nep-env New Economics Papers
on Environmental Economics
Issue of 2014‒11‒07
38 papers chosen by
Francisco S. Ramos
Universidade Federal de Pernambuco

  1. Note on Green Growth for Bhutan By Urvashi Narain; Michael Toman; Zhiyun Jiang
  2. Moral Behaviour, Altruism and Environmental Policy By Marc Daube; David Ulph
  4. Robust Dynamic Optimal Taxation and Environmental Externalities By Li, Xin; Narajabad, Borghan N.; Temzelides, Theodosios
  5. Linking emission trading to environmental innovation: evidence from the Italian manufacturing industry By Simone Borghesi; Giulio Cainelli; Massimiliano Mazzanti
  6. Pollution Offshoring and Emission Reductions in European and US Manufacturing By Claire Brunel
  7. The Korean Energy and GHG Target Management System: An Alternative to Kyoto-Protocol Emissions Trading Systems? By Stefan Niederhafner
  8. Fat Tails and the Social Cost of Carbon By Weitzman, Martin L.
  9. Voluntary Disclosure, Greenhouse Gas Emissions and Business Performance: Assessing the First Decade of Reporting By David C Broadstock; Alan Collins; Lester C Hunt; Konstantinos Vergos
  10. The critical mass approach to achieve a deal on green goods and services : what is on the table? how much to expect ? By de Melo, Jaime; Vijil, Mariana
  11. The Role of National Ecosystem Assessments in Influencing Policy Making By Lucy Wilson; Cristina Secades; Ulf Narloff; Nadine Bowles-Newark; Abisha Mapendembe; Hollie Booth; Claire Brown; Megan Tierney
  12. Water Taxation and the Double Dividend Hypothesis By Nicholas Kilimani
  13. Developments in Regional Trade Agreements and the Environment: 2013 Update By Clive George
  14. Optimal Carbon Sequestration Policies in Leaky Reservoirs By Jean-Marie, Alain; Moreaux, Michel; Tidball, Mabel
  15. Synopse: 2014 WeltHunger-Index: Herausforderung verborgener hunger By von Grebmer, Klaus; Saltzman, Amy; Birol, Ekin; Wiesman, Doris; Prasai, Nilam; Yin, Sandra; Yohannes, Yisehac; Menon, Purnima; Thompson, Jennifer; Sonntag, Andrea
  16. Energy Price and Redistribution in Czech Republic By Ladoux, Norbert; Scasny, Milan
  17. Cost Implications of GHG Regulation in Hawai‘i By Makena Coffman; Paul Bernstein; Sherilyn Wee
  18. The Role of Product and Process Innovation in CGE Models of Environmental Policy By Claudio Baccianti; Andreas Löschel
  19. Is Choice Experiment Becoming more Popular than Contingent Valuation? A Systematic Review in Agriculture, Environment and Health By Pierre-Alexandre Mahieu; Henrik Andersson; Olivier Beaumais; Romain Crastes; François-Charles Wolff
  20. The Effects of China’s Sloping Land Conversion Program on Agricultural Households By Zhen Liu; Arne Henningsen
  21. Consumer Behaviour in a Social Context: Implications for Environmental Policy By Partha Dasgupta; Dale Southerton; Alistair Ulph; David Ulph
  22. Indirect Land Use Effects of Conservation: Disaggregate Slippage in the U.S. Conservation Reserve Program By Uchida, Shinsuke
  23. Price versus Quantities versus Indexed Quantities By Frédéric Branger; Philippe Quirion
  24. Cost Optimal Joint Management of Interdependent Resources: Groundwater vs. Kiawe (Prosopis pallida) By Kimberly Burnett; James Roumasset; Christopher Wada
  25. Model Simulations of Resource Use Scenarios for Europe By Kurt Kratena; Mark Sommer
  26. Groundwater Economics without Equations By James Roumasset; Christopher Wada
  27. Resistance to the Regulation of Common Resources in Rural Tunisia By Xiaoying Liu; Mare Sarr; Timothy Swanson
  28. Growth, deforestation and the efficiency of the REDD mechanism By Helene Ollivier
  29. The Resource Curse Hypothesis: Evidence from Ecuador By Andrea Cori; Salvatore Monni
  30. Running with the red queen: an integrated assessment of agricultural land expansion and global biodiversity decline By Bruno Lanz; Simon Dietz; Tim Swanson
  31. The Potential Contribution of Innovation Systems to Socio-Ecological Transition By Georg Licht; Bettina Peters; Christian Köhler; Franz Schwiebacher
  32. (English) I processi di partecipazione nella gestione dei rifiuti. Applicazione di un modello interpretativo a cinque casi studi (Italiano) I processi di partecipazione nella gestione dei rifiuti. Applicazione di un modello interpretativo a cinque casi studi By Adriana Valente; Sabina De Rosis
  33. Tradable Renewable Quota vs. Feed-In Tariff vs. Feed-In Premium under Uncertainty By Robert Marschinski; Philippe Quirion
  34. Characteristics and Production Costs of U.S. Corn Farms, Including Organic, 2010 Including Organic, 2010 By Foreman, Linda
  35. La soutenabilité des économies insulaires coloniales et postcoloniales. Le cas de l’Ile de La Réunion By Philippe Holstein
  36. Mitigación del cambio climático a través de un alumbrado público eficiente en México: superando los retos políticos en aras de la eficiencia económica y el equilibrio ambiental By Alejandreo Guevara; Alberto Lara
  37. Efficiences technique et environnementale en agriculture: le cas du bassin de la rivière Chaudière au Québec By M.K. Ndegue Fongue; Lota D. Tamini; B. Larue; G.E. West
  38. The Distribution of Natural Resource Rents and the Dutch Disease By Richard Chisik; Bill Battaile; Harun Onder

  1. By: Urvashi Narain; Michael Toman; Zhiyun Jiang
    Keywords: Environment - Climate Change Mitigation and Green House Gases Environmental Economics and Policies Economic Theory and Research Environment - Wildlife Resources Transport Economics Policy and Planning Transport Macroeconomics and Economic Growth
    Date: 2014–07
  2. By: Marc Daube (University of St Andrews); David Ulph (University of St Andrews)
    Abstract: Free-riding is often associated with self-interested behaviour. However if there is a global mixed pollutant, free-riding will arise if individuals calculate that their emissions are negligible relative to the total, so total emissions and hence any damage that they and others suffer will be unaffected by whatever consumption choice they make. In this context consumer behaviour and the optimal environmental tax are independent of the degree of altruism. For behaviour to change, individuals need to make their decisions in a different way. We propose a new theory of moral behaviour whereby individuals recognise that they will be worse off by not acting in their own self-interest, and balance this cost off against the hypothetical moral value of adopting a Kantian form of behaviour, that is by calculating the consequences of their action by asking what would happen if everyone else acted in the same way as they did. We show that: (a) if individuals behave this way, then altruism matters and the greater the degree of altruism the more individuals cut back their consumption of a ’dirty’ good; (b) nevertheless the optimal environmental tax is exactly the same as that emerging from classical analysis where individuals act in self-interested fashion.
    Keywords: Altruism; Climate Change; Environmental Economics; Environmental Tax; Externalities; Moral Behaviour; Pro-Social Behaviour; Public Goods
    JEL: Q5 Q58 D11
    Date: 2014–02–03
  3. By: Michela Faccioli (Universitat de les Illes Balears); Antoni Riera Font (Universitat de les Illes Balears); Catalina M. Torres (Universitat de les Illes Balears)
    Abstract: Climate change will further exacerbate wetland deterioration, especially in the Mediterranean region. On the one side, it will accelerate the decline in the populations and species of plants and animals, this resulting in an impoverishment of biological abundance. On the other one, it will also promote biotic homogenization, resulting in a loss of species’ diversity. In this context, different climate change adaptation policies can be designed: those oriented to recovering species’ abundance and those aimed at restoring species’ diversity. Based on the awareness that knowledge about visitors’ preferences is crucial to better inform policy makers and secure wetlands’ public use and conservation, this paper assesses the recreational benefits of different adaptation options through a choice experiment study carried out in S’Albufera wetland (Mallorca). Results show that visitors display positive preferences for an increase in both species’ abundance and diversity, although they assign a higher value to the latter, thus suggesting a higher social acceptability of policies pursuing wetlands’ differentiation. This finding acquires special relevance not only for adaptation management in wetlands but also for tourism planning, as most visitors to S’Albufera are tourists. Thus, given the growing competition to attract visitors and the increasing demand for high environmental quality and unique experiences, promoting wetlands’ differentiation could be a good strategy to gain competitive advantage over other wetland areas and tourism destinations.
    Keywords: climate change, wetland adaptation, species’ diversity, species’ abundance, recreational benefits, choice experiment.
    JEL: D6 Q51 Q54 Q57
    Date: 2014
  4. By: Li, Xin (International Monetary Fund); Narajabad, Borghan N. (Board of Governors of the Federal Reserve System (U.S.)); Temzelides, Theodosios (Rice University)
    Abstract: We study a dynamic stochastic general equilibrium model in which agents are concerned about model uncertainty regarding climate change. An externality from greenhouse gas emissions damages the economy's capital stock. We assume that the mapping from climate change to damages is subject to uncertainty, and we use robust control theory techniques to study efficiency and optimal policy. We obtain a sharp analytical solution for the implied environmental externality and characterize dynamic optimal taxation. A small increase in the concern about model uncertainty can cause a significant drop in optimal fossil fuel use. The optimal tax that restores the socially 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 concerns can lead to substantially different conclusions.
    Keywords: Climate change; optimal dynamic taxation; uncertainty; robust
    Date: 2014–05–29
  5. By: Simone Borghesi (University of Siena, Italy.); Giulio Cainelli (University of Padova, Italy.); Massimiliano Mazzanti (University of Ferrara, Italy; SEEDS, Ferrara, Italy.)
    Abstract: This paper examines the different forces underlying the adoption of environmental innovations (EI), with a focus on policy related EI. In particular, exploiting the 2006-2008 wave of the Italian Community Innovation Survey (CIS), we investigate whether the first phase of the European Emissions Trading Scheme (EU-ETS) exerted some effects on EI in CO2 abatement and energy efficiency controlling for other variables, grouped as internal/external to the firm, and additional environmental regulation factors. Our empirical analyses show that a few factors emerge as particularly relevant such as relationships with other firms and institutions, sectoral energy expenditure intensity, and current and future expected environmental regulation. For the specific role of the EU ETS, we find that, on the one hand ETS sectors are more likely to innovate than non-ETS sectors but on the other hand that sector specific policy stringency is negatively associated with EI, possibly due to anticipatory behavior from early moving innovative firms and some sector idiosyncratic factors.
    Keywords: Environmental innovation, EU-ETS, CIS EU data, manufacturing
    Date: 2014–10
  6. By: Claire Brunel (Department of Economics, Georgetown University)
    Abstract: Between 1995 and 2008, the European Union and the United States raised environmental standards and concurrently experienced important reductions in emissions from manufacturing despite a rise in output. Levinson (2009) finds that the offshoring of polluting industries to countries with lower environmental standards played only small role in the cleanup of US manufacturing, which was largely due to improvements in production technique. But there is no evidence of whether US patterns hold in other developed economies. I provide the first analysis of the pollution intensity of EU production and imports to examine which forces drove the EU cleanup. I find that concerns about the effect of pollution offshoring were unfounded in the European Union, not because the effect was small like in the United States, but because the patterns of specialization of EU production and imports were actually exactly opposite to what pollution offshoring would predict. Starting in the early 2000s, EU manufacturing increasingly produced more pollution-intensive goods while imports became progressively less pollution- intensive, especially from low-income countries. The "brown" specialization of EU production is difficult to explain, but about a quarter can be matched by increased demand for EU exports of polluting goods. However, similar to the US cleanup, changes in production and imports were overwhelmed by improvements in production technique, which were the main drivers of the cleanup of manufacturing.
    Keywords: Trade and environment, Environmental account and accounting, Technological innovation, Input output table
    JEL: D57 F18 Q55 Q56
    Date: 2014–01–01
  7. By: Stefan Niederhafner (College of Social Sciences, Seoul National University)
    Abstract: The Energy and Greenhouse Gas (GHG) Target Management System (TMS) is one of South Korea’s major instruments to achieve national energy policy as well as GHG reduction targets. The TMS was introduced in the late 1990s, focusing on energy only and aiming to reduce the level of South Korea’s energy consumption and fossil fuel imports. During the presidency of Lee Myung-bak, the system was reformed and a GHG abatement function was integrated. This paper applies an analytical governance perspective to investigate the main procedural logic of the TMS. Even though South Korea’s GHG policy is closely linked to the Kyoto Protocol, the Energy and GHG TMS does not rely on market-based instruments. In fact, it combines command-and-control components with strong voluntary network-like mechanisms. The analysis indicates that the Korean TMS thus represents a policy alternative to an emissions trading system. In conclusion and in reference to an eventual Kyoto follow-up agreement, the paper recommends a better integration of such not market based, energy consumption and GHG abatement addressing instruments with global climate change politics.
    Keywords: Energy Policy, GHG Reduction, South Korea, Governance, Global Climate Change, Emission Trading, Kyoto Protocol.
    JEL: F53 H10 H23 H41 L50 L52 K23 N55 N75 O13 O14 O25 P41 Q4 Q54
    Date: 2014–09
  8. By: Weitzman, Martin L.
    Abstract: At high enough greenhouse gas concentrations, climate change might conceivably cause catastrophic damages with small but non-negligible probabilities. If the bad tail of climate damages is sufficiently fat, and if the coefficient of relative risk aversion is greater than one, the catastrophe-reducing insurance aspect of mitigation investments could in theory have a strong influence on raising the social cost of carbon. In this paper I exposit the influence of fat tails on climate change economics in a simple stark formulation focused on the social cost of carbon. I then attempt to place the basic underlying issues within a balanced perspective.
    Date: 2014
  9. By: David C Broadstock (TIERS, Southwestern University of Finance and Economics, China and Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey, UK.); Alan Collins (Portsmouth Business School, University of Portsmouth, Portsmouth, UK and Department of Economics and Economic History, Rhodes University, Grahamstown, Eastern Province, South Africa.); Lester C Hunt (Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.); Konstantinos Vergos (Department of Economics, University of Alberta, Edmonton, Canada.)
    Abstract: This study explores patterns in the voluntary disclosure of greenhouse gas (GHG) emissions and empirical relationships between GHG emissions and an extensive range of business performance measures for UK FTSE-350 listed firms over the first decade of such reporting and highlighting the level of consistency among these measures. Despite the popular and policy generated environmental imperatives over this period, an extensive pattern of non-reporting of such emissions is apparent by year and sector. Accordingly, a two-stage (Heckman type) selection model is used to analyse the emissions-performance nexus conditional upon the firm choosing to report, using bootstrap inference to further ensure robustness of the results. The results demonstrate firstly that emissions reporting are not directly influenced by the social/governance disclosure attitudes of a firm, thus suggesting that firms disassociate environmental responsibility from social responsibility. Additionally it is demonstrated that for those firms that do report, there is a clear non-linear relationship, initially increasing with firm performance and then elasticities.
    Keywords: voluntary disclosure, carbon emissions, business performance, environmental reporting.
    Date: 2014–10
  10. By: de Melo, Jaime; Vijil, Mariana
    Abstract: At the Davos forum of January 2014, a group of 14 countries pledged to launch negotiations on liberalizing trade in"green goods"(also known as"environmental"goods), focusing on the elimination of tariffs for an Asia-Pacific Economic Cooperation list of 54 products. The paper shows that the Davos group, with an average tariff of 1.8 percent, has little to offer as countries have avoided submitting products with tariff peaks for tariff reductions. Even if the list were extended to the 411 products on the World Trade Organization list, taking into account tariff dispersion, the tariff structure on environmental goods would be equivalent to a uniform tariff of 3.4 percent, about half the uniform tariff-equivalent for non-environmental goods. Enlarging the number of participants to low-income countries might be possible as, on average, their imports would not increase by more than 8 percent. However, because of the strong complementarities between trade in environmental goods and trade in environmental services, these should also be brought to the negotiation table, although difficulties in reaching agreement on their scope are likely to be great.
    Keywords: Environmental Economics&Policies,Free Trade,Trade Policy,Economic Theory&Research,International Trade and Trade Rules
    Date: 2014–10–01
  11. By: Lucy Wilson; Cristina Secades; Ulf Narloff; Nadine Bowles-Newark; Abisha Mapendembe; Hollie Booth; Claire Brown; Megan Tierney
    Abstract: An ecosystem assessment is a social process through which the findings of science concerning the causes of ecosystem change, their consequences for human well-bring, and the management and policy options are evaluated. Ecosystem assessments can play an important role in synthesising and communicating complex information and can both inform and influence decision-making processes. This paper draws insights from experience with National Ecosystem Assessments (NEAs) recently undertaken in the UK, Japan, Spain, and Portugal, as well as other ecosystem assessments undertaken at regional and international geographical scales, and highlights lessons learned so that the impact of NEAs on policy can be enhanced. The paper concludes by identifying key issues needed to develop practical guidance for successful ecosystem assessments. Une évaluation des écosystèmes est un processus social visant à estimer les résultats de la recherche scientifique sur les causes des changements subis par les écosystèmes, leurs conséquences pour le bien-être humain, ainsi que les lignes d’action ou options de gestion possibles. En synthétisant et en véhiculant des informations complexes, les évaluations des écosystèmes peuvent à la fois éclairer et influencer les processus de décision. Ce document tire parti de l’expérience acquise dans le cadre des évaluations nationales des écosystèmes récemment réalisées au Royaume Uni, au Japon, en Espagne et au Portugal, ainsi que d’autres évaluations des écosystèmes entreprises à l’échelle régionale et internationale, et présente les enseignements qui s’en dégagent de façon à renforcer l’impact des évaluations nationales des écosystèmes sur l’action des pouvoirs publics. En conclusion, le document expose les principaux problèmes à résoudre pour élaborer un guide pratique pour la bonne évaluation des écosystèmes.
    Keywords: sustainable development, government policy, ecological economics, biodiversity conservation, renewable resources and conservation, ecosystem services, ressources renouvelables et leur conservation, économie de l’écologie, services écosystémiques, préservation de la biodiversité, politiques publiques, développement durable
    JEL: Q01 Q28 Q57
    Date: 2014–10–07
  12. By: Nicholas Kilimani (Department of Economics, University of Pretoria)
    Abstract: The double dividend hypothesis contends that environmental taxes have the potential to yield multiple benefits for the economy. However, empirical evidence of the potential impacts of environmental taxation in developing countries is still limited. This paper seeks to contribute to the literature by exploring the impact of a water tax in a developing country context, with Uganda as a case study. Policy makers in Uganda are exploring ways of raising revenue by taxing environmental goods such as water. Whereas their primary focus is to raise revenue, we demonstrate how taxes on environmental goods can yield other benefits beyond addressing a country’s fiscal needs. This study employs a computable general equilibrium model to shed light on the impact of a water tax policy when a tax is accompanied by a recycling scheme of the same magnitude. We seek to establish whether taxation and recycling can induce more growth, employment and industry output. The results show that a mechanism which leaves a neutral fiscal balance yields dividends for the economy. In other words, whatever the degree of regressivity resulting from the environmental tax, it is possible to design a recycling scheme that renders the tax policy to be beneficial to the economy.
    Keywords: Environmental Taxation; Revenue recycling; Double dividend; Economic growth
    JEL: C68 H23 E62 Q52
    Date: 2014–10
  13. By: Clive George
    Abstract: This report provides an update on recent developments in the field of Regional Trade Agreements and the environment. Issues arising in the implementation of RTAs with environmental considerations are examined as well as experience in assessing their environmental impacts. This is the seventh update prepared under the aegis of the Joint Working Party on Trade and Environment (JWPTE) since the series began with the 2007 publication Environment and Regional Trade Agreements. The document covers developments from late 2012 to October 2013. It is based on publicly available information.
    Keywords: trade policy, trade and environment, free trade agreements, environmental provisions, regional trade agreements
    JEL: F13 F18 N50 Q56
    Date: 2014–07–25
  14. By: Jean-Marie, Alain; Moreaux, Michel; Tidball, Mabel
    Abstract: We study in this report a model of optimal Carbon Capture and Storage in which the reservoir of sequestered carbon is leaky, and pollution eventually is released into the atmosphere. We formulate the social planner problem as an optimal control program and we describe the optimal consumption paths as a function of the initial conditions, the physical constants and the economical parameters. In particular, we show that the presence of leaks may lead to situations which do not occur otherwise, including that of non-monotonous price paths for the energy.
    Date: 2014–05–26
  15. By: von Grebmer, Klaus; Saltzman, Amy; Birol, Ekin; Wiesman, Doris; Prasai, Nilam; Yin, Sandra; Yohannes, Yisehac; Menon, Purnima; Thompson, Jennifer; Sonntag, Andrea
    Abstract: Der Welthunger-Index (WHI) 2014 stellt die nationale, regionale und weltweite Hungersituation zum neunten Mal in jahrlicher Folge multidimensional dar. Er zeigt, dass bei der globalen Hungerbekampfung seit 1990 Fortschritte erzielt werden konnten, jedoch angesichts sehr ernster oder gar gravierender Hungerwerte in 16 Landern noch immer grober Handlungsbedarf besteht. Der Schwerpunkt dieses Berichts liegt auf einem entscheidenden Aspekt des Hungers, der haufig ubersehen wird, dem verborgenen Hunger. Verborgener Hunger auch Mikronahrstoffmangel genannt betrifft Schatzungen zufolge mehr als zwei Milliarden Menschen weltweit. Dieser Mangel an Vitaminen und Mineralstoffen kann ernste und langfristige Folgen haben. Wo verborgener Hunger verbreitet ist, gefahrdet er nicht nur das Uberleben und beschrankt die Entfaltung der Menschen als produktive Mitglieder ihrer Gesellschaft, sondern halt ganze Lander gefangen in einem Kreislauf aus unzureichender Ernahrung, schlechter Gesundheit, Produktivitatsverlusten, fortdauernder Armut und vermindertem wirtschaftlichen Wachstum.
    Keywords: Africa South of Sahara; Caribbean; CIS; Commonwealth of Independent States; South Asia; Southeast Asia; Latin America; Developing countries; Middle East; North Africa; OECD countries; India; East Africa; East Asia; Eastern Europe; Food availability; food crises; food crisis; food prices; food security; Global Hunger Index; GHI; Gross income; indicators; Children; Land; Land degradation; Nutrition; Malnutrition; Undernutrition; Hunger; Micronutrients; Mortality; Natural resources; Climate change; Data; Policies; Poverty; property rights; smallholders; Stress; Sustainable development; sustainable livelihoods; transition economies; Underweight; Water; resilience; natural disasters; disaster relief; environmental disasters; emergencies; environmental shocks; environmental risks; nutritive value; vitamin deficiencies; mineral deficiencies; nutrition security
    Date: 2014
  16. By: Ladoux, Norbert; Scasny, Milan
    Abstract: This paper studies environmental taxation in a Mirrlees setting when energy, a polluting good, is used both as a factor of production and a final consumption good. The model is calibrated for the Czech economy. We study two different tax systems. Both consider a non-linear income tax but the first one considers a linear energy tax, while the second one allows for a non-linear taxation of energy. We show that: (i) households' energy consumption should be subsidized except if the environmental external costs of energy consumption are sufficiently high (ii) The subsidy applied to energy consumption should decrease with income.
    Keywords: energy tax, Pigouvian tax, redistributive concerns
    JEL: H21 H23
    Date: 2014–05
  17. By: Makena Coffman (Department of Urban and Regional Planning Research, UHERO); Paul Bernstein (Operations Research, UHERO); Sherilyn Wee (UHERO, University of Hawai‘i at Manoa)
    Abstract: The State of Hawai‘i and the U.S. are developing greenhouse gas (GHG) emissions reduction regulations in parallel. The State requires that economy-wide GHG emissions be reduced to 1990 levels by the year 2020 and the U.S. Environmental Protection Agency is developing new source performance standards (NSPS) for new electricity generation units. The State Department of Health has proposed rules that would reduce existing large emitting electricity generating units by 16% from 2010 levels. The NSPS proposes GHG concentration limits for new electricity units. We use a comprehensive model of Hawai‘i’s electricity sector to study the potential cost and GHG impacts of State and Federal GHG regulations. Given uncertainty about the final form and implementation of these regulations, we adopt a series of scenarios that bracket the range of possible outcomes. First we consider the State’s GHG cap (for existing units) and NSPS (for new units) being implemented at the facility level. Next, we consider the implications of allowing for partnering to meet the State GHG cap and the NSPS at a system-wide level. We also consider the case where the State GHG cap is extended to apply to both existing and new units. The current proposed State GHG rules exclude biogenic sources of emissions. We address the impacts of this decision through sensitivity analysis and explore the impact of GHG policy on new coal-fired units. We find that regulating GHGs at the facility level leads to greater reductions in GHG emissions but at higher cost. Over the 30-year period that we study, when biogenic sources of emissions are ignored, facility-level implementation of policy will add $3 billion to the cost of electricity generation at an average cost of $180/ton of GHG abatement. If biogenic sources of emissions are included within the accounting framework, abatement costs rise to $340/ton.
    Date: 2014–04
  18. By: Claudio Baccianti; Andreas Löschel
    Abstract: In the last two decades, large scale CGE models used for environmental policy assessment underwent an important upgrade to integrate endogenous technological progress. Nevertheless, several complexities of innovation are still neglected even if they are of primary interest for policymakers. This paper provides a review of the current state of the art in the CGE modelling literature through a special lens. We discuss how existing models deal with different types of innovation (i.e. product and process innovation) and how differences in innovation activities influence modelling results. We also emphasise the implications of product innovation in a multisector framework, which has received little attention in the literature.
    Keywords: CGE models, ecological innovation, economic growth path, green jobs, innovation, innovation policy, social innovation, socio-ecological transition, sustainable growth
    JEL: O41 O40 O47
    Date: 2014–10
  19. By: Pierre-Alexandre Mahieu (LEMNA, Université de Nantes); Henrik Andersson (LERNA, Toulouse of School of Economics); Olivier Beaumais (LISA, University of Corsica Pasquale Paoli, Corte); Romain Crastes (ESITPA, AGRI’TERR, Rouen); François-Charles Wolff (LEMNA, Université de Nantes)
    Abstract: This paper provides a systematic review based on a large sample of articles published between 2004 and 2013 in economic journals and listed in ISI Web of Science. Results from descriptive statistics and regression models show that choice experiment (CE) is becoming more popular than contingent valuation (CV) in terms of number of publications and citations. Also, journals related to health economics and agricultural economics are more CE oriented than journals related to environmental economics. Finally, divergences across economic journals are found when comparing recent CE articles in terms of questionnaire design, econometric procedure, administration of questionnaire and type of participants. In particular, it is more standard to allow for unobserved taste heterogeneity in environmental journals than in health or agricultural journals.
    Keywords: Contingent valuation, Choice Experiment, Systematic Review, Environment, Health.
    JEL: Q18 Q51 I10
    Date: 2014–10
  20. By: Zhen Liu (Department of Food and Resource Economics, University of Copenhagen); Arne Henningsen (Department of Food and Resource Economics, University of Copenhagen)
    Abstract: In the late 1990s, China aimed to mitigate environmental degradation from agricultural production activities by introducing the world’s largest ’Payments for Environmental Services’ (PES) program ― the Sloping Land Conversion Program (SLCP). In order to analyze its effects on agricultural households, we develop a microeconomic Agricultural Household Model (AHM), which can model the production, consumption, and non-farm labor supply decisions of agricultural households in rural China in a theoretically consistent fashion. Based on this theoretical model, we derive an empirical specification that we use to econometrically estimate the effects of the SLCP and other exogenous factors. Using a large longitudinal farm household survey data set, we estimate the empirical model with the Hausman-Taylor estimation method. The empirical results are generally consistent with the results of our theoretical comparative static analysis, e.g. that the SLCP significantly decreases agricultural production. While the SLCP increases non-farm labor supply and total consumption in the Yellow River basin, these effects could not be observed in the Yangtze River basin. The recent reduction of the SLCP compensation payment rates has had some notable, but generally small effects.
    Keywords: Sloping Land Conversion Program; Agricultural household model; Household behavior; Hausman-Taylor Estimator; China
    JEL: H31 Q12 R38
    Date: 2014–10
  21. By: Partha Dasgupta (University of Cambridge and University of Manchester); Dale Southerton (University of Manchester); Alistair Ulph (University of Manchester); David Ulph (University of St Andrews)
    Abstract: In this paper we summarise some of our recent work on consumer behaviour, drawing on recent developments in behavioural economics, in which consumers are embedded in a social context, so their behaviour is shaped by their interactions with other consumers. For the purpose of this paper we also allow consumption to cause environmental damage. Analysing the social context of consumption naturally lends itself to the use of game theoretic tools, and indicates that we seek to develop links between economics and sociology rather than economics and psychology, which has been the more predominant field for work in behavioural economics. We shall be concerned with three sets of issues: conspicuous consumption, consumption norms and altruistic behaviour. Our aim is to show that building links between sociological and economic approaches to the study of consumer behaviour can lead to significant and surprising implications for conventional economic policy prescriptions, especially with respect to environmental policy.
    Keywords: consumer behaviour, social context, environmental policy, game theory, competitive consumption, consumption norms, altruism, moral behaviour, Kantian calculus
    JEL: D1 D6 H2 Q5 Z1
    Date: 2014–01–01
  22. By: Uchida, Shinsuke
    Abstract: A cropland retirement policy contributes to the reduction of environmental externalities from agricultural production such as soil erosion, nutrient runoff and loss of wildlife habitat. On the other hand, participant's potential adverse behavior could undermine the environmental benefits of the policy. Several sources of such an unintended effect, known as “slippage", have been conceptually identified, but their empirical evidence has been scarce. This article tests one source of slippage caused by in-farm land substitution from noncropland to cropland as a result of farmland retirement in the U.S. Conservation Reserve Program (CRP). With the farm-level longitudinal data I can utilize cross-sectional and time variation of detailed individual farm characteristics to identify the causal relationship of CRP participation and subsequent slippage through in-farm land substitution. An identified assumption of the slippage estimate is verified by farm fixed effects, time-varying county fixed effects, and selection-on-observables. These could eliminate effects of unobservables that are potentially correlated with both the program participation and subsequent farmland reallocation decisions. Overall, slippage seems evident and fairly robust among specifications. It is found that an average program participant converts 14% of noncropland to cropping activities after enrollment. Results further show that participants with a larger share of uncropped land contribute more to slippage, indicating that farms with the excess capacity of conversion are more exible in the land allocation decision and thus likely to give rise to slippage. This suggests that additional restrictions on the rest of land use for participants and/or introduction of penalty points reecting the share of noncropland in the current auction mechanism can hinder such a backward incentive offsetting the program benefits.
    Keywords: Agricultural and Food Policy, Land Economics/Use, Q15, Q18, Q24, Q58,
    Date: 2014–07
  23. By: Frédéric Branger (AgroParisTech ENGREF et CIRED); Philippe Quirion (CNRS et CIRED)
    Abstract: We develop a stochastic model to rank different policies (tax, fixed cap and relative cap) according to their expected total social costs. Three types of uncertainties are taken into account: uncertainty about abatement costs, business-as-usual (BAU) emissions and future economic output (the two latter being correlated). Two parameters: the ratio of slopes of marginal benefits and marginal costs, and the above-mentioned correlation, are crucial to determine which instrument is preferred. When marginal benefits are relatively flatter than marginal costs, prices are preferred over fixed caps (Weitzman’s result). When the former correlation is higher than a parameter-dependent threshold, relative caps are preferred to fixed caps. An intermediate condition is found to compare the tax instrument and the relative cap. The model is then empirically tested for seven different regions (China, the United States, Europe, India, Russia, Brazil and Japan). We find that tax is preferred to caps (absolute or relative) in all cases, and that relative caps are preferred to fixed caps in the US and emerging countries (except Brazil where it is ambiguous), whereas fixed cap are preferred to relative cap in Europe and Japan.
    Keywords: Instrument, Price, Quantity, Intensity Target, Regulation, post-Kyoto, Uncertainty, Climate Policy
    JEL: Q58
    Date: 2014–09
  24. By: Kimberly Burnett (UHERO, University of Hawai‘i at Manoa); James Roumasset (University of Hawai‘i at Manoa, UHERO); Christopher Wada (UHERO, University of Hawai‘i at Manoa)
    Abstract: Local and global changes continue to influence interactions between groundwater and terrestrial ecosystems. Changes in precipitation, surface water, and land cover can affect the water balance of a given watershed, and thus affect both the quantity and quality of freshwater entering the ground. Groundwater management frameworks often abstract from such interactions. However, in some cases, management instruments can be designed to target simultaneously both groundwater and an interdependent resource such as the invasive kiawe tree (Prosopis pallida), which has been shown to reduce groundwater levels. Results from a groundwater-kiawe management model suggest that at the optimum, the resource manager should be indifferent between conserving a unit of groundwater via tree removal or via reduced consumption. The model’s application to the Kona Coast (Hawai‘i) showed that kiawe management can generate a large net present value for groundwater users. Additional data will be needed to implement full optimization in the resource system.
    Keywords: groundwater, kiawe, Prosopis pallida, renewable resources, resource management, dynamic optimization
    Date: 2014–05
  25. By: Kurt Kratena; Mark Sommer
    Abstract: This paper describes the introduction of biophysical constraints into a disaggregated dynamic New Keynesian (DYNK) model using the example of different resource use scenarios for Europe, derived from global UNEP scenarios. The DYNK model covers 59 industries and five income groups of households and has similar features to a DSGE model (e.g. QUEST). The model solution converges towards a long-run full employment equilibrium, but exhibits short-run institutional rigidities (imperfect credit and capital markets, wage bargaining). The DYNK model links physical energy and material flow data to production and consumption activities. Different sources of technical change are modelled at the disaggregate level: TFP, factor-bias and material efficiency in production and energy efficiency in private consumption. These components of technical change drive – together with relative prices – economic growth and resource use and therefore decoupling. A scenario of modest resource use reduction (per capita) is implemented by shifting the bias of technological change from labour/capital saving to energy/resource saving. As one example for a scenario of radical reduction of resource use per capita, the radical reduction of energy demand and GHG emissions is analysed. The results show the various interlinkages between different categories of material flows, which lead to co-benefits of policies. Further policy options are discussed (re-use and recycling of material in key industries, structural change in agriculture) and shall be analysed in a follow-up of this paper.
    Keywords: Decoupling of resource use, technological and structural change, policy simulation
    JEL: Q32 Q55 C54
    Date: 2014–09
  26. By: James Roumasset (University of Hawai‘i at Manoa, UHERO); Christopher Wada (UHERO, University of Hawai‘i at Manoa)
    Abstract: In many parts of the world, irrigation and groundwater consumption are largely dependent on groundwater. Minimizing the adverse effects of water scarcity requires optimal as well as sustainable groundwater management. A common recommendation is to limit groundwater extraction to maximum sustainable yield (MSY). Although the optimal welfare-maximizing path of groundwater extraction converges to MSY in some cases, MSY generates waste in the short and medium term due to ambiguity regarding the transition to the desired long-run stock level and failure to account for the full costs of the resource. However, the price that incentivizes optimal consumption often exceeds the physical costs of extracting and distributing groundwater, which poses a problem for public utilities facing zero excess-revenue constraints. We discuss how the optimal price can be implemented in a revenue-neutral fashion using an increasing block pricing structure. The exposition is non-technical. More advanced references on groundwater resource management are also provided.
    Keywords: Watershed management, natural capital, invasive species, groundwater economics
    Date: 2014–05
  27. By: Xiaoying Liu; Mare Sarr; Timothy Swanson (School of Economics, University of Cape Town, South Africa)
    Abstract: We examine the effect of the introduction of uniform water-charging for aquifer management and provide evidence using a survey-based choice experiment of agricultural water users in rural Tunisia. Theoretically, we show that the implementation of the proposed second-best regulation would result both in efficiency gains and in distributional effects in favour of small landholders. Empirically, we find that resistance to the introduction of an effective water-charging regime is greatest amongst the largest landholders. Resistance to the regulation of common resources may be rooted in the manner in which heterogeneity might determine the distributional impact of different management regimes.
    Date: 2014–09–29
  28. By: Helene Ollivier (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: This paper assesses the long term impacts of an international transfer called the Reduced Emissions from Deforestation and Degradation (REDD) mechanism, which aims at preserving tropical forests of the recipient economy. This two-sector economy faces a dilemma between economic growth and deforestation. The rural sector can substitute reproducible capital for agricultural land whereas the manufacturing sector only requires capital. The model shows that the REDD mechanism has a non-monotonic effect on steady state welfares. For low transfer schemes, the agricultural output increases with the transfer even though less land is under cultivation. For high transfer schemes, the increase in the transfer may not offset the decrease in the agricultural output. The open-loop symmetric Nash equilibrium in a dynamic deforestation game predicts that redistributing the transfer among a finite number of producers is less efficient in reducing deforestation than in the social optimum.
    Keywords: Avoided deforestation; Growth; Aid efficiency
    Date: 2012–11
  29. By: Andrea Cori (Department of Economics, University of Roma 3, Italy.); Salvatore Monni (Department of Economics, University of Roma 3, Italy.)
    Abstract: The aim of this work is to evaluate the economic stability of the choices made by the Government of Ecuador regarding the management of natural resources in the context of the Revolucion Ciudadana designed to create a society based on Buen Vivir. The choice of an intensification of the mining sector not only shows a change in the government’s perspective (from Sumak Kawsayto sustainable development), but also requires an analysis that highlights the possible risks outlined in the recent theory defined as the Resource Curse Hypothesis. Indeed, in this work, the structural conditions, which the reference theoretical framework suggests are essential to avoiding the Resource Curse Hypothesis, will be analysed in order to assess the economic effectiveness of the change of perspective implemented in the Revolucion Ciudadana.
    Keywords: Buen Vivir, Ecuador, Human Capital, Natural resources, Sustainability, Resource Curse Hypothesis, Sumak Kawsay
    JEL: O21 O54 P48 Q01 Q30 Q56
    Date: 2014–10
  30. By: Bruno Lanz; Simon Dietz; Tim Swanson
    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.
    Date: 2014–09
  31. By: Georg Licht; Bettina Peters; Christian Köhler; Franz Schwiebacher
    Abstract: European countries are currently faced with a variety of challenges, ranging from the new global distribution of economic activity, the diffusion of new, radical technologies to the aging of its population, youth unemployment and the aftermath of the economic and financial crisis. These challenges put the traditional growth model and the policies to foster it under strong pressure. This report summarizes the contributions of the wwwforEurope projects on the definition resp. redefinition of industrial, regional and innovation policy to characterise and stimulate the economies along a new growth path. It is argued that a new growth path needs a new vision on what Europe understands as competitiveness. The report highlights the history and the way forward of European industrial policy. As regional and innovation policy are fully intertwined with industrial policy for a new growth path, it sheds light on these domains as well. For example, the report investigates the role of clusters for the new growth path and the contribution of green innovation, especially in the energy sector, to employment creation. Finally, the report takes a look at the role of SMEs and universities, new players in the new growth model which are normally not included in discussions of competitiveness.
    Keywords: Environmental innovation, Social Innovation, Socio-Econological Transition, Europe
    JEL: O33 J23 L80 C21 C23
    Date: 2014–09
  32. By: Adriana Valente; Sabina De Rosis
    Abstract: (English) This paper examines the issue of participatory processes in the waste management, particularly its integration into planning and Strategic Environmental Assessment (SEA) processes. The attention is focused on the dialogic aspects of the public participation: after an analysis of the regulatory framework in this scope, some Italian participatory experiences are reviewed applying an ad hoc made interpretative model of the dynamics of participatory processes. The purpose of this model is to highlight the flows of knowledge and influences between public participants in the analyzed experiences and identified possible influence of endogenous and exogenous factors. Their identification would maximize the effectiveness of participatory processes, if this factors are taken into account during the planning and ongoing evaluation of processes. (Italiano) Il presente contributo approfondisce il tema di processi partecipati nell’ambito della gestione dei rifiuti, in particolare della sua integrazione nei processi di pianificazione e Valutazione Ambientale Strategica (VAS). L’attenzione è focalizzata sugli aspetti dialogici della partecipazione: dopo una analisi del quadro normativo in merito, si sono passate in rassegna alcune esperienze italiane processi partecipati, per le quali è stato messo a punto e applicato un modello interpretativo delle dinamiche dei processi partecipati. Lo scopo di questo modello è mettere in luce i flussi di conoscenze e influenze tra pubblici partecipanti nelle esperienze analizzate e individuare, così, eventuali influenze di una serie di fattori endogeni ed esogeni. L’individuazione di questi ultimi permetterebbe, se tenuti in considerazione in fase di pianificazione e valutazione in itinere, di massimizzare l’efficacia dei processi partecipativi stessi.
    Keywords: (English) Dialogic processes; model; participation; planning; stakeholder; Strategic Environmental Assessment; SEA; waste; waste governance (Italiano) Gestione rifiuti; modello; pianificazione; partecipazione; processi dialogici; rifiuti; stakeholder; valutazione ambientale strategica; VAS
    Date: 2014
  33. By: Robert Marschinski (MCC, PIK, TU-Berlin); Philippe Quirion (CNRS et CIRED)
    Abstract: We study the performance under uncertainty of three renewable energy policy instruments: Tradable Renewable Quota (TRQ), Feed-In-Tariff (FIT), and Feed-In-Premium (FIP). We develop a stylized model of the electricity market, where renewables are characterized by a positive learning externality, which the regulator aims to internalize. Assuming shocks on the fossil-based electricity supply, renewables supply, or on total electricity demand, we analytically derive the conditions determining the instruments’ relative welfare ranking. Although we generally confirm the key role of the slopes of marginal benefits and costs associated with the policy, the specific ranking depends on which type of uncertainty is considered, and whether shocks are permanent or transitory. However, a high learning rate generally favours the FIT, while TRQ is mostly dominated by the other two instruments. These results are confirmed in a numerical application to the US electricity market, in which the FIP emerges as the most robust overall choice and TRQ as the least robust.
    Keywords: Feed-in premium, Feed-in tariff, Renewable energy policy, Renewable portfolio standard, Tradable renewable quota.
    JEL: Q42 Q54 Q55
    Date: 2014–10
  34. By: Foreman, Linda
    Abstract: Data from the 2010 Agricultural Resource Management Survey (ARMS) and ERS cost of production accounts present a snapshot of the production costs, production practices, and characteristics related to U.S. corn production in 2010. This study found considerable variation in the operating and ownership costs for corn, ranging from an average of $1.74 per bushel for low-cost producers to $3.88 per bushel for high-cost producers. In 2010, high corn prices meant that most producers covered their corn production costs from harvest-month prices. The Heartland continues to be the major corn production region with the lowest operating and ownership costs per bushel, mainly because of the region’s high corn yields. The operating and ownership costs per bushel did not vary significantly by enterprise size where size is measured by the number of planted corn acres per farm. However, these costs per planted acre were lowest for farms with the smallest corn enterprises and highest for farms with the largest corn enterprises. Production value less operating and ownership costs per acre from organic corn production was higher than that from conventional corn production because higher prices more than offset lower yields for organic corn.
    Keywords: corn, operator characteristics, production costs, production practices, cost variation, organic corn, Agricultural Resource Management Survey (ARMS), Crop Production/Industries, Farm Management, Production Economics,
    Date: 2014–09
  35. By: Philippe Holstein (OFCE)
    Abstract: Petits, isolés, vulnérables, les territoires insulaires apparaissent comme les symboles des interrogations sur la soutenabilité des systèmes économiques. Cette coïncidence n’a rien de fortuite. Les expériences insulaires et coloniales occupent une place centrale dans la formation de l’économie politique, qui s’intéresse initialement tant à l’accroissement des richesses qu’à la pérennité de cette dynamique, notamment en raison des contraintes écologiques. Réciproquement, l’économie politique nourrit la formation d’un nouvel art de gouverner qui influence en profondeur les trajectoires insulaires et produit des rapports de pouvoir, qui persistent encore. Notamment à travers la notion de développement (durable) qui naturalise une lecture utilitariste de la soutenabilité En rapprochant le paradigme de la complexité, l’économie écologique et les approches poststructuralistes, cette thèse propose d’explorer la construction de ce concept puis de le repenser dans un cadre institutionnaliste qui intègre pleinement les facteurs écologiques, symboliques et sociaux et la pluralité des formes d’organisation des économies. Elle étudie ensuite la construction et les ressorts de l’économie de plantation, à La Réunion et dans les Caraïbes, en interrogeant le paradoxe de l’ « insoutenabilité durable » : comment une économie fondée sur la destruction et incapable de satisfaire les finalités assignées en raison de ses contradictions, peut-elle se maintenir dans la longue durée ? Une troisième partie questionne la soutenabilité du projet départemental : décréter le développement, métamorphoser une colonie ruinée en une économie moderne, équilibrée, tirée par une croissance auto-entretenue.
    Keywords: Iles – Aspect économique, Reunion – Conditions économiques, Ecologie – Aspect économique, Complexité; Islands – Economic conditions, Reunion island – Economic Conditions, Ecology – Economic Aspects Complexity
    Date: 2014–06
  36. By: Alejandreo Guevara (Department of Economics, Universidad Iberoamericana, Mexico City. Mexico); Alberto Lara
    Abstract: Water scarcity and pollution affect large sectors of the population, but they occur excessively on the poor. The relationship between water availability and poverty is of great importance for the public health and social equity. This essay studies the relationship between lack of access to water, the time dedicated to work and income levels. With infor-mation taken from the National Survey on Time-Use 2002 (INEGI) it is estimated the gap in income and hours worked among people who allocated time fetching water and those that did not perform this activity by a propensity score matching method, which considers personal characteristics and municipality level characteristics. In both cases, there is a sta-tistically significant difference. Caeteris paribus, in the first case, the household income-gap is of 18%. In the second, the time allocated to work of a person who carries water decreas-es about 13%. These results suggest that the lack of access to water is a condition that has a significant impact in making a person more susceptible to fall into a condition of poverty. Thus, a public policy aiming at increasing water supply coverage will directly increase ben-eficiaries’ wellbeing while alleviating their poverty levels by increasing time devoted to productive activities. Water provision then, yields a double dividend.
    Date: 2014
  37. By: M.K. Ndegue Fongue; Lota D. Tamini; B. Larue; G.E. West
    Abstract: Malgré l’imposition de normes environnementales strictes au Québec, l’impact des activités agricoles sur la qualité de l’eau demeure préoccupant notamment dans la région de Chaudière-Appalaches. Cette région est intensive en productions animale et végétale ce qui entraîne des surplus de phosphore, d’azote et de sédiments. Cette étude a pour objectif que d’analyser l’efficience technique et l'efficience environnementale des producteurs agricoles du bassin de la rivière Chaudière localisé au Sud de la ville de Québec. Nous adoptons une approche stochastique paramétrique appliquée aux fonctions de distance. Les données utilisées portent sur 210 fermes agricoles et les résultats obtenus montrent qu’il existe une forte corrélation entre les deux efficiences. De plus, comme le montrent d’autres études, la performance environnementale entraîne des coûts additionnels au niveau des exploitations agricoles.
    Keywords: Fonction de distance, frontières stochastiques, efficience technique, efficience environnementale
    JEL: C23 D24 L94
    Date: 2014
  38. By: Richard Chisik (Department of Economics, Ryerson University, Toronto, Canada); Bill Battaile (The World Bank); Harun Onder (The World Bank)
    Abstract: We show that the Dutch disease can arise solely because of the distribution of the natural resource rents. In particular, a less equal distribution of the natural resource rents can generate manufacturing sector stagnation and lower long-run growth even for a country with a smaller resource base and (initially) higher manufacturing productivity. In our framework the Dutch disease arises through a shift in demand. The new found wealth from the resource find increases demand for non-tradable luxury consumption services. Labor that could be used to develop the manufacturing sector is pulled into the service sector. Manufactured goods are more likely to be imported and the learning and production process improvements accrue to the foreign exporters. As opposed to conventional models where income distribution has no effect on economic outcomes, an unequal distribution of the resource wealth can generate or further intensify the Dutch disease dynamics within this framework.
    Date: 2014–10

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