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on Environmental Economics |
| By: | Hallegatte, Stephane; Fay, Marianne; Vogt-Schilb, Adrien |
| Abstract: | Green industrial policies can be defined as industrial policies with an environmental goal -- or more precisely, as sector-targeted policies that affect the economic production structure with the aim of generating environmental benefits. This paper provides a framework to assess their desirability depending on the effectiveness and political acceptability of price instruments. The main messages are the following. (i) Greening growth processes to the extent and with the speed needed cannot be done without industrial policies, even if prices can be adjusted to reflect environmental objectives. (ii)"Sunrise"green industrial policies are needed because they support the development of critical new technologies and sectors, bring down costs, and allow for reduced emissions in the short term even in the absence of carbon pricing. (iii)"Sunset"green industrial policies and trade policies may be needed in conjunction with safety nets to make carbon pricing politically or socially acceptable. They can help mitigate the impact of a carbon price on competitiveness and unemployment and smooth the transition by helping industries adjust to the new conditions. (iv) Green or not, industrial policy requires carefully navigating the twin dangers of market and governance failure. The viability of supported technologies and sectors is difficult to assess through a market-test given their dependence on continued environmental policies or pricing -- such as a carbon price. Particular attention must be paid to avoid potential unintended negative effects, such as rebound effects (especially if prices are inappropriate), misallocation of capital, or capture and rent-seeking behaviors. |
| Keywords: | Climate Change Economics,Transport Economics Policy&Planning,Climate Change Mitigation and Green House Gases,Economic Theory&Research,Labor Policies |
| Date: | 2013–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6677&r=env |
| By: | Lucas Bretschger (ETH Zurich, Switzerland); Christos Karydas (ETH Zurich, Switzerland) |
| Abstract: | We study the effects of greenhouse gas emissions on optimum growth and environmental policy by using an expansion-in-varieties growth model with polluting non-renewable resources. Climate change harms the capital stock. Our main contribution is to introduce and extensively explore the naturally determined time lag between greenhouse gas emission and the damages due to climate change which proves to be crucial for the transition of the economy towards its steady state. The social optimum and optimal abatement policies are fully characterized. The inclusion of a green technology delays optimal resource extraction. The optimal tax rate on emissions is proportional to output. Poor understanding of the emissions dissusion process leads to suboptimal carbon taxes and suboptimal growth and resource extraction. |
| Keywords: | Non-Renewable Resource Extraction; Climate Policy; Optimum Growth; Pollution Diusion lag. |
| JEL: | Q54 O11 Q52 Q32 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:13-184&r=env |
| By: | Shindell, Drew T. |
| Abstract: | The author presents a multi-impact economic valuation framework called the Social Cost of Atmospheric Release (SCAR) that extends the Social Cost of Carbon (SCC) used previously for carbon dioxide (CO2) to a broader range of pollutants and impacts. Values consistently incorporate health and agricultural impacts of air quality along with climate damages. The latter include damages associated with aerosol-induced hydrologic cycle changes that lead to net climate benefits when reducing cooling aerosols. Evaluating a 1% reduction in current global emissions, benefits with a high discount rate are greatest for reductions of sulfur dioxide (SO2), followed by co-emitted products of incomplete combustion (PIC) and then CO2 and methane. With a low discount rate, benefits are greatest for CO2 reductions, and are nearly equal to the total from SO2, PIC and methane. These results suggest that efforts to mitigate atmosphere-related environmental damages should target a broad set of emissions including CO2, methane and aerosols. Illustrative calculations indicate environmental damages are $150-510 billion per year for current US electricity generation (~6-20¢ per kWh for coal, ~2-11¢ for gas) and $0.73±0.34 per gallon of gasoline ($1.20±0.70 per gallon for diesel). These results suggest that total atmosphere-related environmental damages plus generation costs are greater for coal-fired power than other sources, and damages associated with gasoline vehicles exceed those for electric vehicles. -- |
| Keywords: | environmental economics,valuation,air pollution,climate,government policy |
| JEL: | Q51 Q53 Q54 Q58 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201356&r=env |
| By: | Pablo Salas (Cambridge Centre for Climate Change Mitigation Research, Department of Land Economy, University of Cambridge) |
| Abstract: | The power sector contributes with more than one third of the anthropogenic green house gas (GHG) emissions, and therefore it is a relevant target for climate change mitigation measures. However, its technological evolution is co-dependent with many other complex phenomena, such as climate policies, energy investment, natural resources availability, social and political change, among others. In order to create the appropriate policies that help us to adopt low carbon energy technologies, it is necessary to understand how these uncertain phenomena interact, and what are the implications in terms of carbon emissions. This paper is an overview of some of the energy-economic models available to study the evolution of the power sector, with particular emphasis in the uncertain drivers of technological change, and the consequent impacts on GHG emissions. |
| Keywords: | Energy Modelling, Technological Change, Uncertainty |
| JEL: | O33 Q47 D81 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ccc:wpaper:003&r=env |
| By: | Raouf Boucekkine (AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales [EHESS] - Ecole Centrale Marseille (ECM)); Blanca Martínez (Department of Economics, Universidad Complutense de Madrid - Universidad Complutense de Madrid); Ramon Ruiz-Tamarit (Department of Economic Analysis, Universitat de Valencia - Universitat de València, IRES Department of Economics - Université Catholique de Louvain) |
| Abstract: | We study optimal sustainable policies in a benchmark logistic world (where both population and technological progress follow logistic laws of motion) subject to a pollution ceiling. The main policy in the hands of the benevolent planner is pollution abatement, ultimately leading to the control of a dirtiness index as in the early literature of the limits to growth literature. Besides inclusion of demographic dynamics, we also hypothesize that population size affects negatively the natural regeneration or assimilation rate, as a side product of human activities (like increasing pollution, deforestation,...). We first characterize optimal sustainable policies. Under certain conditions, the planner goes to the pollution ceiling value and stays on, involving a more stringent environmental policy and a sacrifice in terms of consumption per capita. Second, we study how the sustainable problem is altered when we depart from the logistic world by considering exponential technical progress (keeping population growth logistic). It's shown that, as expected, introducing such an asymmetry widens the margins of optimal policies as sustainable environmental policies are clearly less stringent under exponential technical progress. Third we connect our model to the data, using in particular UN population projections. |
| Keywords: | limits to growth; sustainable policy; optimal growth; demographic dynamics; pollution ceiling |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00880238&r=env |
| By: | Jonathan Pickering; Jakob Skovgaard; Soyeun Kim; J. Timmons Roberts; David Rossati; Martin Stadelmann; Hendrikje Reich |
| Abstract: | Developed countries have relied heavily on aid budgets to fulfill their pledges to boost funding for addressing climate change in developing countries. However, little is known about how interaction between aid and other ministries has shaped contributors’ diverse approaches to climate finance. This paper investigates intra-governmental dynamics in decision-making on climate finance in seven contributor countries (Australia, Denmark, Germany, Japan, Switzerland, the UK and the US). While aid agencies retained considerable control over implementation, environment and finance ministries have played an influential and often contrasting role on key policy issues, including distribution between mitigation and adaptation and among geographical regions. |
| Keywords: | Climate policy, climate finance, development assistance, bureaucratic politics |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1306&r=env |
| By: | Aileen Lam (Cambridge Centre for Climate Change Mitigation Research, Department of Land Economy, University of Cambridge) |
| Abstract: | Transport is the only sector in the EU in which greenhouse gas emissions are still rising. This paper uses the FTT (future technology transformation) framework to project energy use and emissions from passenger cars in the EU 27 until 2050. Projections are made based on four policy scenarios in order to explore the effect of different policies on penetration and diffusion of cleaner transport technologies. All our scenario projections support the dominance of hybrid cars in 2050. However, our results illustrate that strong emission targets cannot be achieved by only encouraging low-emitting cars, but requires strong policies targeting the cleanest cars. Further emission reductions can be achieved by non-pecuniary measures such as car use reductions and scrappage schemes. |
| Keywords: | Transport, Technological change, Emissions, Fuel use |
| JEL: | O33 O38 R41 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ccc:wpaper:005&r=env |
| By: | Huanxiu GUO (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne : - CLERMONT-FERRAND I); Sébastien Marchand (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I) |
| Abstract: | This paper aims to test the effect of smallholder farmers' participatory social learning on their gain of performance in a village of southwest China. By exploring a panel structure survey data collected in the village, we identify the social learning effect using a Spatial Autoregressive (SAR) model. Particularly, we calculate the technical efficiency and environmental efficiency from a SFA model and use them as dependent variables of the model. Moreover, we investigate the social learning of different technologies, i.e., conventional and organic farming, by separating the estimations. Our identification results suggest that the effect of social learning is weak due to the technological heterogeneity in the general case, whilst it is significantly positive for organized organic farming. However, it appears that farmers learn to improve their economic performance (i.e., maximize yield) rather than environmental performance (i.e., minimize environmentally detrimental input). These results reveal a critical limitation of social learning, and demand more environmental orientation in the agricultural extension service, which is expected to guide smallholder farmers and foster their environmental performance for sustainable agricultural development. |
| Keywords: | Smallholder farming;Social learning;Organic farming;Technical efficiency;Environmental efficiency;China. |
| Date: | 2013–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00878886&r=env |
| By: | Elena Chernovich (Junior Research Fellow, Institute for Statistical Studies and Economics of Knowledge, National Research University Higher School of Economics,) |
| Abstract: | This paper investigates environmental behavior in Russian households by the analysis of 24 in-depth interviews conducted in typical households of the city of Moscow. Using the STS tools such as ‘script’ and ‘moral agency’ it discovers how technologies shape domestic routines and pro-environmental behavior of their users and how the users shape the resource consumption of technological artifacts. Depending on their environmental values and believes three types of residents are identified: committed environmentalists, occasional environmentalists and non-environmentalists. Each of the group of people appeared to have different agencies in relation to their domestic technologies. Technologies also seem to play different role in shaping moral actions of the three categories of residents |
| Keywords: | Human-technology relations, environmentalism, domestic routines |
| JEL: | D19 Q01 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:18sti2013&r=env |
| By: | Mireille Bossy; Nadia Maizi; Odile Pourtallier |
| Abstract: | In this note, we present an existence result of a Nash equilibrium between electricity producers selling their production on an electricity market and buying CO2 emission allowances on an auction carbon market. The producers' strategies integrate the coupling of the two markets via the cost functions of the electricity production. We set out a clear Nash equilibrium that can be used to compute equilibrium prices on both markets as well as the related electricity produced and CO2 emissions covered. |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1311.1535&r=env |
| By: | Antoine CAZALS; Alexandre SAUQUET |
| Abstract: | Is there a strategically beneficial time for political leaders to make international environmental commitments? Based on the political cycles theory we argue that leaders have incentives to delay costly ratification of international environmental agreements to the post-electoral period. However, the cost of participating in these agreements are often lower for developing countries, and they may benefit from indirect gains, which may make them more prone to ratifying in the pre-electoral period. These hypotheses are empirically assessed by studying the ratification process of 48 global environmental agreements censused in the ENTRI database from 1976 to 1999. We use a duration model in which time is measured on a daily basis, enabling us to precisely identify pre- and post-electoral periods -- a significant challenge in political cycles studies. Our investigation reveals the existence of political ratification cycles that are of substantial magnitude and non-linear over the pre- and post-electoral years. |
| Keywords: | International Environmental Agreements, Political cycles, Ratification, duration model |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1464&r=env |
| By: | di Cosmo, Valeria; Hyland, Marie |
| Keywords: | Carbon Tax/scenarios/taxes |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb2013/2/7&r=env |
| By: | Ahlheim, Michael; Börger, Tobias; Frör, Oliver |
| Abstract: | The provision of environmental goods by government creates social benefits which might vary between citizen groups with different cultural and ethnic backgrounds. These differences as well as the overall extent of benefits should be analysed before the implementation of public projects in order to consider not only the efficiency aspects of such a project but also its distributional effects. In Southwest China we are facing a rapid deforestation for the development of rubber cultivation and at the same time find an ethnically highly diverse population. This Contingent Valuation study tries to assess the short-term and long-term benefits accruing from a public reforestation programme in Xishuangbanna and their distribution among different ethnic groups living in that region. The results show that different ethnic groups value short-term and future benefits of reforestation differently and that these differences can be explained by the different cultural and historical backgrounds of these ethnic groups. -- |
| Keywords: | Rubber cultivation,contingent valuation method,environmental costs,ethnicities,equity,cultural ecosystem services,China |
| JEL: | D31 D33 E6 E25 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fziddp:812013&r=env |
| By: | Karp, Larry; Siddiqui, Sauleh; Strand, Jon |
| Abstract: | This paper studies a dynamic game where each of two large blocs, of fossil fuel importers and exporters respectively, sets either taxes or quotas to exercise power in fossil-fuel markets. The main novel feature is the inclusion of a"fringe"of non- strategic (emerging and developing) countries which both consume and produce fossil fuels. Cumulated emissions over time from global fossil fuel consumption create climate damages which are considered by both the strategic importer and the non-strategic countries. Markov perfect equilibria are examined under the four combinations of trade policies and compared with the corresponding static games where climate damages are given (not stock-related). The main results are that taxes always dominate quota policies for both the strategic importer and exporter and that"fringe"countries bene?t from a tax policy as compared with a quota policy for the strategic importer, as the import fuel price then is lower, and the strategic importer's fuel consumption is also lower, thus causing fewer climate damages. |
| Keywords: | Economic Theory&Research,Climate Change Economics,Markets and Market Access,Debt Markets,Emerging Markets |
| Date: | 2013–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6679&r=env |
| By: | Nævdal, Eric (Ragnar Frisch Centre for Economic Research); Vislie, Jon (Dept. of Economics, University of Oslo) |
| Abstract: | An intertemporal optimal strategy for accumulation of reversible capital and management of an exhaustible resource is analyzed for a global economy when resource depletion generates discharges that add to a stock pollutant that affects the likelihood for hitting a tipping point or threshold of unknown location, causing a random“disembodied technical regress”. We characterize an optimal strategy by imposing the notion “precautionary tax” on current extraction for preventing a productivity shock driven by stock pollution and a capital subsidy to promote capital accumulation so as to build up a buffer for future consumption opportunities should the threshold be hit. The precautionary tax will internalize the expected welfare loss should a threshold be hit, whereas the capital subsidy will internalize the expected post-catastrophic long-run return from current capital accumulation. |
| Keywords: | Catastrophic; risk; stochastic; threshold; optimal; saving |
| JEL: | C61 Q51 Q54 |
| Date: | 2013–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2013_024&r=env |
| By: | Ceci , Federica; Masini , Andrea |
| Abstract: | Integrated bundles of products and services are gaining importance in various sectors and are reshaping the competitive landscape of many industries. They also pose new challenges to established firms, who need to reconfigure their capabilities. Drawing upon the resource-based view and contingency theory, we test a model of fit between environmental requirements and integrated solutions capabilities in the IT sector. We used the model to interpret the current industry structure and analyze its dynamics. The analysis suggests the existence of four different configurations and indicates that differences in fit between environmental variables and strategic choices partially account for performance differences among integrated solution providers. |
| Keywords: | Capabilities; Integrated Solutions; Cluster Analysis |
| JEL: | G00 |
| Date: | 2013–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:0972&r=env |
| By: | Lucas Bretschger (ETH Zurich, Switzerland); Simone Valente (The Norwegian University of Science and Technology) |
| Abstract: | We study the incentives of selfish governments to tax tradable primary inputs un- der asymmetric trade. Using an empirically-consistent model of endogenous growth, we obtain explicit links between persistent gaps in productivity growth and the observed tendency of resource-exporting (importing) countries to subsidize (tax) domestic resource use. Assuming uncoordinated maximization of domestic welfare, national governments wish to deviate (i) from inefficient laissez-faire equilibria as well as (ii) from efficient equilibria in which domestic distortions are internalized. The incentive of resource-rich countries to subsidize hinges on slower productivity growth and is disconnected from the typical incentive of importers to tax resource inflows. i.e., rent extraction. The model predictions concerning the impact of resource taxes on relative income shares are supported by empirical evidence. |
| Keywords: | Productivity Growth; Exhaustible Resources; International Trade. |
| JEL: | F43 O40 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:13-185&r=env |
| By: | Bruce A. Babcock (Center for Agricultural and Rural Development (CARD)); Sebastien Pouliot (Center for Agricultural and Rural Development (CARD)) |
| Abstract: | The Environmental Protection Agency created a tradable commodity called RINs (Renewable Identification Numbers)—serial numbers that allow tracking batches of biofuels—to enforce biofuel mandates. To prove they have met their annual biofuel obligations under the Renewable Fuels Standard gasoline and diesel producers and importers accumulate RINs, by either buying biofuels with attached RINs or by buying detached RINs offered in the RIN market. RINs become detached when biofuels are blended with diesel or gasoline. Blenders who are not obligated parties have no use for their RINs; thus they are willing sellers in the RIN market. The price at which RINs are bought and sold is measured in cents per gallon of ethanol. In 2013, RIN prices have varied dramatically, from less than 10 cents per gallon in January to over 140 cents per gallon in July. As of late October, RIN prices for corn ethanol are about 25 cents per gallon. |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:13-pb14&r=env |
| By: | Bruce A. Babcock (Center for Agricultural and Rural Development (CARD)); Sebastien Pouliot (Center for Agricultural and Rural Development (CARD)) |
| Abstract: | The Environmental Protection Agency is poised to release its draft rule for mandated volumes of biofuels for 2014. Earlier this year, EPA indicated that it understood that a limited demand for biofuels, particularly for ethanol, conflicts with the scheduled mandated volumes written in the law. To date, mandates for ethanol have been met with a gasoline blend that contains no more than 10 percent ethanol, referred to as E10. However, mandated volumes for ethanol are scheduled to exceed 10 percent of total gasoline consumption so new marketing channels will need to be developed to meet expanded mandates. Thus, the so-called E10 blend wall presents a real challenge to EPA. |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:13-pb15&r=env |
| By: | Festel, Gunter; Würmseher, Martin; Rammer, Christian; Boles, Eckhard; Bellof, Martin |
| Abstract: | This paper presents the results of a calculation model for biofuel production costs in 2015 and 2020 based on raw material price projections and considering scale and learning effects. Distinguishing six types of biofuels, the paper finds that scale economies and learning effects are critical for 2nd generation biofuels to become competitive. In case these effects can be utilized, cost saving potentials for 2nd generation biofuels are significant. -- |
| Keywords: | Biofuels,Production Cost Scenarios,Raw Material Price Projection,Conversion Costs |
| JEL: | L25 L26 J24 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13075&r=env |