nep-env New Economics Papers
on Environmental Economics
Issue of 2014‒04‒29
eighteen papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Optimal Timing of Carbon Capture and Storage Policies Under Learning-by-doing By Amigues, Jean-Pierre; Lafforgue, Gilles; Moreaux, Michel
  2. National Soft Landing CO2 trajectories under global carbon budgets By Patrick Criqui; Constantin Ilasca; Emmanuel Prados
  3. Strategic Carbon Taxation and Energy Pricing: The Role of Innovation By Zhang, Xiao-Bing
  4. On the environmental Kuznets curve with fossil-fuel induced emission: Theory and some illustrative examples By Sushama Murty
  5. The social and environmental sustainability of the maritime industry By Moreira, Paulo Pires
  6. Necessary and sufficient conditions for an environmental Kuznets curve with some illustrative examples By Sushama Murty
  7. The Effect of Ambient Noise on Cooperation in Public Good Games By Diederich, Johannes
  8. Non-renewable Resources in Asian Economies: Perspective of Availability, Applicability Acceptability, and Affordability By Youngho CHANG; Yanfei LI
  9. A carbon footprint proportional to expenditure - a case for Norway? By Narbel, Patrick A.; Isaksen, Elisabeth T.
  10. Asset-Centred Redistributive Policies for Sustainable Development By Kohler, Pierre
  11. The Effects of Environmental Risk on Consumption: an Empirical Analysis on the Mediterranean Countries By Donatella Baiardi; Matteo Manera; Mario Menegatti
  12. Proving the old spell wrong: New African hydrocarbon producers and the 'resource curse' By Bresand, Albert
  13. A guiding framework for ecosystem services monetization in ecological–economic modeling By Mateo Cordier; José A. Pérez Agúndez; Walter Hecq; Bertrand Hamaide
  14. Greening the Property Tax By Nicola Brandt
  15. Cooperative decision-making for the provision of a locally undesirable facility By Ambec, Stefan; Kervinio, Yann
  16. Forest Condition in Europe: 2013 technical report of ICP forests. Report under the UNECE Convention on Long-Range Transboundary Air Pollution (CLRTAP) By Michel, Alexa (Ed.); Seidling, Walter (Ed.); Lorenz, Martin (Ed.); Becher, Georg (Ed.)
  17. An investigation of the determinants of household demand for bushmeat in the Serengeti using an open-ended choice experiment By Fischer, Anke; Hanley, Nicholas; Lowassa, Asanterabi; Milner-Gulland, EJ; Moro, Mirko; Naiman, Loiruck C
  18. The economic spillovers from resource extraction: a partial resource blessing at the subnational level? By James CUST; Ridwan D. RUSLI

  1. By: Amigues, Jean-Pierre; Lafforgue, Gilles; Moreaux, Michel
    Abstract: Using a standard Hotelling model of resource exploitation, we determine the optimal consumption paths of three energy resources: dirty coal, which is depletable and carbon-emitting; clean coal, which is also depletable but carbon-free thanks to an abatement technology (CCS: Carbon Capture and Storage), and solar energy which is renewable and carbon-free. Carbon emissions are released into the atmosphere and we assume that the atmospheric carbon stock cannot exceed a given ceiling. We consider learning-by-doing in the abatement technology, implying that the marginal CCS cost is decreasing in the cumulative consumption of clean coal. We show the following results. i) Learning-by-doing does not imply "early" capture, i.e. the clean coal exploitation must begin at the earliest once the carbon cap is reached. ii) The energy price path can evolve non-monotonically over time. iii) When the solar cost is low enough, there may exist unusual energy consumption sequence along which solar energy is interrupted for some time and replaced by clean coal.
    Keywords: Climate change; Energy substitution; Carbon Capture and Storage;Learning-by-doing.
    JEL: Q31 Q42 Q54 Q55
    Date: 2014–02
  2. By: Patrick Criqui (PACTE - Politiques publiques, ACtion politique, TErritoires - Institut d'Études Politiques [IEP] - Grenoble - CNRS : UMR5194 - Université Pierre-Mendès-France - Grenoble II - Université Joseph Fourier - Grenoble I); Constantin Ilasca (PACTE - Politiques publiques, ACtion politique, TErritoires - Institut d'Études Politiques [IEP] - Grenoble - CNRS : UMR5194 - Université Pierre-Mendès-France - Grenoble II - Université Joseph Fourier - Grenoble I); Emmanuel Prados (INRIA Grenoble Rhône-Alpes / LJK Laboratoire Jean Kuntzmann - STEEP - INRIA - Université Joseph Fourier - Grenoble I - Laboratoire Jean Kuntzmann - CNRS : UMR5224 - Institut polytechnique de Grenoble (Grenoble INP))
    Abstract: One of the most important outcomes during the last Conferences of the Parties was the Durban Platform for Enhanced Action, which can be seen not only as a window of opportunity, but as a necessity to act. Our concern in the present paper is with the identification of an appropriate international climate-policy architecture in order to foster climate governance. The paper attempts to raise awareness towards the Soft landing commitment scheme which is proposed as an element of answer to the climate-policy dilemma. The scheme (REDEM for REDuction of Emissions) proposes a pathway to stabilize the emissions with a timing and a level of commitment, which are differentiated on the basis of capability (per capita income levels) and responsibility (per capita emissions). We present a couple of simulation examples which show different ways to conceive the shapes of the emissions and their rates of variation. The REDEM algorithm is designed as a tool for the benchmarking of supposed national emission reduction trajectories. The tool shows a practical way to guide the potential national trajectories, through a convergence mechanism into a comprehensible framework.
    Keywords: national emission reduction ; climate policy ; REDEM ; simulation
    Date: 2014–03
  3. By: Zhang, Xiao-Bing (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper investigates the strategic interactions between carbon taxation by a resource-consumers’ coalition and (wellhead) energy pricing by a producers’ cartel under possible innovation in a cheap carbon-free technology through a dynamic game. The arrival time of innovation is uncertain, but can be affected by the amount spent on R&D. The results show that the expectation of possible innovation decreases both the initial carbon tax and producer price, resulting in higher initial resource extraction or carbon emissions. Even though this 'green paradox' effect will appear in the cooperative case (no strategic interactions) as well, the presence of strategic interactions between resource producers and consumers can somewhat restrain such an effect. The optimal R&D to stimulate innovation is an increasing function of the initial CO2 concentration for both the resource consumers and a global planner. However, the resource consumers can over-invest in R&D (compared with the global efficient investment.
    Keywords: Carbon taxation; Innovation; Uncertainty; Dynamic game
    JEL: C73 H21 Q23 Q54
    Date: 2014–04
  4. By: Sushama Murty (Department of Economics, University of Exeter)
    Abstract: We propose a model of fossil-fuel induced emission, which permits multiple emission-mitigation strategies. In a dierentiable framework, we derive a set of necessary and sucient conditions for an environmental Kuznets curve in terms of the relative responses of the preference and technology-based shadow prices of emission to changes in the economic resource base when the emission policy is not allowed to adjust. Employing these conditions we construct examples of preference and technology combinations that result in an EKC in both static and dynamic frameworks. In these examples, optimal emission-mitigation strategies include employing a part of available resources for cleaning-up activities and inter-fuel substitution from dirtier to cleaner energy inputs. We show that the social optimum can be decentralised not only through standard emission policies such a Pigouvian tax, but also by a scheme that subsidises cleaning-up activities and taxes the usage of fossil fuels.
    Keywords: Environmental Kuznets curve, marginal abatement cost, marginal willingness to pay, fossil fuels, inter-fuel substitution, abatement effort
    JEL: Q56 Q58 H23 D62
    Date: 2014
  5. By: Moreira, Paulo Pires
    Abstract: Although in the recent years the trend is changing, still few international academic papers on this topic are available. On the other hand, there is a total void by national academicians regarding the production of literature on social and environmental sustainability of the maritime industry in parallel as in multiple aspects related to the maritime chain and the supply chain management seen in its global assumptions. Nevertheless, sustainability in its different components – economical, social and environmental – is becoming a major concern for citizens, on the basis of participatory citizenship or as aggregated sources of social capital, public and private policy makers and governments. As concern about climate change grows and that the events of maritime disasters multiply, there is an entire industry, which despite of being vital to the world economy and for the welfare of the people, continues to be managed in a way that requires no more regulation but their actual application. An industry for the future but at the same time one that largely contributes to emissions and several forms of air and marine pollution and which cannot continue to use the planet seas and oceans as sewage. Thus, we chose to extract from scratch the fundamentals through elaborate work of collecting and analysing institutional information and by unroll the intricate web that this issue, being transversal to the entire maritime industry, incorporates. So we focused on the norms and laws issued by agencies and sectoral organizations of regulatory nature and the methodology is based in the paradoxical confrontation between occurrences and existing legislation.
    Keywords: social and environmental sustainability; international shipping
    JEL: R41 R49
    Date: 2014–04
  6. By: Sushama Murty (Department of Economics, University of Exeter)
    Abstract: We propose a set of necessary and sufficient conditions for the environmental Kuznets curve (EKC) phenomenon in a general model that permits non-smooth preferences and feasible sets and corner solutions for welfare maximisation. These conditions pertain to the relationship between the sets of preference and technology-based shadow prices at an outcome reached by an emission-held-fixed-effect (EHFE), where the emission policy does not adjust to an increase in the economic resource base and only consumption adjusts. In particular, an EKC arises if and only if there exists a threshold level of resource such that, at any level of resource below (respectively, above) the threshold, the outcome reached by the EHFE is one where the set of preference-based shadow prices lies completely below (respectively, above) the set of technological shadow prices. This characterisation is employed to study and construct examples of preference-technology combinations that can potentially result in an EKC, when emission is a consumption externality. In particular, the cases of homothetic economies, increasing returns to abatement, emission as a normal good, and EKC in a model with economic growth are studied.
    Keywords: environmental Kuznets curve, Clarke's tangent and normal cones, sets of preference and technology-based shadow prices of emission, marginal willingness to pay, marginal abatement cost, welfare maximisation, homotheticity, normal good, inferior good, increasing returns to abatement.
    JEL: Q56 D62 C60
    Date: 2014
  7. By: Diederich, Johannes
    Abstract: Environmental stressors such as noise, pollution, extreme temperatures, or crowding can pose relevant externalities in the economy if certain conditions are met. This paper presents experimental evidence that exposure to acute ambient noise decreases cooperative behavior in a standard linear public good game.
    Keywords: private provision of public goods; environmental stress; noise
    Date: 2014–04–16
  8. By: Youngho CHANG (Scholl of Humanities and Social Sciences, Nanyang Technological University); Yanfei LI (Economic Research Institute for ASEAN and East Asia (ERIA))
    Abstract: This paper reviews the factors that determine the sustainability of nonrenewable energy production and consumption in Asian economies. It reviews the recent literature on the issue and all of the key findings under the 4As framework (Availability, Applicability, Acceptability, and Affordability) which is derived from the classical Hotelling non-renewable resource economics models. Conclusions derived focus on the implications of the fast growth in non-renewable energy consumption and its outpacing the growth in indigenous production, the uneven distribution of exploitable non-renewable energy resources, the potentials of shale oil and shale gas, the role of coal, renewable energy and nuclear energy, the reform of domestic energy markets, and the environmental impacts of the use of nonrenewable energy in the Asian economies.
    Keywords: Non-renewable energy, Sustainability, Asian economies, 4A framework
    JEL: Q01 Q30 Q40
    Date: 2014–02
  9. By: Narbel, Patrick A. (Dept. of Business and Management Science, Norwegian School of Economics); Isaksen, Elisabeth T. (Centre for Ecological and Evolutionary Synthesis, Dept. of Biosciences, University of Oslo)
    Abstract: Assuming that emissions originate from the consumption of goods and services, we study the relationship between consumption-based per capita carbon footprint and per capita expenditure for Norway, using 2007 data. A two-region input-output model reveals that the consumption-based per capita carbon footprint is directly proportional to expenditure with an estimated elasticity close to unity. We show that this result is at least partly driven by a near zero-emission power sector, which leads to comparatively low emission intensities for domestically-produced goods and services.
    Keywords: Carbon footprint; consumption; trade
    JEL: Q40 Q50
    Date: 2014–04–14
  10. By: Kohler, Pierre
    Abstract: The objective of this discussion paper is to propose an asset-centred analytical framework for (i) mapping the most important redistributive policy tools that shape the distribution of income and income-generating assets (such as human capital and wealth, including land, industrial or financial capital) across individuals as well as between the private and the public sector and (ii) outlining key linkages between redistributive policies, equity and sustainable development by looking at how they can shape a socio-economic context and incentives that are conducive to financial stability and economic development, political inclusion, gender equality and social mobility, as well as environmental sustainability. The paper further aims at (iii) contrasting the potential scope of redistributive policies with the more narrow set of policies that have been implemented in most countries/regions over the last 30 years in order to (iv) derive recommendations for redistributive policies in support of greater equity and sustainable development in the post-2015 context. Conceptualizing redistributive policies from a stock-flow perspective reveals an artificial blind spot of the prevailing approach to redistribution and development: wealth redistribution. The prevailing approach generally covers income redistribution and the provision of public goods as a means to foster human capital accumulation (e.g., the MDGs approach), but it ignores wealth redistribution. This omission impoverishes the understanding of redistribution and hampers the design of redistributive policies in pursuit of development objectives (e.g., efficient taxation, progressive and increased revenue mobilization, poverty reduction, equality of opportunity, etc.). Furthermore, conceptualizing redistributive policies in light of their linkages to equity and sustainable development is increasingly needed given the upcoming transition from the MDGs to SDGs in a context characterised by sustainability challenges, such as rising income inequality, wealth concentration and growing carbon emissions. In this regard, an asset-centred model allows thinking beyond redistributive policy options affecting production and consumption incentives (e.g., progressive environmental taxes) in order to consider possible asset transfers between the private and public sector (e.g., socialization of natural resource ownership, etc.). Based on these premises, this paper suggests a number of steps for developing a more comprehensive approach to redistribution and moving towards a framework enabling asset-centred redistributive policies for greater equity, economic democracy and sustainable development.
    Keywords: Income, wealth, inequality, redistribution, public social spending, revenue mobilization, progressive tax system, net wealth tax, carbon tax, international tax cooperation, MDGs, SDGs, post-2015
    JEL: D31 H2 H3 H4 H41 H71 H82 H87
    Date: 2014–04
  11. By: Donatella Baiardi; Matteo Manera; Mario Menegatti
    Abstract: This paper empirically estimates a micro-founded model which studies the macroeconomic impact of environmental and financial risks on consumption choices in the Mediterranean Region. The analysis is carried out using time series aggregate data for fourteen Mediterranean countries over the period 1965-2008. Our results indicate that both risks and their interaction significantly influence consumption dynamics. Our estimates of the indexes of relative risk aversion and relative prudence, as well as the relative preference for the quality of environment suggest marked cross-country heterogeneity.
    Keywords: Consumption, environmental risk, financial risk, prudence, relative risk aversion, relative preference for the quality of environment
    JEL: Q50 D81 E21
    Date: 2014–04
  12. By: Bresand, Albert (Groningen University)
    Abstract: Avoiding the ?resource curse? will be key to turning oil and gas discoveries into sustainable development for new African producers. The article focuses on international and national policy innovations that can cut the economic, institutional and cultural Gordian knot behind the curse. ?Oil funds? have a disappointing record; best practices on why and how to use them are ambiguous. By contrast, the Extractive Industry Transparency Initiative has triggered learning processes of strengthening momentum. Leveraging transparency toward accountability through informed national policy debates is now the central policy challenge for new African producers. Meanwhile, Corporate Social Responsibility has evolved beyond health and safety to cover a firm?s environmental and social impact and can be mobilized in the form of developmentsupportive partnerships with investing companies. Much of past policy innovation has been defensive in nature, however. The post-2015 Sustainable Development Goals proposed by the UN High Level Panel present governments, companies and stakeholders with a shared positive agenda to eradicate poverty and turn natural resources into sustainable development.
    Date: 2014
  13. By: Mateo Cordier; José A. Pérez Agúndez; Walter Hecq; Bertrand Hamaide
    Date: 2014–03–30
  14. By: Nicola Brandt
    Abstract: This paper reviews the literature and policy discussions about the role of the property tax for land use. Various externalities of the development of land, such as new infrastructure needs, the loss of open space or air pollution due to longer commutes as people locate far from city centres, are not internalised fully by property taxes or other policy instruments and this is often thought to contribute to excessive land use and urban sprawl. The impact of property taxes on land use intensity and sprawl is ambiguous in theory, however, and it depends on tax design, as well as land use regulation policies and other taxes that can influence municipalities’ incentives to convert land for development. Yet, there is some evidence suggesting that higher property taxes can limit urban sprawl, in particular when the tax on land is higher than on structures, although effects are small given relatively given a limited price elasticity of land use. Various property tax design options are discussed that may help to better internalise land use related externalities.
    Keywords: land use, fiscal zoning, property tax, urban sprawl
    JEL: R14 R38 R51 R52
    Date: 2014–04–08
  15. By: Ambec, Stefan; Kervinio, Yann
    Abstract: We consider the decentralized provision of a global public good with local external- ities in a spatially explicit model. Communities decide on the location of a facility that benefits everyone but exhibits costs to the host and its neighbors. They share the costs through transfers. We examine the cooperative game associated with this so-called NIMBY ("Not In My Back-Yard") problem. We derive and discuss conditions for core solutions to exist. These conditions are driven by the temptation to exclude groups of neighbors at any potential location. We illustrate the results in different spatial settings. In particular, we construct a hypothetical example on a real administrative unit in which the core is shown to be empty. These results clarify how property rights can affect cooperation and shed further light on a limitation of the Coase theorem.
    Keywords: NIMBY, externality, Coase theorem, pollution, waste, core, cooperative game, spatial model.
    JEL: C71 D62 Q53 R53
    Date: 2014–03–26
  16. By: Michel, Alexa (Ed.); Seidling, Walter (Ed.); Lorenz, Martin (Ed.); Becher, Georg (Ed.)
    Abstract: Of the 42 countries that have participated in ICP Forests since 1986, 27 countries reported largescale monitoring data from Level I plots and more detailed forest ecosystem related monitoring data from Level II plots for the year 2012. In total, the participating countries provided information on more than 15,000 plots and more than 220,000 trees. Data analyses for this 2013 Technical Report focused on the impact of air pollution on tree crown condition and on sulphate and nitrogen deposition to forests. In addition, the impact on individual trees of factors other than air pollution, e.g., biotic agents, was assessed. Crown condition is the most widely applied indicator for forest health and vitality of European forests. One of its primary parameters is the rate of defoliation, which is assessed as the percentage of needle/leaf loss in the crown compared to a reference tree with full foliage. The mean defoliation of 114,361 sample trees on 6,168 transnational Level I plots in 2012 was 19.7%. Of all trees assessed in 2012 every fourth to fifth tree (22.9%) was scored as damaged, i.e., had a defoliation rate of more than 25%. In general, broadleaved trees showed a higher mean defoliation rate than conifer species (23.6% and 20.2%, respectively). Oak species still seem to be the most vulnerable of all the investigated species. Of the main species groups, deciduous temperate oak species had the highest mean defoliation (26.5%), closely followed by Mediterranean evergreen oak species (25.2%), and deciduous (sub-) temperate oak species (24.6%). A mean defoliation rate of 19.6% was assessed for European beech (Fagus sylvatica). Coniferous species expressed lower defoliation rates on average, with European spruce (Picea abies) reaching 19.2%, followed by Scots pine (Pinus sylvestris) with 19.3%, and Mediterranean lowland pine species with 20.7%. These figures are, however, not directly comparable to those of previous reports because of fluctuations in the plot sample that are primarily due to changes in the annual participation of countries. Therefore, the temporal development of crown condition was calculated separately from the monitoring results for those countries which have submitted data every year without interruption since 1993, 1998, and 2002, respectively. In addition, maps were drawn that depict temporal species trends in defoliation. The presented results suggest that there was no overall improvement of crown condition for the longest analyzed time period from 1993 to 2012. Over the last 20 years the percentage of plots with clearly increasing mean defoliation (17.2%) even exceeded the share of plots with decreasing defoliation (12.5%) but most of the investigated plots showed no statistically significant change in crown condition (70.3%). Compared to the previous year only, the investigated trees showed on average similar rates of defoliation in 2012. More than three out of four plots (78.7%) showed no statistically significant difference in mean defoliation between those two years. Defoliation increased on 13.8% and decreased on only 7.5% of the plots. --
    Date: 2014
  17. By: Fischer, Anke; Hanley, Nicholas; Lowassa, Asanterabi; Milner-Gulland, EJ; Moro, Mirko; Naiman, Loiruck C
    Abstract: Illegal hunting for bushmeat is regarded as an important cause of biodiversity decline in Africa. We use a stated preferences method to obtain information on determinants of demand for bushmeat in villages around the Serengeti National Park, Tanzania. We estimate the effects of changes in the own price of bushmeat and in the prices of two substitute protein sources - fish and chicken. Promoting the availability of protein substitutes at lower prices would be effective at reducing pressures on wildlife. Supply-side measures that raise the price of bushmeat would also be e ffective.
    Keywords: Tanzania; alternative protein sources; price elasticity of demand; open-ended choice experiments; stated preferences; illegal bushmeat; conservatio n
    Date: 2014–04
  18. By: James CUST (University of Oxford & University of Luxembourg); Ridwan D. RUSLI (Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Singapore, 637332.)
    Abstract: We examine the economic consequences of resource extraction and associated revenue windfalls, measured at the subnational level. Our analysis focuses on variations across Indonesian districts and municipalities to estimate the spillover effects on economic activity, measured in terms of local GDP. Two important channels are identified: direct spillover eects from extraction activity, and the fiscal spillovers from local government spending associated with revenue windfalls from extraction activity. We use Indonesia's fiscal sharing rules to quantify and disentangle these two channels by application of an instrumental variable. We show that the main economic gains accrue via transfers to, and spending by, local government. While direct project-level investments and production contribute to measures of overall GDP, these are found to be largely due driven by the value of oil extraction, with only limited evidence for a direct impact on non-oil GDP. In contrast to other works, it appears that regionally decentralized government spending can be growth-enhancing over the decade surveyed. We argue that resource endowments do contribute to increased economic activity at the subnational level in Indonesia, but may lower the overall growth eect of spending.
    Date: 2014–02

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