nep-env New Economics Papers
on Environmental Economics
Issue of 2014‒09‒25
nineteen papers chosen by
Francisco S. Ramos
Universidade Federal de Pernambuco

  1. Cooperation and Competition in Climate Change Policies: Mitigation and Climate Engineering when Countries are Asymmetric By Vassiliki Manoussi; Anastasios Xepapadeas
  2. Structural disparities in carbon dioxide consumption and trade in the world economy By Stefan Ederer; Stefan Weingärtner
  3. Is sustainable transport policy sustainable? By Jonas ELIASSON; Stefan PROOST
  4. A dynamic CGE modelling approach for analyzing trade-offs in climate change policy options: the case of Green Climate Fund By Alessandro Antimiani; Valeria Costantini; Anil Markandya; Chiara Martini; Alessandro Palma; ; Maria Cristina Tommasino
  5. Searching for carbon leaks in multinational companies By Antoine Dechezleprêtre; Caterina Gennaioli; Ralf Martin; Mirabelle Muûls
  6. The Drivers of Long-run CO2 Emissions: A Global Perspective since 1800 By Sofia Teives HENRIQUES; Karol Jan BOROWIECKI
  7. Abatement Technology Search By Alain-Désiré Nimubona; Andrew Leach
  8. Governance of Ecosystem Services: insights from Life+ Making Good Natura project By Marino, Davide; Gaglioppa, Pierluca; Schirpke, Uta; Guadagno, Rossella; Marucci, Angelo; Palmieri, Margherita; Pellegrino, Davide; Gusmerotti, Natalia
  9. Climate Change Mitigation, Economic Growth and the Distribution of Income By G.A. Meagher; P.D. Adams; Felicity Pang
  10. Climate change mitigation and employment growth By G.A.Meagher; R.A.Wilson; J.M. Dixon
  11. Atténuation de l’effet de serre d’origine agricole : efficacité en coûts et instruments de régulation By Stephane De Cara; Bruno Vermont
  12. Sustainability of local versus global bread supply chains: a literature review By Gava, Oriana; Galli, Francesca; Bartolini, Fabio; Brunori, Gianluca
  13. The Effects of Experience on Preference Uncertainty: Theory and Empirics for Public and Quasi-Public Environmental Goods By Czajkowski, Mikołaj; Hanley, Nick; LaRiviere, Jacob
  14. Investment climate reforms and job creation in developing countries : what do we know and what should we do ? By Rahman, Aminur
  15. The Residential Energy Efficiency Program in Lithuania By Viktoras Sirvydis
  16. Revenue Sharing of Natural Resources in Africa : Reflections from a Review of International Practices By Giorgio Brosio; Raju Jan Singh
  17. Émissions de gaz à effet de serre d’origine agricole : coûts et potentiels d’atténuation, instruments de régulation et efficacité By Stephane De Cara; Bruno Vermont
  18. The Impact of the 2005 CAP-First Pillar Reform as a Multivalued Treatment Effect -Alternative Estimation Approaches By Esposti, Roberto
  19. Running with the Red Queen: An integrated assessment of Agricultural Land Expansion and Global Biodiversity Decline By Bruno Lanz; Timothy Swanson; Simon Dietz

  1. By: Vassiliki Manoussi; Anastasios Xepapadeas
    Abstract: We study a dynamic game of climate policy design in terms of emissions and solar radiation management (SRM) involving two heterogeneous regions or countries. Countries emit greenhouse gasses (GHGs), and can block incoming radiation by unilateral SRM activities, thus reducing global temperature. Heterogeneity is modelled in terms of the social cost of SRM, the environmental damages due to global warming, the productivity of emissions in terms of generating private benefits, the rate of impatience, and the private cost of geoengineering. We determine the impact of asymmetry on mitigation and SRM activities, concentration of GHGs, and global temperature, and we examine whether a tradeoff actually emerges between mitigation and SRM. Our results could provide some insights into a currently emerging debate regarding mitigation and SRM methods to control climate change, especially since asymmetries seem to play an important role in affecting incentives for cooperation or unilateral actions.
    Keywords: Climate change, mitigation, solar radiation management, cooperation, differential game, asymmetry, feedback Nash equilibrium.
    JEL: Q53 Q54
    Date: 2014–09–02
  2. By: Stefan Ederer; Stefan Weingärtner
    Abstract: Social scientists have long argued that developed countries are more and more responsible for climate change because they externalise pollution to less developed countries. This paper offers a way to quantify climate responsibility by calculating carbon footprints and carbon balances between regions by means of an input-output analysis. We find that regions in the center of the world economy are increasingly consuming CO2 which was emitted in the periphery. Developed countries exhibit a large emission balance deficit with the less developed economies. Furthermore, we decompose carbon footprint developments between 1995 and 2007 into three effects: technical progress, shifts in the global value chain and increasing final demand. Our results show that the effect of technical progress is overcompensated by the effect of increased consumption and value chain shifts. Footprint growth in the center is strongly linked to additional pollution and technical development in the periphery. These findings challenge the prevailing view of the potential of modernisation and globalisation with regard to climate change.
    Keywords: Climate responsibility, carbon leakage, carbon footprint, environmental world-system theory, input-output analysis
    JEL: C67 F18 Q37 Q56 O13
    Date: 2014–09
  3. By: Jonas ELIASSON; Stefan PROOST
    Abstract: The paper challenges part of the sustainable transport literature. Sustainable transport plans often focus on reducing carbon emissions in a specific city, region or country, and this neglects two handicaps of strong unilateral action. The first is that climate is a global commons problem, so a strong binding international climate agreement is unlikely. The second is that a unilateral reduction of oil consumption may be partially, or even completely, offset by market responses – in some circumstances, cumulative emissions may even come earlier (the “green paradox”). When a coalition of the willing reduces oil use in the transport sector, this may delay rather than reduce total emissions. This requires rethinking climate policies for the transport sector: What policies remain cost effective in reducing greenhouse gas emissions?
    Date: 2014–06
  4. By: Alessandro Antimiani; Valeria Costantini; Anil Markandya; Chiara Martini; Alessandro Palma; ; Maria Cristina Tommasino
    Abstract: We investigate the trade-offs between economic growth and low carbon targets for developing and developed countries in the period up to 2035. Policy options are evaluated with an original version of the dynamic CGE model GDynE. Abatement costs appear to be strongly detrimental to economic growth for developing countries. We investigate options for reducing these costs that are consistent with a green growth strategy. We show that Green Climate Fund financed through a levy on carbon taxation can benefit all parties, and larger benefits are associated with investment of the Green Climate Fund to foster energy efficiency in developing countries.
    Keywords: Climate Change Policies, Green Growth, Developing Countries, Dynamic CGE Energy Model, Green Climate Fund
    Date: 2014–05
  5. By: Antoine Dechezleprêtre; Caterina Gennaioli; Ralf Martin; Mirabelle Muûls
    Abstract: Does climate change policy cause companies to shift the location of production, thereby creating carbon leakage? We examine the impact of the European Union Emissions Trading System (EU ETS) on the geographical distribution of carbon emissions within multinational companies based on data from the Carbon Disclosure Project for the period 2007- 2009. Our data includes regional emissions of 435 companies, of which 47 are subject to EU ETS regulation. We find no evidence that the EU ETS has induced a displacement of carbon emissions from Europe towards the rest of the world. Our results suggest that claims that the EU ETS would cause carbon leakage might have been exaggerated.
    Date: 2014–09
  6. By: Sofia Teives HENRIQUES (Department of Business and Economics, University of Southern Denmark); Karol Jan BOROWIECKI (Department of Business and Economics, University of Southern Denmark; Department of Economics, Trinity College Dublin)
    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 Q5
    Date: 2014–09
  7. By: Alain-Désiré Nimubona (Department of Economics, University of Waterloo); Andrew Leach (Alberta School of Business, University of Alberta)
    Abstract: We develop a three-stage model of abatement technology search, adoption, and deployment. Using this model, which draws on search theory tools more frequently used in labour and monetary economics, we compare market-based and command-and-control pollution control instruments with respect to the incentives each provides for abatement technology search and adoption, expected emissions reductions, and expected compliance costs. We show that the polluting firm always has more incentives to search for and adopt a more ecient abatement technology under either an emissions tax or a tradeable permit system than under an equivalently stringent emissions standard. We also show that while expected incentives for innovation are comparable under emissions taxes and tradeable permit regimes, the likelihood for total future compliance costs to be reduced after an increase in the stringency of environmental policy - the so-called Porter hypothesis - is higher with a tradeable permit regime.
    JEL: Q55 Q58 H23 D83
    Date: 2014–08
  8. By: Marino, Davide; Gaglioppa, Pierluca; Schirpke, Uta; Guadagno, Rossella; Marucci, Angelo; Palmieri, Margherita; Pellegrino, Davide; Gusmerotti, Natalia
    Abstract: The Natura 2000 network is the cornerstone of EU Biodiversity Strategy aimed at halting the loss of biodiversity and services natural and semi-natural ecosystems provide to human populations. The Member States are mainly responsible to implement conservation strategies through management plans and conservation measures, but in many cases the level of development and execution of these instruments is very low due to scarce financial resources, and management effectiveness is rarely achieved. This paper presents first insights from Life+ Making Good Natura (MGN) project and highlights costs and benefits associated to 2 out of 21 Natura 2000 study sites in Italy in order to define the basis for a new governance approach relied on the qualitative and quantitative valuation of ecosystem services (ES) and suitable for reaching management effectiveness. To date, the habitat cover of the agro-forest sites and socio-economic data for the core area and a buffer zone of 20 km, gathered through questionnaires to management authority, have been analyzed. After mapping and assessing the most important ES for each site based on spatial data and on the information from the questionnaires, meetings with local public and private stakeholders were organized in order to discuss the identified ES and their social and economic importance for the area. Preliminary results suggest that quantification of costs related to the Natura 2000 network is a crucial point within a systematic approach to environmental accountability that allows to measure and assess management bodies’ management strategy effectiveness and efficiency and to redefine Natura 2000 sites conservation priorities. Furthermore, in a general context of stagnant and uncertain funding for biodiversity conservation, also the need of defining a wide range of governance and management tools, referring to the policy mix instruments, seems urgent.
    Keywords: Natura 2000 network, ecosystem services, PES, local communities, governance, management, natural resources, protected area, Environmental Economics and Policy, Q570,
    Date: 2014
  9. By: G.A. Meagher; P.D. Adams; Felicity Pang
    Abstract: In October 2008, the Australian Government released a major report: Australia's Low Pollution Future: The Economics of Climate Change Mitigation. In that report, various scenarios are used to explore the potential economic effects of climate mitigation policy in Australia. One of the scenarios, designated CPRS-5, a Carbon Pollution Reduction Scheme (CPRS) aims to reduce emissions to 5 per cent below 2000 levels by 2020. It is consistent with stabilisation at around 550 parts per million of carbon dioxide equivalent (ppm CO2-e) in the atmosphere by 2100. In assessing the likely effects these policies on the future growth of output and employment by industry, the Government's report relies mainly on economic modelling using the MMRF applied general equilibrium model of the Australian economy. Results are reported for 58 industries. This paper begins by using the same model to closely reproduce the analysis of the CPRS-5 scenario conducted for the report. However, this time the MMRF model is enhanced by a labour market extension MLME which allows the employment results to be extended to 81 occupations and 64 skill groups. The enhanced model is then used in a top-down configuration with an income distribution extension MIDE and a microsimulation extension MMSE to generate changes in income. In MIDE, income redistributions between households (taken collectively), corporate trading enterprises, financial trading enterprises, the government and foreigners (the 'institutions') are modelled by the inclusion of the associated current and capital accounts from the Australian System of National Accounts. Within the household sector, changes in disposable income from unincorporated enterprises (differentiated by 17 industries), compensation of employees (differentiated by 81 occupations), property income, and net transfers from other institutions are separately modelled. On the income side, one hundred types of recipient are identified corresponding to personal income percentiles. On the expenditure side, six hundred types of household are identified, this time differentiated by household income and the ages of its members. This arrangement allows changes in real income to be computed using household specific CPIs. The microsimulation extension MMSE uses MIDE results to update the incomes of more than 13,500 persons. The effects of the climate change mitigation policies on the incomes of various socio-economic groups are then be obtained by aggregation.
    Keywords: CGE modelling, climate change mitigation, distribution of employment, distribution of income, microsimulation
    JEL: C68 D31 D58 J23 O56 Q52
    Date: 2014–09
  10. By: G.A.Meagher; R.A.Wilson; J.M. Dixon
    Abstract: Reducing greenhouse gas emissions without reducing economic growth requires advances in technology (which reduce the emissions intensity of industrial production) and/or policy measures to promote structural change (which shift the composition of production in favour of less polluting industries). Moreover, both methods of mitigating the effect of the gases must inevitably proceed in an environment of structural change driven by a variety of other economic forces. This paper introduces new economic modelling which permits an analysis of the effects of mitigation policy on employment that is firmly located within the historical structure of the economy, and within its likely future development in the medium term. Specifically, the paper investigates the imposition of a tax on the employment of labour by each industry in proportion to the emissions per hour of employment in the industry. In this approach, the extent to which the job of a particular worker can be considered to be 'green' depends on the industry in which he/she works and not on his/her occupation or skill level. The effects of imposing the tax are reported as deviations from the current CEDEFOP medium-term employment forecasts for the European Union. The analysis uses a CGE labour market extension to the macro-econometric E3ME model. The tax is assumed to be returned to producers in such a way that aggregate employment remains constant, so the focus of the analysis is on the structural, rather than the secular, implications of mitigation policy for employment growth. The model incorporates a detailed description of the structure of the labour market, identifying cross-classified employment in 41 industries, 27 occupations and 3 skill levels. Hence it allows for a comprehensive, cohesive assessment of the economy's requirements for 'green' skills in the sense that it determines which occupations/skill levels expand, and which contract, in response to the mitigation policy. This kind of comparison is important for assigning the appropriate weight to training programs that allocate resources to green skills rather than alternative objectives of educational policy. The analysis in the paper is restricted to the United Kingdom but the model is designed to provide a suitable basis for comparative-dynamic labour market analyses for all countries belonging to the European Union.
    Keywords: CGE modelling, climate change mitigation, distribution of employment, green jobs
    JEL: C68 D33 D58 I29 J23 O52 Q52
    Date: 2014–09
  11. By: Stephane De Cara (Economie Publique, INRA); Bruno Vermont (Economie Publique, INRA)
    Abstract: Du fait de son poids dans les émissions de gaz à effet de serre (GES), l’agriculture peut (et doit) participer significativement à l’effort d’atténuation global. Les politiques publiques peuvent jouer un rôle important pour que les potentiels d’atténuation que peut offrir ce secteur soient mobilisés au meilleur coût pour la société. Ce texte synthétise les concepts qui sous-tendent les travaux d’économie appliquée qui ont examiné cette question. Il précise notamment le concept d’efficacité en coûts et le rôle que peuvent jouer les instruments économiques à cet égard. Les résultats de travaux récents portant sur cette question dans les cas français et européen illustrent l’importance des gains en efficacité permis par les instruments économiques. Ces éléments sont mis en regard de l’évolution récente des politiques climatiques et agricoles dans leur prise en compte de la question des émissions de GES d’origine agricole.
    Abstract: Given its weight in greenhouse gas emissions (GHG), agriculture can (and should) contribute significantly to the global mitigation effort. Public policies may play an important role in realizing the mitigation potential in this sector at the lowest possible cost for the society. This text provides an overview of the concepts used in applied economics research works that have addressed this issue. In particular, it presents the concept of cost-effectiveness and the role that economic instruments can play in this regard. Recent results from studies that have examined this question in the French and European contexts illustrate the efficiency gains that can be expected from the implementation of economic instruments. These results are then used to analyze the recent trends in climate and agricultural policies with respect to the issue of GHG emissions from agriculture.
    Keywords: gaz à effet de serre, émission de gazinstrument économiqueprotoxyde d'azote, méthaneefficacitécoût
    Date: 2014
  12. By: Gava, Oriana; Galli, Francesca; Bartolini, Fabio; Brunori, Gianluca
    Abstract: The sustainability of the food supply chain is a core issue in the research and policy debate and is one of the priorities in the EU Horizon 2020 Strategies (EU, 2014). As a result, increasing knowledge of the resource efficiency of the food supply chain can help to meet EU global challenges. The literature review on food chain performance reveals methodological differences when investigating multiple dimensions, i.e. economics, social, human health, environmental, ethics; thus, comparisons are arduous. The majority of studies focus on environmental, social and economic performance overlooking health and ethical aspects. The paper will investigate the scientific literature focusing on the contribution of supply chain on economic, social, health, environmental and ethical performance. Results could help in understanding the strengths and weaknesses of different approaches as well as their reliability in assessing how food chain sustainability is affected by its length.
    Keywords: sustainability dimensions, food supply chain, local, global, bread, Agricultural and Food Policy, Q18, Q10,
    Date: 2014
  13. By: Czajkowski, Mikołaj; Hanley, Nick; LaRiviere, Jacob
    Abstract: This paper develop and estimates a model of demand estimation for environmental public goods which allows for consumers to learn about their preferences through consumption experiences. We develop a theoretical model of Bayesian updating, perform comparative statics over the model, and show how the theoretical model can be consistently incorporated into a reduced form econometric model. We then estimate the model using data collected for two environmental goods. We find that the predictions of the theoretical exercise that additional experience makes consumers more certain over their preferences in both mean and variance are supported in each case.
    Keywords: discrete choice experiment, preference learning, stated preferences, Bayesian updating, generalized multinomial logit, scale, scale variance,
    Date: 2013
  14. By: Rahman, Aminur
    Abstract: This paper reviews the literature on the role of the investment climate reforms in job creation. It finds that the current landscape of employment and private sector activity in developing countries indicates a number of potential channels through which investment climate reforms can positively affect job creation. However, rigorous empirical evidence is scarce and most of the relevant studies focus on business entry reforms with a few focusing on business taxation and investment promotion activities. Overall, there is evidence of job creation through business entry, tax reforms, and investment promotion activity in developing countries. Almost all of these evidences are from quasi-experimental studies that are significant improvements over conventional cross-country or cross-section panel data analysis. Still, various endogeneity concerns in these studies cannot be ruled out completely. In assessing job effects, future research should provide deeper insights on the gross versus net and short-run versus long-run job effects and general equilibrium effects of various investment climate reforms related to jobs, productivity, competition, and other developmental outcomes. Another critical agenda for future research is to shed light on which investment climate reforms matter most for spurring the employment and productivity growth of firms in developing countries. The World Bank Group, in partnership with development partners and client government countries, can play a significant role in bridging the current knowledge gap by integrating rigorous evaluation as an integral part of project design and implementation, and improving data quality, particularly through its information and communication technologies-led private sector development reform initiatives.
    Keywords: Environmental Economics&Policies,Labor Markets,Microfinance,Emerging Markets,Access to Finance
    Date: 2014–09–01
  15. By: Viktoras Sirvydis
    Keywords: Finance and Financial Sector Development - Access to Finance Environmental Economics and Policies Urban Development - Urban Housing Banks and Banking Reform Energy - Energy Production and Transportation Environment
    Date: 2014–05
  16. By: Giorgio Brosio; Raju Jan Singh
    Keywords: Environmental Economics and Policies Macroeconomics and Economic Growth - Subnational Economic Development Economic Theory and Research Finance and Financial Sector Development - Debt Markets Public Sector Economics Public Sector Development Environment
    Date: 2014–04
  17. By: Stephane De Cara (Economie Publique, INRA); Bruno Vermont (Economie Publique, INRA)
    Abstract: Du fait de sa contribution aux émissions de gaz à effet de serre (GES), il est essentiel que le secteur agricole participe à l’effort d’atténuation global. Il est également important que les potentiels d’atténuation dans ce secteur soient mobilisés au meilleur coût pour la société. Ce texte synthétise les méthodes, concepts et résultats des travaux d’économie appliquée qui ont examiné cette question. Il précise le concept d’efficacité en coûts et le rôle que peuvent jouer les instruments économiques à cet égard. Les différentes méthodes mobilisées dans la littérature pour évaluer les potentiels et les coûts d’atténuation sont ensuite comparées et les implications des résultats de travaux récents, portant sur les cas français et européen, sont discutées.
    Keywords: coût d’atténuation, efficacité en coûts, émission de gaz, gaz à effet de serreagricultureinstrument économiqueatténuation
    Date: 2014
  18. By: Esposti, Roberto
    Abstract: This paper aims at evaluating the impact of the 2003/2005 CAP reform on farm production choices. The outcome of “market orientation” is measured by considering both the short-term production choices and the long-term investment decisions. The Treatment Effect (TE) is estimated through recent alternative multiple/continuous TEs estimators based on the Generalized Propensity Score (GPS). Instead of looking at non-treated counterfactuals these approaches take advantage of the different intensity with which the first pillar support is delivered to treated units. These alternative estimators are implemented and their statistical robustness assessed and results compared. Results show that the 2003/2005 reform of the first pillar of the CAP actually had an impact more in (ri)orienting short-term farm production choices then investment decisions and this effect is significantly more evident for farms with a limited contribution of the CAP on their own Gross Production Value.
    Keywords: Treatment Effects, Common Agricultural Policy, Farm Production Choices, Matching, Agricultural and Food Policy, Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, Q18, Q12, C21, O13,
    Date: 2014
  19. By: Bruno Lanz; Timothy Swanson; Simon Dietz (Centre for International Environmental Studies, IHEID, The Graduate Institute of International and Development Studies, Geneva)
    Abstract: Modern agriculture relies on a small number of highly productive crops and the continued expansion of agricultural land area has led to a significant loss of biodiversity. In this paper we consider the macroeconomic consequences of a continued expansion of modern agriculture from the perspective of agricultural productivity and food production: as the genetic material supporting agriculture declines, pests and pathogens become more likely to adapt to crops and proliferate, increasing crop losses due to biological hazards. To evaluate the macroeconomic consequences of a reduction in agricultural productivity associated with the expansion of agriculture, we employ a quantitative, structurally estimated model of the global economy in which economic growth, population and food demand, agricultural innovations, and the process of land conversion are jointly determined. We show that even a small impact of global biodiversity on agricultural productivity calls for both a halt in agricultural land conversion and increased agricultural R&D in order to maintain food production associated with population and income growth.
    Keywords: Global biodiversity; Agricultural productivity; Endogenous innovations; Land conversion; Population dynamics; Food security; Quantitative growth model
    JEL: N10 N50 O31 O44 Q15 Q16 Q57

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