nep-env New Economics Papers
on Environmental Economics
Issue of 2013‒11‒16
forty papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Kazakh emissions trading scheme: legal implications for land use By Sabitova, Saltanat
  2. Two World Views on Carbon Revenues By Burtraw, Dallas; Sekar, Samantha
  3. Directed technical change, unilateral actions, and climate change By Hiroaki Sakamoto
  4. Wood Bioenergy and Land Use: A Challenge to the Searchinger Hypothesis By Sedjo, Roger A.; Sohngen, Brent; Riddle, Anne
  5. Border Carbon Adjustment and International Trade: A Literature Review By Madison Condon; Ada Ignaciuk
  6. Tax Reform and Environmental Policy: Options for Recycling Revenue from a Tax on Carbon Dioxide By Goulder, Lawrence H.; Hafstead, Marc A.C.
  7. Proceedings of the International Conference and Young Researchers’ Forum - “Natural resource use in Central Asia: Institutional challenges and the contribution of capacity building” held in Giessen, 1st October 2013 By Anonymous; Pawlowski, Ira
  8. Livelihood assessment: A participatory tool for natural resource dependent communities By Lax, Jutta; Krug, Joachim
  9. Will technological progress be sufficient to effectively lead the air transport to a sustainable development in the mid-term (2025)? By Chèze, Benoit; Chevallier, Julien; Gastineau, Pascal
  10. Optimal Sustainable Policies under Pollution Ceiling: The Demographic Side By Raouf Boucekkine; Blanca Martinez; Ramon Ruiz-Tamarit
  11. Welfare Effects of Subsidizing a Dead-End Network of Less Polluting Vehicles By Antje-Mareike Dietrich; Gernot Sieg
  12. Business Activity and Environmental Degradation in Mexico By Anissa Chaibi; Mohamed Arouri; Gazi Salah Uddin; Sanjib Chakraborty; Philippe Foulquier
  13. Short-term emissions reductions in the electricity sector By Solier, Boris
  14. Analysis of Fossil Fuel Subsidies in Kazakhstan By Nugumanova, Lyazzat
  15. Intensive Commercial Agriculture in Fragile Uplands of Vietnam: How to Harness its Poverty Reduction Potential while Ensuring Environmental Sustainability? By Keil, Alwin; Saint-Macary, Camille; Zeller, Manfred
  16. Managing Risks and Tradeoffs Using Water Markets By Kerr, Suzi
  17. Measuring the Technical Efficiency of Farms Producing Environmental Output: Parametric and Semiparametric Estimation of Multi-output Stochastic Ray Production Frontiers By Tomasz Gerard Czekaj
  18. Climate Economics in Progress 2013 By Geoffron, Patrice
  19. Dust storms, dust transfer and depositions in the southern Aral Sea region By Aslanov, Ilkhomjon
  20. Governance of CO2 markets: lessons from the EU ETS By Trotignon, Raphaël; De Perthuis, Christian
  21. Special Study on Sustainable Fisheries Management and International Trade in the Southeast Asia and Pacific Region By Masayuki Komatsu
  22. Water Resoures and Unconventional Fossil Fuel Development: Linking Physical Impacts to Social Costs By Kuwayama, Yusuke; Olmstead, Sheila; Krupnick, Alan
  23. Pourquoi et comment redresser le système européen des quotas de CO² By Trotignon, Raphaël; De Perthuis, Christian
  24. Valuing wind farms’ environmental impacts by geographical distance: A contingent valuation study in Portugal By Anabela Botelho; Lígia M.Costa Pinto; Patricia Sousa
  25. Economic analysis of afforestation of marginal croplands in Uzbekistan By Djanibekov, Utkur; Khamzina, Asia; Villamor, Grace B.; Lamers, John P.A
  26. Climate Change Creates Trade Opportunity in India By Dinda, Soumyananda
  27. The Effects of Experience on Preference Uncertainty: Theory and Empirics for Public and Quasi-Public Environmental Goods By Czajkowski, Mikolaj; Hanley, Nicholas; LaRiviere, Jacob
  28. An overview of CO2 cost pass-through to electricity prices in Europe By Jouvet, Pierre-André; Solier, Boris
  29. The Effect of Mail-in Utility Rebates on Willingness-to-Pay for ENERGY STAR® Certified Refrigerators By Li, Xiaogu; Clark, Christopher D; Jensen, Kimberly L; Yen, Steven T
  30. Using the Tax System To Address Competition Issues with a Carbon Tax By Metcalf, Gilbert E.
  31. Stratégie optimale de stockage de déchets radioactifs à vie longue sous contrainte de capacité By Villeneuve, Bertrand
  32. Mandatory versus voluntary payment for green electricity By Elcin Akcura
  33. Impact on Corn Prices from Reduced Biofuel Mandates By Bruce A. Babcock; Wei Zhou
  34. Floodplain Conservation as a Flood Mitigation Strategy: Examining Costs and Benefits By Kousky, Carolyn; Walls, Margaret
  35. Pollution Control Effort at China’s River Borders: When Does Free Riding Cease? By Matthew E. Kahn; Pei Li; Daxuan Zhao
  36. Equilibrium Transitions from Non Renewable Energy to Renewable Energy under Capacity Constraints By Amigues, Jean-Pierre; Ayong Le Kama, Alain; Chakravorty, Ujjayant; Moreaux, Michel
  37. Macroeconomics, Financial Crisis and the Environment: Strategies for a Sustainability Transition By Miklós Antal; Jeroen van den Bergh
  38. Do corporate bond and credit default swap markets value environmental, social or corporate governance events? By Berg, Florian; Le Pen, Yannick
  39. Legal Arrangements and Pasture–related Socio–ecological Challenges in Kyrgyzstan By Dörre, Andrei
  40. The Evolving Geography of China’s Industrial Production: Implications for Pollution Dynamics and Urban Quality of Life By Siqi Zheng; Cong Sun; Ye Qi; Matthew E. Kahn

  1. By: Sabitova, Saltanat
    Abstract: Kazakhstan ratified the Kyoto Protocol on 26 March 2009. As part of measures aimed at implementing the Kyoto Protocol, Kazakhstan is preparing for launching its first domestic emissions trading scheme (ETS). National cap-and-trade system is expected to be a key climate-policy instrument for reaching general commitments of the country to mitigate climate change. Emitters which are subject to the Kazakh emissions trading scheme are allocated with emission caps, which can be traded within national cap-and-trade scheme. Such emitters can reduce their own emissions and then sell excess of cap allowances on the market. If emitting more than allowed, they can buy allowances if any available, otherwise are obliged to pay strict fines defined by the government. Domestic sectors, which are subject to Kazakh emissions trading scheme, were chosen with the intention to regulate key sectors and categories by one market-based tool. Kazakh ETS will cover companies emitting from twenty thousand tons of carbon dioxide equivalent per year. In the time when Kazakhstan is actively investigating other options for reducing emissions to comply with its present voluntary commitments and future commitments under the Kyoto Protocol, establishment of a domestic emissions trading scheme may be a good option. That is why Kazakh ETS is taking serious attention of the government. In this way, the government intends to raise the interest of operators to move gradually to energy efficiency and low-carbon policy by their own initiatives. GHG emissions can be reduced by several means such as establishing renewables,installing energy-saving technologies, and such others; however, GHGs can also be reduced through increasing GHG absorbing measures, provided within the land use, landuse change and forestry (LULUCF) sector of the Kyoto Protocol. Kazakh emissions trading scheme does not provide trading of carbon units in the LULUCF sector directly. Planting new forests to absorb carbon dioxide in the atmosphere is one viable option to employ forests to curb climate change. The idea of planting carbon offsets is now being implemented worldwide under the Kyoto Protocol and beyond it. There are three major frameworks for LULUCF projects. First, avoiding emissions by conservation of existing carbon stocks, second, increasing carbon storage by sequestration, and third, substituting carbon for fossil fuel and energy intensive products. The aim of the study is to analyze how the LULUCF sector can be employed under current Kazakh emissions trading scheme.
    Keywords: Kazakhstan, Kyoto Protocol, domestic emissions trading scheme (ETS), land use, landuse change and forestry (LULUCF), Community/Rural/Urban Development, Environmental Economics and Policy, International Development, Research Methods/ Statistical Methods, R, Q, O,
    Date: 2013–10–01
  2. By: Burtraw, Dallas (Resources for the Future); Sekar, Samantha (Resources for the Future)
    Abstract: The introduction of a price on carbon dioxide is expected to be more efficient than prescriptive regulation. It also instantiates substantial economic value. Initially programs allocated this value to incumbent firms (grandfathering), but the growing movement toward auctioning or emissions fees makes carbon revenues into a payment for environmental services. This paper asks, to whom should this payment accrue? If the atmosphere resource, as a common property resource, is viewed as the property of government, then the decision of how to use the revenue can be viewed as a fiscal problem, and efficiency considerations dominate. If the atmosphere is viewed as held in common, then the revenue might be considered compensation to owners and delivered as payment to individuals. This decision has efficiency and distributional consequences that affect the political economy and the likelihood and durability of climate policy. We summarize trends among six existing carbon-pricing programs.
    Keywords: auction, cap and trade, emissions fee, emissions tax, allocation, grandfathering, climate change, policy
    JEL: H23 N5 P48
    Date: 2013–10–10
  3. By: Hiroaki Sakamoto
    Abstract: In this paper, I investigate the implications of policy-induced technological change based on a multi-region variant of the directed technical change model developed by Acemoglu et al. (2012). On top of the pollution externality accompanied by carbon dioxide emission, different regions are connected through a global market where energy-related machine producing firms monopolistically compete with each other. One of the main findings of the analysis is that unilaterally introduced climate policies in developed regions might have only a slight short-term impact at a global level, but later will turn out to be a basis for low-carbon development in developing regions as well as developed regions. The simulation results indicate that an extension of the Kyoto protocol, if appropriately designed, can trigger a long-term shift in energy use at a global level even without active involvement of the United States. Moreover, if the United States decides to join the treaty and a fairly moderate abatement target is agreed upon among the member states, the similar level of long-term environmental consequence as in the universal climate regime can be replicated without explicit participation of developing regions.
    Keywords: Climate change, directed technical change, unilateral policy, innovation, Kyoto protocol
    JEL: O31 O33 Q54 Q55 Q58
  4. By: Sedjo, Roger A. (Resources for the Future); Sohngen, Brent; Riddle, Anne
    Abstract: A concern of many environmentalists is that the use of biomass energy will decimate the forests. Searchinger et al. (2008, 2009) examined this issue related to corn ethanol and suggested that substituting corn ethanol for petroleum would increase carbon emissions associated with the land conversion abroad necessary to offset the decline in corn availability. Associated with these concerns is the overall issue of climate change (IPCC 2006). This issue is broader than simply corn. If agricultural croplands are drawn into the production of biofuel feedstocks, commodity prices are expected to rise, triggering land conversions overseas, releasing carbon emissions, and offsetting the carbon reductions expected from bioenergy. Using a general stylized forest sector management model, our study examines the economic potential of traditional industrial forests and supplemental dedicated fuelwood plantations to produce biomass on submarginal lands. It finds that these sources can economically produce large levels of biomass without compromising crop production, thereby mitigating the land conversion and carbon emissions effects posited by the Searchinger Hypothesis.
    Keywords: biomass, forests, fuelwood, land use, land conversion, wood biomass, bioenergy, carbon emissions, feedstock, Searchinger Hypothesis, climate change
    JEL: Q1 Q16 Q23 Q24 Q42 Q54
    Date: 2013–11–05
  5. By: Madison Condon; Ada Ignaciuk
    Abstract: An important source of political opposition to measures aimed at reducing emissions of greenhouse gases (GHGs) arises from concerns over their negative effects on the competitiveness of domestic firms, especially those that are energy-intensive and exposed to competition from foreign producers. Politicians and industry representatives alike fear that imports from countries without similar regulations can gain cost-of-production advantages over domestic goods. With many of the major economies of the world contemplating unilateral action to restrict their carbon emissions (while continuing to pursue co-ordinated multilateral action), the parallel concern of carbon leakage — whereby domestic reductions in emissions are partially or wholly counterbalanced by increased emissions elsewhere in the world — has also arisen. Various adjustments have been proposed, both in the academic literature and in draft climate legislation, including levying a border tax or requiring importers to surrender a quantity of carbon permits. Collectively, these kinds of adjustments are often referred to as border carbon adjustments, or BCAs. This note reviews the existing literature on BCAs and alternatives to BCAs and discusses what various researchers have concluded about the efficacy of BCAs from both a trade and an environmental perspective.
    Keywords: trade and environment, border tax adjustment, climate change, border carbon adjustment
    JEL: F13 F18 F53 F59 H23 K32 K33 Q48 Q54 Q58
    Date: 2013–10–31
  6. By: Goulder, Lawrence H.; Hafstead, Marc A.C. (Resources for the Future)
    Abstract: Carbon taxes are a potential revenue source that could play a key role in major tax reform. This paper employs a numerical general equilibrium model of the United States to evaluate alternative tax reductions that could be financed by the revenues from a carbon tax. We consider a carbon tax that begins at $10 per ton in 2013 and increases at 5 percent per year to the year 2040. The net revenue from the tax is substantial, and the GDP and welfare impacts of the tax depend significantly on how this revenue is recycled to the private sector. Under our central case simulations (which do not account for beneficial environmental impacts) over the period 2013–2040, the tax reduces GDP by .56 percent when revenues are returned through lump-sum rebates to households, as compared with .33 and .24 percent when the revenues are recycled through reductions in personal and corporate tax rates, respectively. Introducing tradable exemptions to the carbon tax reduces or eliminates the negative impacts on the profits of the most vulnerable carbon-supplying or carbon-using industries. The GDP and welfare impacts are somewhat larger when such exemptions are introduced.
    Keywords: carbon tax, tax reform, climate
    JEL: Q50 Q58 H23
    Date: 2013–10–08
  7. By: Anonymous; Pawlowski, Ira
    Keywords: natural resources, water, agriculture, climate change, Central Asia, Community/Rural/Urban Development, Environmental Economics and Policy, International Development, Land Economics/Use, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods,
    Date: 2013–10–01
  8. By: Lax, Jutta; Krug, Joachim
    Abstract: [Foreword] Globally, around 15 million hectares of forests - mainly tropical forests - are converted to other uses or lost through natural causes each year. Without forests mankind has no chance to survive. However, the poorest of the poor are directly dependent on forests as a resource of food, medicine, construction material and energy. Management, conservation, and sustainable development of forests are key issues of the international environmental and forest policy since the United Nations Conference on Environment and Development in Rio de Janeiro in the year 1992 to counteract the destruction of forests. In order to maintain tropical forests and to conserve their functions, structure and biodiversity as a collective good of humankind, forests need to be managed in a sustainable way. Conservation efforts are faced with the threefold task of incorporating ecological, economic and social sustainability aspects equally into development approaches. The relevance of livelihood issues to sustainable development has its basis in the United Nations Conference on Environment and Development 1992 and is at present an essential element in development approaches (e.g. MDGMillenium Development Goals). In line with Campbell the understanding of rural livelihoods is one of the keys to putting an end to global poverty. Though environmental resources can make up a considerable proportion of rural livelihoods it is necessary to evaluate this environmental dependency. This field manual introduces a participatory tool for the assessment of local livelihood situations of rural forest dependent communities. The assessment tool was initially implemented in a case study in Northern Vietnam. Vietnam, representative for many other tropical countries considered a developing country, where over 60 % of the populations livelihood strategy is based on agricultural and forest activities. --
    Date: 2013
  9. By: Chèze, Benoit; Chevallier, Julien; Gastineau, Pascal
    Abstract: The aim of this article is to investigate whether anticipated technological progress can be expected to be strong enough to offset carbon dioxide (CO2)emissions resulting from the rapid growth of air transport. Aviation CO2 emissions projections are provided at the worldwide level and for eight geographical zones until 2025. Total air traffic flows are first forecast using a dynamic panel-data econometric model and then converted into corresponding quantities of air traffic CO2 emissions, through jet fuel demand forecasts, using specific hypothesis and energy factors. None of our nine scenarios appears compatible with the objective of 450 ppm CO2-eq. (a.k.a. “scenario of type I”) recommended by the Intergovernmental Panel on Climate Change (IPCC). None is either compatible with the IPCC scenario of type III, which aims at limiting global warming to 3.2◦C. Thus, aviation CO2 emissions are unlikely to diminish over the next decade unless there is a radical shift in technology and/or travel demand is restricted.
    Keywords: Air transport; CO2 emissions; Forecasting; Climate change;
    JEL: C53 L93 Q47 Q54
    Date: 2013–01
  10. By: Raouf Boucekkine (Aix-Marseille University (Aix-Marseille School of Economics, CNRS & EHESS, IRES and CORE, Université Catholique de Louvain.); Blanca Martinez (Universidad Complutense de Madrid); Ramon Ruiz-Tamarit (Department of Economic Analysis, Universitat de Valencia, Spain, and IRES Department of Economics, Université Catholique de Louvain, Belgium.)
    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: 2013–11–04
  11. By: Antje-Mareike Dietrich (Institute of Transport Economics, Muenster); Gernot Sieg (Institute of Transport Economics, Muenster)
    Keywords: environmental externalities, network effects, private transport, technological change
    JEL: L92 Q55
    Date: 2013–10
  12. By: Anissa Chaibi; Mohamed Arouri; Gazi Salah Uddin; Sanjib Chakraborty; Philippe Foulquier
    Abstract: This paper contributes to the literature by investigating the relationships between business activity, carbon dioxide (CO2) emissions, energy consumption in a developing country by taking into consideration the effects of ongoing industrialization and financial development. To do this, we introduce an innovative empirical approach based on ARDL bounds testing in the presence of structural breaks and apply it to Mexico over the period 1971-2011. We show strong evidence of cointegration between these variables. More interestingly, we find that energy is the long-run forcing variable to explain the Mexican business activity growth. This implies that energy savings policy may result in decreasing the national income or employment.
    Keywords: Business activity, Environment, ARDL cointegration
    Date: 2013–10–15
  13. By: Solier, Boris
    Keywords: Supply and demand; Zephyr- Switch simulation model; electricity; EU ETS; European Union CO2 emissions trading scheme;
    JEL: L94 Q56 Q52 Q41
    Date: 2013
  14. By: Nugumanova, Lyazzat
    Abstract: During the last decades the topic of fossil fuel subsidies has been gaining importance in the policy discussion. International Energy Agency (IEA) (2011) estimates that the total global fossil fuel subsidies in 2010 amounted to $409 billion. Kazakhstan is energy-rich country with significantly high subsidies on fossil fuels. Fossil fuel subsidies are a distortion which causes inefficient use of energy and natural resources, high CO2 emissions, distort the energy markets, put pressure on the state budget, and hinder investments into energy sector and renewable energy and thus long-term sustainable development in Kazakhstan. Removing fossil fuel subsidies could be in the long-term beneficial for Kazakhstan. The main research question is to analyze macroeconomic effects of removing current distortions in the energy market using the computable general equilibrium model (CGE), GTAP. The specific objectives are to understand the issue and the extent of fossil fuel subsidies in Kazakhstan, analyze implications of these subsidies, and provide general policy suggestions on this topic. This paper first presents main data on fossil fuel subsidies, energy and environment in Kazakhstan, literature review, methodological approach suitable for this research and expected results.
    Keywords: fossil fuel subsidies, Kazakhstan, computable general equilibrium model (CGE), GTAP, Environmental Economics and Policy, International Development, International Relations/Trade, Research Methods/ Statistical Methods, R, Q, O,
    Date: 2013–10–01
  15. By: Keil, Alwin; Saint-Macary, Camille; Zeller, Manfred
    Abstract: Markets for high-value agricultural commodities are growing and can contribute to reducing rural poverty. However, the poor may be unable to participate in such markets, and adverse environmental impacts may counterbalance short-term benefits. Hence, policies are needed that help reducing poverty while protecting the environment. We address this challenge using the case of commercial maize production for animal feed purposes in a marginal upland area of Vietnam. We identify determinants of farmers’ degree of participation in maize production using regression analysis and assess farmers’ awareness of soil erosion and their conservation practices. The poorest are particularly specialized in maize but depend on disadvantageous input supply and marketing arrangements to offset infrastructural and institutional deficiencies. High awareness of soil erosion is contrasted by lacking conservation practices due to high opportunity costs. Policies should foster the integration of livestock in the maize-based farming system and promote soil conservation technologies that produce feed.
    Keywords: Commercial agriculture; rural poverty; land degradation; tobit regression; Vietnam;
    JEL: O13 Q56
    Date: 2013
  16. By: Kerr, Suzi (Motu Economic and Public Policy Research)
    Abstract: Risk (and often the certainty) of adverse environmental outcomes motivates environmental regulation; other risks also affect welfare outcomes. Economic instruments are one way to reduce environmental risk while maintaining flexibility that helps manage other risks. However regulation not only mitigates risks, it also creates them. While the literature has explored some aspects of risk and economic instruments in great detail, other risks have been largely ignored. Actual and perceived risks are often a barrier to the use of economic instruments so, where they are appropriate, it would be valuable to pay more attention to mitigating risks and demonstrating that they can be mitigated. This note creates a framework for synthesising experience with economic instruments for managing risks relating to water quantity and quality and illustrates it with two New Zealand case studies for which detailed information is available. It also explores some linkages between economic instruments that are not primarily directed at water management – for example emissions trading - and water management outcomes. The surprising outcomes illustrate the importance of context for assessing impact and risk.
    Keywords: water quality; Lake Taupo; Lake Rotorua; economic instruments; risk; policy interaction
    JEL: D81 Q53 Q57
    Date: 2013–11
  17. By: Tomasz Gerard Czekaj (Department of Food and Resource Economics, University of Copenhagen)
    Abstract: This paper investigates the technical efficiency of Polish dairy farms producing environmental output using the stochastic ray function to model multi-output – multi-input technology. Two general models are considered. One which neglects the provision of environmental output and one which accounts for such output. Three different proxies of environmental output are discussed: the ratio of permanent grassland (including rough grazing) to total agricultural area, the total area of permanent grassland and the amount of environmental subsidies which farmers are paid for providing environmental goods and services. These proxies are discussed on the basis of microeconomic production theory and are empirically compared by the econometric approach using parametric and semiparametric stochastic frontier models. The main focus is on the estimation of technical efficiency of farms producing the environmental output. Since some farms do not provide such output at all, the stochastic ray frontier functions are estimated to overcome the problem of the zero valued dependent variables which often occur when the Translog output distance function is used. The detailed results of the technical efficiency analysis show that, although the estimated efficiencies from the models which neglect the environmental output and those which account for the output are rather similar on average, the rankings based on these efficiencies differ. Finally, based on the theoretical economic reasoning and empirical application, we find that, for the given dataset, the semiparametric stochastic frontier model which uses a quantity of permanent grassland area as a proxy of environmental output, is the most suitable for application.
    Keywords: environmental output, stochastic frontier analysis, stochastic ray function, Translog, Polish dairy farms
    JEL: C14 C23 D24 Q12
    Date: 2013–10
  18. By: Geoffron, Patrice
    Keywords: Energy;
    JEL: Q4
    Date: 2013
  19. By: Aslanov, Ilkhomjon
    Keywords: Dust storms, dust transfer and depositions, the southern Aral Sea region, Environmental Economics and Policy, Land Economics/Use, Research Methods/ Statistical Methods, R, Q, O,
    Date: 2013–10–01
  20. By: Trotignon, Raphaël; De Perthuis, Christian
    Keywords: European Union Emission Trading Scheme; Energy policy;
    JEL: Q56 Q48
    Date: 2013
  21. By: Masayuki Komatsu (Asian Development Bank Institute (ADBI))
    Abstract: This paper analyzes the current status of fisheries and aquaculture in Southeast Asia and international trade. Analysis concludes that a policy of sustainable management for both capture fisheries and aquaculture is of greatest importance, but such a policy has been neither planned nor implemented with a holistic and long-term perspective. Current policy reflects a short-term view and the immediate needs of each nation. Therefore, capacity building of human resources and organizations, including governments, is needed for the formulation of holistic national policies to seek long-term and fundamental remedies for the sustainable management of fisheries resources and intensified and extensive aquaculture. Such holistic national policies should include science-based management, monitoring, enforcement, coordination of capture fisheries and aquaculture, and international trade policies. It may include the effects of climate change and oil price increases, as well as international market trends and regulations or barriers. Moreover, international trade will be promoted based on the sustainability of capture fisheries and aquaculture. ADB members and governments are urged to provide official development assistance for policy implementation, in particular to the private sectors that may not otherwise receive any, and to small and community-related businesses. Recommendations focus on building capacity for the long run, among others, for which facilitation should be provided.
    Keywords: Sustainable Fisheries Management, international trade in fishery and aquaculture, the sustainability of capture fisheries and aquaculture
    JEL: Q22 O13
    Date: 2013–10
  22. By: Kuwayama, Yusuke (Resources for the Future); Olmstead, Sheila; Krupnick, Alan (Resources for the Future)
    Abstract: The production of crude oil and natural gas from unconventional reservoirs has become a growth sector within the North American energy industry, and current projections indicate that the production of some of these unconventional fossil fuels will continue accelerating in the foreseeable future. This shift in the energy industry has been accompanied by rising concerns over potential impacts on water resources because producing these fuels is thought to require more water per unit of energy produced than conventional sources and may lead to greater degradation of water quality. In this paper, we address these emerging environmental issues by (a) providing a comprehensive overview of the existing literature on the water quantity and quality implications of producing the main unconventional fossil fuels in North America and (b) characterizing the differences in social costs that arise from the extraction and production of these fuels versus those from conventional fossil fuel production.
    Date: 2013–11–06
  23. By: Trotignon, Raphaël; De Perthuis, Christian
    Keywords: Permis de pollution négociables; Compensation carbone; Politique énergétique; Transition énergétique; AIMC; EU ETS;
    JEL: Q56 Q48
    Date: 2013–04
  24. By: Anabela Botelho (NIMA, Universidade do Minho); Lígia M.Costa Pinto (NIMA, Universidade do Minho); Patricia Sousa (NIMA, Universidade do Minho)
    Abstract: Wind energy is currently one the most important energy sources in the production of electricity. In this study, we use the CVM to elicit the monetary value attached to wind power’s environmental impacts from three different groups of individuals: local residents, residents in a nearby town, and residents outside the area of a wind farm located in Portugal, one of the top 10 countries in the world with the highest cumulative wind power capacity to date. In each case, our empirical analysis employs a novel likelihood function that is constructed to be appropriate for the type of data collected. The main results are supportive of a NYMBY effect, but also indicate that the amount needed to compensate local residents for the negative impacts caused by the wind farm can be raised by the constitution of a compensation fund paid by non-residents, thereby overcoming the inefficiency caused by the NYMBY effect.
    Keywords: Contingent Valuation, uncertainty, renewable energy; Stochastic frontier models; Willingness to pay/accept; hypothetical bias
    JEL: Q50 Q51 C29 Q40 Q58 Q53
    Date: 2013–07
  25. By: Djanibekov, Utkur; Khamzina, Asia; Villamor, Grace B.; Lamers, John P.A
    Abstract: Irrigated agricultural production in Uzbekistan is threatened by the impacts of land degradation, irrigation water scarcity and climate change. The conversion of marginal croplands to tree plantations is an option for rehabilitation of nutrient-depleted cropland soils, saving of irrigation water, carbon sequestration, and improving population welfare. The economic benefits and impacts of tree planting on marginal croplands, and policies that may facilitate the adoption of this land use are not well known. We employed various methods at different scales to investigate economically viable options of afforestation on marginal croplands on example of irrigated drylands of Uzbekistan. This includes analyzing the impacts of afforestation supported by the carbon (C) sequestration reward on the rural livelihoods. At field level (one hectare), the stochastic dominance analysis was employed to investigate the financial attractiveness of afforestation on marginal farmlands under uncertainty. At the farm level, the expected utility method was employed to analyze effects of this land use change on farm incomes. To consider the bimodal structure of agriculture in Uzbekistan, the stochastic dynamic farm-household model was developed. The results indicate that due to benefits from non-timber products, afforestation is a more viable land use option on marginal lands than crop cultivation. Allowing the exemption of marginal lands from cotton cropping in favor of tree planting would incentivize afforestation. At the same time, the field level analysis indicates that due to variability in returns a substantial increase in C prices would make afforestation as financially attractive as crops on marginal lands. However, when considering uncertainties in land use returns at the whole farm level, afforestation would occur without the C incentives due to improved irrigation water use efficiency and reduced revenue risks through land use diversification. Through the considered farm-household wage-labor relationship, the benefits of afforestation on marginal croplands at farm would be also transferred to rural smallholders employed at this farm. This would mainly result from improved payment structure by tree products, particularly fuelwood and foliage for livestock fodder.
    Keywords: Uzbekistan, Sustainable rural development, Land use diversification, Bimodal agricultural system, Non-timber tree products, Community/Rural/Urban Development, International Development, Land Economics/Use, Production Economics, Research Methods/ Statistical Methods, R, Q, O,
    Date: 2013–10–01
  26. By: Dinda, Soumyananda
    Abstract: Climate change is an emerging challenge to developing economy like India however it also creates opportunity to grow through climate friendly goods production and new direction of trade. This paper focuses India’s potential export trade in climate friendly goods. The estimated gravity model is defined as the potential trade and potential trade gap is measured as how well a bilateral trade flow performs relative to the mean as predicted by the model. Potential trade gap means that actual trade is less than predicted trade value. It suggests that there is a scope to increase the export of climate friendly goods (CFG) to trading partners. The total estimated CFG export potential trade gap in India is around 6 billion US dollar (USD) in 2008. This study contributes on the empirical measurement of potential trade of climate friendly goods in India. Paper suggests a possible climate smart export-led growth model in India and mitigates climate change problems.
    Keywords: Bilateral trade flow, Climate friendly goods, Export, Gravity model, Potential Trade, Asia, EU, USA, UK.
    JEL: C13 F43 O5 Q56
    Date: 2013–02–11
  27. By: Czajkowski, Mikolaj; Hanley, Nicholas; LaRiviere, Jacob
    Abstract: This paper develop and estimates a model of demand estimation for environmental public goods which allows for consumers to learn about their preferences through consumption experiences. We develop a theoretical model of Bayesian updating, perform comparative statics over the model, and show how the theoretical model can be consistently incorporated into a reduced form econometric model. We then estimate the model using data collected for two environmental goods. We find that the predictions of the theoretical exercise that additional experience makes consumers more certain over their preferences in both mean and variance are supported in each cas e.
    Keywords: scale variance; scale; generalized multinomial logit; Bayesian updating; stated preferences; preference learning; discrete choice experiment
    Date: 2013–10
  28. By: Jouvet, Pierre-André; Solier, Boris
    Abstract: This paper investigates the link between wholesale electricity prices in Europe and the CO2 cost, i.e. the price of European Union Allowances (EUAs), over the two first phases of the European Union Emissions Trading Scheme (EU ETS). We set up a theoretical framework and an empirical model to estimate to what extent daily fluctuations of CO2 costs may have impacted electricity prices. Regarding estimation results for the first phase of the EU ETS, about 42% of estimated pass-through rates appear to be statistically significant, while only one third of them are statistically different from zero in the second phase. We try to improve those results by proposing alternative estimates based on the EU ETS compliance periods.
    Keywords: European Union Emissions Trading Scheme; EU ETS; spot markets;
    JEL: L94 G1 C58 C22
    Date: 2013–10
  29. By: Li, Xiaogu; Clark, Christopher D; Jensen, Kimberly L; Yen, Steven T
    Abstract: This study examines how a $50 mail-in rebate influences consumer willingness-to-pay for an ENERGY STAR-certified refrigerator. Data collected from a 2009 U.S. online survey containing a hypothetical choice experiment. Results suggest that a rebate induces uncertainty about the quality of ENERGY STAR-certified refrigerators and, thus, could actually reduce willingness-to-pay.
    Keywords: Choice Experiment, Eco-label, Energy Star, Generalized Multinomial Logit, Ordered Probit, Rebate, Refrigerator, Willingness-to-Pay, Environmental Economics and Policy, Q58, D12,
    Date: 2013
  30. By: Metcalf, Gilbert E.
    Abstract: This paper considers how tax reductions financed by a carbon tax could be designed to mitigate the need for specific relief for firms in select energy-intensive, trade-exposed (EITE) sectors. In particular, I consider impacts on manufacturing sectors at the six-digit North American Industry Classification System level, with a special focus on firms that would be presumptively eligible for competitiveness relief using the criteria in the Waxman–Markey bill (H.R. 2454). The paper has a number of findings. First, determination of eligibility for relief analogous to the free allowance allocation in H.R. 2454 is sensitive to energy intensity. Second, providing compensation to EITE sectors through the corporate income tax—analogous to the output-based allowance allocation in Waxman–Markey—is certainly feasible, but tax appetite within the EITE sectors is insufficient to fully use any credits that attempted to offset more than about one-quarter of their carbon tax liability. Third, certain reforms do better than others at providing disproportionate relief to EITE sectors. Finally, economic theory predicts a substantial cost to diverting carbon tax revenue toward compensation of specific sectors. Theory also suggests that firms should treat policy risk no differently from the way they treat the other risks they face as they do business. But politics may dictate otherwise; if so, the analysis here suggests that certain approaches may work better than others to ensure that relief is appropriately targeted at minimal cost.
    Keywords: carbon taxes, taxation, tax code, energy-intensive, trade-exposed industries
    JEL: H23 H25 Q54 Q58
    Date: 2013–10–07
  31. By: Villeneuve, Bertrand
    Abstract: The paper models a program of high‐activity nuclear‐waste management. The physics of cooling incites to store hot waste for a while to spare scarce disposal volume: indeed, colder parcels may be put in tighter conditions. The optimal unconstrained duration of storage is characterized. Various constraints (on disposal capacity, on the length of storage, on storage capacity) are considered. They all lead to contrasted strategies depending on vintage.
    Keywords: déchets nucléaires; durée d’entreposage; stockage; contrainte de capacité;
    JEL: Q49 L94 R32
    Date: 2013
  32. By: Elcin Akcura (EBRD)
    Abstract: Renewable energy sources have a critical role to play in contributing to the diversity, sustainability and security of energy supplies. The main objective of the paper is to gain an understanding of the support mechanism of renewable energy sources most preferred by households in the United Kingdom. This paper analyses households’ preferences and willingness to pay under a mandatory scheme where all households contribute compared to a voluntary scheme where only those who wish to pay to support renewables do so (such as the green tariffs offered by electricity suppliers in the UK). Two self-designed contingent valuation method (CVM) surveys are used to explore whether the type of payment option has an impact on households’ willingness to pay (WTP) for increasing share of renewable energy in electricity generation. The paper also investigates whether the type of payment mode affects respondents’ self-reported certainty of paying their stated valuations. The results indicate that the likelihood of paying a positive amount for supporting renewable energy is higher under a mandatory scheme compared to a voluntary payment option in the UK. Respondents have a higher level of certainty in paying their stated WTP under a mandatory payment scheme.
    Keywords: contingent valuation method, renewable energy, willingness to pay, zero inflated ordered probit model
    JEL: C35 D10 D12 D80
    Date: 2013–10
  33. By: Bruce A. Babcock (Center for Agricultural and Rural Development (CARD)); Wei Zhou
    Abstract: Press reports indicate that the Environmental Protection Agency may significantly reduce ethanol mandates to levels that can easily be met. To gain insight into what this decision implies about the price of corn we use a new model of the corn and RIN markets to project corn and ethanol prices and quantities through the 2019 marketing year under two ethanol mandate scenarios. The first scenario is the status quo where mandates that can be met with corn ethanol increase to 14.4 billion gallons in 2014 and 15 billion gallons in 2015 and thereafter. Mandates at this level can only be met using E85 so also included in this scenario is 5,000 new locations where E85 can be purchased. The second scenario holds mandates at 13 billion gallons, a level that can be met with E10. The price of corn is higher by between 5 and 6 percent—about 25 cents per bushel—in the higher mandate scenario. RIN prices are close to zero most of the time in the lower mandate scenario and average between 50 and 60 cents in the higher mandate scenario. Though the corn price difference is economically meaningful to corn farmers and livestock feeders, it is small compared to the price swings that the market has experienced since 2006. This modest change in corn prices from alternative mandate levels suggests that the level of mandate should be determined more by consideration of broad policy objectives rather than the impact on the price of corn. Of key importance to the advanced biofuel industry is whether policy will support the expansion of biofuels consumption by creating incentives to invest in flex cars and fueling stations that will facilitate expanded consumption of low-carbon ethanol. Consideration of the costs and benefits of creating these incentives as part of a national energy policy is of greater long-run importance than the impact of mandates on the price of corn.
    Date: 2013–11
  34. By: Kousky, Carolyn (Resources for the Future); Walls, Margaret (Resources for the Future)
    Abstract: There is growing interest in floodplain conservation as a flood damage reduction strategy, particularly given the co-benefits protected lands provide. We evaluate one such investment—a greenway along the Meramec River in St. Louis County, Missouri. We estimate the opportunity costs, the avoided flood damages, and the capitalization of proximity to protected lands into nearby home prices. To estimate avoided flood damages, we undertake a parcel-level analysis using the Hazus-MH flood model, a GIS-based model developed for FEMA that couples a hydrology and hydraulics model with a damage model relating flood depths to property damage. We examine the distribution of damages across parcels, demonstrating that careful spatial targeting can increase the net benefits of floodplain conservation. In addition, we estimate a hedonic model and find that the increased property values for homes near protected lands are more than three times larger than the avoided flood damages, stressing the continued importance of more traditional conservation values. These benefits alone exceed the opportunity costs; the avoided flood damages further strengthen the economic case for floodplain conservation.
    Keywords: floodplain conservation, benefit–cost analysis, hedonic model, hazus, floods
    JEL: Q51 Q54
    Date: 2013–10–10
  35. By: Matthew E. Kahn; Pei Li; Daxuan Zhao
    Abstract: At political boundaries, local leaders often have weak incentives to reduce polluting activity because the social costs are borne by downstream neighbors. This paper exploits a natural experiment set in China in which the central government changed the local political promotion criteria and hence incentivized local officials to reduce border pollution along specific criteria. Using a difference in difference approach, we document evidence of pollution progress with respect to targeted criteria at river boundaries. Other indicators of water quality, not targeted by the central government, do not improve after the regime shift. Using data on the economic geography of key industrial water polluters, we explore possible mechanisms.
    JEL: H23 H4 R48
    Date: 2013–11
  36. By: Amigues, Jean-Pierre; Ayong Le Kama, Alain; Chakravorty, Ujjayant; Moreaux, Michel
    Abstract: We study the transition between non renewable and renewable energy sources with adjustment costs over the production capacity of renewable energy. Assuming constant variable marginal costs for both energy sources, convex adjustment costs and a more expensive renewable energy, we show the following. With sufficiently abundant non renewable energy endowments, the dynamic equilibrium path is composed of a first time phase of only non renewable energy use followed by a transition phase substituting progressively renewable energy to non renewable energy and a last time phase of only renewable energy use. Before the complete transition towards renewable energy, the energy price follows a Hotelling like path. Depending upon the shape of adjustment costs, investment into renewable energy may either begin before production of renewable energy or be delayed until the energy price achieves a sufficient gap with respect to the renewable energy marginal production cost. In all cases, the renewable energy sector bears negative returns over its investments in its early stage of development. Investment into renewable energy production capacity building first increases before having to decrease strictly before the depletion time of the non renewable resource. Renewable energy capacity continues to expand afterwards but at a forever decreasing rate converging to zero in the very long run. The development path of renewable energy may be largely independent from the non renewable resource scarcity. In particular with initially abundant non renewable energy, the length of the transition phase between non renewable and renewable energy together with the accumulated renewable production capacity at the end of this phase do not depend upon the scarcity rent of the non renewable resource and of the initial size of the resource stock.
    Keywords: non renewable resource, renewable energy, adjustment costs, resources transition, capacity constraints.
    Date: 2013–10
  37. By: Miklós Antal; Jeroen van den Bergh
    Abstract: We raise fundamental questions about macroeconomics relevant to escaping the financial-economic crisis and shifting to a sustainable economy. First, the feasibility of decoupling environmental pressure from aggregate income is considered. Decoupling as a single environmental strategy is found to be very risky. Next, three main arguments for economic growth are examined: growth as progress, growth to avoid economic instability, and growth to offset unemployment due to labor productivity improvements. For each, we offer orthodox, heterodox and new responses. Attention is paid to progress indicators, feedback mechanisms affecting business cycles, and strategies to limit unemployment without the need for growth. Besides offering an economy-wide angle, we discuss the role of housing and mortgage markets in economic cyclicality. Finally, interactions between real economic and financial-monetary spheres are studied. This includes money creation, capital allocation and trade-offs between efficiency and operating costs of financial systems. Throughout, environmental and transition implications are outlined.
    Keywords: Financial-monetary system, GDP information, housing-mortgage markets, macroeconomics, positive and negative feedbacks, productivity trap
    Date: 2013–11
  38. By: Berg, Florian; Le Pen, Yannick
    Abstract: We measure the impact of negative environmental, social and governance news on corporate bond prices and credit default swap premiums for the Eurozone market. Each firm is affected at least by one piece of news related to its environmental, social and governance practices. Each news is then flagged with an indicator of importance. Ab- normal bond returns are computed by subtracting return from a matching portfolio to the return of the observed bond return. Abnormal credit default swap return is calculated with a regression of the observed bond return on an equiweighted index that is constructed to transpose our bond universe on the credit default swap market. Several parametric and non parametric tests do not show any significant impact of these negative events as a whole on corporate bond prices, even though there is evidence of some impact of two subcategories of social events. When considering all events, we find a slight but counter-intuitive decrease of the credit default swap premium within the 5 following days of the event. REMARK: We did finish the database and have now more than 2000 events associated to 212 firms. Unfortunately, the calculation of the matching portfolios takes more time than we expected due to the various constraints. However, we joined the first results for the credit default swap market (Table 7). It does not change the results we found with our subsample of 85 firms.
    Keywords: Corporate Social Responsibility; Bond market; Credit Default Swaps; Event study;
    JEL: G12 G14 G30
    Date: 2013–05
  39. By: Dörre, Andrei
    Abstract: It has to be stated from the beginning that grasslands in Kyrgyzstan have a crucial economic importance from the macroeconomic national level down to the level of local households as supplier of natural animal fodder, as well as crucial ecological meanings such as for water and nutrient cycling, filtration, and soil formation. In spite of the vast expanse of pasture lands and the reduction of livestock numbers in the 1990s, the scope and diversity of pasture-related socio-ecological challenges have increased remarkably, and have come to endanger the continued provision of these services (Wilson 1997:62–63; Undeland 2005: 22). Degradation leads to a growing shortage of grassland, and pasture-related conflicts jeopardize the country’s social integrity. Based on these facts, this presentation has two objectives. The first is to shed light on the importance of legal institutions for the emergence of pasture-related social and ecological problems. Second, it advocates for a participatory approach to the creation of institutional regulations regarding the management and utilization of natural resources. Including the local population in the pasture utilization-related institution-building process can make a decisive contribution to a sustainable development of the country’s society by balancing different interests. The hypothesis to be explored is that formal institutions, especially top-down-initiated legal rules, are decisively contributing to the formation of socio-ecological pasturerelated challenges.
    Keywords: Kyrgyzstan, Legal Arrangements and Pasture–related Socio–ecological Challenges, Community/Rural/Urban Development, International Development, R, Q, O,
    Date: 2013–10–01
  40. By: Siqi Zheng; Cong Sun; Ye Qi; Matthew E. Kahn
    Abstract: China’s rapid economic growth has been fueled by industrialization and urbanization. Given its export focus, this industrialization was spatially concentrated in the coastal eastern cities. Over the last decade, a spatial transformation has taken place leading to a deindustrialization of the rich coastal cities and sharp industrial growth in the inland cities. This survey examines recent work that studies the economic geography of industrial production, per-capita income, pollution and quality of life in China’s cities. We focus on the interaction between firms, local governments and the central government that together determine the new economic geography of industry and pollution within China.
    JEL: L23 L38 L6 R14 R23 R28
    Date: 2013–11

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