nep-env New Economics Papers
on All new papers
Issue of 2014‒09‒08
34 papers chosen by
Francisco S. Ramos
Universidade Federal de Pernambuco

  1. A Review of Renewable Energy Supply and Energy Efficiency Technologies By Abolhosseini, Shahrouz; Heshmati, Almas´; Altmann, Jörn
  2. Are Environmentally Related Taxes Effective? By Sebastian Miller; Mauricio Vela
  3. Barriers to the implementation of environmental policies at the local level in China By Kostka, Genia
  5. Revisiting the Environmental Kuznets Curve in a Global Economy By Muhammad Shahbaz; Ilhan Ozturk; Talat Afza; Amjad Ali
  6. What is MENA Region Initially Needed: Grow Output or Mitigate CO2 Emissions? By Sahbi Farhani; Muhammad Shahbaz; Rashid Sbia; Anissa Chaibi
  7. The Drivers of Long-run CO2 Emissions: A Global Perspective since 1800 By Henriques, Sofia Teives; Borowiecki, Karol Jan
  8. Optimal Adaptation and Mitigation to Climate Change in Small Environmental Economies By Omar Chisari; Sebastian Galiani; Sebastian Miller
  9. The Main Support Mechanisms to Finance Renewable Energy Development By Abolhosseini, Shahrouz; Heshmati, Almas
  10. Assessing the efficiency of payments for biodiversity conservation: A bio-econometric analysis of Natura 2000 contracts in forest By Emeline Hily; Serge Garcia; Anne Stenger; Gengyang Tu
  11. The Role of Renewable Energy Consumption and Trade: Environmental Kuznets Curve Analysis for Sub-Saharan Africa Countries By Mehdi Ben Jebli; Slim Ben Youssef; Ilhan Ozturk
  12. Environmental Aspects of Resource Extraction Contracts By Hanna Krings
  13. How Can Latin America Help the World to Cope with Climate Change? By Sebastian Galiani; Manuel Puente; Federico Weinschelbaum
  14. Are Environmental Taxes Affected by Legislatures` Ideological Positions? By Sebastian Miller; Mauricio Vela
  15. Optimal Transition from Coal to Gas and Renewable Power under Capacity Constraints and Adjustment Costs By Oskar Lecuyer; Adrien Vogt-Schilb
  16. Consequences of Climate Change Damages for Economic Growth: A Dynamic Quantitative Assessment By Rob Dellink; Elisa Lanzi; Jean Chateau; Francesco Bosello; Ramiro Parrado; Kelly de Bruin
  17. Selective Reporting and the Social Cost of Carbon By Havranek, Tomas; Irsova, Zuzana; Janda, Karel; Zilberman, David
  18. Review of the Stochastic Properties of CO2 Futures Prices By Julien Chevallier
  20. Determinants of labor shortage - with particular focus on the German environmental sector By Horbach, Jens
  22. Intensity-Based Permit Quotas and the Business Cycle: Does Flexibility Pay Off? By Olli-Pekka Kuuselaa; Gregory S. Amacher; Kwok Ping Tsang
  23. Long-Term Effect of Climate Change on Health: Evidence from Heat Waves in Mexico By Jorge Aguero
  24. Who bears the costs of climate change? Evidence from Tunisia By Manfred Wiebelt; Perrihan Al-Raffai; Richard Robertson
  25. The Effects of Air Pollution on Educational Outcomes: Evidence from Chile By Sebastian Miller; Mauricio Vela
  26. On the determinants of renewable energy consumption: International Evidence By Anis Omri; Duc Khuong Nguyen
  27. Causal interactions between CO2 emissions, FDI, and economic growth: Evidence from dynamic simultaneousequation models By Anis Omri; Duc Khuong Nguyen; Christophe Rault
  28. Risk Spillovers across the Energy and Carbon Markets and Hedging Strategies for Carbon Risk By Mehmet Balcılar; Rıza Demirer; Shawkat Hammoudeh; Duc Khuong Nguyen
  29. Les clauses environnementales dans les accords de libre échange entre pays développés et pays émergents - Analyse des déterminants By Arslan Tariq Rana; Philippe Saucier
  30. The cost of failing to install renewable energy in regional Western Australia By Liam Byrnes
  31. Adapting to Climate Change: Long-Term Effects of Drought on Local Labor Markets By Paulo Bastos; Matias Busso; Sebastian Miller
  32. Politics under the Weather: Droughts, Parties and Electoral Outcomes By Paulo Bastos; Sebastian Miller
  33. Natural Resource Production, Corruption, and Expropriation By Ramin Dadasov; Carsten Hefeker; Oliver Lorz
  34. Market Design for Trading Commoditized Renewable Energy By Heshmati, Almas; Abolhosseini, Shahrouz

  1. By: Abolhosseini, Shahrouz (College of Engineering, TEMEP, Seoul National University, Seoul, Korea); Heshmati, Almas´ (Centre of Excellence for Science and Innovation Studies (CESIS), and Jönköping University (JIBS)); Altmann, Jörn (College of Engineering, TEMEP, Seoul National University, Seoul, Korea)
    Abstract: Electricity consumption will comprise an increasing share of global energy demand during the next two decades. In recent years, the increasing prices of fossil fuels and concerns about the environmental consequences of greenhouse gas emissions have renewed the interest in the development of alternative energy resources. In particular, the Fukushima Daiichi accident was a turning point in the call for alternative energy sources. Renewable energy is now considered a more desirable source of fuel than nuclear power due to the absence of risk and disasters. Considering that the major component of greenhouse gases is carbon dioxide, there is a global concern about reducing carbon emissions. In this regard, different policies could be applied to reducing carbon emissions, such as enhancing renewable energy deployment and encouraging technological innovations. Two main solutions may be implemented to reduce CO2 emissions and overcome the problem of climate change: replacing fossil fuels with renewable energy sources as much as possible and enhancing energy efficiency. In this paper, we discuss alternative technologies for enhancing renewable energy deployment and energy use efficiency.
    Keywords: energy resources; renewable energy; energy use efficiency; generation technology; carbon emission; green employment
    JEL: D61 D62 H23 N50 O13 Q52 Q55
    Date: 2014–08–25
  2. By: Sebastian Miller; Mauricio Vela
    Abstract: This paper focuses on the question of whether the magnitude of long-established environmentally related taxes (ERT) is related to countries environmental performance. While environmental taxes efficiencies have previously been discussed, those taxes contribution to reducing pollution and improving environmental quality has not been fully explored. This paper therefore analyzes the effectiveness of environmental taxes by examining the environmental performance of 50 countries from all regions in association with the amount of revenues from environmentally related taxes each country collects. Using a cross-section regression and a panel dynamic regression, the paper finds that countries with higher revenues from these types of taxes also exhibit higher reductions in CO2 emission, PM10 emissions, and energy consumption and production from fossil sources.
    JEL: H23 Q53 Q58
    Date: 2013–11
  3. By: Kostka, Genia
    Abstract: China's national leaders have recently made a priority of changing lanes from a pollution-intensive, growth-at-any-cost model to a resource-efficient and sustainable one. The immense challenges of rapid urbanization are one aspect of the problem. Central-local government relations are another source of challenges, since the central government's green agenda does not always find willing followers at lower levels. This paper identifies barriers to a more comprehensive implementation of environmental policies at the local level in China's urban areas and suggests ways to reduce or remove them. The research focuses particularly on the reasons for the gap between national plans and policy outcomes. Although environmental goals and policies at the national level are quite ambitious and comprehensive, insufficient and inconsistent local level implementation can hold back significant improvements in urban environmental quality. By analyzing local institutional and behavioral obstacles and by highlighting best-practice examples from China and elsewhere, the paper outlines options that can be used at the national and local levels to close the local"environmental implementation gap."The findings emphasize the need to create additional incentives and increase local implementation capacities.
    Keywords: Environmental Economics&Policies,Transport Economics Policy&Planning,Climate Change Mitigation and Green House Gases,Climate Change Economics,Public Sector Management and Reform
    Date: 2014–08–01
  4. By: Loganathan, Nanthakumar; Muhammad Shahbaz; Roshaiza Taha
    Abstract: This paper explores how carbon taxation and economic growth affect environment hazards in Malaysia using time series data over the period of 1974-2010. We applied cointegration and causality approaches to determine long term and the direction of causal relationship between these variables. Based on the results, we found the cointegration relationship between the variables. Furthermore, we noted that Kuznets’ theory i.e. inverted-U shaped curve between economic growth and CO2 emissions is valid for Malaysia but the carbon taxation policy is ineffective to control CO2 emissions. The causality analysis revealed that there is bidirectional relationship is found between carbon tax and CO2 emissions. Economic growth Granger causes CO2 emissions and carbon tax is Granger cause of economic growth. To enhance the awareness on pollution issues governments should rely on alternative instruments, which may give benefit not only to taxpayers but also to reduce pollution, which is the pivotal issue to be tackle globally.
    Keywords: economic growth, environment hazards
    Date: 2014–08–29
  5. By: Muhammad Shahbaz; Ilhan Ozturk; Talat Afza; Amjad Ali
    Abstract: The present study deals with an empirical investigation between CO2 emissions, energy intensity, economic growth and globalization using annual data over the period of 1970- 2010 for Turkish economy. We applied unit root test and cointegration approach in the presence of structural breaks. The direction of causality between the variables is investigated by applying the VECM Granger causality approach. Our results confirmed the existence of cointegration between the series. The empirical evidence reported that energy intensity, economic growth (globalization) increase (condense) CO2 emissions. The results also validated the presence of Environmental Kuznets curve (EKC). The causality analysis shows bidirectional causality between economic growth and CO2 emissions. This implies that economic growth can be boosted at the cost of environment.
    Keywords: Carbon dioxide emissions, EKC, economic growth
    JEL: C32 O4 Q56
    Date: 2014–08–29
  6. By: Sahbi Farhani; Muhammad Shahbaz; Rashid Sbia; Anissa Chaibi
    Abstract: We contribute to the economic growth–CO2 emissions literature in the MENA region by focusing on both production and environmental functions. Adopting an original analytical framework, our empirical investigation parallels two approaches. The first one follows the studies by Lean and Smyth (2010a) and Sadorsky (2012) which examine the dynamic interaction of energy consumption and trade openness using production function. The second one extends the recent works by Halicioglu (2009), Jalil and Mahmud (2009), and Jayanthakumaran et al. (2012) which attempt to introduce energy consumption and trade openness in the environmental function as a solution to circumvent omitted variable bias. Our findings suggest that MENA countries should adopt policies to control the increase of pollution as well as to stabilize the productivity growth. One of these policies is to increase the share of renewable energy relative to non-renewable energy sources.
    Keywords: Energy; Economic growth; CO2 emissions; Panel data analysis
    Date: 2014–08–29
  7. By: Henriques, Sofia Teives (Department of Business and Economics); Borowiecki, Karol Jan (Department of Business and Economics)
    Abstract: Fossil-fuel-related carbon dioxide emissions have risen dramatically since 1800. We identify the long-run drivers of CO2 emissions for a sample of twelve developed economies using an extended Kaya decomposition. By considering biomass and carbon-free energy sources along with fossil fuels we are able to shed light on the effects of past and present energy transitions on CO2 emissions. We find that at low levels of income per capita, fuel switching from biomass to fossil fuels is the main contributing factor to emission growth. Scale effects, especially income effects, become the most important emission drivers at higher levels of income and also dominate the overall long-run change. Technological change is the main offsetting factor. Particularly in the last decades, technological change and fuel switching have become important contributors to the decrease in emissions in Europe. Our results also individualize the different CO2 historical paths across parts of Europe, North America and Japan.
    Keywords: CO2 emissions; Kaya decomposition; Energy transition
    JEL: N70 O44 Q40 Q54
    Date: 2014–08–25
  8. By: Omar Chisari; Sebastian Galiani; Sebastian Miller
    Abstract: This paper compares the optimal dynamic choices between policies of mitigation and adaptation for three economies: Brazil, Chile and the United States. The focus is on the optimal role of mitigation and adaptation for “environmentally small economies,” i. e. , economies that are witnessing an exogenous increase in emissions to which they are contributing very little. The simulations lead to three main conclusions. First, small economies should concentrate their environmental efforts, if any, on adaptation. This is not a recommendation that such economies indulge in free-riding. Instead, it is based on considerations of cost effectiveness, ceteris paribus. Second, small economies that are unable to spend enough on adaptation may end up spending less on mitigation owing to their impoverishment as a result of negative climate shocks. Third, higher mitigation expenditures may arise not only as a result of greater optimal adaptation expenditures, but also because of increased adaptation to the incentives for mitigation provided by richer countries.
    JEL: Q52 Q54
    Date: 2013–10
  9. By: Abolhosseini, Shahrouz (College of Engineering, TEMEP, Seoul National University, Seoul, Korea); Heshmati, Almas (Centre of Excellence for Science and Innovation Studies (CESIS), and Jönköping University (JIBS))
    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: 2014–08–25
  10. By: Emeline Hily (Laboratoire d'Economie Forestière, INRA - AgroParisTech); Serge Garcia (Laboratoire d'Economie Forestière, INRA - AgroParisTech); Anne Stenger (Laboratoire d'Economie Forestière, INRA - AgroParisTech); Gengyang Tu (Laboratoire d'Economie Forestière, INRA - AgroParisTech)
    Abstract: In this article, we empirically assess the efficiency of Natura 2000 contracts in forest, a payment for environmental service (PES) scheme, aiming at biodiversity conservation. To do so, we perform a bio-econometric analysis of public and private contracts in France. We estimate a cost function for biodiversity provision, in which the level of biodiversity output is quantified by a biodiversity index value. Estimation results show that payments for Natura 2000 contracts are inadequately defined. While payments’ definition considers opportunity costs linked to landvalue, the latter neglects opportunity costs associated with foregone profits from timber production. This impedes satisfactory participation, especially from private forest owners, whose forests could bring interesting results in terms of cost-efficiency. We show that the cost elasticity of biodiversity provision is significantly lower than one, suggesting to implement ecologically more ambitious contracts with lower average costs. Public owners are able to bear higher opportunity costs than private owners.
    Keywords: Resource management, Payment for environmental service, forest, biodiversity index, provision cost of biodiversity
    JEL: C31 D04 Q23 Q57 Q58
    Date: 2015–01
  11. By: Mehdi Ben Jebli; Slim Ben Youssef; Ilhan Ozturk
    Abstract: Based on the Environmental Kuznets Curve (EKC) hypothesis, this paper uses panel cointegration techniques to investigate the short and the long-run relationship between CO2 emissions, economic growth, renewable energy consumption and trade openness for a panel of 24 Sub-Saharan Africa countries over the period 1980-2010. The validity of the EKC hypothesis has not been supported for these countries. Short-run Granger causality results reveal that there is a bidirectional causality between emissions and economic growth; bidirectional causality between emissions and real exports; unidirectional causality from real imports to emissions; and unidirectional causality runs from trade (exports or imports) to renewable energy consumption. There is an indirect short-run causality running from emissions to renewable energy and an indirect short-run causality from GDP to renewable energy. In the long-run, the error correction term is statistically significant for emissions, renewable energy consumption and trade openness. The long-run estimates suggest that real GDP per capita and real imports per capita both have a negative and statistically significant impact on per capita CO2 emissions. The impact of the square of real GDP per capita and real exports per capita are both positive and statistically significant on per capita CO2 emissions. For the model with imports, renewable energy consumption per capita has a positive impact on per capita emissions. One policy recommendation is that Sub-Saharan countries should expand their trade exchanges particularly with developed countries and try to maximize their benefit from technology transfer generated by such trade relations as this increases their renewable energy consumption.
    Keywords: Environmental Kuznets Curve; Renewable electricity consumption; International trade; Panel cointegration; Sub-Sahara.
    JEL: C33 F14 Q43 O55
    Date: 2014–08–29
  12. By: Hanna Krings (University of Aachen)
    Abstract: This paper analyzes resource partnerships and their influence on the environmental quality in a resource-rich country by introducing incomplete contracts, imperfect property rights protection, and a lack of valuation for the environment by the government in the South. Employing numerical simulations, I determine the equilibrium extraction rate, the applied extraction technology, and the environmental quality in dependence of the state of democracy in the resource-rich country. In contrast to what one might expect, under certain circumstances it can be environmentally beneficial to have incomplete contracts that induce the utilization of a suboptimal technology for resource extraction. Further, reducing the holdup problem by shifting bargaining power to the North, is only desirable if the environmental quality in- creases with a better extraction technology.
    Keywords: Resource Extraction, Environment, North-South Trade
    JEL: F18 Q37 Q56
    Date: 2014
  13. By: Sebastian Galiani; Manuel Puente; Federico Weinschelbaum
    Abstract: Latin America has a comparative advantage in deforestation compared to other forms of climate change mitigation. Thus, to the extent that Latin America should engage in mitigation, the optimal climate change policy should manage these advantages by generating incentives in Latin America to deal with forestry. This paper describes the problem of deforestation and studies the market failures that arise in relation to forestry emission problems, analyzing them from a global public good perspective. The paper additionally describes other problems related to forestry emission issues and presents a non-exhaustive review of the solutions currently proposed to address this issue. The paper concludes with policy recommendations.
    JEL: D71 D79 F18 F53 Q54
    Date: 2013–08
  14. By: Sebastian Miller; Mauricio Vela
    Abstract: Environmental taxes have been discussed as one of the main mechanisms to deal with environmental problems. Nonetheless, instruments of this type have rarely been implemented, and the adoption of new or higher environmental taxes has faced resistance in some countries. The purpose of this work is to identify one possible political answer to why adoption of environmental taxes varies. One explanation is that legislatures’ ideological position affects the degree of usage of taxes generally and environmental taxes in particular. For example, right-wing parties tend to be less associated with environmental concerns and more associated with lower government intervention. This paper presents evidence that reflects this relationship, showing the positive association of more left-wing legislatures with higher levels of environmental taxation. A panel of data for 37 developed and developing countries over 16 years is used considering the percentage of total revenue from environmentally related taxes, the ratio of this revenue to total energy use and tax levels in industry and household sectors. The results show that most of these impacts involve environmentally related taxes in the industry sector. Proportional representation electoral systems and high seat concentration by few parties appear to be necessary conditions for the negative relation of right-wing ideology with environmental taxes.
    JEL: H23 P16 Q58
    Date: 2013–09
  15. By: Oskar Lecuyer (Department of Economics and Oeschger Centre for Climate Change Research - University of Bern); Adrien Vogt-Schilb (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - AgroParisTech, Climate Change Group - The World Bank)
    Abstract: This paper studies the optimal transition from existing coal power plants to gas and renewable power under a carbon budget. It solves a model of polluting, exhaustible resources with capacity constraints and adjustment costs (to build coal, gas, and renewable power plants). It finds that optimal investment in renewable energy may start before coal power has been phased out and even before investment in gas has started, because doing so allows for smoothing investment over time and reduces adjustment costs. Gas plants may be used to reduce short-term investment in renewable power and associated costs, but must eventually be phased out to allow room for carbon-free power. One risk for myopic agents comparing gas and renewable investment is thus to overestimate the lifetime of gas plants - e.g., when computing the levelized cost of electricity - and be biased against renewable power. These analytical results are quantified with numerical simulations of the European Commission's 2050 energy roadmap.
    Keywords: climate change mitigation; path dependence; optimal timing; investment; resource extraction; dynamic efficiency; early-scrapping
    Date: 2014
  16. By: Rob Dellink; Elisa Lanzi; Jean Chateau; Francesco Bosello; Ramiro Parrado; Kelly de Bruin
    Abstract: This report focuses on the effects of climate change impacts on economic growth. Simulations with the OECD’s dynamic global general equilibrium model ENV-Linkages assess the consequences of a selected number of climate change impacts in the various world regions at the macroeconomic and sectoral level. This is complemented with an assessment of very long-run implications, using the AD-RICE model. The analysis finds that the effect of climate change impacts on annual global GDP is projected to increase over time, leading to a global GDP loss of 0.7% to 2.5% by 2060 for the most likely equilibrium climate sensitivity range. Underlying these annual global GDP losses are much larger sectoral and regional variations. Agricultural impacts dominate in most regions, while damages from sea level rise gradually become more important. Negative economic consequences are especially large in South and South-East Asia whereas other regions will be less affected and, in some cases, benefit thanks to adjustments from international trade. Emissions to 2060 will have important consequences in later decades and centuries. Simulations with the AD-RICE model suggest that if emissions continue to grow after 2060, annual damages of climate change could reach 1.5%-4.8% of GDP by the end of the century. Some impacts and risks from climate change have not been quantified in this study, including extreme weather events, water stress and large-scale disruptions. These will potentially have large economic consequences, and on balance the costs of inaction presented here likely underestimate the full costs of climate change impacts. More research is needed to assess them as well as the various uncertainties and risks involved. However, this should not delay policy action, but rather induce policy frameworks that are able to deal with new information and with the fact that by their nature some uncertainties and risks will never be resolved. Conséquences des impacts du changement climatique sur la croissance économique : Une évaluation quantitative en dynamique Ce rapport approfondit les impacts du changement climatique sur la croissance économique. Sur la base de simulations dynamiques, effectuées avec le modèle d'équilibre général de l'OCDE ENV-Linkages, les conséquences sur la croissance de long terme d'un certain nombre d'impacts du changement climatique sont évaluées. Une appréciation des conséquences à très long terme avec le modèle AD-RICE complète cette analyse. L'analyse révèle que les effets des impacts du changement climatique sur le PIB annuel mondial devraient s’accroître à l’avenir, conduisant à une perte de PIB mondial de 0,7% à 2,5% en 2060, selon un éventail raisonnable de sensibilités climatiques. L’analyse souligne en outre de fortes disparités dans les impacts selon les secteurs et les régions concernées. Dans la plupart des régions, les impacts sur les rendements agricoles dominent, cependant la raréfaction des surfaces cultivables due à la montée des océans prend de plus en plus d’importance. Les conséquences économiques négatives devraient être particulièrement élevées dans le Sud et Sud-Est de l'Asie, tandis que les autres régions seraient moins affectées et, pourraient même, dans certains cas, bénéficier du changement climatique, grâce notamment aux ajustements du commerce international. Les émissions de gaz à effets de serre dégagées jusqu’en 2060 auront d'importantes conséquences dans les décennies et des siècles qui suivront. Des simulations effectuées avec le modèle AD-RICE suggèrent que si les émissions continuent à augmenter après 2060, les dommages annuels du changement climatique pourraient atteindre 1,5% -4,8% du PIB d'ici la fin du siècle. Certains impacts et risques du changement climatique ne sont pas quantifiés dans ce rapport, y compris des événements météorologiques extrêmes, le stress hydrique et des perturbations à grande échelle. Ceux-ci pourraient avoir de grandes conséquences économiques et, finalement, les coûts de l'inaction présentés dans ce rapport sous-estiment probablement les coûts totaux des impacts du changement climatique. Un progrès de la science dans ces domaines seraient nécessaire afin de mieux comprendre ces sujets ainsi que les divers incertitudes et risques associés. Toutefois, cela ne devrait pas retarder l'action politique, mais plutôt inciter à circonscrire des cadres politiques capables de faire face à de tenir compte de ces nouvelles informations.
    Keywords: economic growth, climate change, computable general equilibrium model, changement climatique, modèle d’équilibre général calculable, croissance économique
    JEL: D58 O44 Q54
    Date: 2014–06–30
  17. By: Havranek, Tomas; Irsova, Zuzana; Janda, Karel; Zilberman, David
    Keywords: Social and Behavioral Sciences, Social cost of carbon, climate policy, integrated assessment models, meta-analysis, selective reporting, publication bias
    Date: 2014–08–25
  18. By: Julien Chevallier
    Abstract: In this paper, we review the extant mathematical and environmental economics literatures on the stochastic properties of CO2 emission allowance futures prices. We explain the main findings arising from this literature from both continuous- and jump-diffusion models. Based on the Activity Signature Fuction by Todorov and Tauchen (2010,2011), our review shows that the Brownian motion shall be dismissed when modeling CO2 futures, in sharp contrast with the bulk of previous literature on this topic. The central result is that the evolution of the carbon futures price can be described in terms of a pure jump-diffusion process. For instance, important cases of informational shocks leading to allowance price jump can be addressed when modeled as an appropriately sampled, centered Lévy or Poisson process.
    Keywords: Carbon Price; Stochastic Modeling; Activity Signature Function.
    JEL: C14 C32 G1 Q4
    Date: 2014–08–29
  19. By: Thai-Thanh Dang; Annabelle Mourougane
    Abstract: The objective of this paper is to estimate the effect on MFP of air pollution in 7 ASEAN economies (Cambodia, Indonesia, Lao PDR, Malaysia, Philippines, Thailand and Vietnam) and China. For this purpose, standard measures of MFP are corrected for the impact of pollution applying the framework developed by Brandt et al. (2013), and valuing pollution through country-specific time-varying shadow price estimates for CO2, SOx, NOx and PM10, derived from an output distance function approach. Shadow prices of pollutants, the opportunity cost of abating pollution in the form of reduced output, are found to vary widely across economies, depending on national environmental regulations, the use of inefficient abatement technologies, and the structure of the economy. In all countries but Cambodia, shadow prices of the various pollutants experience a downward trend since the Asian crisis, suggesting that ASEAN countries and China have strengthened their regulatory framework and encouraged the adoption of clean technologies. Accounting for pollution leads to very different adjustments to standard MFP measures across countries. In most countries the adjustment is positive, suggesting that standard MFP measures have tended to underestimate the true measure. Such correction would be above 2 percentage points in Lao PDR and the Philippines. It is estimated to be around 1 percentage point in China, Indonesia and Thailand and about half that size in Malaysia. It would be negative in Cambodia in this country and nil in Vietnam.
    Date: 2014–08–29
  20. By: Horbach, Jens
    Abstract: "Despite the ongoing discussion on labor shortage in the German economy there is still a lack of empirical analyses of this problem based on adequate econometric methods. The paper explores the determinants of labor shortage in the environmental sector supplying products and services that help to reduce environmental impacts and energy use. Labor shortages occur when the price adjustment mechanism is too slow to balance labor demand and supply. The empirical analysis of labor shortage uses recent data of the establishment panel of the Institute for Employment Research in Nuremberg. A descriptive analysis shows that the environmental sector seems to be over-proportionally affected by labor shortage. Following the results of an econometric analysis innovative firms are significantly more likely to be characterized by labor shortage problems. For climate protection technologies, analytics/consulting or environmental research and development labor shortage seems to result from the respective innovative activities of the firms requiring highskilled and specialized staff whereas labor shortage in the recycling sector is due to a lack of low-paid personnel. Further econometric estimations show that firms characterized by labor shortage problems are significantly more likely to pay wages above average." (Author's abstract, IAB-Doku) ((en))
    Keywords: Arbeitskräftebedarf, Fachkräfte, Arbeitskräftemangel, IAB-Betriebspanel, regenerative Energie, Umweltschutzindustrie, Ökologie
    JEL: J23 J63 Q55 C35
    Date: 2014–08–28
  21. By: Thai-Thanh Dang; Annabelle Mourougane
    Abstract: The objective of this paper is to estimate time variant shadow prices for CO2, SOx, NOx and PM10 in 19 OECD countries over the period 1990-2008 relying on an output distance function approach. Shadow prices for pollutants are found to vary widely across countries, depending on national environmental regulations, the use of inefficient abatement technologies and the structure of the economy. All countries but Korea experienced a decline in CO2 and NOx prices over the period 1990-2008, with the bulk of the decrease occurring since 2000. This suggests that most OECD countries have strengthened their regulatory framework and encouraged the adoption of clean technologies since the 2000s. Estimates of shadow prices of PM10 appear to be extremely variable across countries. Contrary to what is observed for CO2 and NOx, steep declines have occurred in both 1990-2000 and 2000-2008 sub-periods. The empirical work undertaken in this paper could easily be replicated to other countries, and is relatively parsimonious in terms of data.
    Date: 2014–08–29
  22. By: Olli-Pekka Kuuselaa; Gregory S. Amacher; Kwok Ping Tsang
    Abstract: Tradable permit markets for carbon dioxide (C02) emissions respond to short-run fluctuations in economic activity. To provide stability, both price and quantity interventions have been proposed. This paper focuses on the relative performance of fixed versus intensity allowances in the presence of both productivity and energy price uncertainty. Both instruments achieve the same steady-state emissions reduction target of 20 percent, which is similar to the current policy proposals, and the regulator then chooses the allowance policy that has the lowest expected abatement cost. A standard real business cycle (RBC) model is used to solve for the expected abatement cost under both policies. Expected cost outcomes are compared using data from the U. S. economy as the baseline scenario. Unlike previous studies, this paper’s results show that, under a reasonable model calibration, fixed allowances outperform intensity allowances by a cost difference of as much as 30 percent.
    JEL: E32 Q54 Q58
    Date: 2013–10
  23. By: Jorge Aguero
    Abstract: This paper uses year-to-year variation in temperature to estimate the long-term effects of climate change on health outcomes in Mexico. Combining temperature data at the district level and three rounds of nationally representative household surveys, an individual’s health as an adult is matched with the history of heat waves from birth to adulthood. A flexible econometric model is used to identify critical health periods with respect to temperature. It is shown that exposure to higher temperatures early in life has negative consequences on adult height. Most importantly, the effects are concentrated at the times where children experience growth spurts: infancy and adolescence. The robustness of these findings is confirmed when using health outcomes derived from accidents, which are uncorrelated with early exposure to high temperatures.
    JEL: I12 Q41 Q54
    Date: 2014–01
  24. By: Manfred Wiebelt; Perrihan Al-Raffai; Richard Robertson
    Abstract: In order to estimate the economic costs of climate change for Tunisia, this paper uses a combination of biophysical and economic models. In addition, the paper draws on the literature to complement the quantitative analysis with policy recommendations on how to adapt to the changing climate. The results bear out the expectation that climate change has a negative but weak overall effect on the Tunisian economy. Decomposing the global and local effects shows that global climate change may benefit the agricultural sector since higher world market prices for agricultural commodities are likely to stimulate export expansion and import substitution. Locally felt climate change, however, is likely to hurt the agricultural sector as lower yields reduce factor productivities lead to lower incomes and higher food prices. The combined local and global effects are projected to be mostly negative and the costs will have to be carried mainly by urban and richer households. From a policy perspective, the results suggest that Tunisia should try to maximize the benefits from rising global agricultural prices and to minimize (or reverse) declining crop yields at home
    Keywords: climate change, agricultural growth, general equilibrium analysis, Tunisia, Middle East and North Africa
    JEL: O5 O13 D13 C68
    Date: 2014–08
  25. By: Sebastian Miller; Mauricio Vela
    Abstract: In addition to the morbidity and mortality concerns of outdoor air pollution, studies have shown that air pollution also generates problems for children`s cognitive performance and human capital formation. High concentrations of pollutants can affect children’s learning process by exacerbating respiratory illnesses, fatigue, absenteeism and attention problems. The purpose of this work is to analyze the possible contemporary effects of PM10 and other different air pollutants on standardized test scores in Chile. It examines results for 3,880 schools in the Metropolitan, Valparaiso and O’Higgins regions for children in fourth, eight and tenth grades between 1997 and 2012. Data for particulate matter (PM10 and PM2. 5), carbon monoxide (CO), nitrogen oxide (NOx) and ozone (O3) were interpolated at school level using a kriging methodology. The results suggest that higher annual P M10 and O3 levels are clearly associated with a reduction in test scores. Nonetheless, as of 2012 many municipalities in these Chilean regions are still exceeding the annual P M10 international standard quality norm (50 micrograms per cubic meter) by 15 micrograms per cubic meter on average. Efforts to reduce pollution below this norm in the most polluted municipalities would account for improvements in reading and math test scores of 3. 5 percent and 3. 1 percent of a standard deviation, respectively.
    JEL: H23 I25 Q51 Q53
    Date: 2013–12
  26. By: Anis Omri; Duc Khuong Nguyen
    Abstract: Over recent years, renewable energy sources have emerged as an important component of world energy consumption. Little is however known about the determinants of renewable energy consumption. This article tackles this issue for a global panel consisting of 64 countries over the period 1990-2011 by using a dynamic system- GMM panel model. We also consider three homogeneous subpanels which are constructed based on the income level of sample countries (high-, middle-, and low-income subpanels). We mainly find that the increases in CO2 emissions and trade openness are the major drivers of renewable energy consumption. Oil price increases have a smaller but negative impact on renewable energy consumption in the middle-income and global panels. Policy implications of our results are also discussed.
    Keywords: Renewable energy consumption, Dynamic panel data, system-GMM.
    Date: 2014–08–29
  27. By: Anis Omri; Duc Khuong Nguyen; Christophe Rault
    Abstract: In this article, we investigate the causality links between CO2 emissions, foreign direct investment, and economic growth using dynamic simultaneous-equation panel data models for a global panel of 54 countries over the period 1990–2011. We also implement these empirical models for 3 regional sub-panels: Europe and Central Asia, Latin America and the Caribbean, and the Middle East, North Africa, and sub-Saharan Africa. Our results provide evidence of bidirectional causality between FDI inflows and economic growth for all the panels and between FDI and CO2 for all the panels, except Europe and North Asia. They also indicate the existence of unidirectional causality running from CO2 emissions to economic growth, with the exception of the Middle East, North Africa, and sub-Sahara panel, for which bidirectional causality between these variables cannot be rejected. These empirical insights are of particular interest to policymakers as they help build sound economic policies to sustain economic development.
    Keywords: CO2 emissions, FDI inflows, economic growth
    JEL: C33 C51 E22 O13 Q43 Q56
    Date: 2014–08–29
  28. By: Mehmet Balcılar; Rıza Demirer; Shawkat Hammoudeh; Duc Khuong Nguyen
    Abstract: This study examines the risk spillovers between energy futures prices and Europe-based carbon futures contracts. We use a Markov regime-switching dynamic correlation, generalized autoregressive conditional heteroscedasticity (MSDCC- GARCH) model in order to capture the time variations and structural breaks in the spillovers. We further evaluate the optimal weights, hedging effectiveness, and dynamic hedging strategies for the MS-DCC-GARCH model based on both the regime dependent and regime independent optimal hedge ratios. We finally complement our analysis by examining the in- and out-of sample hedging performances for alternative strategies. Our results mainly show significant volatility and time-varying risk transmission from energy markets to carbon market. We also find that spot and futures segments of the emission markets exhibit time-varying correlations and volatile hedging effectiveness. These results have important investment and policy implications.
    Keywords: Multivariate regime-switching; time-varying correlations; hedging; CO2 allowance prices.
    JEL: C32 G11 G19 Q47 Q54
    Date: 2014–08–29
  29. By: Arslan Tariq Rana (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR7322 - Université d'Orléans); Philippe Saucier (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR7322 - Université d'Orléans)
    Abstract: En s'appuyant sur la base de données de la Banque Mondiale " Global Preferential Trade Agreements Data Base (GPTAD) " qui recense plus de 268 accords de libre échange, la communication propose une analyse des clauses environnementales pouvant figurer dans ces accords, en particulier dans les accords impliquant pays développés et pays émergents. Une première présentation qualitative permet de dégager les traits essentiels des phénomènes observés. Une analyse économétrique, fondée sur la méthode logit s'efforce ensuite d'identifier les facteurs déterminants de l'introduction des clauses environnementales, sous leurs différentes formes, dans les accords de libre-échange, régionaux ou non, multilatéraux ou bilatéraux, et tente de dégager les enjeux environnementaux dans les négociations Nord-Sud.
    Keywords: Environmental clauses in free trade agreements between developed and emerging countries - Analysis of determinants
    Date: 2013
  30. By: Liam Byrnes (School of Economics, University of Queensland)
    Abstract: Providing electricity to regional and remote communities is challenging and expensive. Uniform tariff policies result in subsidised electricity costs for consumers in high cost regional areas. Prices have a dual role of incentivising efficient use of resources and distributing income. These dual roles cause tension between efficient resource use and the provision of reliable and affordable electricity access regardless of location and economic circumstances. This study assesses the benefit resulting from deployment of solar PV across distributed networks in the case of regional Western Australia. Installing solar PV reduces the total cost to supply, particularly for diesel powered networks. The reduction reduces the required subsidy and inefficiency associated with the cross-subsidisation of electricity tariffs. However, the results also highlight that requiring technological adaptation to manage intermittent supply prior to connection acts as a disincentive to deployment. If governments and electricity utilities intend to exploit the reductions in cost of supply that solar PV can provide, careful consideration needs to be given to the requirement to pay for adaptation to existing infrastructure prior to connection. Failure to do so will likely reduce incentives for grid connected renewable energy, while simultaneously reinforcing the status quo – and consequently the inefficient allocation of resources.
    Keywords: Energy Economics, Electricity Markets, Energy Policy, Renewable Energy
    JEL: Q48 Q41 Q43
    Date: 2014–09
  31. By: Paulo Bastos; Matias Busso; Sebastian Miller
    Abstract: We examine the long-term impacts of drought on local labor markets in Brazil. Us- ing rainfall data going back over a century, we build contemporaneous and historical drought indices for more than 3,000 local areas, and examine them in conjunction with five waves of population census data spanning 1970-2010. Results from a difference- in-differences design reveal that increased drought frequency in the previous decade reduces local value added, employment and wages in the agricultural sector; leads to job losses and pay cuts in the local manufacturing and services sectors; and induces out-migration, especially among younger cohorts, leading to relative population de- cline. These findings are in line with standard general-equilibrium theory featuring imperfect labor mobility across space.
    JEL: J61 N96 O15 Q54 R11 R23
    Date: 2013–12
  32. By: Paulo Bastos; Sebastian Miller
    Abstract: The increased occurrence of extreme weather conditions leading to drought is a key development challenge. This paper studies how these extreme events interact with the political process at the local level using rich administrative data for drought declarations and mayoral elections in Brazil. While accounting for current and historical rainfall patterns, the paper finds that that: i) municipalities led by a mayor affiliated with the President’s party are more likely to receive formal drought declarations prior to the municipal election; and ii) receiving a drought declaration reinforces the electoral advantage of incumbent mayors running for reelection. These results are robust to the inclusion of a rich set of controls for municipal attributes.
    JEL: D72 Q54
    Date: 2013–10
  33. By: Ramin Dadasov (University of Berlin); Carsten Hefeker (University of Aachen); Oliver Lorz (University of Aachen)
    Abstract: We develop a formal model that looks at the mutually endogenous determination of foreign direct investments in natural resource-rich countries, the decision of host governments to expropriate these investments, and the level of corruption. Higher resource production makes expropriation more attractive from the perspective of national governments. A low expropriation risk is in turn an important determinant of international investments and is therefore associated with high levels of production. Moreover, resource production leads to high levels of corruption. Our theoretical results are confirmed by estimations of a simultaneous equation model for 50 resource-rich countries in which we endogenize expropriation risk, corruption, and resource production.
    Keywords: Natural resources, hold-up problem, foreign direct investment, corruption.
    JEL: F21 D73 Q38
    Date: 2014
  34. By: Heshmati, Almas (Centre of Excellence for Science and Innovation Studies (CESIS), and Jönköping University (JIBS)); Abolhosseini, Shahrouz (College of Engineering, TEMEP, Seoul National University, Seoul, Korea)
    Abstract: Information and communication technology plays an important role in achieving a higher level of energy efficiency. In particular, energy efficiency can be achieved by integrating information technology into electricity networks to enable the interaction between suppliers and customers (smart grids). Power generation by renewable energy sources can also benefit from this integration of technologies. Distributed power generation, which will be the basis of renewable energy production, encourages the production of renewable energy resources and, accordingly, decreases transmission loss, increases energy saving, and enhances energy efficiency. Therefore, integrating distributed, renewable energy sources and smart grids within local marketplaces for trading renewable energy in small units can be a promising combination. In this paper, we propose a structure of a marketplace for renewable energy sources, design a market mechanism for trading in this market, and outline the requirements for such a market to function efficiently. Finally, we conclude and present recommendations to policymakers to provide incentives to generators to increase deployment of renewable energy sources and to end users to save electricity and to consume clean energy.
    Keywords: Market design; market mechanism; trading energy; renewable energy; clean energy; energy policy
    JEL: D40 H44 L11 L49 Q13 Q27 Q42
    Date: 2014–08–25

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