nep-env New Economics Papers
on Environmental Economics
Issue of 2014‒06‒07
ten papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Worse off from reduced cost? The role of policy design under uncertain technological advancement By Matthias Weitzel
  2. A Study on Circular Economy Implementation in China By Kui ZHOU; Dominique BONET FERNANDEZ; Chengcheng WAN; Akumba DENIS; Gael-Miguel JUILLARD
  3. The dust was long in settling: Human capital and the lasting impact of the american dust bowl By Vellore Arthi
  4. Social Protection and Climate Change By Chris Béné; Terry Cannon; Mark Davies; Andrew Newsham; Thomas Tanner
  5. An Integrated Environmental and Economic Modeling Framework for Technological Transitions By Randall Jackson
  6. Integrated Groundwater Resource Management By James Roumasset; Christopher Wada
  7. Semi-Endogenous Growth and Pollution: No Double Dividend in the Long Term By Pascal Da Costa
  8. Which Incentives Does Regulation Give to Adapt Network Infrastructure to Climate Change? - A German Case Study By Anna Pechan
  9. WHY MY PARTICIPATION MATTERS: Rent-seeking with endogenous prize determination By Klarizze Anne Puzon; Marc Willinger
  10. L'action publique entre rhétorique et légitimité : une analyse des politiques locales de développement durable en termes de besoins fondamentaux By Gaël Plumecocq

  1. By: Matthias Weitzel
    Abstract: A simple model is used to illustrate the effects of a reduction in (marginal) abatement cost in a two country setting. It can be shown that a the country experiencing a cost reduction can actually be worse off. This holds true for a variety of quantity and price based emission policies. The most important channel is that a country with lower abatement costs engages in additional abatement effort for which it is not compensated. Under a quantity based policy with a given allocation, a seller of permits can also be negatively affected from a lower carbon price. We also argue that abatement cost shocks to renewable energy and carbon capture and storage (CCS) are different in terms of their effects on international energy markets. A shock to renewable energy reduces fossil fuel rents benefiting energy importers, while the opposite holds for a shock to CCS. The channels obtained in the theoretical model can be confirmed in a more complex global computable general equilibrium model. Some regions are indeed worse off from shock that lowers their abatement costs
    Keywords: Climate policy, prices vs. quantities, renewable energy, CCS, technological uncertainty, CGE model
    JEL: C68 Q54 Q58
    Date: 2014–05
  2. By: Kui ZHOU; Dominique BONET FERNANDEZ; Chengcheng WAN; Akumba DENIS; Gael-Miguel JUILLARD
    Abstract: Abstract: As one of the most well-known concepts concern with sustainable development, circular economy (CE) has been implemented in many countries since the end of last century. As one of the biggest developing countries, China achieved rapid economical growth associated with significant natural resource consumption and environmental degradation. Recognizing nation’s sustainable development needs a well coordinated economic growth and environment protection, China’s top administration heightened attention on ecological modernization, green growth, and low carbon development with a national circular economy strategy. In this research, with a purpose of better future practice of CE, we introduce the progress and status of CE implication in China, including introductions of CE supporting laws and regulations and a case study to provide readers a clearer view of the relevant issues in China.
    Keywords: Circular Economy, Implementation, China
    Date: 2014–06–02
  3. By: Vellore Arthi (Department of History)
    Abstract: I use variation in childhood exposure to the Dust Bowl, an environmental shock to health and income, as a natural experiment to explain variation in adult human capital. I find that the Dust Bowl produced significant adverse impacts in later life, especially when exposure was in utero, increasing rates of poverty and disability, and decreasing rates of fertility and college completion. Dependence on agriculture exacerbates these effects, suggesting that the Dust Bowl was most damaging via the destruction of farming livelihoods. This collapse of farm incomes, however, had the positive effect of reducing demand for child farm labor and thus decreasing the opportunity costs of secondary schooling, as evidenced by increases in high school completion amongst the exposed.
    Keywords: Dust Bowl, environmental shock, human capital formation, early life health
    Date: 2014–04–22
  4. By: Chris Béné; Terry Cannon; Mark Davies; Andrew Newsham; Thomas Tanner
    Abstract: Climate change has already resulted in climate-related extreme events of greater frequency and/or intensity. This, along with long-term changes in average conditions (whether in temperature or rainfall), is likely to continue to have a major impact on livelihoods. Developing countries will be especially affected by such events – and more specifically, the poor people in developing countries – because of their geographical exposure and their greater reliance on climate-sensitive sectors such as agriculture. Social protection offers a wide range of instruments (e.g. cash transfers, insurance products, pension schemes and employment guarantee schemes) that can be used to support households that are particularly vulnerable to both the ongoing and acute impacts of climate changes. Although the evidence base showing how these measures can help those affected prevent and cope with climate challenges is still limited, this paper aims to provide a condensed review of the current knowledge and evidence about the role of social protection in reducing the impact of climate change on the poorest populations and provides a series of recommendations for both social protection and climate change practitioners and for strengthening the evidence base.
    Date: 2014–06–05
  5. By: Randall Jackson (Regional Research Institute, West Virginia University)
    Abstract: There is an increasing demand for models that address both environment and economy, and that also estimate or forecast the impacts of introducing new and markedly different technologies from those already existing in the systems under study. Because most conventional models are calibrated to recent data characterizing current economic structure and conditions, their standard turn-key operation will need to be replaced by more comprehensive algorithms and procedures designed to explicitly accommodate shifts in technology and economic structure. This paper lays out one viable alternative for integrating environmental and economic modeling frameworks, and focuses specifically on one of the major challenges to this kind of modeling, that of dovetailing life cycle assessment and input-output modeling frameworks. (Acknowledgements: This material is based upon work supported by the National Science Foundation under Grant No. 1235684 and USDA NIFA Award 2012-67009-19660.)
    Keywords: environement, environmental modeling, life cycle assessment
    JEL: Q55
    Date: 2014–02–17
  6. By: James Roumasset (University of Hawai‘i at Manoa & University of Hawai’i Economic Research Organization); Christopher Wada (University of Hawai’i Economic Research Organization)
    Abstract: General principles of groundwater management for a single aquifer are extended to the management of multiple water resources, including additional aquifers, recycled wastewater, and desalinated seawater. Optimal groundwater extraction can be incentivized by pricing according to the Pearce equation for renewable resources, although the standard version of the equation must be modified in certain situations, e.g. to accommodate corner solutions or governance costs. Groundwater management and pricing must be coordinated with the management of watershed and related resources lest the benefits of conservation are squandered by wasting the water saved. Joint optimization also provides the basis for correctly pricing ecosystem services such as groundwater recharge. From the models and examples discussed, one can conclude that a systems approach is necessary, and ad hoc rules-of-thumb such as maximum-sustainable-yield are welfare reducing. Inasmuch as actual groundwater management may be far from efficient, the Gisser-Sanchez effect notwithstanding, we discuss the problem of optimal resource governance.
    Keywords: Groundwater, renewable resources, dynamic optimization, sustainable yield, Pearce equation, marginal user cost, conjunctive use, water institutions, Gisser-Sanchez effect, governance, natural capital
    JEL: Q20 Q25
    Date: 2014–05
  7. By: Pascal Da Costa (LGI - Laboratoire Génie Industriel - EA 2606 - Ecole Centrale Paris)
    Abstract: Literature on endogenous growth shows that a polluting economy can grow sustainably and that a double-dividend or win-win effect comprising growth and the environment is possible. Even with a semi- endogenous growth approach, which occur when the knowledge stock yield falls below the unit in the production of innovations, what happens to sustainability and the double dividend? This paper presents the first semi-endogenous growth model with pollution which answers this very question. We first illustrate that the dynamics of this economy can be sustainable even if its long-term growth rate is exogenous. To ensure the latter, a knowledge stock yield that is greater than a certain strictly positive threshold is required. We then demonstrate that the double dividend is impossible since the level of support for innovation no longer has a positive impact on the long-term growth rate. And the environmental policy always has a negative effect on growth.
    Keywords: Innovation; Pollution; Semi-Endogenous Growth; Double Dividend
    Date: 2014–05–22
  8. By: Anna Pechan (University of Oldenburg, Department of Economics)
    Abstract: Climate change poses a new challenge in particular to long-lasting electricity networks. At the same time, this industry is highly regulated, which greatly affects the behavior of network operators. In this paper, the impact of regulation in general and of the German electricity grid regulation in particular on anticipatory adaptation investments is analyzed. The qualitative analysis shows that in general a whole set of elements of the regulatory model and their coordination influence the decision of ex ante adaptation to climate change. A careful and balanced design, e.g. of efficiency and quality measurement, is thus crucial to avoid inadequate adaptation. The regulation in Germany discourages flexible adaptation to extreme weather events (EWEs). For irreversible adaptation of new and existing infrastructure to EWEs, the incentives highly depend on the cost approval of the regulator. Currently, the regulation discourages this type of adaptation. But if the additional costs can be claimed, the network operator is indifferent to adapt. Similarly, incentives to irreversibly adapt existing and new infrastructure to slow onset events (SOEs) range between excessively high and undistorted depending on the regulator’s discretion. Undistorted means that the decision to implement adaptation measures is not biased by regulation. Undistorted are also the incentives for flexible measures to adapt to SOEs. Only in the undistorted cases, the risk of inadequate adaptation are borne by the network operator.
    Keywords: Electricity Networks, Regulation, Climate Change, Germany
    Date: 2014–05
  9. By: Klarizze Anne Puzon; Marc Willinger
    Abstract: We analyze an institutionalized rent-seeking game in which groups can endogenously choose the prize at stake, e.g. a common-pool resource. In the first stage, groups determine how much of the resource to protect and equally share. In the second stage, the unprotected fraction is competed for in a rent-seeking game. We consider two institutions varying in the extent by which subjects participate: majority voting (i.e. "unrestrained participation" where all group members participate in the protection stage) and dictatorial rule (i.e. "limited participation" where only one member decides in the protection stage) [...]
    Date: 2014–06
  10. By: Gaël Plumecocq (AGIR - AGrosystèmes et développement terrItoRial - Institut national de la recherche agronomique (INRA) : UMR1248, LEREPS - Laboratoire d'Etude et de Recherche sur l'Economie, les Politiques et les Systèmes Sociaux - Université des Sciences Sociales - Toulouse I : EA4212 - École Nationale de Formation Agronomique - ENFA - Institut d'Études Politiques [IEP] - Toulouse - Université Toulouse le Mirail - Toulouse II)
    Abstract: Dans cet article, nous examinons l'hypothèse selon laquelle les politiques publiques, en particulier dans le domaine du développement durable, reposent sur des modalités rhétorique. En s'appuyant sur le cas des politiques locales mises en œuvre dans la région du Nord-Pas de Calais, cet article insiste sur la nécessité d'apporter des fondements légitimes à cette modalité rhétorique, fondements qui conditionnent son efficacité. Dans cette optique, nous nous appuyons sur une méthode pluridisciplinaire. Les résultats obtenus permettent de dessiner les contours d'une politique de développement durable acceptable qui s'appuie sur deux modalités complémentaires : régulation/incitation et rhétorique.
    Keywords: Politiques régionales ; Développement Durable ; Rhétorique politique ; Légitimité ; Besoins fondamentaux
    Date: 2013–06–03

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