nep-env New Economics Papers
on Environmental Economics
Issue of 2013‒11‒14
seventeen papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Indexing European carbon taxes to the EU ETS Permit Price: a good idea? By Carlén, Björn; Hernández, Aday
  2. Emission Taxes and Border Tax Adjustments for Oligopolistic Industries By Timothy Halliday; Sumner La Croix
  3. Strategic Approaches of CO2 Emissions: The Cases of the Cement Industry and Chemical Industry By Arjaliès , Diane-Laure; Goubet , Cécile; Ponssard , Jean Pierre
  4. A diagnostic approach to the institutional analysis of climate adaptation By Oberlack, Christoph; Neumärker, Bernhard
  5. Green finance is essential for economic development and sustainability By Chowdhury, Tasnim; Datta, Rajib; Mohajan, Haradhan
  6. Natural Disaster, Policy Action, and Mental Well-Being: The Case of Fukushima By Jan Goebel; Christian Krekel; Tim Tiefenbach; Nicolas R. Ziebarth
  7. Economics of Land Degradation Initiative: Methods and Approach for Global and National Assessments By Nkonya, Ephraim; von Braun, Joachim; Mirzabaev, Alisher; Le, Quang Bao; Kwon, Ho Young; Kirui, Oliver
  8. An assessment of energy resources for global decarbonisation By Jean-Francois Mercure; Pablo Salas
  9. Investment and adaptation as commitment devices in climate politics By Heuson, Clemens; Peters, Wolfgang; Schwarze, Reimund; Topp, Anna-Katharina
  10. Climate Change, Human Rights and the International Legal Order: The Role of the UN Human Rights Council By Margaretha Wewerinke
  11. Intergenerational equity with individual impatience in a model of optimal and sustainable growth By Lee H. Endress; Sittidaj Pongkijvorasin; James Roumasset; Christopher Wada
  12. A systematic approach for assessing spatially and temporally differentiated opportunity costs of biodiversity conservation measures in grasslands By Mewes, Melanie; Drechsler, Martin; Johst, Karin; Sturm, Astrid; Wätzold, Frank
  13. A conceptual model of incomplete markets and the consequences for technology adoption policies in Ethiopia By Larson, Donald F.; Gurara, Daniel Zerfu
  14. Investment Decisions in the Renewable Energy Sector: An Analysis of Non-Financial Drivers By Masini, Andrea; Menichetti , Emanuela
  16. L'articulation des usages diagnostique et interactif d'un seul et même système de contrôle de gestion : le cas d'un système d'indicateurs environnementaux dans une entreprise française de vins et spiritueux By Angèle Renaud
  17. La collecte des déchets en Wallonie : organisation et performances By Axel GAUTIER; Sophie REGINSTER

  1. By: Carlén, Björn (VTI); Hernández, Aday (University of Las Palmas de Gran Canaria)
    Abstract: We study an environmental policy that (i) tax some emitters while others are covered by a cap-and-trade system and (ii) index the tax level to the permit price. Such a policy could be attractive in a world where abatement costs are uncertain and the regulator has information about the correlation between the cost shocks to the two groups. We show that this index policy yields lower expected social cost than the policy mix studied in Mandell (2008). The value of indexing is higher the stronger the correlation is, the steeper the marginal abatement benefit curve is, and the more uncertain we are about the taxed sector’s abatement costs. The index policy may also outperform the uniform policy alternatives emission tax and cap-and-trade system. The conditions for this are more restrictive, though. Given parameter values plausible for the European climate change policy context, expected net-gains are small or negative.
    Keywords: Uncertainty; Environmental policy; Emissions tax; Tradable permits
    JEL: H23 Q23 Q58
    Date: 2013–10–31
  2. By: Timothy Halliday (Department of Economics, University of Hawaii at Manoa); Sumner La Croix (Department of Economics, University of Hawaii at Manoa)
    Abstract: We examine the welfare consequence of emissions tax with and without a Border Tax Adjustment for an imperfectly competitive industry, where intra-industry trade arises between countries. BTA allows a government to impose a pollution-content tariff on imports and refund an emission tax for export sales. We analyze the structure of an optimal emission tax with BTA when a government chooses its emission tax rate to maximize its national welfare. We show that the optimal emission tax policy with BTA achieves greater national welfare and higher environmental quality than the optimal policy without BTA.
    Keywords: trade and environment, border tax adjustment, intra-industry trade
    JEL: F18 F12 Q56
    Date: 2013–09
  3. By: Arjaliès , Diane-Laure; Goubet , Cécile; Ponssard , Jean Pierre
    Abstract: The ability of firms to transform an environmental constraint into a strategic opportunity has been a controversial issue in the literature. Based on a comparative study of CO2 strategies in the cement and chemical industries, the article shows that the capacity of firms to be proactive regarding sustainable development is largely constrained by the characteristics of the sector in terms of dependence on natural resources, flexibility in the composition of activities portfolio and structure of the downstream sector.
    Keywords: Innovation; Sustainable Development; Corporate Strategy
    JEL: M14 M21 Q25
    Date: 2013–07–01
  4. By: Oberlack, Christoph; Neumärker, Bernhard
    Abstract: Economics has a key role to play for understanding vulnerability and adaptation to climate change. However, economic approaches to climate adaptation are rarely articulated and discussed at a framework level. This article first reviews and critically assesses welfare economics approaches to climate adaptation and, secondly, develops a novel institutional economics approach to climate adaptation. Concepts and tools of welfare economics have contributed to assessments of benefits and costs of adaptation; outlined strategies for adaptation; identified responsibilities of the public sector and described policy instruments for adaptation. However, the neoclassical framing of collective action based on the concept of market failure seems too narrow to do analytical justice to the multitude of governance challenges associated with adaptation. Adaptation economics seems underequipped with analytical tools to study the role of institutions for climate adaptation. Therefore, an institutional economics approach to climate adaptation is developed and illustrated. This approach contributes to integrated economic analyses of climate adaptation in three major ways: First, by broadening the scope of climate adaptation economics; second, by delivering a diagnostic framework of climate adaptation that enables the analyst to explain adaptation processes in a systematic manner, synthesizes findings from a large number of research efforts, places particular research questions, governance problems and results in a broader context, and can guide the design of theoretical and empirical inquiries of climate adaptation; third, by offering research strategies and methods for developing generalisable and valid insights in the face of pronounced heterogeneity and diversity of climate adaptation. --
    Keywords: Economics of Climate Adaptation,Institutional Economics,Governance of Climate Adaptation,Diagnostic Framework
    JEL: Q54 B52 D02 D78
    Date: 2013
  5. By: Chowdhury, Tasnim; Datta, Rajib; Mohajan, Haradhan
    Abstract: Green finance is part of a broader occurrence; from the incorporation of various non-financial or ethical concerns onto the financial universe. Generally green finance is considered as the financial support for green growth which reduces greenhouse gas emissions and air pollutant emissions significantly. Green finance in agriculture, green buildings and other green projects should increase for the economic development of the country. In this paper an attempt has been made to describe green financing in a boarder sense.
    Keywords: Environment, Green building, Green finance, Green projects, Renewable energy.
    JEL: G17
    Date: 2013–03–16
  6. By: Jan Goebel; Christian Krekel; Tim Tiefenbach; Nicolas R. Ziebarth
    Abstract: We study the impact of the Fukushima disaster on people’s mental well·being in another industrialized country, more than 5000 miles distant. The meltdown significantly increased environmental concerns by 20% among the German population. Subsequent drastic policy action permanently shut down the oldest nuclear reactors, implemented the phase·out of the remaining ones, and proclaimed the transition to renewables. This energy policy turnaround is largely supported by the population and equalized the increase in mental distress. We estimate that during the 3 months after the meltdown, Fukushima triggered external monetized health costs worth €250 per distressed citizen—particularly among risk averse women.
    Keywords: Fukushima, meltdown, nuclear phase·out, mental health, environmental worries, SOEP
    JEL: I18 I31 Z13 Q54
    Date: 2013
  7. By: Nkonya, Ephraim; von Braun, Joachim; Mirzabaev, Alisher; Le, Quang Bao; Kwon, Ho Young; Kirui, Oliver
    Abstract: Healthy land ecosystems are essential to sustainable development, including food security and improved livelihoods. Yet, their key services have usually been taken for granted and their true value underrated, leading to land degradation becoming a critical global problem. This pattern of undervaluation of lands is about to change in view of the rapidly rising land prices, which is the result of increasing shortage of land and high output prices. Despite the urgent need for preventing and reversing land degradation, the problem has yet to be appropriately addressed. Policy actions for sustainable land management are lacking, and a policy framework for action is missing. Such a framework for policy action needs to be supported by evidence-based and action-oriented research. The Economics of Land Degradation (ELD) initiative seeks to develop such a science basis for policy actions to address land degradation. The purpose of this methodological paper is to provide with sound and feasible standards for ELD assessment at global and national levels. Only if some basic standards are identified and adhered to, comparative assessments can be conducted between countries and useful aggregation of findings, based on these case studies, can be achieved. Therefore, using the Total Economic Value (TEV)framework, the paper identifies minimum core standards that need to be adhered to in all country case studies to generate comparable material for international assessment and ELD policy guidance. It also identifies additional and desirable areas of information and analyses that would add value to the country case study material. The proposed framework is also intended as a forward-looking agenda which can guide future research.
    Keywords: Economics of Land Degradation, ELD, case studies, Total Economic Value, 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, B41, Q01, Q15, Q24, Q51,
    Date: 2013–10
  8. By: Jean-Francois Mercure; Pablo Salas (Cambridge Centre for Climate Change Mitigation Research, Department of Land Economy, University of Cambridge)
    Abstract: This paper presents an assessment of global economic energy potentials for all major natural energy resources. This work is based on both an extensive literature review and calculations based onto natural resource assessment data. In the first part, economic potentials are presented in the form of cost-supply curves, in terms of energy flows for renewable energy sources, or fixed amounts for fossil and nuclear resources, using consistent energy units that allow direct comparisons to be made. These calculations take into account, and provide a theoretical framework for considering uncertainty in resource assessments, providing a novel contribution aimed at enabling the introduction of uncertainty into resource limitations used in energy modelling. The theoretical details and parameters provided in tables enable this extensive natural resource database to be adapted to any modelling framework for energy systems. The second part of this paper uses these cost-supply curves in order to build a tool for analysing global scenarios of energy use, in the context of exploring the feasibility global decarbonisation using renewable energy sources. For such a purpose, a theoretical framework is given for evaluating either flows of stock energy resources for given price path assumptions for the related energy carriers, or the prices of energy carriers given energy demand assumptions. Results of both approaches are used in order to produce a complete comparison of global energy resources. The particular case of the feasibility of global decarbonisation by the end of the century is explored. Since the scale of the required amount of energy flows from renewables is comparable to the sum of the technical potentials, the associated scale of global land use for energy production is found to be large. For complete decarbonisation, without energy demand reductions, 7 to 12\% of the global land area could be required for energy production activities, emphasising the importance of improving energy consumption patterns and intensity of the global economy. The third part of this work is an appendix that provides all missing details, equations and databases necessary to understand and reproduce the work of Part I. This part is therefore aimed at enabling energy modellers to reproduce exactly and use in their own work the database that was constructed in this work.
    Keywords: Global energy resources, Climate change mitigation, Energy Commodity Price Dynamics, Global Decarbonisation
    JEL: Q21 Q31 Q41 Q54
    Date: 2013–09
  9. By: Heuson, Clemens; Peters, Wolfgang; Schwarze, Reimund; Topp, Anna-Katharina
    Abstract: It is well established that adaptation and technological investment in each case may serve as a commitment device in international climate politics. This paper for the first time analyzes the combined impact of these two strategic variables on global mitigation within a noncooperative framework where countries either decide on mitigation before or after adaptation. By investment, which is assumed to be made in the first place due to its considerable lead time, countries commit to lower national contributions to the global public good of mitigation. We find that the sequencing of adaptation before mitigation reinforces this strategic effect of technological investments at least for sufficiently similar countries. As a consequence, the subgame-perfect equilibrium yields a globally lower level of mitigation and higher global costs of climate change when adaptation is decided before mitigation. Besides this theoretical contribution, the paper proposes some strategies to combat the unfortunate rush to adaptation which can be currently observed in climate politics. --
    Keywords: adaptation,climate policy,investment,mitigation,non-cooperative behavior
    JEL: Q54 H41 H87 C72
    Date: 2013
  10. By: Margaretha Wewerinke (Cambridge Centre for Climate Change Mitigation Research, Department of Land Economy, University of Cambridge; European University Institute, Florence, Italy)
    Abstract: This article discusses recent developments related to recognition of the link between human rights and climate change in international human rights forums. It focuses on the main human rights body of the United Nations, the Human Rights Council, which has addressed climate change in three resolutions, two panel discussions and at its annual Social Forum. The analysis shows that the main challenge faced by the Human Rights Council as it seeks to address climate change is getting to grips with the relationship between international human rights law on the one hand and the principles of the United Nations Framework Convention on Climate Change (UNFCCC) on the other. The article argues that this relationship is best captured through quasi-judicial analyses, whereby input from those whose human rights are affected by climate change is sought. It identifies concrete ways in which the Council could promote or enable such analyses through the adoption of another resolution. More broadly, it demonstrates the capacity of the international human rights system to interpret laws aimed at preventing dangerous climate change and to contribute to their operationalisation in accordance with human rights norms.
    Keywords: Human rights, Climate change, International Law,
    JEL: K32 K33
    Date: 2013–10
  11. By: Lee H. Endress (University of Hawaii at Manoa); Sittidaj Pongkijvorasin (Chulalongkorn University); James Roumasset (University of Hawaii at Manoa); Christopher Wada (University of Hawaii Economic Research Organization)
    Abstract: Among the ethical objections to intergenerational impartiality is the violation of consumer sovereignty given that individuals are impatient. We accommodate that concern by distinguishing intra- and inter-generational discounting in an OLG model suitable for analyzing sustainability issues. Under the assumption of constant elasticity of marginal felicity, the optimum trajectory of aggregate consumption is guided, via the Ramsey condition, by the intergenerational discount rate but not the personal discount rate. In an economy with produced capital and a renewable resource, intergenerational neutrality results in a sustained growth path, without the necessity of a sustainability constraint, even in the presence of intragenerational impatience. We also find that green net national product remains constant along the optimal approach path to golden rule consumption.
    Keywords: Sustainability of optimal growth, intergenerational equity, intra-generational discounting, renewable resources, GNNP
    JEL: Q56 Q41 Q01
    Date: 2013–10
  12. By: Mewes, Melanie; Drechsler, Martin; Johst, Karin; Sturm, Astrid; Wätzold, Frank
    Abstract: Biodiversity loss in Europe is caused to a large extent by agricultural intensification. To halt this loss and to support species and habitat types in agricultural areas, agri-environment schemes have been introduced in Europe to compensate farmers for (costly) conservation measures. Currently, agri-environment schemes for grassland in general consider only a few conservation measures with fixed dates and a payment for average opportunity costs, e.g. for later mowing. A systematic approach that calculates farmers' opportunity costs in relation to the timing of grassland use is still lacking. We fill this gap by developing a systematic agri-economic cost assessment approach. Our approach is general enough to be applicable on a large spatial scale but can still sensitively differentiate among different timings. Moreover it is straightforward and time-saving enough to be suitable for implementation in regional scale optimisation procedures. We demonstrate this by applying the systematic cost assessment in the decision support software DSS-Ecopay using the example of grassland species and habitats conservation in the German federal state of Saxony. --
    Keywords: biodiversity conservation,cost-effectiveness,ecological-economic modelling,agri-environment scheme,grassland,DSS-Ecopay
    Date: 2013
  13. By: Larson, Donald F.; Gurara, Daniel Zerfu
    Abstract: In Africa, farmers have been reluctant to take up new varieties of staple crops developed to boost smallholder yields and rural incomes. Low fertilizer use is often mentioned as a proximate cause, but some believe the problem originates with incomplete input markets. As a remedy, African governments have introduced technology adoption programs with fertilizer subsidies as a core component. Still, the links between market performance and choices about using fertilizer are poorly articulated in empirical studies and policy discussions, making it difficult to judge whether the programs are expected to generate lasting benefits or to simply offset high fertilizer prices. This paper develops a conceptual model to show how choices made by agents supplying input services combine with household livelihood settings to generate heterogeneous decisions about fertilizer use. An applied model is estimated with data from a panel survey in rural Ethiopia. The results suggest that adverse market conditions limit the adoption of fertilizer-based technologies, especially among resource-poor households. Farmers appear to respond to market signals in the aggregate and this provides a pathway for subsidies to stimulate demand. However, the research suggests that lowering transaction costs, through investments in infrastructure and market institutions, can generate deeper effects by expanding the technologies available to farmers across all pricing outcomes.
    Keywords: Environmental Economics&Policies,Climate Change and Agriculture,Markets and Market Access,Fertilizers,Economic Theory&Research
    Date: 2013–10–01
  14. By: Masini, Andrea; Menichetti , Emanuela
    Abstract: Notwithstanding their many environmental, economic and social advantages, renewable energy technologies (RE) account for a small fraction of the world’s primary energy supply. One possible cause for this limited diffusion is that private investments in the RE sector, although potentially appealing, remain insufficient. The lack of adequate financing is also a clear indication that our understanding of the process by which investors fund RE ventures is still incomplete. This paper aims to fill in this gap and to shed new light on RE investment decisions. Building upon behavioral finance and institutional theory, we posit that, in addition to a rational evaluation of the economics of the investment opportunities, various nonfinancial factors affect the decision to invest in renewables. We analyze the investment decisions of a large sample of investors, with the objective to identify the main determinants of their choices. Our results shed new light on the role of institutional and behavioral factors in determining the share of renewable energy technologies in energy portfolios, and have important implications for both investors and policy makers: they suggest that RE technologies still suffer from a series of biased perceptions and preconceptions that favor status quo energy production models over innovative alternatives
    Keywords: Renewable Energies; behavioral finance; empirical analysis; portfolio; investments diversification; survey research
    JEL: G00
    Date: 2013–04–13
  15. By: Denis Travaillé (Centre de Recherche Magellan - Université Jean Moulin - Lyon III : EA3713); Gérald Naro (ERFI – ISEM - Université Montpellier I)
    Abstract: L'objet de cet article consiste en une réflexion sur les limites du concept de performance globale et de son instrumentation sous la forme de Balanced Scorecard ou Sustainability Balanced Scorecard, face aux paradoxes du développement durable induits par l'existence d'attentes différenciées et contradictoires des diverses Parties Prenantes. Notre propos vise à dépasser la thèse du découplage néo-institutionnel en proposant une approche fondée sur la reconnaissance et la gestion des paradoxes. A ce dessein, nous explorons les perspectives offertes par le concept de contrôle interactif (Simons, 1995) et proposons une alternative au Balanced Scorecard en lui substituant le concept de "Paradoxical Scorecard".
    Keywords: Développement Durable, Parties Prenantes, Découplage, Sustainability Balanced Scorecard, Paradoxical Scorecard
    Date: 2013–06–01
  16. By: Angèle Renaud (LEG - Laboratoire d'Economie et de Gestion - CNRS : UMR5118 - Université de Bourgogne)
    Abstract: En mobilisant le cadre conceptuel des leviers de contrôle de Simons (1995), cet article montre comment articuler les usages diagnostique et interactif d'un seul et même système de contrôle de gestion (en l'occurrence d'un système d'indicateurs environnementaux) pour permettre le déploiement et l'émergence de nouvelles stratégies. En opposition à la littérature, nous proposons une articulation " en parallèle " comme alternative à l'articulation " en glissement " des leviers de contrôle. Ces résultats sont obtenus à partir d'une étude de cas réalisée dans une entreprise française de vins et spiritueux sujette à de fortes incertitudes environnementales stratégiques.
    Keywords: Systèmes de contrôle de gestion ; contrôle diagnostique ; contrôle interactif ; indicateurs environnementaux ; stratégie verte
    Date: 2013–10–01
    Abstract: En Wallonie, la collecte des déchets est fréquemment déléguée par les communes à une intercommunale ou à un collecteur privé. Par ailleurs, de plus en plus de communes utilisent des conteneurs à puce. Cet article compare les performances en termes de coûts de ces différentes alternatives
    Date: 2013–10–15

This nep-env issue is ©2013 by Francisco S.Ramos. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.