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on Environmental Economics |
| By: | Mareike Lange |
| Abstract: | It is still difficult for biofuel producers to proof the contribution of their biofuels to reducing carbon emissions because the production of biofuel feedstocks can cause land use change (LUC), which in turn causes carbon emissions. A carbon map can serve as a basis to proof such contribution. I show how to calculate a carbon map according to the sustainability requirements for biofuel production adopted by the European Commission (EU-RED) for Kalimantan and Sumatra in Indonesia. Based on the carbon map and the carbon balance of the production process I derive maps showing the possible emission savings that would be generated by biofuels based on palm if an area were to be converted to produce feedstock for this biodiesel options. I evaluate these maps according to the criterion contained in the EU-RED of 35% minimum emission savings for each biofuel option compared to its fossil alternative. In addition, to avoid indirect LUC effects of the EU-RED that might offset any contribution of biofuels to reducing carbon emissions, I argue that all agricultural production should be subject to sustainability assessments and that for an effective forest protection policies need to address the manifold drivers of deforestation in the country. In this effort, my resulting carbon maps can be the basis for a sustainable land use planning with a strategy to reactivate degraded areas that is binding for all agricultural production in the country |
| Keywords: | biofuels, carbon emissions, Renewable Energy directive, carbon map, land use change, Indonesia |
| JEL: | Q42 Q58 Q56 Q16 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1863&r=env |
| By: | Ignazio Musu (Department of Economics, University of Venice Cà Foscari) |
| Abstract: | When confronted with market weaknesses and failures determining sustainability problems for environmental common-pool resources, economic analysis has proposed government intervention as the only alternative available. Elinor Ostrom showed that this dichotomy between market and government is not always helpful, and proposed a more complex approach to institutions focusing on an active role of communities, social norms and a polycentric system of governance. This paper summarizes the main factors at work in determining the role of institutions to deal with sustainability issues and explores the implications of this wider approach in dealing with environmental commons, particularly with global environmental commons, discussing two issues: climate change and biodiversity. Involvement of governments and a reference framework provided by intergovernmental agreements are necessary, but the difficulties of building a successful intergovernmental institutional framework require responsible and convinced actions at the level of consumers and firms, public opinion involvement in individual countries, and coordination between local and national levels of government: provided that some conditions are fulfilled, common resource management can be very helpful in achieving them. |
| Keywords: | Environment, Sustainability, Common-pool resources, Global environmental problems, Climate Change, Biodiversity |
| JEL: | B52 H0 H4 Q01 Q2 Q5 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2013:20&r=env |
| By: | Liam Wagner (Department of Economics, University of Queensland); Ian Ross (IMB, University of Queensland); John Foster (Department of Economics, University of Queensland); Ben Hankamer (IMB, University of Queensland) |
| Abstract: | Reducing CO2 emissions is imperative to stay within the 2oC global warming ‘safe limit’ of the Intergovernmental Panel on Climate Change. However to ensure social and political stability, these reductions must be aligned with fuel security and economic growth. Here an advanced multifactorial model is used to forecast global energy demand, based on global population, current energy use and economic growth rates allowing a critical analysis of global energy use patterns. A severe upward pressure on global energy demand results from the combined interplay of increasing population and continuing economic growth. The predictive output highlights (i) the potential for an exponential increase of fuel consumption (ii) serious fossil fuel limitations from 2033 onward, (iii) implications for CO2 emission reduction in a ‘pro-growth’ global economy and (iv) poverty alleviation. These findings place economists and environmentalists on the same side and establish a reference to guide sustainable development. |
| Keywords: | Energy Demand; Fossil Fuels; Economic Growth; Climate Change; Equilibrium correction Model; Time Series; |
| JEL: | Q41 Q32 Q43 C53 O13 O44 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqeemg:7-2013&r=env |
| By: | Roberto Roson (Department of Economics, University Of Venice Cà Foscari); Martina Sartori (Scuola di Studi Internazionali, University of Trento) |
| Abstract: | We evaluate the structural consequences of water availability scenarios in the Mediterranean, following a multidisciplinary approach and a sequential modelling methodology. This includes an assessment of future water availability and a general equilibrium macroeconomic analysis of changes in agricultural productivity. Lower productivity in agriculture, induced by reduced water availability, generates negative consequences in terms of real income and welfare. The magnitude of the loss depends on the amount of the productivity shock, but also on the share of agricultural activities in the economy and on the stringency of the environmental regulation. We find evidence of a dramatic cut in the supply of water for agriculture in the Middle East. We consider alternative scenarios, differing in terms of stringency of environmental regulation and assumptions about water efficiency. The largest welfare losses turn out to be in Morocco and Tunisia, in the “worst” scenario NM. Other very relevant impacts can be observed in Turkey, Italy and Rest of Middle East and North Africa (XMENA). There are also clear differences among the scenarios. First, applying a constraint on access to environmental water reserves only for Europe does make a big difference for non-European countries (Morocco, Tunisia and XMENA), implying that governments in the Middle-East could respond to increasing water scarcity by accepting, to some extent, lower environmental quality (deterioration of aquatic environments). Second, improvements in water efficiency, as envisaged in the simulation exercise, appear to curb the economic impact of water scarcity quite significantly. This is especially true for countries in the North, whereas efficiency does not compensate for a strict environmental policy in the South. |
| Keywords: | Climate change, water use, agriculture, General Equilibrium Models, Mediterranean. |
| JEL: | C68 Q15 Q25 Q56 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2013:21&r=env |
| By: | Sandro Montresor (JRC-IPTS); Claudia Ghisetti (University of Bologna); Alberto Marzucchi (Catholic University of Milan) |
| Abstract: | This Policy Brief presents recent results on the impact that an open innovation mode has on European firms' environmental innovations. New evidence drawn from the CIS suggests that knowledge sourcing can increase the environmental innovation performance of firms. However, the way firms search for external knowledge and work to absorb it can lead them to different results, depending on whether they are involved in the adoption of an eco-innovation or the extension of their eco-innovation portfolio. Drawing on these results, policy implications for the European Research and Innovation Agenda are discussed. |
| Keywords: | innovation, environment, eco-innovation |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc83831&r=env |
| By: | Bhim Adhikari |
| Abstract: | Poverty, property rights and distributional implications of community-based resource management havebecome major topics of discussion and debate in recent years. This study tries to examine the contributionof community forestry to household-level income with particular emphasis on group heterogeneity andequity in benefit distribution. The assessment of household level benefits suggests that poorer householdsare currently benefiting less in absolute terms from community forestry than less poor households. Interms of the contribution of forests to household income, the study results suggest that the poor are notnecessarily more dependent than the rich, a finding that contradicts results from other similar studies.Econometric analysis suggests that income from community forests is related to socio-economic attributesand private resource endowments of households. Households with land and livestock assets, as well asupper caste households gain more from the commons, while better educated households depend less onforest resources. Female-headed households benefit less from community forests, further aggravatingthe inequity in distribution of benefits. The study makes a number of recommendations to improvecommunity forest management in Nepal, which include, due consideration for community needs inselecting species for community forestry, transferability of user rights, which would allow less endowedhouseholds to benefit more, and more and equitable representation of women and disadvantaged groupsin forest management committees (JEL Q2, Q23 ). |
| Keywords: | Property rights, common property resources, heterogeneity, community forestry, forest user groups, equity, distribution, forest income. |
| JEL: | Q2 Q23 |
| URL: | http://d.repec.org/n?u=RePEc:snd:wpaper:80&r=env |
| By: | Michele Pinelli (Dept. of Management, Università Ca' Foscari Venice) |
| Abstract: | This paper joins the debate on businessÕ role in the implementation of sustainable development and argues that firms are beginning to run more sustainable practices as these are becoming increasingly profitable. It is also argued that such evolution of the economics of social environmental performance is the result of a three stage dynamics which involves consumer awareness, industrial policies, new cost structures and stakeholdersÕ pressure. Moreover, it is also considered that such a phenomenon implies that corporations can be of huge help to regulations in the implementation of sustainability. Finally, by running analyses of the relevant literature on the business case for sustainability, this paper reconciles the mixed and inconclusive results which the academic research on the economic rationale of sustainability has always produced. |
| Keywords: | corporate social responsibility, sustainable development, social impact, environment, sustainability. |
| JEL: | M14 M21 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:vnm:wpdman:50&r=env |
| By: | Ignazio Musu (Department of Economics, University of Venice Cà Foscari) |
| Abstract: | The evolution during the Anthropocene is analyzed through the interaction between economic and technological development, characterized by the role of fossil fuels and by the progressive dominance of those with a higher energy and density power. The challenge is how to make the rising demand for economic growth, mainly coming from developing and emerging countries, compatible with the sustainability of the processes concerning the Earth system. Mainly by focusing on the energy-environment challenge, it is claimed that the required technological breakthrough will not be possible without an appropriate combination of environmental and innovation policies. The big size of the needed investments in a context of limited financial resources asks for a strong support and definition of precise priorities by the governments. A strong help will come from a cultural change able to determine a more sustainable demand for goods and services and a new system of social norms. |
| Keywords: | Economic development, Technical Change, Sustainability, Environment, Energy |
| JEL: | O1 O3 Q4 Q5 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2013:18&r=env |
| By: | Geoffrey G. Jones (Harvard Business School, General Management Unit); Christina Lubinski (German Historical Institute) |
| Abstract: | This working paper examines the growth of corporate environmentalism in the West German chemical industry between the 1950s and the 1980s. It focuses on two companies, Bayer and Henkel and traces the evolution of their environmental strategies in response to growing evidence of pollution and resulting political pressures. Although German business has been regarded as pioneering corporate environmentalism, this study reveals major commonalities between the German and American chemical industries until the 1970s, when the two German firms diverged from their American counterparts in using public relations strategies not only to contain fallout from criticism, but also as opportunities for changes in corporate culture. The working paper finds no evidence for variety of capitalism explanations why German firms should have been early in their sustainability strategies, partly because of the importance of regional as opposed to national influences, but the study is supportive of organizational sociology theories which have identified the importance of visibility in corporate green strategies. |
| Keywords: | environmental strategies, corporate responsibility, sustainability, chemical industry, detergents, Germany |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:14-018&r=env |
| By: | R. Balasubramanian; K.N. Selvaraj |
| Abstract: | Irrigation tanks are one of the oldest and most important common property water resources in the resource-poor regions of South India. Tanks are also important from an ecological perspective because they serve as a geographically well-distributed mechanism for the conservation of soil, water and bio-diversity. Unfortunately, tank irrigation has undergone a process of rapid decline in the recent past, much of which can be attributed to the disintegration of traditional irrigation institutions. In response, people adopt various coping strategies such as migration, non-agricultural employment, and private tube-wells. Adoption of private coping mechanisms has serious implications for community coping mechanisms, i.e., for collective conservation efforts. Against this background, this study tries to understand the main causes of tank degradation and the complex interrelationships among poverty, private coping mechanisms and community coping mechanisms that affect tank performance. Primary and secondary data are used to estimate three regressions models: a macro model on tank degradation, a household-level model on collective action, and a production function incorporating collective action as an input. In general, poor people are more dependent on tanks for various livelihood needs and hence they contribute more towards tank management compared to non-poor households. The analysis of tank degradation shows that there has been a decline in the performance of tanks. Population pressure is found to have accelerated the process of tank degradation. Though the emergence of private tube-wells contributes towards mitigating tank degradation within a narrow range, a continuous increase in the number of wells beyond limits exacerbates the process of tank degradation. This result is further validated by the micro-level econometric model of collective action towards tank management, which indicates that the increase in the number of private wells has a strong negative effect on the participation of rural communities in tank management. The size of the user group has a negative impact on cooperation, while the existence of traditional governance structures, such as rules for water allocation, promotes collective action. Wealth inequality is found to have a U-shaped relationship with collective action. The production function analysis shows that collective action has a positive and significant impact on the rice yields. Therefore, collective action is important for higher productivity and income. The study proposes several policy measures to revive and sustain tanks so as to provide livelihood security to the poor, who are the most affected by resource degradation. |
| Keywords: | Irrigation tanks, collective action, coping mechanisms, poverty, common pool resources, South India |
| URL: | http://d.repec.org/n?u=RePEc:snd:wpaper:79&r=env |
| By: | Michael Dittmar (Institute of Particle Physics, ETH Zurich, Switzerland) |
| Abstract: | The scientific data about the state of our planet, presented at the 2012 (Rio+20) summit, documented that today's human family lives even less sustainably than it did in 1992. The data indicate furthermore that the environmental impacts from our current economic activities are so large, that we are approaching situations where potentially controllable regional problems can easily lead to uncontrollable global disasters. Assuming that (1) the majority of the human family, once adequately informed, wants to achieve a "sustainable way of life" and (2) that the "development towards sustainability" roadmap will be based on scientific principles, one must begin with unambiguous and quantifiable definitions of these goals. As will be demonstrated, the well known scientific method to define abstract and complex issues by their negation, satisfies these requirements. Following this new approach, it also becomes possible to decide if proposed and actual policies changes will make our way of life less unsustainable, and thus move us potentially into the direction of sustainability. Furthermore, if potentially dangerous tipping points are to be avoided, the transition roadmap must include some minimal speed requirements. Combining the negation method and the time evolution of that remaining natural capital in different domains, the transition speed for a "development towards sustainability" can be quantified at local, regional and global scales. The presented ideas allow us to measure the rate of natural capital depletion and the rate of restoration that will be required if humanity is to avoid reaching a sustainable future by a collapse transition. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1309.0348&r=env |
| By: | Stefano Balbi; Carlo Giupponi; Roland Olschewski; Vahid Mojtahed |
| Abstract: | Hydro-meteorological disasters have caused increasing losses in recent years. Efficient risk reduction policies require accurate assessment approaches, with careful consideration of costs, beyond direct tangible costs, which are commonly used in practice. Faced with possible risk reduction scenarios, limited financial resources require an improvement in the quality of cost estimation, thereby contributing to an efficient allocation of resources. This paper focuses on the concept of total costs of hydro-meteorological disasters, based on direct and indirect as well as tangible and intangible cost categories. These categories are defined and explained, supported by a comprehensive review of economic valuation methods. Based on this information, practice relevant suggestions are made concerning the most appropriate methods for different cases in terms of scale, availability of data and of technical resources. Our survey also provides critical insights to drawbacks of flood risk estimation, which need to be addressed and carefully dealt with in any future research in this area. |
| Keywords: | hydro-meteorological disasters, total cost, risk reduction, economic valuation, intangible costs, indirect costs, JEL Classification Q5 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2013-12&r=env |
| By: | Michele Pinelli (Dept. of Management, Università Ca' Foscari Venice) |
| Abstract: | Profits and social-environmental performance have always been perceived as in contrast with one another. Governments and super-national authorities felt that corporations were lacking the incentives to pursue sustainable practices, which then had to be imposed through regulation. Such situation opens space to (at least) two debates: the first one is about whether or not entrepreneurs can help regulations and policies to implement sustainable development; the second one concerns how the current economic context is going to affect sustainable development. This paper joins such debates arguing that a) the role of entrepreneurs in the implementation of sustainability is increasingly important and not just complementary to regulations and policies; b) changes in the economic contexts will give an increasingly ÒregionalÓ character to sustainable development. There is emerging evidence that sustainability is becoming profitable for firms as a result of a dynamics involving consumer awareness, regulations, new cost structures and market-driven requests for sustainable business practices. This new-born profitability is the incentive which will make firms play their important part in the implementation of sustainability. Increased geographical proximity among activities and less global value chains will be the result of the efforts that companies will make in order to capture these profits through sustainable business model innovation. This will lead to invest in surrounding communities and territories (Porter and Kramer, 2011), to leverage circular economies (Fang, Cot, Qin, 2007) and to re-think logistics and transportation strategies. Entrepreneurs capable to relocate activities fitting with each other and to aggregate them properly in coherent bundles can realize durable competitive advantages (Porter, 1996). This is why sustainability has a ÒregionalÓ soul. |
| Keywords: | innovation, business model, entrepreneurship, sustainable development. |
| JEL: | M14 M16 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:vnm:wpdman:51&r=env |
| By: | Singh, K.M.; Meena, M.S. |
| Abstract: | Conservation agriculture / RCT offer a new paradigm for agricultural research and development different from earlier one, which mainly aimed at achieving specific food grains production targets. A shift in paradigm has become a necessity in view of widespread problems of resource degradation, which accompanied past strategies to enhance production with little concern for resource integrity. Integrating concerns of productivity, resource conservation and quality and environment is now fundamental to sustained productivity growth. Developing and promoting CA systems will be highly demanding in terms of knowledge base. This will call for greatly enhanced capacity of scientists to address problems from a systems perspective; be able to work in close partnerships with farmers and other stakeholders and strengthened knowledge and information-sharing mechanisms. CA offers an opportunity for arresting and reversing downward spiral of resource degradation, decreasing cultivation costs and making agriculture more resource-use-efficient, competitive and sustainable. ‘Conserving resources-enhancing productivity’ has to be new mission. |
| Keywords: | Economics of conservation agriculture, Conservation agriculture, Resource conservation technologies, Benefits of Conservation agriculture. |
| JEL: | O31 O32 O33 Q16 Q2 |
| Date: | 2013–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:49381&r=env |
| By: | Nicholas Kilimani (Department of Economics, University of Pretoria) |
| Abstract: | The increasing variability in the climatic pattern and its adverse effects on the Ugandan economy has become a major development challenge. For example, a key but climate sensitive sector like agriculture is increasingly experiencing severe disruptions as a result of its reliance on rainfall which has increasingly become unpredictable. Recent studies indicate a seemingly decreasing trend in the number of rainy days during the months which are crucial for crop growth. This trend is severely disrupting agricultural activity across the country. Since water is a vital input in many economic activities, we need to clearly understand the available supply of water resources and the level of utilization by the different sectors of the economy. This is with the view to establishing whether or not, there is room for increased utilization; within the framework of Integrated Water Resources Management. It is the objective to the study to provide this understanding through a water resource accounting framework. However, no developed water resource accounts exist for the Ugandan economy. Hence the task of the study was to develop the water resource accounts for Uganda. The results show evidence of under utilization of the available water resources. The under utilization is prevalent across all productive sectors of the economy and is likely to constrain the scope for productivity improvements, economic growth and other development outcomes. |
| Keywords: | Water Accounts, Water utilization, Economic performance |
| JEL: | E01 Q56 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201347&r=env |
| By: | Deschenes, Olivier (University of California, Santa Barbara); Greenstone, Michael (MIT); Shapiro, Joseph S. (Yale University) |
| Abstract: | Demand for air quality depends on health impacts and defensive investments that improve health, but little research assesses the empirical importance of defenses. We study an important cap-and-trade market, which dramatically reduced NOx emissions, a key ingredient in ozone formation. A rich quasi-experiment reveals that it decreased summertime ozone, pharmaceutical expenditures, and mortality rates. Reductions in pharmaceutical purchases and mortality are each valued at $900 million annually, suggesting that defensive investments are a substantial portion of willingness-to-pay. We cautiously conclude that ozone reductions are the primary channel for these effects, implying that ozone's costs are larger than previously understood. |
| Keywords: | pharmaceuticals, ozone, cap and trade, willingness to pay for air quality, mortality, compensatory behavior, human health |
| JEL: | H4 I1 Q4 Q5 D1 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7557&r=env |
| By: | Deborah E. Lee, Stephen G. Hosking and Mario Du Preez |
| Abstract: | Estuaries in South Africa face negative crowding effects with respect to motorised boat use, due to competing demand. This paper proposes this be managed through user charges and that the setting of these charges be informed by applying a choice experiment to estimate user preferences for reduced motorized boat congestion on the Kromme River Estuary, Eastern Cape. The application of this method led the paper to deduce that users are willing to pay an additional supplementary charge of R483 per annum during peak periods in order to experience a decrease in negative crowding effects and an improvement in overall welfare. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:366&r=env |
| By: | Henry Thompson |
| Abstract: | This paper develops the intertemporal equilibrium of a small open economy with a nonrenewable resource intensive export and a labor intensive import. Optimal depletion implies the resource price rises at the rate of the capital return. Capital grows with investment and labor at a steady rate, raising the issue of whether depletion necessarily diminishes. Effects of a depletion tax, import tariff, and export subsidy are examined. Simulations with Cobb-Douglas production functions illustrate model properties. The paper also considers a constant depletion rate, tragedy of the commons, and myopic resource owner. |
| Keywords: | Resource Depletion; Trade; General Equilibrium |
| JEL: | F11 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:abn:wpaper:auwp2013-13&r=env |
| By: | Brooks A. Kaiser (Department of Environmental and Business Economics, University of Southern Denmark) |
| Abstract: | This paper uses bio-economic modeling and simulation to investigate the de-mise of the sperm whale industry in the mid-19th century. Petroleum is widely credited both contemporaneously and today with ‘saving the whales.’ We in-vestigate the transition in illumination technologies from whale oil to petroleum as a stochastic dynamic process in which there is uncertainty over the parameters of the fishery and the timing of available substitutes for sperm oil in order to determine the effect on the whale population. Using new biological analysis of the sperm whale fishery (Whitehead, 2002) and insights from natural resource economics we show that under most economic conditions the dynamics, even without a substitute, would have prevented extinction; this result is notably different, for economic and biological reasons, than that usually determined for the better studied baleen whales. This research builds on a long history of understanding the whale fisheries, particularly Davis et al. (1988) and related work, integrating new scientific and economic evidence. |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:sdk:wpaper:116&r=env |
| By: | Johane Dikgang and Edwin Muchapondwa |
| Abstract: | This paper estimates the visitation demand function for Kgalagadi Transfrontier Park (KTP) in order to determine the conservation fee to charge South African residents to maximise park revenue. We conducted contingent behavior experiments at KTP and three other national parks, which we assume are either substitutes or complements for visitors to KTP. Our random effects Tobit model shows that there is a wide variation in the own-price elasticities of demand between the parks but they are generally not elastic. The cross-price estimates indicate that there is limited substitutability in visitation demand among the four parks. The study uses the unitary elasticity rule to demonstrate that there is a possibility of raising conservation fees to revenue-maximising levels at KTP as well as the other parks, using methods such as a mandatory conservation fee increment or a community-bound voluntary donation above the regular conservation fee. Sharing conservation revenue with communities surrounding parks could demonstrate the link between ecotourism and local communities’ economic development, promote a positive view of land restitution involving national parks, help address South Africa’s heavily skewed distribution of income, and act as an incentive for the local communities to participate in conservation even more. |
| Keywords: | Contingent behavior, conservation fee, demand, land claim, national park |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:368&r=env |