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on Environmental Economics |
| By: | Jonah Busch |
| Abstract: | An international mechanism to reduce emissions from deforestation using carbon payments (REDD+) can be leveraged to make payments for forests’ biodiversity as well. Paradoxically, under conditions consistent with emerging REDD+ programs, money spent on a mixture of carbon payments and biodiversity payments has the potential to incentivize the provision of greater climate benefits than an equal amount of money spent only on carbon payments. This paradoxical result arises when diversifying payments across multiple services allows a funding agency to spend less on additional rents to existing suppliers of avoided deforestation and more on incentivizing the participation of new suppliers. |
| Keywords: | Biodiversity conservation; climate change; deforestation; payments for ecosystem services (PES) |
| JEL: | Q23 Q24 Q54 Q57 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:347&r=env |
| By: | Munnich Vass, Miriam (Department of Economics, Swedish University of Agricultural Sciences); Elofsson, Katarina (Department of Economics, Swedish University of Agricultural Sciences) |
| Abstract: | Forest management affects the quantity of CO2 emissions in the atmosphere by carbon sequestration in standing biomass, carbon storage in forest products and production of bioenergy that replace fossil fuels. The main question in this paper is whether forest sequestration is worth increasing at the expense of bioenergy and forest products to achieve EU’s emission reduction target to 2050 cost-effectively. The assessment is based on numerical calculations using a dynamic, partial equilibrium model of cost-effective solutions, where three abatement methods in the forest sector are included together with abatement in the fossil fuel sector. The results show that forest sequestration in standing biomass is cost-effective compared to bioenergy. When sequestration is taken into account, net present costs for meeting EU carbon targets can be reduced by 18%. This is achieved through an increase in annual carbon sequestration by 30-158 million ton CO2. The overall cost of reaching the 80 per cent carbon reduction target amounts to 2,002 billion Euros when sequestration is included in the policy, but increases to 2,371 billion Euros without sequestration. Results suggest that forests can serve as a cost-efficient carbon sink over the considered time period. |
| Keywords: | Forest carbon sequestration; bioenergy; cost-effectiveness; dynamic partial equilibrium; EU climate policy |
| JEL: | Q23 Q52 Q54 Q58 |
| Date: | 2013–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slueko:2013_009&r=env |
| By: | Lenka Wildnerova (UP1 UFR02 - Université Paris 1, Panthéon-Sorbonne - UFR d'Économie - Université Paris I - Panthéon-Sorbonne - PRES HESAM) |
| Abstract: | The goal of this paper is to explore the environmental policies introduced by the government that cares about the welfare of its citizens and the contributions from the lobby groups. Our addition to the topic of environmental lobbying is in modeling lobby groups, where we distinguish between local and global pollution. We showed that in some cases, the environmental lobbying might have a negative impact on the tax level, which is not true for the local lobbying. Even more interesting result shows that the presence of supergreens might increase the pollution level in the home country. Our results for the cooperative policies prove that the introduced tax will imply lower global emissions. We demonstrated that the asymmetries in some parameters will reinforce the tax levels in the case of national lobby and supergreens if the asymmetry parameter in the foreign country is larger. |
| Keywords: | environmental lobbying, lobby groups, pollution tax, emission leakage, large countries, local lobby, supergreens |
| Date: | 2013–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:dumas-00906165&r=env |
| By: | Grimaud, André; Neubauer, Mauricio; Rougé, Luc |
| Abstract: | We study an economy in which a final good is produced by two sectors. One uses a non-renewable and polluting resource, the other a renewable and clean resource. A specific type of research is associated to each sector. The public authorities levy a carbon tax and simultaneously subsidize both research sectors. We study the impact of such a policy scheme on the rate of resource extraction and emissions. The subsidy to research in the clean sector goes in the opposite direction of the effects of the carbon tax. If the tax creates a green paradox, the subsidy moderates it; if the tax slows down resource extraction, then the subsidy generates a green paradox |
| Keywords: | carbon tax, directed technical change, green paradox, R&D policy |
| JEL: | O32 O41 Q20 Q32 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:27734&r=env |
| By: | Shurojit Chatterji; Sayantan Ghosal; Sean Walsh; John Whalley |
| Abstract: | Whats the role of unilateral measures in global climate change mitigation in a post-Durban, post 2012 global policy regime? We argue that under conditions of preference heterogeneity, unilateral emissions mitigation at a subnational level may exist even when a nation is unwilling to commit to emission cuts. As the fraction of individuals unilaterally cutting emissions in a global strongly connected network of countries evolves over time, learning the costs of cutting emissions can result in the adoption of such activities globally and we establish that this will indeed happen under certain assumptions. We analyze the features of a policy proposal that could accelerate convergence to a low carbon world in the presence of global learning. |
| Keywords: | Unilateral initiatives, mitigation, spillovers, global learning, technol- ogy transfer |
| JEL: | Q54 F53 Q55 O33 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:gla:glaewp:2013_23&r=env |
| By: | Idrissa Sibailly (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, LEI - Laboratoire d'Economie Industrielle - Centre de Recherche en Économie et STatistique (CREST)) |
| Abstract: | Clean technologies implemented by polluters subject to environmental regulation are often developed and patented by specialized technology suppliers. This paper investigates the impact of the environmental regulation stringency on the diffusion of patented clean technologies when the polluters (i.e. the potential licensees) compete in imperfectly competitive markets. We show that the polluters' willingness to pay for clean technology and the diffusion of such technology (i.e. the extent to which it is privately disseminated through licensing) depend not only on the regulatory stringency and the technological efficiency, but also on the polluters' competitive environments. More stringent regulations (e.g., higher carbon taxes) or increased technological efficiency (e.g., supported by more R&D subsidies) do not necessarily induce more diffusion of efficient clean technologies. Indeed, as the returns to implementing a clean technology increase, so do the technology supplier's incentives to sell fewer licenses so as to extract more rent from each of its licensees. |
| Keywords: | Clean technology, Environmental Regulation, Oligopoly, Licensing |
| Date: | 2013–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00911453&r=env |
| By: | Sandro Sacchet de Carvalho |
| Abstract: | Neste artigo, estuda-se a relação entre o crescimento econômico e a degradação ambiental por meio de uma discussão sobre a curva de Kuznets ambiental. Apresentam-se os principais resultados obtidos por uma imensa literatura, avaliando-se suas implicações. Empiricamente, reconsidera-se a validade da curva de Kuznets ambiental para as emissões de dióxido de carbono com modelos robustos à presença de variáveis não estacionárias e à dependência entre as unidades do painel. Os resultados apontam a fragilidade do conceito de uma curva de Kuznets ambiental quando as propriedades das séries temporais são adequadamente levadas em consideração. In this paper we study the relationship between economic growth and environmental degradation through a discussion of the environmental Kuznets curve. We present the main results of an immense literature and assess its implications. Empirically, we reassess the validity of the environmental Kuznets curve for emissions of carbon dioxide with models robust to the presence of non-stationary variables and dependence among the units of the panel. The results point out the weakness of the concept of an environmental Kuznets curve when the properties of the series are properly taken into account |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:1902&r=env |
| By: | Shital Sharma |
| Abstract: | This research studies the link between environmental regulation and plant level productivity in two U.S. manufacturing industries: pulp and paper mills and oil refineries using Data Envelopment Analysis (DEA) models. Data on abatement spending, emissions and abated emissions are used in different DEA models to study plant productivity outcomes when accounting for abatement spending or emissions regulations. Results indicate that pulp and paper mills and oil refineries in the U.S. suffered decreases in productivity due to pollution abatement activities from 1974 to 2000. These losses in productivity are substantial but have been slowly trending downwards even when the regulations have tended to become more stringent and emission of pollutants has declined suggesting that the best practice has shifted over time. Results also show that the reported abatement expenditures are not able to explain all the losses arising out of regulation suggesting that these abatement expenditures are consistently under-reported. |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:13-51&r=env |
| By: | Robert W. Hahn; Robert A. Ritz |
| Abstract: | We evaluate a recent U.S. initiative to include the social cost of carbon (SCC) in regulatory decisions. To our knowledge, this paper provides the first systematic test of the extent to which applying the SCC has affected national policy. We examine all economically significant federal regulations since 2008, and obtain a surprising result: Putting a value on changes in carbon dioxide emissions does not generally affect the ranking of the preferred policy compared with the status quo. Overall, we find little evidence that use of the SCC has affected U.S. policy choices to date. We offer an explanation related to the political economy of regulation. |
| Keywords: | Cost-Benefit Analysis; Social Cost of Carbon; Climate Policy; Regulatory Innovation |
| JEL: | H43 K32 Q51 Q58 |
| Date: | 2013–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1346&r=env |
| By: | Osberghaus, Daniel |
| Abstract: | Climate change is one of the most pressing challenges in current environmental policy. Appropriate policies intended to stimulate efficient adaptation and mitigation should not exclusively rely on the assumption of the homo oeconomicus, but take advantage of well-researched alternative behavioural patterns. Prospect theory provides a number of climate-relevant insights, such as the notion that evaluations of outcomes are reference dependent, and the relevance of perceived certainty of outcomes. This paper systematically reviews what prospect theory can offer to analyse mitigation and adaptation. It is shown that accounting for reference dependence and certainty effects contributes to a better understanding of some well-known puzzles in the climate debate, including (but not limited to) the different uptake of mitigation and adaptation amongst individuals and nations, the role of technical vs. financial adaptation, and the apparent preference for hard protection measures in coastal adaptation. Finally, concrete possibilities for empirical research on these effects are proposed. -- |
| Keywords: | Adaptation,Climate Change,Mitigation,Prospect Theory,Reference Point,Uncertainty |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13091&r=env |
| By: | Mazzanti, M.; Musolesi, A. |
| Abstract: | This paper documents the structural differences that exist among advanced countries with regard to their long run carbon dioxide-income relationships. The application of intervention analysis to the framework of Environmental Kuznets curves shows that time related effects, namely structural breaks, have been predominantly relevant in explaining the eventual occurrence of `bell shaped curves' with significant turning points. We indeed present heterogeneity of effects when comparing advanced countries long run dynamics. The second oil shock in the 80's and the 1992 Rio convention are among the major underlying causes of temporal breaks. Thus, environmental policy can exert long run beneficial shocks to the energy-economic system. Evidence provides food for thought for the post Kyoto era policy making, just after the Rio+20 step. Market and policy shocks are likely to be dynamically interrelated, but generating mutually interactive effects in the way the system `adapts' and reacts to changing (pricing) conditions over time. |
| Keywords: | ENVIRONMENTAL KUZNETS CURVE;CARBON KUZNETS CURVE;RIO CONVENTION;POLICY EVENT;OIL SHOCK;INTERVENTION ANALYSIS;STRUCTURAL BREAK |
| JEL: | C22 Q53 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:gbl:wpaper:2013-11&r=env |
| By: | Clémence Christin (Université de Caen Basse-Normandie, France); Jean-Philippe Nicolai (ETH Zurich, Switzerland); Jerome Pouyet (Paris School of Economics, France) |
| Abstract: | Under imperfect competition, the effect of a cap-and-trade system on indus- try profits depends on the type of abatement technology that is used by firms: industries that use process-integrated technologies are more affected than those using end-of-pipe abatement technologies. The interaction between environmental policy and the evolution of the market structure is then studied. In particular, a reserve of pollution permits for new entrants is justified when the industry uses a process-integrated abatement technology, while a system with a preemption right may be justified in the case of end-of-pipe abatement technology. |
| Keywords: | Cap-and-trade system; imperfect competition; abatement technologies. |
| JEL: | L13 Q53 Q58 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:13-186&r=env |
| By: | Idrissa Sibailly (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, LEI - Laboratoire d'Economie Industrielle - Centre de Recherche en Économie et STatistique (CREST)) |
| Abstract: | This note investigates the impact of (international) technology transfer on optimal pollution taxation. To use a patented pollution abatement technology, the polluters subject to the emissions tax only pay fixed license fees to an (international) eco-industry (whose profits are shared among national and foreign suppliers). The second-best emissions tax is shown to decrease as the exogenous share of imported technology increases. When the domestic polluting industry is imperfectly competitive, this tax is always lower than the marginal damage. In contrast, when the polluting industry is perfectly competitive, the second-best emissions tax is lower than the marginal damage only in the case of incoming technology transfer. If the technology is transferred domestically, the second-best emissions tax is equal to the marginal damage. These results contrast with the literature on the impact of market power in the eco-industry on optimal policy design, initiated by David and Sinclair-Desgagné (2005). |
| Keywords: | Pigouvian Taxes, Eco-Industry, Technology Transfer, International Trade |
| Date: | 2013–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00911464&r=env |
| By: | Papageorgiou, Chris; Saam, Marianne; Schulte, Patrick |
| Abstract: | Recently Acemolgu, Aghion, Bursztyn and Hemous (AER 2012) formulated a model in which a high macroeconomic elasticity of substitution between clean and dirty production represents a crucial condition for green growth. Until now it has never been systematically estimated. Using a novel panel of cross-country sectoral data, we formulate specifications of nested CES production functions that allow to estimate a special case of this parameter: the elasticity of substitution between clean and dirty energy inputs. Contrary to what is expected based on the earlier interfuel substitution literature, we find evidence that this elasticity exceeds one. -- |
| Keywords: | clean and dirty energy inputs,aggregate elasticity of substitution,CES function,cross-country sectoral data,environmental policy |
| JEL: | O44 O47 Q54 Q58 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13087&r=env |
| By: | Flues, Florens; Rübbelke, Dirk; Vögele, Stefan |
| Abstract: | The iron and steel industry is one of the most carbon emitting and energy consuming sectors in Europe. At the same time this sector is of high economic importance for the European Union. Therefore, while public environmental and energy policies target this sector, there is political concern that it suffers too much from these policy measures. Various actors fear a policy-induced decline in steel production, and possibly an international reallocation of production plants. This study analyzes the role that input prices and public policies may play in attaining an environmentally more sustainable steel production and how this - in turn - affect total steel output. As we find out for examples of major European steel producing countries, a kind of rebound effect of energy-efficiency improvements in steel production on total steel output may arise. -- |
| Keywords: | energy efficiency,iron and steel industry,environmental protection,rebound effect |
| JEL: | L51 L61 Q43 Q50 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13101&r=env |
| By: | OECD |
| Abstract: | The transition towards a green economy is a key factor for growth and prosperity in the German federal state of Brandenburg. Future living conditions will be determined by the course set now. We have to decide today how we want to live tomorrow, not only in economic terms, but also with regard to environmental stewardship. I am convinced that there is no alternative to a green transition when it comes to shaping the world to be a place worth living in. There are issues we have to deal with, but first and foremost there are great opportunities to seize. The relevant players in Brandenburg are aware of complex challenges resulting from the present transitional process. They are redoubling their efforts to promote further economic development towards sustainability. This study presents the green growth path of the regional growth core (RGC) Schönefelder Kreuz. |
| Date: | 2013–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2013/15-en&r=env |
| By: | Elcin Akcura |
| Abstract: | Renewable energy sources have a critical role to play in contributing to the diversity, sustainability and security of energy supplies. The main objectives of the paper is to gain an understanding of UK households' preferences for the type of mechanism that is used to support renewables. 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 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, Payment Method, Renewable Energy, Green Tariffs, Willingness to Pay, Zero Inflated Ordered Probit Model |
| JEL: | C35 D10 D12 D80 |
| Date: | 2013–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1339&r=env |
| By: | Mark Lemon; Michael G. Pollitt; Steven J. Steer |
| Abstract: | This paper seeks to provide insights into the links between the local and national energy policy. Leicester City Council has sought to take a leadership role on implementing innovative energy policies within their city. Consequently, this paper investigates the impact of national and local energy policy in Leicester. It examines the consumption of energy within city, the network of players within energy policy and two flagship aspects of the policy – the district heating scheme and the use of smart metering. The paper concludes that energy policy looks very different at local and national levels. |
| Keywords: | local energy policy, Leicester, energy transition, CHP, intelligent metering. |
| JEL: | H76 L97 |
| Date: | 2013–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1337&r=env |
| By: | Adam Isen; Maya Rossin-Slater; W. Reed Walker |
| Abstract: | This paper examines the long-term impacts of in-utero and early childhood exposure to ambient air pollution on adult labor market outcomes. We take advantage of a new administrative data set that is uniquely suited for addressing this question because it combines information on individuals' quarterly earnings together with their counties and dates of birth. We use the sharp changes in ambient air pollution concentrations driven by the implementation of the 1970 Clean Air Act Amendments as a source of identifying variation, and we compare cohorts born in counties that experienced large changes in total suspended particulate (TSP) exposure to cohorts born in counties that had minimal or no changes. We find a significant relationship between TSP exposure in the year of birth and adult labor market outcomes. A 10 unit decrease in TSP in the year of birth is associated with a 1 percent increase in annual earnings for workers aged 29-31. Most, but not all, of this effect is driven by an increase in labor force participation. In present value, the gains from being born into a county affected by the 1970 Clean Air Act amount to about $4,300 in lifetime income for the 1.5 million individuals born into these counties each year. |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:13-52&r=env |