbon prices generated through the European Union emission trading system (EU ETS) have been too low to create the incentives necessary to stimulate technological development. This paper empirically analyzes how the Swedish carbon dioxide tax and the EU ETS have affected productivity development in the Swedish pulp and paper industry 1998-2008. A Luenberger total factor productivity (TFP) indicator is computed using data envelopment analysis. How the policy measures affect TFP is assessed using a system generalized method of moments estimator. The results show that climate policy had a modest impact on technological development in the pulp and paper industry, and if significant it has been negative. The price on fossil fuels, on the contrary, seems to have created important incentives for technological development. Hence, results suggest that the carbon prices faced by the industry through EU ETS and the carbon dioxide tax have been too low.
    Keywords: CO2 tax; EU ETS; Luenberger productivity indicator; GMM
    JEL: D22 D24 Q54 Q55 Q58
    Date: 2013–05–02
  10. By: Hoel, Michael (Dept. of Economics, University of Oslo); de Zeeuw, Aart (Tilburg University)
    Abstract: For sufficiently low abatement costs many countries might undertake significant emission reductions even without any international agreement on emission reductions. We consider a situation where a coalition of countries does not cooperate on emission reductions but cooperates on the development of new, climate friendly technologies that reduce the costs of abatement. The equilibrium size of such a coalition, as well as equilibrium emissions, depends on the distribution across countries of their willingness to pay for emission reductions. Increased willingness to pay for emissions reductions for any group of countries will reduce (or leave unchanged) the equilibrium coalition size. However, the effect of such an increase in aggregate willingness to pay on equilibrium emissions is ambiguous.
    Keywords: Technology agreement; Coalition stab ility; climate; International agreement
    JEL: C72 F42 O32 Q02
    Date: 2013–01–07
  11. By: Francesco Bosello (Centro Euro-Mediterraneo sui Cambiamenti Climatici, Fondazione Eni Enrico Mattei and University of Milan, Italy); Lorenza Campagnolo (Centro Euro-Mediterraneo sui Cambiamenti Climatici, Fondazione Eni Enrico Mattei and University of Venice, Italy); Fabio Eboli (Centro Euro-Mediterraneo sui Cambiamenti Climatici, Fondazione Eni Enrico Mattei and University of Venice, Italy)
    Abstract: The present research offers an economic assessment of climate change impacts on the four major crop families characterizing Nigerian agriculture, covering more than 80% of agricultural value added. The evaluation is performed shocking land productivity in a computable general equilibrium model tailored to replicate Nigerian economic development until the mid of this century. The detail of land uses in the model has been also increased differentiating land types per agro ecological zones. Uncertainty on future climate is captured, using, as input, yield changes computed by a crop model, covering the whole range of variability produced by an envelope of one RCM and tem GCM runs. Climate change turns to be unambiguously negative for Nigeria in the medium term with production losses, increase in crop prices, higher food dependency on foreign imports and GDP losses in all the simulations after 2025. In a second part of the paper a cost effectiveness analysis of adaptation in Nigeria agriculture is conducted. Adaptation practices considered are a mix of cheaper “soft measures” and more costly “hard” irrigation expansion. The main result is that cost effectiveness of the whole package crucially depends on the possibility to implement adaptation exploiting low cost opportunities. In this case all climate change damages can be offset with a benefit cost ration larger than one in all the climate regimes. Expensive irrigation expansion should however be applied on a much more limited acreage compared with soft measures. If adaptation costs are those of the high end estimates, full adaptation ceases to be cost/effective.This points out the need of a careful planning and implementation of adaptation, irrespectively on the type, looking for measures apt to control its unit cost.
    Keywords: Climate Change, Impact, Adaptation, Agriculture, CGE Modelling
    JEL: C68 Q51 Q54 Q15
    Date: 2013–04
  12. By: Johannes Emmerling (Fondazione Eni Enrico Mattei (FEEM) and Centro-Euro Mediterraneo per i Cambiamenti Climatici (CMCC), Italy); Massimo Tavoni (Fondazione Eni Enrico Mattei (FEEM) and Centro-Euro Mediterraneo per i Cambiamenti Climatici (CMCC), Italy)
    Abstract: The potential of geoengineering as an alternative or complementary option to mitigation and adaptation has received increased interest in recent years. The scientific assessment of geoengineering is driven to a large extent by assumptions about its effectiveness, costs, and impacts, all of which are highly uncertain. This has led to a polarizing debate. This paper evaluates the role of Solar Radiation Management (SRM) on the optimal abatement path, focusing on the uncertainty about the effectiveness of SRM and the interaction with uncertain climate change response. Using standard economic models of dynamic decision theory under uncertainty, we show that abatement is decreasing in the probability of success of SRM, but that this relation is concave and thus that significant abatement reductions are optimal only if SRM is very likely to be effective. The results are confirmed even when considering positive correlation structures between the effectiveness of geoengineering and the magnitude of climate change. Using a stochastic version of an Integrated Assessment Model, the results are found to be robust for a wide range of parameters specification.
    Keywords: Geoengineering, Mitigation, Climate Policy, Uncertainty
    JEL: Q54 C63 D81
    Date: 2013–04
  13. By: von Braun, Joachim; Gerber, Nicolas; Mirzabaev, Alisher; Nkonya, Ephraim M.
    Abstract: Healthy soils are essential for sustaining economies and human livelihoods. In spite of this, the key ecosystem services provided by soils have usually been taken for granted and their true value – beyond market value – is being underrated. This pattern of undervaluation of soils is about to change in view of rapidly raising land prices, which is the result of increased shortage of land and raising output prices that drive implicit prices of land (with access to water) upward. Moreover, the value of soil related ecosystems services is being better understood and increasingly valued. It is estimated that about a quarter of global land area is degraded, affecting about 1.5 billion people in all agro-ecologies around the world. Land degradation has its highest toll on the livelihoods and well-being of the poorest households in the rural areas of developing countries. Vicious circles of poverty and land degradation, as well as transmission effects from rural poverty and food insecurity to national economies, critically hamper their development process. Despite the need for preventing and reversing land degradation, the problem has yet to be appropriately addressed. Policy action for sustainable land use is lacking, and a policy framework for action is missing. Key objectives of this Issue Paper and of a proposed related global assessment of the Economics of Land Degradation (ELD) are: first, to raise awareness about the need for and role of an assessment of the economic, social and environmental costs of land degradation; and second, to propose and illustrate a scientific framework to conduct such an assessment, based on the costs of action versus inaction against land degradation. Preliminary findings suggest that the costs of inaction are much higher than the costs of action.
    Keywords: Economics of Land Degradation, ecosystem services, land degradation neutrality, Agricultural and Food Policy, Community/Rural/Urban Development, Environmental Economics and Policy, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Development, Land Economics/Use, Resource /Energy Economics and Policy,
    Date: 2013–03
  14. By: Peter J. Wood; Peter Heindl; Frank Jotzo; Andreas Löschel
    Abstract: This paper examines the linking of price-based and quantity-based provision of a public good by two parties in the example of pollution control under a global quantity constraint, using a stochastic partial-equilibrium model. One country chooses a price-based instrument (tax) and trades with another that lets its emissions price adjust. The expected cost for the price-setting country and the combined expected cost is higher than if both countries choose a quantity-based instrument, and the country with the quantity instrument stands to benefit in terms of expected net costs. The effect increases when the relative size of the country with the pice-based constraint increases; and increases with respect to the degree of correlation in ex-ante uncertain abatement costs. While the quantity-setting country benefits from lower expected costs in most circumstances, the variance in cost can be much higher if its costs are correlated with the pricesetting country. The optimal ex-ante tax rate differs from that under quantity-quantity linking. These results have important implications for instrument choice for the regulation of greenhouse gases and other pollutants and for the design of international agreements when there are domestic preferences for price
    Keywords: Instrument Choice; Linking; Climate Policy; Prices vs. Quantities
    JEL: Q52 H23 K32
    Date: 2013–04
  15. By: Toruno, Pedro Jose; Roque-Gomez, Johanna Lissette; Torres-Rios, Zeneyda Antonia
    Keywords: Sistemas productivos adaptativos, género, aceptación, adopción, Agricultural and Food Policy, Environmental Economics and Policy, Farm Management,
    Date: 2013–04–12
  16. By: Bekchanov, Maksud; Bhaduri, Anik; Ringler, Claudia
    Abstract: Increasing water demand due to population growth and economic development under the mounted investment costs for developing new water sources calls for efficient, equitable and sustainable management of water resources in many developing countries. This is more essential in the Aral Sea basin where the tremendous development in irrigation since the 1960s combined with unbalanced water resources management led to the destruction of the ecosystems in the delta zone and the gradual desiccation of the Aral Sea, once the fourth biggest lake of the world with a surface area of 68,000 km2 and total water volume of 1,100 km3. Disintegration of the Central Asian states after the collapse of the Soviet Union also increased the tensions among up- and downstream users over sharing water resources. Insufficient investments in irrigation infrastructure, lack of economic incentives to adopt water-wise approaches, and inefficient water governance and institutions have been the main reasons of decreased water use efficiency in the post-Soviet period. Market-based water allocation is tested to deal with aggravating water conflicts in the Aral Sea basin. Aggregated integrated hydro-economic model is constructed to analyze the water market mechanism as an alternative option to the traditional administrative water allocation. Water users are allowed to trading their water use rights and increasing their benefits under this decentralized water management system. The analyses show the availability of additional gains amounted to US$ 373 to 476 million under inter-catchment water trading depending on the level of water availability. Similarly, additional gains of US$ 259 to 339 million are estimated under intra-catchment water trading. Furthermore, increased trend of additional gains from water trading along with decreased water availability are found. However, transaction costs of introducing tradable water rights are essential to judge the effectiveness of water market reforms and initiate appropriate institutional changes. According to our estimations, transaction costs of more than 5 ¢/m3 of traded water use rights eliminate the potential benefits of the water trading option. Friendly relationships among the riparian countries and infrastructural improvements are suggested as a means of developing low cost enforcement of water trading contracts.
    Keywords: water trading, transaction costs, environmental flow, hydro-economic model, Agribusiness, Agricultural Finance, Community/Rural/Urban Development, Crop Production/Industries, Environmental Economics and Policy, Land Economics/Use,
    Date: 2013–04
  17. By: Joëlle Noailly (CIES, Graduate Institute of International and Development Studies, Geneva, Switzerland and CPB Netherlands Bureau for Economic Policy Analysis, The Hague, The Netherlands); Roger Smeets (Rutgers Business School, Newark, USA)
    Abstract: This paper investigates the determinants of directed technical change in the electricity generation sector. We use firm-level data on patents led in renewable (REN) and fossil fuel (FF) technologies by about 7,000 European firms over the period 1978-2006. We separately study specialized firms that innovate in only one type of technology during the sample period, and mixed firms that innovate in both technologies. We find that for specialized firms the main drivers of innovation are fossil-fuel prices, market size, and firms' past knowledge stocks. Also, prices and market size drive the entry of new REN firms into innovation. By contrast, we find that innovation by mixed firms is mainly driven by strong path-dependencies since for these firms past knowledge stock is the major driver of the direction of innovation. These results imply that generic environmental policies that affect prices and energy demand are mainly effective in directing innovation by small specialized firms. In order to direct innovation e orts of large mixed corporations with a long history of FF innovation, targeted R&D policies are likely to be more effective.
    Keywords: Directed Technical Change, Energy, Patents, Firms' Dynamics
    JEL: Q4
    Date: 2013–04
  18. By: Klarizze Anne Martin Puzon (LAMETA-Université Montpellier I, France)
    Abstract: This study proposes a new mechanism for the resource curse: crowding-out of innovation due to the existence of an option to engage in conflict. Using a game theoretical framework, it is argued that an increase in the amount of natural resources (in the informal sector here conflict for a common-pool rent materializes) reduces the incentives of entrepreneurial groups to engage in cost-reducing R&D (in the non-resource sector where production occurs). Compared to most models of the resource curse, the impact of resource abundance on income and welfare was interestingly observed to be non-monotonic. An increase in the amount of resources in the common pool induces intensified conflict among groups and less R&D investment. Depending on the relative strengths of the income and diversion effects, three scenarios were exhibited. First, there is a 1.) Pure Blessing. This happens when both the extent of technological spillovers and the initial level of resource are low. Starting from scarcity, the increase in natural resource generates an overall jump in the groups' income levels. Even if an increase in resources decreases innovation in the formal sector, both income and welfare still go up. Meanwhile, for intermediate initial values of the natural resource, there is a 2.) Pseudo-curse. A resource boom induces an immediate income effect. However, this income gain is dominated by the indirect diversion effect due to lower output and higher price (because of less cost-reducing R&D). Consequently, while income increases, the welfare of the economy decreases. The range of resource levels where this occurs is greater when spillovers are high. Finally, a 3.) Double Curse occurs for extremely high initial levels of natural resources. Both aggregate income of the economy and welfare suffer.
    Keywords: Innovation, Appropriation, Natural Resources
    JEL: O13 Q33 P48
    Date: 2013–03
  19. By: Vincent Martinet
    Abstract: Biofuel policies (blend mandate or tax credit) have impacts on food and energy prices, and on land-use. The magnitude of these effects depends on the market response to price, and thus on the agricultural supply curve, which, in turn, depends on the land availability (quantity and agronomic quality). To understand these relationships, we develop a theoretical framework with an explicit representation of land heterogeneity. The elasticity of the supply curve is shown to be non-constant, depending on land heterogeneity and the availability of land for agricultural expansion. This influences the welfare economics of biofuels policies, and the possible carbon leakage in land and fuel markets. We emphasize that the impacts of biofuel policies on welfare and land-use change depend strongly on the potential development of the agricultural sector in terms of expansion and intensification, and not only on its current size.
    Keywords: Agricultural and energy market, Biofuels, Land use, Soil heterogeneity, Welfare
    Date: 2012–03–05
  20. By: Damte, Abebe; Koch, Steven F.; Mekonnen, Alemu
    Abstract: This study uses survey data from randomly selected rural households in Ethiopia to examine the coping mechanisms employed by rural households to deal with fuelwood scarcity. The determinants of collecting other biomass energy sources were also examined. The results of the empirical analysis show that rural households in forest-degraded areas respond to fuelwood shortages by increasing their labor input for fuelwood collection. However, for households in high forest cover regions, forest stock and forest access may be more important factors than scarcity of fuelwood in determining household’s labor input to collect it. The study also finds that there is limited evidence of substitution between fuelwood and dung, or fuelwood and crop residue. Therefore, supply-side strategies alone may not be effective in addressing the problem of forest degradation and biodiversity loss. Any policy on natural resource management, especially related to rural energy, should distinguish regions with different levels of forest degradation.
    Keywords: fuelwood, labor allocation, biomass, rural Ethiopia
    JEL: Q12 Q21 Q42
    Date: 2012–01–27
  21. By: Basak Bayramoglu; Jean-François Jacques
    Abstract: There is an ongoing debate over the potential effects of international trade on fishery resources. In this study, we investigate whether the trade in fish and fish products contributed to the decline in a given number of fish species in Turkey. The overall purpose is to test the theoretical findings of Brander and Taylor (1997) who argue that trade openness decreases fish harvest in a small open economy characterized by a regime of open-access to fishery resources. To this end, we estimate a panel data model to measure the effects of trade openness on fish harvests in the case of 57 fish species observed from 1996 to 2009 in Turkey. We estimate Turkish fish harvests in terms of the relative importance of openness to trade as well as in terms of biological characteristics, in addition to economic and technological factors. Estimation results reveal a backward-bending supply curve for the fish harvest. Furthermore, we find that the indicator of openness to trade has a significant and positive impact on the fish harvest. Our results suggest that further openness to trade would put additional pressure on Turkey’s already declining fishery resources.
    Keywords: Openness to trade, Fish harvest, Fishery technology, Biological factors, Panel data model
    JEL: Q22 Q56 C33
    Date: 2012–01–31
  22. By: Tsegai, Daniel W.; McBain, Florence; Tischbein, Bernhard
    Abstract: Inadequate access to safe water and sanitation services coupled with poor hygiene practices continues to kill, sicken and diminish opportunities of millions of people in developing countries. Various interventions to improve drinking water quality and service levels, sanitation and hygiene (WSH) have been applied, albeit in isolated approaches. Relevant literature focused on assessing the cost and health effectiveness of such approaches. In parallel, irrigation in agriculture, which affects all the water cycle and thus drinking water quality and quantity, has been developed without looking into the consequences for WSH. In this paper, we argue that the ‘nexus’ approach should take peoples’ multiple water needs as a starting point for providing integrated services and thus move beyond conventional sectoral barriers of domestic and productive sectors. Isolated approaches have their drawbacks missing out on positive externalities on health and nutrition outcomes. We also argue that (the prospect of) a holistic approach including WSH and agriculture sectors for a long term health and nutrition impact should be explored. The paper reviews the body of literature dealing with WSH and irrigation agriculture, synthesizes the remarks thereof and concludes with suggestions to unravel the ‘nexus’ between WSH and agriculture for a long term health and nutrition impact.
    Keywords: Nexus, water, sanitation and hygiene, agriculture, intervention approaches, Agricultural and Food Policy, Community/Rural/Urban Development, Environmental Economics and Policy, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Health Economics and Policy,
    Date: 2013–01
  23. By: Andries Richter (Centre for Ecological and Evolutionary Synthesis (CEES), University of Oslo, Norway, and Department of Mathematical Statistical Methods, Wageningen University, the Netherlands); Daan van Soest (Department of Spatial Economics and IVM, VU University Amsterdam, Department of Economics, Tilburg University, the Netherlands); Johan Grasman (Department of Mathematical and Statistical Methods, Wageningen University, the Netherlands)
    Abstract: Real world observations suggest that social norms of cooperation can be effective in overcoming social dilemmas such as the joint management of a common pool resource – but also that they can be subject to slow erosion and sudden collapse. We show that these patterns of erosion and collapse emerge endogenously in a model of a closed community harvesting a renewable natural resource in which individual agents face the temptation to overexploit the resource, while a cooperative harvesting norm spreads through the community via interpersonal relations. We analyze under what circumstances small changes in key parameters (including the size of the community, and the rate of technological progress) trigger catastrophic transitions from relatively high levels of cooperation to widespread norm violation – causing the social-ecological system to collapse.
    Keywords: Social Norms, Common Pool Resource, Co-Evolution, Resilience, Alternative Stable States
    JEL: C73 D62 D64 Q20
    Date: 2013–04
  24. By: Avdeitchikova , Sofia (CIRCLE, Lund University; Growth Analysis (Swedish Agency for Growth Policy Analysis)); Coenen, Lars (CIRCLE, Lund University; Nordic Institute for Studies in Innovation, Research and Education, Norway)
    Abstract: Clean technology is seen as indispensable to solve or at least abate an environmental/energy crisis without abandoning possibilities for progress and economic growth. This, however, does not imply that sustainable development can be readily achieved through a ‘technical fix’. Innovation and commercial introduction of new technology are inherently uncertain processes that fail more often than that they succeed. Studies on the commercialization of new technology in entrepreneurship literature have often failed to explain why some new technologies reach markets while others don’t, as well as why some technological solutions ultimately become industry standards while others quickly disappear from the market. Technology commercialization models are often linear, based on a technology-push logic and focus rather exclusively on micro-level issues such as characteristics of technology and product, entrepreneurial experience and access to resources. This chapter takes stock with a linear perspective to cleantech commercialization processes and, instead, suggests an alternative approach to analyze the entrepreneurial process of commercializing cleantech. In particular, this approach underlines the duality concerning structure and agency that entrepreneurs tend to encounter in the commercialization of cleantech. The objective of this chapter is to identify how agency and structure interplay in the process of commercializing cleantech. To do so, the chapter compares two literatures that each depart from different starting points. Whereas the institutional entrepreneurship literature often departs from the micro-level of individual or organizational action, the socio-technical transitions literature departs from a systems perspective on technological change. The contribution of the chapter lies in making explicit the agency-structure discussion in the different approaches in order to add to our understanding of cleantech as an emergent technological field and the role of entrepreneurs and/or entrepreneurship in shaping this field. By reviewing the recent knowledge development in the area, we also identify two possible ways how these literature streams can enrich each other; namely by incorporating the transition process in institutional entrepreneurship and by incorporating entrepreneurial strategies in socio-technical transitions.
    Keywords: cleantech; technology entrepreneurship; sustainability transitions; institutional entrepreneurship
    JEL: O31 Q56
    Date: 2013–02–02

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