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on Environmental Economics |
| By: | Caspar Sauter (Institute of economic research IRENE, Faculty of Economics and Business, University of Neuchâtel, Switzerland) |
| Abstract: | One of the biggest obstacles in cross-country empirical research in the area of environmental economics is the absence of a sound indicator quantifying environmental policy stringency. A variety of indicators have been proposed and are currently used. Almost none of them rely on an explicitly stated methodology, violating thereby one of the most fundamental rules of index construction. To overcome this problem, this paper develops a new general methodology for the measurement of environmental policy stringency and proposes a first implementation using the example of CO2 policy stringency. To do so it combines originally extensive databases on CO2 emissions. |
| Keywords: | Greenhouse gas emissions, environmental regulation, environmental policy stringency, policy stringency index, CO2 emissions |
| JEL: | Q50 Q53 Q58 C18 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:14-01&r=all |
| By: | Sahbi, Farhani; Shahbaz, Muhammad |
| Abstract: | This study attempts to explore the causal relationship between renewable and non-renewable electricity consumption, output and carbon dioxide (CO2) emissions for 10 Middle East and North Africa (MENA) countries over the period of 1980–2009. The results from panel Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) show that renewable and non-renewable electricity consumption add in CO2 emissions while output (real gross domestic product (GDP) per capita) exhibits an inverted U-shaped relationship with CO2 emissions i.e. environment Kuznets curve (EKC) hypothesis is validated. The short-run dynamics indicate the unidirectional causality running from renewable and non-renewable electricity consumption and output to CO2 emissions. In the long-run, there appears to be the bidirectional causality between electricity consumption (renewable and non-renewable) and CO2 emissions. The findings suggest that future reductions in CO2 emissions might be achieved at the cost of economic growth. |
| Keywords: | Electricity consumption, Output, CO2 emissions, MENA region |
| JEL: | C5 |
| Date: | 2014–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57461&r=all |
| By: | Maja Schlüter; Alessandro Tavoni; Simon Levin |
| Abstract: | Growing empirical evidence points to the importance of social norms for achieving sustainable use of common pool resources (CPR). Social norms can facilitate the cooperation and collective action needed to sustainable share a common resource. With global change, however, the social and environmental conditions under which cooperation has evolved and been maintained in the past may vary dramatically. Higher variability of resource availability and more frequent extreme events, for instance, will put additional pressure on cooperation, possibly triggering its collapse, with detrimental effects on the environment. In light of this, the potential impact of climate change on conflict has recently received considerable attention. Here we assess the robustness of norm-driven cooperation to changing resource availability in a stylised model of community harvesting from a shared resource. The model is a generalised representation of CPR extraction, which allows for social disapproval towards norm-violators. We use an agent-based model to assess the robustness of cooperative outcomes to variable resource flows. Our results indicate that both resource abundance and low resource variability can lead to its unsustainable use, while wither scarcity or high variability in the resource have the potential to stabilise cooperation. These findings provide insights into possible effects of global change on self-governance of the commons. They also indicate that there is no simple answer to the question whether global change has the potential to destabilise cooperation in natural resource use, and lead to environmental degradation and possible conflict. |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp146&r=all |
| By: | Caspar Sauter (Institute of economic research IRENE, Faculty of Economics and Business, University of Neuchâtel, Switzerland) |
| Abstract: | This is the online appendix to the paper “How should we measure environmental policy stringency? A new approach” (Sauter, 2014). The main paper outlines the general methodology proposed to construct environmental policy indexes and proposes a first implementation of a CO2 input index and a CO2 performance index. This online appendix reports the results of the implementation of a SO2 input index, a SO2 performance index, a CH4 input index, a CH4 performance index as well as the broad GHG input index. All of those indexes have been constructed using the methodology outlined in the main paper. |
| Keywords: | Greenhouse gas emissions, environmental regulation, environmental policy stringency, policy stringency index, CO2 emissions |
| JEL: | Q50 Q53 Q58 C18 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:14-02&r=all |
| By: | Ingmar Schumacher |
| Abstract: | The results in this paper show that a policy maker who ignores regional data and instead relies on aggregated integrated assessment models will strongly underestimate the carbon price and thus the required climate policy. Using a stylized theoretical model we show that, under the mild and widely-accepted assumptions of asymmetric climate change impacts and declining marginal utility, an Aggregation Dilemma may arise that dwarfs most other policy- relevant aspects in the climate change cost-benefit analysis. Estimates based on the RICE model (Nordhaus and Boyer 2000) suggest that aggregation leads to around 26% higher total world emissions than those from a regional model. The backstop energy use would be zero in aggregated versions of the model, while it is roughly 1.3% of Gross World Product in the regionally-disaggregated models. Though the policy recommendations from fully aggre- gated models like the DICE model are always used as a benchmark for policy making, the results here suggest that this should be done with the reservations raised by the Aggregation Dilemma in mind. |
| Keywords: | Aggregation Dilemma; aggregation; Integrated Assessment Models; climate policy. |
| JEL: | Q54 Q58 |
| Date: | 2014–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-428&r=all |
| By: | Mouez Fodha (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Thomas Seegmuller (AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM)); Hiroaki Yamagami (Seikei University - Seikei University) |
| Abstract: | This article analyzes the consequences of environmental tax policies when the government imposes a constraint on stabilizing public debt. A public sector of pollution abatement is financed by taxation and by issuing public debt. Considering a simple overlapping-generations model, the tax reform stimulates steady-state investment. Then, the environmental quality and the aggregate consumption increase if and only if (i) pollution abatement is large enough and (ii) there is under-accumulation of the per capita capital stock. This arises if environmental taxation allows a decrease of either income taxation or debt-output ratio. |
| Keywords: | environmental tax reform; debt; public emission abatement; double dividend |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01023798&r=all |
| By: | Ted Temzelides (Rice University); Borghan Narajabad (Federal Reserve) |
| Abstract: | We study a dynamic stochastic general equilibrium model where agents are concerned about model uncertainty regarding climate change. An externality from greenhouse gas emissions adversely affects the economys capital stock. We assume that the mapping from climate change to damages is subject to uncertainty, and we adapt and use techniques from robust control theory in order to study efficiency and optimal policy. We obtain a sharp analytical solution for the implied environmental externality, and we characterize dynamic optimal taxation. A small increase in the concern about model uncertainty can cause a significant drop in optimal energy extraction. The optimal tax which restores the social optimal allocation is Pigouvian. Under more general assumptions, we develop a recursive method and solve the model computationally. We find that the introduction of uncertainty matters qualitatively and quantitatively. We study optimal output growth in the presence and in the absence of concerns about uncertainty and find that these can lead to substantially dfferent conclusions. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed014:59&r=all |
| By: | Paul Collier; Anthony J. Venables |
| Abstract: | Climate policy required that much of the world’s reserves of fossil fuels remain unburned. This paper makes the case for implementing this directly through policy to close the global coal industry. Coal is singled out because of its high emissions intensity, low rents per unit value, local environmental costs and sheer scale. Direct supply policy – the sequenced closure of coal mines – may lead to less policy leakage (across countries and time) than other policies based on demand or price management. It also has the advantage of involving relatively few players and leading to clear-cut and observable outcomes. Appropriately sequenced closure of the world coal industry could, we suggest, create the moral force needed to mobilise collective international action. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp157&r=all |
| By: | Carola Kniebes; Christine Merk; Gert Pönitzsch; Katrin Rehdanz; Ulrich Schmidt |
| Abstract: | Climate engineering (CE) and carbon capture and storage sub-seabed (CCS-S) are currently controversially debated options to address climate change. Our paper provides empirical evidence on the public perception of two different CE measures, namely, stratospheric sulphate injection (SSI) and afforestation, as well as CCS-S. Using data from a novel large-scale survey, we analyse the determinants of acceptance of these measures in Germany. We also provide experimental evidence on how additional information on these measures changes the respondents’ acceptance. We show that the acceptance differs strongly between the three measures. Afforestation is strongly favoured over CCS-S and SSI. This ranking holds independent of the amount of information provided. For all three measures, we find that, on average, additional information decreases acceptance. However, the sign and the strength of the information effect strongly depend on personal characteristics, such as gender and risk attitude |
| Keywords: | Climate Engineering, Carbon Capture and Storage, Climate Change, Public Opinion, Survey |
| JEL: | Q50 Q54 C83 D19 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1936&r=all |
| By: | Juan Antonio Duro (Universitat Rovira i Virgili); Jordi Teixidó-Figueras (Universitat Rovira i Virgili); Emilio Padilla (Univ. Autónoma de Barcelona) |
| Abstract: | This paper uses the possibilities provided by the regression-based inequality decomposition (Fields, 2003) to explore the contribution of different explanatory factors to international inequality in CO2 emissions per capita. In contrast to previous emissions inequality decompositions, which were based on identity relationships (Duro and Padilla, 2006), this methodology does not impose any a priori specific relationship. Thus, it allows an assessment of the contribution to inequality of different relevant variables. In short, the paper appraises the relative contributions of affluence, sectoral composition, demographic factors and climate. The analysis is applied to selected years of the period 1993–2007. The results show the important (though decreasing) share of the contribution of demographic factors, as well as a significant contribution of affluence and sectoral composition. |
| Keywords: | CO2 emissions, international emissions inequality, regression-based decomposition |
| JEL: | C19 D39 Q43 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2013/6/doc2014-20&r=all |
| By: | Honma, Satoshi; Yoshida, Yushi |
| Abstract: | For the period between 1988 and 2009, we constructed the two sets of the world panel database for the pollution emission embedded in international trade. By applying the time-invariant common pollution intensity at industry level for international trade of over 150 countries, a change in pollution emission from the first database reflects scale and composition effects. This first database allows us to investigate whether the composition of international trade for a country changed toward pollution intensive industries during the last two decades. By utilizing a time-varying and country-varying pollution intensity variable for technique effect, the second database provides a full account of pollution emission embodied in global trade and show to what degree the pollution emission is attributed to scale, composition and technique effects. |
| Keywords: | Database Construction; Environment; International trade; Pollution emission; World Panel Database |
| JEL: | F18 O13 Q56 |
| Date: | 2014–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57489&r=all |
| By: | Mark Purdon; Razack Lokina |
| Abstract: | This study presents findings from a systematic comparative research effort to investigation the additionality claims of CDM afforestation projects in Tanzania, Uganda and Moldova.Using what we refer to as an ex-post comparative baseline approach that accounts for how project financing and background economic conditions evolve over a CDM project’s implementation and crediting periods, we demonstrate that the projects in Uganda and Moldova are very likely to be fully additional while only approximately one-quarter of carbon credits resulting from the Tanzania project are genuine. The conditions of additionality can change significantly over the course of a CDM project in a way that undermines project environmental integrity because the CDM rules do not accommodate changing baseline conditions. Rather, current CDM rules allow initial baseline conditions to be frozen over a project’s crediting period. We recommend that a reformed CDM, REDD, NAMA or other new market mechanism adopt some of the elements of our approach including use of comparative performance benchmarks, an additionality risk management tool and engaging donors in the development of “ODA-baselines” for climate mitigation projects which combine carbon finance and development assistance. |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp149&r=all |
| By: | Jean Cavailhes; Daniel Joly (ThéMA, Centre National de la Recherche Scientifique); Mohamed Hilal (Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux, INRA); Thierry Brossard (ThéMA, Centre National de la Recherche Scientifique); Pierre Wavresky (Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux, INRA) |
| Abstract: | Nous présentons un modèle théorique dans lequel des ménages consomment une aménité climatique, où le climat modifie leur goût pour un mode de vie extérieur (effet barbecue) et où le prix unitaire des migrations alternantes dépend du climat (effet verglas). Des prédictions théoriques sont tirées de ce modèle sur le gradient de rente foncière et sur l’étalement des villes. Elles sont testées par des modèles économétriques qui prennent en compte un biais de sélection et l’endogénéité de régresseurs, à partir des enquêtes Logement de l’Insee. Les résultats montrent que la température a un prix hédoniste positif, que là où le climat est plus chaud les aires urbaines sont plus étendues et que les gradients de rente foncière sont plus plats. Par conséquent, dans le cas d’un pays tempéré comme la France, l’étalement urbain et le réchauffement climatique se renforcent mutuellement, dans un cercle vicieux pour l’environnement. |
| Abstract: | We present a theoretical model in which, households consume a climatic amenity, warmer climates increase an outdoor way of life (barbecue effect) and where commuting costs depend on climate (glare ice effect). We derive theoretical predictions on land rent gradients and urban sprawl. They are tested by econometric models that take into account a selection bias and endogenous variables using individual data from housing surveys. First, we estimate hedonic prices of climatic variables, second we show that were temperature is warmer urban areas are more sprawled and land rent gradients flatter. Therefore, in the French case, urban sprawl and warming reinforce each other, in an environmental vicious circle. |
| Keywords: | habitat, prix hédoniste, climat, france, modèle théoriqueéconomie urbaine, comportement des consommateurs |
| JEL: | D12 Q51 Q54 R31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:inr:wpaper:264230&r=all |
| By: | Valérie Angeon (CEREGMIA, Faculté de droit et d'économie, Université des Antilles et de la Guyane); Armelle Caron (Mutations des Activités, des Espaces et des Formes d'Organisation dans les Territoires Ruraux, INRA); Patrice Cayre (Mutations des Activités, des Espaces et des Formes d'Organisation dans les Territoires Ruraux, INRA; Ministère de l’Alimentation, de l'Agriculture et de la Pêche); Arnaud Larade (Agrosystèmes tropicaux, INRA; Mutations des Activités, des Espaces et des Formes d'Organisation dans les Territoires Ruraux, INRA; UMR Métafort, AgroParisTech) |
| Abstract: | The Green and Blue infrastructure (Trame verte et bleue ?TVB) is a new conservation policy tool based on the notions of ecological network and corridor. The TVB's implementation process establishes the connection of multi and nested decisional and action levels and needs permanent adjustment to change that is analyzed as adaptive governance mechanisms. The implementation of an adaptive governance is described as an mean to overpass those failures. The literature on adaptive governance gives learning process a central place as it permits to systematically improve policies and practices for an effective preservation of the environment. The aim of this article is to provide a critical perspective on learning processes in adaptive governance. We aim at reintroducing two blind spots. First, knowledge theory frequently forget to consider the strategic issue of knowledge. Second, knowledge theory implicitly recognizes that an actor acts but, it is often true that an actor can «be acted». |
| Keywords: | sociologie de la connaissance, politique de l'environnement, politique de sauvegarde, politique environnementale, apprentissage, mode de gouvernance, gouvernance adaptative, trame verte et bleue processus d'apprentissagedéveloppement durable, protection de l'environnementacquisition de connaissances, théorie des apprentissages, théorie scientifique, théorie de la connaissancefrance |
| JEL: | Q58 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:inr:wpaper:226906&r=all |
| By: | Swantje Sundt; Katrin Rehdanz |
| Abstract: | The number of studies published focusing on people’s preferences for green electricity has increased steadily, making it more and more difficult to identify key explanatory factors that determine people’s willingness-to-pay (WTP). Based on results of a meta-regression our results indicate e.g. that hydropower is the least preferred technology. Variables such as information on the type of power plant that will be replaced by renewables, which are often omitted from primary valuation studies, are important in explaining differences in values as well. When assessing the predictive power of our results for out-of-sample value transfers we find median errors of approximately 30%, depending on model specification |
| Keywords: | meta-analysis, renewable energy, valuation, value transfer, willingness to pay |
| JEL: | C53 D62 Q40 Q48 Q51 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1931&r=all |
| By: | Kirk Hamilton |
| Abstract: | The adoption of the System of Environmental-Economic Accounting 2012: Central Framework as a UN statistical standard is a landmark in environmental accounting. The SEEA has the same authority and weight as the System of National Accounts in the pantheon of official statistics. The SEEA defines the unit value of depletion of an exhaustible resource to equal the average value of the asset (the total asset value divided by the physical stock of resource). By applying this definition to a non-optimal Dasgupta-Heal-Solow model of an extractive economy, we show that ‘depletion-adjusted net saving’ as defined in the SEEA supports a generalized version of the Hartwick Rule. This measure of saving can guide policies for sustainable development in extractive economies, in particular fiscal policies concerning consumption and investment expenditures funded by resource rents. The conditions required to support this finding are not unduly restrictive: that extraction declines over time at a constant rate, and that the marginal cost of resource extraction is constant. |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp154&r=all |
| By: | Mintewab Bezabih; Salvatore Di Falco; Alemu Mekonnen |
| Abstract: | This paper assesses the distinct impacts of weather and climate change measures on agricultural revenue of farm households in the Amhara region of Ethiopia. This distinction is highlighted by observations in the temperature data, which show that the pattern of temperature for both short term and long values follows a bell-shaped distribution, with the striking feature that the extreme ends of the distribution have fatter tails for the long term values. The analysis employs monthly rainfall and 14 temperature categories related to weather measures and four categories corresponding with the extreme ends of the long term temperature distribution. The analysis also distinguishes between summer and spring seasons and different crops in recognition of Ethiopia’s multi-cropping and multi-season agriculture. The major findings show that temperature effects are distinctly non-linear but only when the weather measures are combined with the extreme ends of the distribution of the climate measures. In addition, rainfall generally has a less important role to play than temperature, contrary to expectations in rain-fed agriculture. |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp148&r=all |
| By: | Bangzhu Zhu; Shujiao Ma; Julien Chevallier; Yiming Wei |
| Abstract: | The aim of this research is to examine the structural changes of European carbon futures price under the European Union Emissions Trading Scheme (EU ETS) during 2005-2012. More speci fically, by relying on the daily EU allowance (EUA) futures contract, we investigate the structural changes of the European carbon futures price. Structural breakpoints are detected based on the i terative cumulative sums of squares (ICSS) algorithm, and event study models. The results show that since 2005, there have been three major breakpoints of the European carbon futures price, stemming from the two extreme events of the 2008 global financial crisis and the 2011 European debt crisis. This study contributes to understanding the pricing mechanism of the EU ETS, and effectively forecasting carbon prices. |
| Keywords: | Carbon futures; Structural breakpoint tests; ICSS algorithm; Event study |
| JEL: | C22 G15 Q40 |
| Date: | 2014–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-422&r=all |
| By: | Dabo Guan; Xin Su; Qiang Zhang; Glen Peters; Zhu Liu; Yu Lei; Kebin He |
| Abstract: | Primary PM2.5�emissions contributed significantly to poor air quality in China. We present an interdisciplinary study to measure the magnitudes of socioeconomic factors in driving primary PM2.5�emission changes in China between 1997–2010, by using a regional emission inventory as input into an environmentally extended input–output framework and applying structural decomposition analysis. Our results show that China's significant efficiency gains fully offset emissions growth triggered by economic growth and other drivers. Capital formation is the largest final demand category in contributing annual PM2.5�emissions, but the associated emission level is steadily declining. Exports is the only final demand category that drives emission growth between 1997–2010. The production of exports led to emissions of 638 thousand tonnes of PM2.5, half of the EU27 annual total, and six times that of Germany. Embodied emissions in Chinese exports are largely driven by consumption in OECD countries. |
| URL: | http://d.repec.org/n?u=RePEc:qsh:wpaper:184101&r=all |
| By: | Limin Du; Aoife Hanley; Katrin Rehdanz |
| Abstract: | Our analysis is the first of its kind to explore patterns of subsidization and CO2 emissions in China’s electricity producing sector. Applying data for all power plants across China and controlling for the age, capacity and location of generating stations, we find that plants attracting a higher government subsidy are also worryingly the plants generating a disproportionate share of CO2 emissions. This distortion is incongruent with China’s aspiration for a greener economy but may be eliminated if China delivers on its November 2013 announcement to review many industry subsidies on its way to a fully-fledged market economy (Bloomberg News, 28.02.2014) |
| Keywords: | CO2 emissions, China, energy sector, plant-level data |
| JEL: | Q53 Q48 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1934&r=all |
| By: | Noël Bonneuil (INED - Institut National d'Etudes Démographiques Paris - INED, EHESS - École des hautes études en sciences sociales - École des Hautes Études en Sciences Sociales (EHESS)); Raouf Boucekkine (AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM)) |
| Abstract: | When cheap fossil energy is polluting and pollutant no longer absorbed beyond a certain concentration, there is a moment when the introduction of a cleaner renewable energy, although onerous, is optimal with respect to inter-temporal utility. The cleaner technology is adopted either instantaneously or gradually at a controlled rate. The problem of optimum under viability constraints is 6-dimensional under a continuous-discrete dynamic controlled by energy consumption and investment into production of renewable energy. Viable optima are obtained either with gradual or with instantaneous adoption. A longer time horizon increases the probability of adoption of renewable energy and the time for starting this adoption. It also increases maximal utility and the probability to cross the threshold of irreversible pollution. Exploiting a renewable energy starts sooner when adoption is gradual rather than instantaneous. The shorter the period remaining after adoption until the time horizon, the higher the investment into renewable energy. |
| Keywords: | multi-stage optimal control; threshold effects; irreversibility; non-renewable resources; viability |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01025470&r=all |
| By: | You, Jing; Huang, Yongfu |
| Abstract: | This paper investigates the determinants China’s green growth and its pathways in the future. We use the OECD conceptual framework for green growth to measure green growth rates for 30 provinces over the period 1998-2011. By estimating a spatial dynamic panel model at provincial level, we find that China has experienced green growth, but with slower speed in the sample period. The average green growth rate is forecast to decline first and then fluctuate around zero over the next two decades. There appears to be a conditional convergence in provincial green growth and positive spatial influence across neighboring areas, yielding a cap of the country’s level of green development in the future. Mass innovation financed by the government and green structural reforms achieved at firm level are likely to stimulate green growth, while political shocks in terms of reappointment of provincial officials could retard China’s progress to a green economy. |
| Keywords: | Green growth, spatial dynamic panel model, forecasting, China |
| JEL: | C33 O10 O13 O53 |
| Date: | 2013–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57468&r=all |
| By: | Emanuele Campiglio |
| Abstract: | It is widely acknowledged that introducing a price on carbon represents a crucial precondition for filling the current gap in low-carbon investment. However, as this paper argues, carbon pricing in itself may not be sufficient. This is due to the existence of market failures in the process of creation and allocation of credit that may lead commercial banks – the most important source of external finance for firms willing to invest – not to respond as expected to price signals. Under certain economic conditions, banks would shy away from lending to low-carbon activities even in presence of a carbon price. This possibility calls for the implementation of additional policies not based on prices. In particular, the paper discusses the potential role of monetary policies and macroprudential financial regulation: modifying the incentives and constraints that banks face when deciding their lending strategy – through, for instance, a differentiation of reserve requirements according to the destination of lending – may fruitfully expand credit creation directed towards low-carbon sectors. This seems to be especially feasible in emerging economies, where the central banking framework usually allows for a stronger public control on credit allocation and a wider range of monetary policy instruments than the sole interest rate. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp160&r=all |
| By: | Kathryn Gordon; Joachim Pohl; Marie Bouchard |
| Abstract: | Investment treaty law – which is scattered over 3 000 international investment agreements adopted over a period of 50 years – is a crucial but complex basis for regulating international investment flows. Investment treaties are often thought to be silent on investors’ responsibilities to host societies and on their contributions to sustainable development. The present paper establishes a factual and statistical basis for understanding the relationship between investment treaty law and governments’ ability to advance the sustainable development agenda and promote responsible business conduct. The paper presents survey results of 2 107 investment treaties and 1 113 treaty-based arbitration cases in order to shed light on how (if at all) labour, environmental, human rights and anti-corruption considerations are referred to in investment treaties and investor-state arbitration cases based on them. |
| Keywords: | corruption, investment treaties, environmental law, bribery, investor state arbitration, ISDS, labour law |
| JEL: | F23 F53 K11 K33 |
| Date: | 2014–07–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dafaaa:2014/1-en&r=all |
| By: | Rhydian Fôn James (Bangor University); Molly Scott Cato |
| Abstract: | TThis paper develops an answer to the question of what constitutes a resilient region (Bristow, 2010) by arguing that the resilient region can be seen as a prototype bioregion. The transition from a proto-bioregion to a bioregion, and thus from proto-bioregionalism to bioregionalism proper, is examined. The paper begins with a review of the existing literature on regional resilience. The authors then explore the possible heterodox theoretical underpinnings of this approach, drawing on post-Keynesian, Marxian and green economy concepts. The paper’s final section extends the theory to a bioregional conclusion, and discusses the policy approaches that might be applied to extend a resilient region into a bioregion. |
| Keywords: | bioregion; green economy; resilient regions; post-Keynesian |
| JEL: | P16 R1 Q57 B50 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp1407&r=all |
| By: | Michelle Harding |
| Abstract: | Company cars form a large proportion of the car fleet in many OECD countries and are also influential in determining the composition of the wider vehicle fleet. When employees provided with a company car use that car for personal purposes, personal income tax rules value the benefit in a number of different ways. How accurate these rules are in valuing the benefit has important implications for tax revenue, the environment and other social impacts such as congestion. This paper outlines the tax treatment of company cars and commuting expenses in 27 OECD countries and one partner country. It compares these tax settings with a stylised “benchmark” tax treatment that estimates the full value of the benefit received by employees with company vehicles. The paper demonstrates that the estimated tax expenditures associated with company car taxation in these countries in 2012 can be quite considerable. Significantly, from an environmental perspective, in most countries employees faced no additional increase in tax payable in response to an increase in the assumption of distance driven. Traitement des véhicules de société et des frais de transport au regard de l'impôt sur le revenu des personnes physiques : Estimation des coûts budgétaires et environnementaux Dans de nombreux pays de l’OCDE, les véhicules de société constituent une grande partie de la flotte automobile, et influent également sur la composition du parc de véhicules au sens large. Lorsque les salariés qui disposent d’un véhicule de société l’utilisent pour leur usage personnel, les dispositions relatives à l’impôt sur le revenu valorisent cet avantage de différentes manières. La capacité de ces dispositions à évaluer correctement cet avantage a d’importantes conséquences en matière de recettes fiscales, d’impact environnemental et d’autres coûts sociaux tels que les embouteillages. Ce document présente le régime fiscal des véhicules de société et des frais de transport dans 27 pays de l’OCDE et dans un pays partenaire. Il compare ce régime fiscal avec un régime « de référence » simplifié qui estime la valeur globale de l’avantage dont bénéficient les salariés disposant de véhicules de société. Ce document montre que les dépenses fiscales estimées qui sont associées à l’imposition des véhicules de société dans ces pays en 2012 peuvent être tout à fait considérables. D’un point de vue environnemental, on constate surtout que dans la plupart des pays, les salariés ne subissent pas de hausse d’impôt suite à une augmentation de l’hypothèse relative à la distance parcourue avec leur véhicule de société. |
| Date: | 2014–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ctpaaa:20-en&r=all |
| By: | Emma Suckling; Leonard Smith |
| Abstract: | While state-of-the-art models of the Earth’s climate system have improved tremendously over the last twenty years, nontrivial structural flaws still hinder their ability to forecast the decadal dynamics of the Earth system realistically. Contrasting the skill of those models not only with each other but also with their physical basis effectively and quantify their ability to add information to operational forecasts. The skill of decadal probabilistic hindcasts for annual global-mean and regional-mean temperatures from the EU ENSEMBLES project is contrasted with several empirical models. Both the ENSEMBLES models and a “Dynamic Climatology” empirical model show probabilistic skill above that of a static climatology for global-mean temperature. The Dynamic Climatology model, however, often outperforms the ENSEMBLES models. The fact that empirical models display skill similar to that of today’s state-of-the-art simulation models suggests that empirical forecasts can improve decadal forecasts for climate services, just as in weather, medium range, and seasonal forecasting. It is suggested that the direct comparison of simulation models with empirical models becomes a regular component of large model forecast evaluations. Doing so would clarify the extend to which state-of-the-art simulation models provide information beyond that available from simpler empirical models and clarify current limitations in using simulation forecasting for decision-support. Ultimately the skill of simulation models based on physical principles is expected to surpass that of empirical models in a changing climate; their direct comparison provides information on progress towards that goal which is not available in model-model intercomparisons. |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp150&r=all |
| By: | Gérard GAUDET; Stephen W. SALANT |
| Abstract: | The purpose of this chapter is to provide an elementary introduction to the nonrenewable resource model with multiple demand curves. The theoretical literature following Hotelling (1931) assumed that all energy needs are satisfied by one type of resource (e.g. "oil"), extractible at different per-unit costs. This formulation implicitly assumes that all users are the same distance from each resource pool, that all users are subject to the same regulations, and that motorist users can switch as easily from liquid fossil fuels to coal as electric utilities can. These assumptions imply, as Herfindahl (1967) showed, that in competitive equilibrium all users will exhaust a lower cost resource completely before beginning to extract a higher cost resource: simultaneous extraction of different grades of oil or of oil and coal should never occur. In trying to apply the single-demand curve model during the last twenty years, several teams of authors have independently found a need to generalize it to account for users differing in their (1) location, (2) regulatory environment, or (3) resource needs. Each research team found that Herndahl's strong, unrealistic conclusion disappears in the generalized model; in its place, a weaker Herfindahl result emerges. Since each research team focussed on a different application, however, it has not always been clear that everyone has been describing the same generalized model. Our goal is to integrate the findings of these teams and to exposit the generalized model in a form which is easily accessible. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:mtl:montec:08-2014&r=all |
| By: | Natacha Raffin (EconomiX - CNRS : UMR7166 - Université Paris X - Paris Ouest Nanterre La Défense, Climate Economics Chair - University Paris Dauphine); Thomas Seegmuller (AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM)) |
| Abstract: | This paper presents an overlapping generations model where pollution, private and public healths are all determinants of longevity. Public expenditure, financed through labour taxation, provide both public health and abatement. We study the complementarity between the three components of longevity on welfare and economic stability. At the steady state, we show that an appropriate fiscal policy may enhance welfare. However, when pollution is heavily harmful for longevity, the economy might experience aggregate instability or endogenous cycles. Nonetheless, a fiscal policy, which raises the share of public spending devoted to health, may display stabilizing virtues and rule out cycles. This allows us to recommend the design of the public policy that may comply with the dynamic and welfare objectives. |
| Keywords: | longevity; pollution; welfare; complex dynamics |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01024691&r=all |
| By: | Pere Mir-Artigues (Universitat de Lleida); Pablo del Río (Institute of Public Goods and Policies. Consejo Superior de Investigaciones Científicas (CSIC)) |
| Abstract: | Policy combinations and interactions have received a considerable attention in the energy policy realm. The aim of our working paper is to provide insight on the cost-effectiveness of combinations of deployment instruments for the same technology. A financial model is developed for this purpose, whereby feed-in tariffs (FITs) and premiums (FIPs) are combined with investment subsidies and soft loans. The results show that combining deployment instruments is not a cost-containment strategy. However, combinations may lead to different inter-temporal distributions of the same amount of policy costs which can affect the social acceptability and political feasibility of renewable energy support. |
| Keywords: | Renewable energy, policies, combinations, cost-effectiveness, feed-in tariffs |
| JEL: | H81 L51 Q48 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2013/6/doc2014-23&r=all |
| By: | Xavier Vollenweider |
| Abstract: | This article introduces a new methodology to estimate climate exposure at the household’s level with the standardized precipitation evapotranspiration index (SPEI) as its building block. As the probability distribution of the SPEI is known, one can easily recover the marginal probability distribution of expected consumption. Furthermore, the approach is simple enough to accommodate quantile regressions and hence offer the opportunity to broaden the scope of the analysis to different categories of the population. I illustrate the methodology with a case study on Ethiopia. I find notably that while poor households in the most remote villages are almost as resilient to a 10-year return period drought as poor households living in the vicinity of a town (up to 20 km), the contrary is true for richer households: the ones living in remote parts of Ethiopia are much more at risk than their suburban counterparts. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp158&r=all |