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on Environmental Economics |
| By: | de Melo, Jaime |
| Abstract: | This paper discusses the state of knowledge about the trade-related environmental consequences of a country’s development strategy along three channels: (i) direct trade-environment linkages (overexploitation of natural resources and trade-related transport costs);(ii) ‘virtual trade’ in emissions resulting from production activities; (iii) the product mix attributes of a ‘green-growth’ strategy (environmentally preferable products and goods for environmental management). Main conclusions are the following. Trade exacerbates over-exploitation of natural resources in weak institutional environments, but there is little evidence that differences in environmental policies across countries has led to significant ‘pollution havens’. Trade policies to ‘level the playing field’ would be ineffective and result in destructive conflicts in the WTO. Lack of progress at the Doha round suggests the need to modify the current system of global policy making. |
| Keywords: | Environmental goods; green growth; natural resources; trade and climate |
| JEL: | F18 Q56 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9660&r=env |
| By: | Zeba Anjum (Crawford School of Public Policy, The Australian National University); Paul J. Burke; Reyer Gerlagh; David I. Stern |
| Abstract: | We adopt a new representation of the relationship between emissions and income using long-run growth rates. Our approach allows us to test multiple hypotheses about the drivers of per capita emissions in a single framework and avoid several of the econometric issues that have plagued previous studies. We find that for carbon dioxide emissions, scale, convergence, and resource endowment effects are statistically significant. For sulfur emissions, the scale and convergence effects are significant, there is a strong negative time effect, and non-English legal origin and higher population density are associated with more rapidly declining emissions. The environmental Kuznets effect is not statistically significant in our full sample for either carbon or sulfur. |
| Keywords: | Economic growth, decoupling, pollution, environmental Kuznets curve, convergence |
| JEL: | Q56 O44 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1403&r=env |
| By: | Hemous, David |
| Abstract: | This paper builds a two-country (North, South), two-sector (polluting, nonpolluting) trade model with directed technical change, examining whether unilateral environmental policies can ensure sustainable growth. The polluting good is produced with a clean and a dirty input. I show that a temporary Northern policy combining clean research subsidies and a trade tax can ensure sustainable growth but Northern carbon taxes alone cannot. Trade and directed technical change accelerate environmental degradation either under laissez-faire or if the North implements carbon taxes, yet both help reduce environmental degradation under the appropriate unilateral policy. I characterize the optimal unilateral policy analytically and numerically using calibrated simulations. |
| Keywords: | climate change; directed technical change; environment; innovation; trade; unilateral policy |
| JEL: | F18 F42 F43 O32 O33 O41 Q54 Q55 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9733&r=env |
| By: | Carraro, Carlo; Longden, Thomas; Marangoni, Giacomo; Tavoni, Massimo |
| Abstract: | This paper analyses a set of new scenarios for energy markets in Europe to evaluate the consistency of economic incentives and climate objectives. It focuses in particular on the role of natural gas across a range of climate policy scenarios (including the Copenhagen Pledges and the EU Roadmap) to identify whether current trend and policies are leading to an economically efficient and, at the same time, climate friendly, energy mix. Economic costs and environmental objectives are balanced to identify the welfare-maximising development path, the related investment strategies in the energy sector, and the resulting optimal energy mix. Policy measures to support this balanced economic development are identified. A specific sensitivity analysis upon the role of the 2020 renewable targets and increased energy efficiency improvements is also carried out. We conclude that a suitable and sustained carbon price needs to be implemented to move energy markets in Europe closer to the optimal energy mix. We also highlight that an appropriate carbon pricing is sufficient to achieve both the emission target and the renewable target, without incurring in high economic costs if climate policy is not too ambitious and/or it is internationally coordinated. Finally, our results show that natural gas is the key transitional fuel within the cost-effective achievement of a range of climate policy targets. |
| Keywords: | Carbon Pricing; Energy Markets; EU Climate Policy; Gas Share; Renewables Target |
| JEL: | O33 O41 Q43 Q48 Q54 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9715&r=env |
| By: | Claudio Marcantonini; A. Denny Ellerman |
| Abstract: | Incentives for the development of renewable energy have increasingly become an instrument of climate policy, that is, as a means to reduce GHG emissions. This research analyzes the German experience in promoting renewable energy over the past decade to identify the ex-post cost of reducing CO2 emissions in the power sector through the promotion of renewable energy, specifically, wind and solar. A carbon surcharge and an implicit carbon price due to the renewable energy incentives for the years 2006-2010 are calculated. The carbon surcharge is the ratio of the net cost of the renewable energy over the CO2 emission reductions resulting from actual renewable energy injections. The net cost is the sum of the costs and cost savings due to these injections into the electric power system. The implicit carbon price is the sum of the carbon surcharge and the EUA price and it can be seen as a measure of the CO2 abatement efficiency of the renewable energy incentives. Results show that both the carbon surcharge and he implicit carbon price of wind are relatively low, on the order of tens of euro per tonne of O2, while the same measures for solar are very high, on the order of hundreds of euro per tonne of CO2. |
| Keywords: | Renewables incentives, wind energy, solar energy, abatement cost, EU ETS |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2014/28&r=env |
| By: | Alix-Garcia, Jennifer (University of Wisconsin-Madison); Wolff, Hendrik (University of Washington) |
| Abstract: | Every year between 2000 and 2010, our planet lost native forests roughly the size of Costa Rica. (FAO, 2010). This rapid deforestation has dramatically changed the chemical composition of the world's atmosphere, the level of biodiversity, and the presence of vegetation key to maintaining watershed function and preventing landslides. There has been a boom in the design of local and international policy instruments to prevent further deforestation and encourage forest growth. This paper reviews the theory and evidence surrounding forest-related Payment for Ecosystem Services (PES) schemes intended to slow and reverse deforestation. We cover the most recent work touching on a range of issues related to PES programs, including research on targeting, contract design, environmental effectiveness, challenges to program implementation, spillovers, and distributional considerations of conditional cash transfers. We also highlight areas of potential future research. |
| Keywords: | environmental policy, deforestation, afforestation, reforestation, climate change, conditional cash transfers, PES |
| JEL: | H23 H43 J43 Q23 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8179&r=env |
| By: | Abolhosseini, Shahrouz (Seoul National University); Heshmati, Almas (Jönköping University, Sogang University) |
| Abstract: | Considering that the major part of greenhouse gases is carbon dioxide, there is a global concern aimed at reducing carbon emissions. Additionally, major consumer countries are looking for alternative sources of energy to avoid the impact of higher fossil fuel prices and political instability in the major energy supplying countries. In this regard, different policies could be applied to reduce carbon emissions, such as enhancing renewable energy deployment and encouraging technological innovation and creation of green jobs. There are three main support mechanisms employed by governments to finance renewable energy development programs: feed-in-tariffs, tax incentives, and tradable green certificates. Considering that many of the promising technologies to deploy renewable energy require investment in small-scale energy production systems, these mechanisms could be used to enhance renewable energy development at the desired scale. Employing a carbon emission tax or emission trading mechanism could be considered ideal policies to mitigate emissions at the lowest cost. The comparison of feed-in-tariffs and renewable portfolio standard policies showed that the former is good when a policy to develop renewable energy sources with a low level of risk for investors is considered. However, the latter is an appropriate policy when a market view policy is applied by the government. |
| Keywords: | renewable energy, financing renewable energy, feed-in-tariffs, tax incentives, tradable green certificates, carbon emission tax, green jobs |
| JEL: | H23 L71 O13 O31 Q27 Q42 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8182&r=env |
| By: | Kahn, Matthew E. |
| Abstract: | This paper explores the challenges and opportunities that government officials face in designing coherent'rules of the game'for achieving urban sustainability during times of growth. Sustainability is judged by three criteria. The first involves elements of day-to-day quality of life, such as having clean air and water and green space. The provision of these public goods has direct effects on the urban public's health and productivity. The second focuses on the city's greenhouse gas emissions. Developing cities are investing in new infrastructure, from highways and public transit systems to electricity generation and transmission. They are building water treatment, water delivery, and sewage disposal systems. Residents of these cities are simultaneously making key decisions about where they live and work and whether to buy such energy-consuming durables as private vehicles and home air-conditioning units. Given the long-lived durability of the capital stock, short-term decisions will have long-term effects on the city's carbon footprint. The third criterion is a city's resilience to natural disasters and extreme weather events. This subsection focuses on how the urban poor can be better equipped to adapt to the anticipated challenges of climate change. |
| Keywords: | Transport Economics Policy&Planning,Climate Change Mitigation and Green House Gases,Energy Production and Transportation,Climate Change Economics,Population Policies |
| Date: | 2014–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6878&r=env |
| By: | Rezai, Armon; van der Ploeg, Frederick |
| Abstract: | Climate change must deal with two market failures, global warming and learning by doing in renewable use. The social optimum requires an aggressive renewables subsidy in the near term and a gradually rising carbon tax which falls in long run. As a result, more renewables are used relative to fossil fuel, there is an intermediate phase of simultaneous use, the carbonfree era is brought forward, more fossil fuel is locked up and global warming is lower. The optimal carbon tax is not a fixed proportion of world GDP. The climate externality is more severe than the learning by doing one. |
| Keywords: | additive damages; carbon tax; climate change; directed technical change; integrated assessment; learning by doing; multiplicative damages; Ramsey growth; renewables subsidy |
| JEL: | H21 Q51 Q54 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9921&r=env |
| By: | Anna Grodecka; Karlygash Kuralbayeva |
| Abstract: | This paper studies the design of optimal fiscal policy in a real business cycle model with distortionary taxes and a climate change externality. Governments face the dual task of internalizing environmental externalities and raising revenues to finance the provision of public goods, including public capital. At their disposal governments have access to two tax instruments: tax on emissions and labor tax. We find that a tax on labor is an efficient instrument to finance public spending and facilitate the adjustment of the economy to the temporary improvement in productivity. Therefore, labor tax is cut in the model. Tax on emissions follows a distinct pattern depending on whether the potential economic expansion in response to a positive productivity shock is strong or weak: it is procyclical in the model that features public capital and is countercyclical in the models with public consumption only. The model implies that by restraining or boosting expansion in the short-run, the optimal carbon tax policy can help policy makers reconcile short-term concerns over economic growth with longer-term risks from climate change. The welfare gains from such short-run policies are non-negligible and can amount to USD 121.9bn or 0.7% of the US GDB. |
| Keywords: | public finance, public goods, business cycles, distortionary taxes, environmental policy |
| JEL: | E32 H23 Q54 Q58 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:137&r=env |
| By: | Patrick DoupŽ (Crawford School of Public Policy, The Australian National University; Potsdam Institute for Climate Impact Research) |
| Abstract: | The clearing of forests for agricultural land and other marketable purposes is a well-trodden path of economic development. With these private benefits from deforestation come external costs: emissions from deforestation currently account for 12 per cent of global carbon emissions. A widespread intervention in reducing emissions from deforestation will affect the paths of agricultural expansion and economic growth of lower income nations. To investigate these processes, this paper presents a general, dynamic, stochastic model of deforestation and economic growth. The model is shown to generate unique deforestation and investment paths and a model without reduced deforestation policy is shown to have a stationary distribution of income and landholdings. There are three main findings. First, in the short run national output growth falls with compensation for reduced deforestation. Second, deforestation rates are reduced through compensating either reduced deforestation directly or the stock of forests; however, compensating the stock of forests is likely to be prohibitively expensive. Finally, by offering a fixed compensation rate, as opposed to a compensation rate tied to a stochastic carbon price, further reductions in deforestation can be achieved. |
| Keywords: | Reduced deforestation, economic growth, climate policy, stochastic stability |
| JEL: | Q38 Q56 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1402&r=env |
| By: | Markusen, James R. |
| Abstract: | International trade policy analysis has tended to focus on the production side of general equilibrium, with policies such as a tariff or carbon tax affecting international and internal income distributions through a Heckscher-Ohlin nexus of factor intensities and factor endowments. Here I move away from this structure to focus on demand and preferences. The specific context is an international environmental externality such as carbon emissions, and I assume a high income elasticity of demand for environmental quality. I analyze how per-capita income differences between two countries affect their abatement efforts in a non-cooperative policy-setting game. This outcome can then be used as a disagreement point to analyze cooperative Nash bargaining. In both outcomes, the poor country makes a lower abatement effort in equilibrium; indeed, it may make none at all and cooperative bargaining with only abatement levels as an instrument may offer no gains. Other features include a novel terms-of-trade externality in which an abating country passes on a part of its abatement cost to its trading partner, in which case the non-cooperative and cooperative outcomes are identical under special symmetry assumptions. When per-capita income differences are large, the poor country may be worse off when the rich country abates. Finally, I examine “issue linking” in international bargaining, in which one country is both large and rich, and hence has both a high tariff and a high abatement effort in a non-cooperative equilibrium. |
| Keywords: | international negotiations; non-cooperative environmental policy; Trade and environment |
| JEL: | F1 F18 Q56 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9799&r=env |
| By: | Wolff, Hendrik (University of Washington) |
| Abstract: | Spatial distribution and leakage effects are of great policy concern and increasingly discussed in the economics literature. Here we study Europe's most aggressive recent air pollution regulation: Low Emission Zones are areas in which vehicular access is allowed only to vehicles that emit low levels of air pollutants. Using new administrative datasets from Germany, we assess the distribution of air pollution and the spatial substitution effects in green versus dirty vehicles. We find that LEZs decrease air pollution by around nine percent in urban traffic centers while pollution is unchanged in non-traffic areas. These results are driven by our finding that vehicle owners have an incentive to adopt cleaner technologies the closer they live to an LEZ. We reject the widespread concern that dirty vehicles contribute to higher pollution levels by increasingly driving longer routes outside of the LEZ. Back of the envelope calculations suggest that the health benefits of roughly two billion dollars have come at a cost of just over 1 billion dollars for upgrading the fleet of vehicles. Moreover, we find that non-attainment cities that decided not to include an LEZ but engaged in other methods (building ring roads, enhancing public transportation), experience no decrease in pollution. |
| Keywords: | low emission zones, air pollution, PM10 |
| JEL: | Q58 R48 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8180&r=env |
| By: | Cai, Ruohong (Princeton University); Feng, Shuaizhang (Shanghai University of Finance and Economics); Pytlikova, Mariola (KORA - Danish Institute for Local and Regional Government Research); Oppenheimer, Michael (Princeton University) |
| Abstract: | While there is considerable interest in understanding the climate-migration relationship, particularly in the context of concerns about global climatic change, little is known about underlying mechanisms. We analyze a unique and extensive set of panel data characterizing annual bilateral international migration flows from 163 origin countries to 42 OECD destination countries covering the last three decades. We find a positive and statistically significant relationship between temperature and international outmigration only in the most agriculture-dependent countries, consistent with the widely-documented adverse impact of temperature on agricultural productivity. In addition, migration flows to current major destinations are especially temperature-sensitive. Policies to address issues related to climate-induced international migration would be more effective if focused on the agriculture-dependent countries and especially people in those countries whose livelihoods depend on agriculture. |
| Keywords: | international migration, climate variability, agricultural productivity |
| JEL: | Q54 J10 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8183&r=env |
| By: | Oskar Lecuyer (Department of Economics and Oeschger Centre for Climate Change Research, University of Bern); Adrien Vogt-Schilb (CIRED and World Bank) |
| Abstract: | We study the transition from preexisting polluting fossil-fueled capital (coal power) to cleaner fossil-fueled capital (gas) and zero-carbon capital (renewable). We model exhaustible resources, irreversible investment, adjustment costs and a carbon budget; both fossil-fuel and renewable energy consumption are subject to capacity constraints. To smooth investment and spread costs, optimal investment in expensive renewable power may start before the cheaper fossil resources are exhausted. Gas power operates as a bridge technology between coal and renewable: it allows building less renewable at the beginning of the transition, moving some efforts from the short to the middle term. Finally, the popular criteria of the levelized cost of electricity is biased toward cheaper and lower-potential alternatives (gas instead of renewable) if computed against current prices. We provide numerical simulations of the European power sector based on the Commission’s energy roadmap to 2050. |
| Keywords: | Climate change mitigation, Path dependence, Optimal timing, Dynamic efficiency, Early-scrapping |
| JEL: | Q54 Q58 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2014.05&r=env |
| By: | de Melo, Jaime; Vijil, Mariana |
| Abstract: | Barriers to trade in Environmental Goods (EGs) and Environmental Services (ESs) are documented for a large sample of countries and compared with barriers to trade in other goods and other services. Some progress at reduction in barriers has occurred at the national, regional and sectoral levels but not at the multilateral level where countries have been unable to agree on an approach to reduce barriers to trade. For EGs, tariffs and NTBs are highest for low-income countries and low for high-income countries. First-order estimates of the import response to a 50% reduction in tariffs for low-income countries suggest an increase in imports of around 4%. For ESs, estimates draw on the comparison of an Environment Services Liberalization index calculated across modes and services sub-sectors. The limitations of this ordinal index coupled with the inadequacy of the UN CPC list where services are defined in an exclusionary manner so that they cannot appear on two lists, casts greater uncertainty as to the informational content of the commitment measures presented here which, at best, indicate bindings on market access and national treatment rather than actual policies. It would appear nonetheless that at least as great, and probably greater commitments took place in the environmental sectors (as defined by the CPC) both multilaterally and regionally than for ‘other’ services with the same pattern across income groups: greater commitments observed for HIC than for MICs and LICs although it is widely recognized that GATS commitments by HICs largely amounted to consolidated members’ unilateral services policies. North-South Regional Trade Agreements resulted mostly in commitments by the Southern partners indicating greater prospects for reducing barriers to trade in a regional than in a multilateral context. |
| Keywords: | Doha round; environmental goods; environmental services; tariff reductions |
| JEL: | F18 Q56 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9869&r=env |
| By: | Amigues, Jean-Pierre; Lafforgue, Gilles; Moreaux, Michel |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:28019&r=env |
| By: | Glaeser, Edward; Joshi-Ghani, Abha |
| Abstract: | Urbanization is undoubtedly a key driver of development -- cities provide the national platform for prosperity, job creation, and poverty reduction. But urbanization also poses enormous challenges that one is familiar with: congestion, air pollution, social divisions, crime, the breakdown of public services and infrastructure, and the slums that one billion urban resident's call home. Urbanization is perhaps the single most important question in development today. It is clear that cities have not performed as well as can be expected in their transformative role for more livable, inclusive, people-centered, and sustainable development. But they have enormous potential as growth escalators, offering the opportunity to lift millions out of poverty, and serve as centers of knowledge, innovations, and entrepreneurship. Cities in both the developed and developing world want to attract more entrepreneurs and create more jobs. Cities also need to be resilient to natural hazards and the impacts of climate change. If these are left unaddressed, cities will become part of the problem rather than the solution. |
| Keywords: | Transport Economics Policy&Planning,Environmental Economics&Policies,Urban Slums Upgrading,Urban Services to the Poor,National Urban Development Policies&Strategies |
| Date: | 2014–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6875&r=env |
| By: | Ryo Ishida (Visiting Scholar, Policy Research Institute, Ministry of Finance, Japan); Takuro Miyamoto (Economist, Policy Research Institute, Ministry of Finance Japan) |
| Abstract: | We theoretically examine voluntary policies' potential for controlling emissions from a large number of heterogeneous rms under an asymmetric information case as well as the exibility of the optimal voluntary policy. The potential of exible voluntary policies depends on the type of heterogeneity, distribution of rms and possibility of failure in introduction of inexible mandatory regulation. If heterogeneity of emission abatement costs results from firms' technology level and there are few low technology rms, there is likely to be a exible voluntary policy that generates higher social welfare than the inexible mandatory regulation. However, an inexible voluntary policy is the best among the feasible voluntary policies if there are more higher abatement cost rms than lower abatement cost rms. Moreover, no voluntary policy can generate higher social welfare than inexible mandatory regulation if heterogeneity of emission abatement costs results from rms' emission size, there are many small emission size rms, some medium emission size rms and a few large emission size rms, and the introduction of the inexible mandatory regulation can fail. |
| Keywords: | Voluntary Approarch, Heterogeneous rms with private information |
| JEL: | Q58 D78 D82 |
| URL: | http://d.repec.org/n?u=RePEc:mof:wpaper:ron257&r=env |
| By: | Alessandro Manello (Ceris - Institute for Economic Research on Firms and Growth,Turin, Italy); Matteo Ferraris (Università degli Studi di Milano, Milan, Italy DEMM Dipartimento di Economia, Management e Metodi Quantitativi) |
| Abstract: | In the light of the recent European environmental regulation, in Italy, waste collection management has been involved in some important changes both from environmental and management point of view. From the one hand, firms want to maximize the quantity of collected Municipal Solid Waste (MSW) showing an increasing capacity of waste collection per unit of labor and capital, from the other hand they want to minimize the level of Undifferentiated Solid Wastes (USW) in order to meet environmental goals. This paper extends the concept of Directional Distance Function (DDF) to the waste sector, in which previous applications of efficiency models have been mainly focused on the cost-function side. The idea of DDF (by Chambers et al.,1996; 1998) is here applied to treat asymmetrically two categories of outputs: one desirable (amount of MSW) and one undesirable (level of undifferentiated wastes) both observed (with inputs) from a sample of around 450 Italian municipalities during 2006. Computed efficiency scores are analyzed in light of different tariff systems (e.g. flat fee and pay as you through), different socio-economic contexts (e.g. Northern vs Southern Italy) and prevalent political side in local government (Left wings vs Right-wing parties). Keywords: 4-6 nanocompounds, atmospheric pollutants, social costs evaluation, social saving, titanium dioxide. |
| Keywords: | DEA, DDF, Waste Management, Waste Policies |
| JEL: | Q53 Q56 L23 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:csc:cerisp:201312&r=env |
| By: | Saraly Andrade de Sa; Julien Daubanes |
| Abstract: | This paper questions the ability of a carbon tax to reduce oil extraction. Demand for oil is very price inelastic. Facing such demand, an extractive cartel induces the highest price that does not destroy its demand; it tolerates "non-drastic" substitutes but deters substitution possibilities that have the potential to drastically deteriorate its demand. Limit-pricing equilibria of non-renewable resource markets sharply differ from conventional Hotelling outcomes. Oil taxes become neutral. Policies only reduce current oil extraction when they support existing non-drastic substitutes. Since the carbn tax applies to oil and to its current carbon substitutes, it induces higher oil current production. |
| Keywords: | Carbon tax, Limit pricing, Non-renewable resource, Monopoly, Demand elasticity, Substitutes subsidies |
| JEL: | Q30 L12 H21 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:136&r=env |
| By: | Bonnet, Céline; Bouamra-Mechemache, Zohra |
| Abstract: | The market for organic products increases continuously over time. Because consumers are willing to pay a premium for organic goods, firms may have an interest in developing organic production strategies and entering a profitable market segment. The objective of this paper is to assess the profitability of such a strategy and to determine how the value added created by the existence of an organic label is shared in a vertical chain among manufacturers and retailers. Using purchase data on the French fluid milk sector, we develop a structural econometric model of demand and supply that takes into account the relative bargaining power between manufacturers and retailers. Our results suggest that the organic label segment is more profitable as it permits the existence of higher margins. Moreover, an organic label allows manufacturers to achieve more bargaining power relative to retailers and hence to obtain a higher share of total margins. The econometric model is then used to assess the impact of an environmental policy in favor of the organic segment based on a mechanism of price support. Our results suggest that while a subsidy policy towards organic products benefits both manufacturers and retailers, a tax policy toward conventional products benefits manufacturers at the expense of retailers. Moreover, the environmental impact of the policy is mitigated and depends on the environmental issues at stake. |
| Keywords: | fluid milk market, bargaining power, organic, environmental policy, manufacturers, retailers, structural econometrics |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:28220&r=env |
| By: | Rigoberto A. Lopez (University of Connecticut; University of Connecticut); Nataliya Plesha (University of Connecticut) |
| Abstract: | This report, produced at the request of the Dairy Committee of the Connecticut Farm Bureau Association, assess es the economic and dairy farm sustainability impacts of Connecticut’s Public Act 09 - 229 . Th e Act established a dairy farm sustainability and safety net program by providing payments to dairy farmers when ever the federal milk price falls below a minimum sustainable monthly cost of production . The Act has provide d $ 1 6. 72 million in payments between 2010 and 2012. T o this end, three supportive objectives are pursued: 1) to examine recent trends in Connecticut dairy farming and policies; 2) to assess the impact of the Act on dairy farming sustainability; and 3) to assess the economic impact of payments under the Act. The focus is on dairy farming and does not take into account impacts beyond the farm gate or impacts on open space and other environmental benefits. |
| Keywords: | milk, dairy, sustainability, Connecticut, pricing |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:zwi:outrep:17&r=env |
| By: | Nordén, Anna |
| Abstract: | Because the effectiveness of payment for ecosystem services (PES) programs depends on landowners’ engagement, understanding the relationship between the type of payment and participation is a key issue. This paper reports on a choice experiment that quantifies landowners’ preferences for cash and educational in-kind payment. The main results indicate a positive correlation between participation in a PES contract and the magnitude of the cash payment, while participation seems uncorrelated with the magnitude of the educational in-kind payment. In addition, we investigate the mix of payment types and heterogeneity in preferences, which can help policymakers design strategies to increase participation. |
| Keywords: | payment for ecosystem services, cash payments, in-kind payments, stated preferences, land owners |
| JEL: | Q28 Q57 |
| Date: | 2014–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-11-efd&r=env |
| By: | Heinz Welsch (University of Oldenburg, Department of Economics); Susana Ferreira (University of Georiga) |
| Abstract: | Recent years have seen a sharp increase in the use of subjective well-being data in environmental economics. This article discusses the conceptual underpinnings of using such data as a tool for preference elicitation and non-market valuation. Given the connection of those data to the notion of experienced utility, we refer to this approach as the experienced preference method and discuss recent methodological advances and applications of the approach to subject areas not previously reviewed. In addition, we discuss insights concerning environmental behavior that can be gained with the help of subjective well-being data. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:old:dpaper:367&r=env |
| By: | Dinkelman, Taryn |
| Abstract: | Drought is Africa’s primary natural disaster and a pervasive source of income risk for poor households. This paper documents the long-run health effects of early life exposure to drought and investigates an important source of heterogeneity in these effects. Combining birth cohort variation in South African Census data with cross-sectional and temporal drought variation, I estimate long-run health impacts of drought exposure among Africans confined to homelands during apartheid. Drought exposure in early childhood significantly raises later life male disability rates by 4% and reduces cohort size. Among a subset of homelands – the TBVC areas – disability effects are double and negative cohort effects are significantly larger. I show that differences in spatial mobility restrictions that influence the extent of migrant networks across TBVC and non-TBVC areas contribute to this heterogeneity. Placebo checks show no differential disability impacts of drought exposure across TBVC and non-TBVC areas after the repeal of migration restrictions. The results show that although drought has significant long-run effects on health human capital, migrant networks in poor economies provide one channel through which families mitigate these negative impacts of local environmental shock |
| Keywords: | disability and early life health; drought; local shocks; migration; South Africa |
| JEL: | I15 J61 N37 O15 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9801&r=env |
| By: | Alpízar, Francisco; Martinsson, Peter; Nordén, Anna |
| Abstract: | In this paper, we investigate how different levels of entrance fees affect donations for a public good, a natural park. To explore this issue, we conducted a stated preference study focusing on visitors’ preferences for donating money to raise funds for a protected area in Costa Rica given different entrance fee levels. The results reveal that there is incomplete crowding-out of donations when establishing an entrance fee. |
| Keywords: | crowding out, entrance fee, donation, voluntary contribution, stated preferences, protected areas, Costa Rica |
| JEL: | Q26 Q28 |
| Date: | 2014–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-10-efd&r=env |
| By: | Bertaud, Alain |
| Abstract: | Cities emerge from the spatial concentration of people and economic activities. But spatial concentration is not enough; the economic viability of cities depends on people, ideas, and goods to move rapidly across the urban area. This constant movement within dense cities creates wealth but also various degrees of unpleasantness and misery that economists call negative externalities, such as congestion, pollution, and environmental degradation. In addition, the poorest inhabitants of many cities are often unable to afford a minimum-size dwelling with safe water and sanitation, as if the wealth created by cities was part of a zero-sum game where the poor will be at the losing end. The main challenge for urban planners and economists is reducing cities'negative externalities without destroying the wealth created by spatial concentration. To do that, they must plan and design infrastructure and regulations while leaving intact the self-organizing created by land and labor markets. The balance between letting markets work and correcting market externalities through infrastructure investment and regulation is difficult to achieve. Too often, planners play sorcerer's apprentice when dealing with markets whose functioning they poorly understand. The role of the urban planner is then, first, to better understand the complex interaction between market forces and government interventions, infrastructure investment and regulation, and second, to design these interventions based on precise quantitative objectives. Each city's priorities would depend on its history, circumstances, and political environment. But maintaining mobility and keeping land affordable remains the main urban planning objective common to all cities. |
| Keywords: | Transport Economics Policy&Planning,Municipal Financial Management,Urban Housing,National Urban Development Policies&Strategies,Urban Housing and Land Settlements |
| Date: | 2014–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6870&r=env |
| By: | Monica Cariola (Ceris - Institute for Economic Research on Firms and Growth,Turin, Italy); Alessandro Manello (Ceris - Institute for Economic Research on Firms and Growth,Turin, Italy) |
| Abstract: | Because nowadays more than 200 kind of diseases are to some extent connected to atmospheric pollution, with a very significant impact on the social cost of a community, it can be important to study the effect that plans for using technologies able to treat urban areas atmosphere as a whole (in particular public areas), may have on reducing social and economic costs. The relationship between the increment of air pollutant concentration and morbidity/mortality due to natural, heart, encephalovascular and respiratory causes has been widely documented in national and international scientific literature. A technology based on nano-structured materials (TiO2 based nanocompounds) which, under ultraviolet radiations, presents photocathalytic effects, can be able to decompose a wide variety of atmospheric pollutants as nitrogen dioxide (NO2) and nano-powder (PM10). In this paper we study and set up a model for the economic and social impact assessment of a large scale implementation of this technology in the field of urban and building construction. The paper assumes that the estimates of economic-social costs of air pollution, can be used as a starting point for a preliminary determination of the savings, which can be realized by employing photocatalytic pigments and mortars on a wide urban scale. This analysis has been applied to data referred to the town of Turin and has highlighted the possibility of a considerable level of saving in terms of social and economic costs. |
| Keywords: | 4-6 nanocompounds, atmospheric pollutants, social costs evaluation, social saving, titanium dioxide |
| JEL: | Q51 Q53 Q55 Q58 I18 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:csc:cerisp:201311&r=env |
| By: | Nicole Ahner; Jean-Michel Glachant |
| Abstract: | Recent years have seen increasing efforts in Europe to win the Southern Mediterranean countries as new suppliers of energy from renewable sources (RES-E). Massive amounts of green electricity that is generated in the Middle East and the North Africa (MENA) regions might someday be consumed in the EU. However, beyond the stark invocation of an Euro-Mediterranean RES-E exchange, less attention has been given to its actual implementation. This article takes stock of the applicable EU regime that governs the transfer of green electricity via Maghreb-EU corridors. In our investigation, centre stage is given to Article 9 of Directive 2009/28/EC (RES Directive), which introduced the opportunity for the EU Member States to receive credit towards their 2020 targets for clean power generated in third countries, provided that it is consumed inside the EU. We will argue that the EU, in practice, is moving towards a ‘corridor-by-corridor’ approach, rather than towards a fully-fledged ‘EU-style’ system. |
| Keywords: | Renewables Directive, Cooperation Mechanism, Renewables Exchange, Mediterranean Basin |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2014/39&r=env |
| By: | Jelliffe, Jeremy (University of Connecticut); Bravo-Ureta, Boris (University of Connecticut) |
| Abstract: | •In Recent Years, Wine Makers have gone Crazy over Climate Change! •"If you look at most of the places growing grapes worldwide, many of them have been right at the cool-limit margins and so a little bit of warming has made them more suitable" (Dr. Greg Jones, The University of Oregon). •“This means that over time wine-growing regions will shift north toward cooler climates in the Northern Hemisphere and further south in the Southern Hemisphere.” - CT growers may produce more sensitive & appealing varieties |
| Keywords: | Connecticut, Maritime Industry |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:zwi:outrep:16&r=env |