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on Environmental Economics |
| By: | Georg Zachmann |
| Abstract: | The issue Combating climate change on the global level will be much easier when abundant low-carbon technologies that are competitive in their cost and capabilities are available. But private companies underinvest in low-carbon innovation because they cannot capture the climate benefits. There are three policies to address this issue - pricing carbon, supporting deployment of as-yet uncompetitive technologies and supporting research and development. Policy challenge Funding all possible low-carbon technologies with all types of support instruments is not a sensible or viable option. Finite budgets need to be allocated to different technologies, but not all innovation policies are equally efficient. However, the combination of the three support policies and their coordination at European level can improve results and reduce costs. To make low-carbon technology support smarter the European Union should (1) improve carbon pricing, especially provide more long-term visibility for the carbon price; (2) enhance European cooperation, both in terms of deployment and R&D support; (3) balance support for deployment and RD&D; and (4) develop a more methodological approach to technology selection. Source - Bruegel. This Policy Brief summarises previous papers that have benefited from funding under the Simpatic project (http -//www.simpatic.eu). Research assistance by Burak Turkoglu and Augustin Lagarde is acknowledged. References can be found in the PDF version of the Policy Brief which is available for download at the bottom of this page. While the specific effects of increasing concentrations of greenhouse-gases in the atmosphere on the climate system cannot be accurately predicted, there is a non-trivial risk that beyond some ex-ante unknown tipping points – in terms of greenhouse- gas concentration and/or global temperature – irreversible and highly expensive events might unfold. This calls for quick action to reduce the probability that such tipping points will be passed. Annual greenhouse gas emissions will have to be reduced dramatically before 2050. In order to stabilise carbon dioxide concentrations in the atmosphere at about 450 parts per million (ppm)1 by 2050, global emissions would have to decline by about 40-70 percent by 2050. Such aggressive global decarbonisation requires an international agreement. Otherwise, fossil fuels not used in some countries will be used in others2. But an agreement is only feasible and stable if the benefit for each country exceeds the cost, which depends on the cost of low-carbon technologies. Consequently, reducing the cost of these technologies in Europe would not only allow cheaper domestic decarbonisation and for a competitive edge to be gained in selling these technologies overseas, but most importantly it would be a major contribution to an international agreement. In this Policy Brief, we describe the interaction between three approaches that are effective in driving innovation in low-carbon technologies. Based on that, we provide four recommendations for making low-carbon technology support smarter - (1) improve carbon pricing; (2) improve European cooperation; (3) combine deployment and research, development and demonstration (RD&D) support; and (4) take a more methodological approach to technology selection. Key strategies to drive low-carbon innovation This is also true for low-carbon innovation, but supporting lowcarbon innovation involves the particular challenge of targeting innovation that brings down the decarbonisation cost. For this, there are three main policies - (i) a price on carbon, (ii) directly support public and private RD&D investment in the targeted lowcarbon technologies, and (iii) create demand for technologies to foster private innovation.Numerous policy instruments support innovation, ranging from patent protection to public research funding and public procurement, to subsidies for private investment in innovation3, but there is no consensus on a single best practise4. There are, however, conventional ‘dos and don’ts’. For example, do regularly conduct independent evaluations of innovation policies, do avoid excessive risk aversion in project selection and do determine clear triggers for cutting support5. Pricing carbon If companies know that they or their (potential) customers will be faced with high carbon prices in the future, they will have every incentive to invest in development of low-carbon alternatives. Calel and Dechezleprêtre (2012) provide evidence that carbon pricing in the EU has increased low-carbon patenting both by companies directly covered by the EU emissions trading system (ETS) and by companies that do not fall under the ETS6 (Figure 1). Creating the expectation of a high future carbon price has one big advantage over all other innovation policies (such as predictably tightening fuel standards) – it is completely technology neutral. At the same time, carbon pricing incentivises investment in lowcarbon power technologies (eg solar photovoltaic), energy-efficient appliances, carbon capture and storage or more resource-efficient processes (eg recycling of aluminium). |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polbrf:9016&r=env |
| By: | Nelly Exbrayat (Jean Monnet University, IAE, Saint-Etienne); Stéphane Riou (Jean Monnet University, IAE, Saint-Etienne); Skerdilajda Zanaj (CREA, Université de Luxembourg) |
| Abstract: | In this paper, we investigate the e¤ects of a global carbon tax and its ability to curb carbon emissions in a two-country setup characterized by an uneven spatial distribution of mobile heterogeneous firms. Trade takes place between the two asymmetric countries and carbon dioxide (CO2) emissions are a by-product of the production activity of manufac- turing firms. We advance the hypothesis that although a global carbon tax is an attractive environmental measure, it may be subject to debate because, among other effects, it can have a significant impact on the location of heterogeneous firms as well as on foreign trade patterns worldwide. |
| Keywords: | Global carbon tax: spatial selection, heterogeneous firms |
| JEL: | F12 F15 H87 Q28 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:15-17&r=env |
| By: | Delzeit, Ruth; Sipangule, Kacana; Thiele, Rainer |
| Abstract: | The year 2015 is important for sustainable development: the Millennium Development Goals (MDGs) have expired and have been replaced by the Sustainable Development Goals (SDGs) in September, and from November 30th to December 11th, the 21st Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21/CMP11) will be held. The COP21/CMP11 aims to reach a universal, legally binding agreement to combat climate change and boost the transition towards resilient, low-carbon societies and economies. Reducing greenhouse gas emissions to limit global warming (mitigation) and helping societies adapt to existing climate change are seen as measures the agreement should equally focus on. The group that is likely to suffer most from climate change is poor rural households in developing countries who mainly rely on small-scale agriculture for their livelihood. In large parts of Sub-Saharan Africa and South Asia, the two regions with the highest incidence of undernutrition, the MDG of cutting hunger by half has not been met (United Nations 2014). Reaching the still more ambitious SDG 2 (end hunger until 2030, achieve food security and improved nutrition, and promote sustainable agriculture) appears to be a daunting task even in the absence of climate change. By lowering agricultural yields in some regions, climate change adds to the challenge. This policy brief therefore argues for a particular focus on agricultural production and food security in the current COP21 to help the largest possible number of people satisfy the most basic need of being well nourished. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:pegnpb:22015&r=env |
| By: | Guntram B. Wolff; Georg Zachmann |
| Abstract: | An extended version of this paper was presented at the ECOFIN meeting in Luxembourg on 11 September 2015. Click here to download it. The issue Combating climate change is perhaps the most formidable public policy challenge of our times. Unmitigated climate change will be irreversible. It will place significant costs on future generations, and expose them to unexplored risks. To mitigate climate change, global coordination is indispensable. European Union citizens consider climate change a central problem. The EU and its member states have therefore put in place signficant and costly climate mitigation policies. Policy challenge Without an ambitious deal at the United Nations climate summit in Paris in late 2015, much of EU climate policy will be futile. Climate finance is the most important tool the EU has to make a deal likely. A strong and unified EU position backed by common resources would increase the EU’s ability to shape the emerging international climate institutions and their governance, to ensure that climate finance is used to reduce mitigation costs and to ensure that European industry benefits from the opportunities related to climate finance. A redirection of domestic mitigation costs to climate finance and the crowding-in of private money would reduce the burden on taxpayers. Dedicated resources, collected through a revamped emissions trading system and a carbon tax on transport and heating fuels, would increase the predictability and credibility of EU climate finance. Source - Bruegel based on OECD (2015) and Standing Committee on Finance (2014). Addressing climate change – a global challenge Climate change is already affecting our environment - Global average temperatures have risen by almost 1°C above pre-industrial levels. Sea levels have risen by 19cm since the beginning of the last century. The frequency of extreme weather events has increased. Water cycles and certain ecosystems are affected1. Climate simulations show that temperature increases will be different in different parts of the world2. In some vulnerable regions, more extreme temperatures and desertification could trigger migration3. The EU might also be directly affected by substantial increases in droughts and extreme heat phenomena in southern Europe by the end of the century4. The scientific consensus is that this temperature increase is very likely the result of man-made emissions of greenhouse gases (GHG)5. The concentration of CO2 in the atmosphere has increased by about 2 parts per million (ppm) per year since 20026, passing 400 ppm in 20157. Baseline projections suggest that without mitigation, the average global temperature could increase by more than 4°C by the end of the century8. Addressing climate change is arguably imperative for the following main reasons - Ethical - Climate change will hit the poorest parts of the world’s population hardest9. It will also affect future generations much more than current generations. Ethical considerations call for the preservation of the common good of an intact environment10. Risk management - climate change affects a complex system that we do not fully understand. Research has indicated the possibility of potential vicious cycles (such as release of greenhouse gases from melting permafrost) and threshold events (such as a shift in the Gulf Stream). Global warming remains a large-scale experiment on our planet with uncertain outcomes. Irreversibility - climate change is a slow-moving but long-lasting phenomenon that humans cannot easily stop when its effects turn out to be severe. Even after a complete stop of man-made greenhouse-gas emissions, the stock of greenhouse gases in the atmosphere will continue to cause global temperature increases for centuries. Expected economic cost - There is a consensus that above a certain temperature level, climate change will have significant economic costs – but there is no consensus on how big this cost will be11. Addressing climate change involves both adaptation and mitigation. Adaptation policies to cope with the consequences of global warming are primarily carried out by local or national authorities and do not require global cooperation. Mitigation is all policy action aimed at limiting global warming. Mitigation is a truly global challenge because action by countries acting alone would be largely ineffective. Reduced fossil fuel consumption in a few participating countries would lead to lower fossil fuel prices. Countries that opt out would hence increase their production/exports (of energy-intensive products) based on highly competitive fossil fuels, largely off-setting the greenhouse-gas reductions in participating countries. The optimal balance between mitigation, adaptation and endurance is uncertain. In an optimal scenario, the overall costs related to climate change will be spread relatively evenly across all three12. To achieve the politically-set goal of limiting global warming to less than 2°C above pre-industrial level, global emissions must be cut drastically. |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polbrf:9518&r=env |
| By: | Ramón E. López; Vinod Thomas; Pablo Troncoso |
| Abstract: | Intense climate-related disasters—floods, storms, droughts, and heat waves—have been on the rise worldwide. At the same time and coupled with an increasing concentration of greenhouse gases in the atmosphere, temperatures, on average, have been rising, and are becoming more variable and more extreme. Rainfall has also been more variable and more extreme. Is there an ominous link between the global increase of these hydrometeorological and climatological events on the one side and anthropogenic climate change on the other? This paper considers three main disaster risk factors—rising population exposure, greater population vulnerability, and increasing climate-related hazards—behind the increased frequency of intense climate-related natural disasters. In a regression analysis within a model of disaster risk determination for 1971–2013, population exposure measured by population density and people’s vulnerability measured by socioeconomic variables are positively linked to the frequency of these intense disasters. Importantly, the results show that precipitation deviations are positively related to hydrometeorological events, while temperature and precipitation deviations have a negative association with climatological events. Moreover, global climate change indicators show positive and highly significant effects. Along with the scientific association between greenhouse gases and the changes in the climate, the findings in this paper suggest a connection between the increasing number of natural disasters and man-made emissions of greenhouse gases in the atmosphere. The implication is that climate mitigation and climate adaptation should form part of actions for disaster risk reduction. |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:udc:wpaper:wp414&r=env |
| By: | Ke Wang; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology); Zhimin Huang |
| Abstract: | China has recently launched its pilot carbon emissions trading markets. Theoretically, heterogeneity in abatement cost determines the efficiency advantage of market based programs over command and control policies on carbon emissions. This study tries to answer the question that what will be the abatement cost savings or GDP loss recoveries from carbon emissions trading in China from the perspective of estimating the potential gains from carbon emissions trading. A DEA based optimization model is employed in this study to estimate the potential gains from implementing two carbon emissions trading schemes compared to carbon emissions command and control scheme in China. These two schemes are spatial tradable carbon emissions permit scheme and spatial-temporal tradable carbon emissions permit scheme. The associated three types of potential gains, which are defined as the potential increases on GDP outputs through eliminating technical inefficiency, eliminating suboptimal spatial allocation of carbon emissions permit, and eliminating both suboptimal spatial and temporal allocation of carbon emissions permit, are estimated by an ex post analysis for China and its 30 provinces over 2006-2010. Substantial abatement cost savings and considerable carbon emissions reduction potentials are identified in this study which provide one argument for implementing a market based policy instrument instead of a command and control policy instrument on carbon emissions control in China. |
| Keywords: | Carbon emissions, DEA, Emissions trading, Potential gains, Tradable permit |
| JEL: | Q58 Q40 |
| Date: | 2015–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:84&r=env |
| By: | Jana Stoever (Hamburg Institute of International Economics and Hamburg University); John P. Weche (Monopolies Commission and Leuphana University Luneburg, Germany) |
| Abstract: | We investigate the impact of environmental regulation on firm performance and investment behavior. Exploiting the case of a German water withdrawal regulation that is managed on the state level, we analyze firms’ reactions to an increase in the water tax using a regression-adjusted difference-in-differences approach. We analyze the individual firm’s response to a change in environmental regulation, distinguishing between add-on and integrated environmental investments. This allows us to include intra-firm innovations into our analysis, which are likely to be of importance for increasing resource-efficiency. Our results show that the regulation in question shows no sign of affecting firms’ overall competitiveness. The results imply that the predicted negative impact of the regulation on firms’ economic performance that was brought up before the introduction of the tax, does not seem to weigh heavily in this case. Nevertheless, when placed into a sustainable competitiveness context, the regulation considered does not qualify as an appropriate policy tool for fostering green growth. |
| Keywords: | Environmental regulation, DID, green growth, green investment, Porter hypothesis, sustainable competitiveness, water withdrawal regulation |
| JEL: | L60 O31 O32 Q58 Q55 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:351&r=env |
| By: | Garg, Amit; Mishra, Vimal; Dholakia, Hem H. |
| Abstract: | Climate change is projected to have severe adverse impacts on India’s population, natural eco-systems, and socio-economic parameters. India’s vulnerability to climate change impacts is profound since around 650 million Indians are dependent on rain-fed agriculture for their livelihoods; around 250 million Indians live along a 7500 km of coastline that is at high risk due to sea level rise and extreme weather events; many of the 10,000-odd Indian glaciers are receding at a rapid rate; and deforestation is happening. India is concerned about climate change impacts. India occupies 2.4% of the global land area, supports 17% of the global population and contributes less than 4% of global greenhouse gas emissions. Sustainable development is at the core of Indian planning process and India has been making huge efforts for enhancing the quality of life of her people including sustained poverty alleviation efforts. The number of people below poverty line has declined from 469 million to about 388 million during 2005 to 2010. Even then roughly threefourths of Indian population lives below a daily income of US$ 2 (PPP). This also highlights the extent of number of people who are vulnerable to adverse impacts of a changing climate. India has submitted the Intended Nationally Determined Contributions to UNFCCC on October 1, 2015 highlighting a strong GHG mitigation plan until 2030 and also providing a glimpse into national vulnerability to adverse impacts of climate change across regions and sectors. According to IPCC AR5, adaptation and mitigation are complementary strategies for reducing and managing the risks of climate change. The below 2oC target also unequivocally includes reducing the combined and cumulative risks of mitigation and adaptation actions. The Lima COP-20 (2014) agreed on elevating adaptation onto the same level as the curbing and cutting of greenhouse gas emissions. This report analyzes the climate change that is already occurring in India, projected future climate change, the proactive measures Government of India is taking to adapt to the adverse impacts of climate change, and the Adaptation Gap that is ever increasing. India has experienced substantial changes in mean and extreme climate during the period of 1951-2013. For instance, mean annual air temperature has increased in many regions of the country. Other than the mean annual air temperature, prominent increase was observed in the number of hot days, night-time temperature, and growing degree days during the period of 1951-2013. Figure 1 indicates the regions that are experiencing temperatures equivalent to various RCPs currently. Based on our analysis, around 36 districts (5.5% of land area or ~36 million people) are observing temperatures equivalent to Representative Concentration Pathway 8.5(warming of 4°C+)., 65 districts (11% of land area or ~65 million people) RCP6 (warming of 3°C-4°C), 346 districts (59% of land area or ~704 million people) RCP4.5(warming of 2°C -3°C) and the remaining 190 (24.5% of land area or ~405 million people) districts RCP2.6 (warming of 2°C). The RCP are internationally accepted scenarios to project climate change. Similary for precipation, these numbers are 63% area for RCP 8.5, 2.6% area for RCP 6, 24% area for RCP 4.5 and 11% area for RCP 2.6. 35 districts are facing the highest risk facing due to enhanced temperature now (following profiles similar to RCP 8.5). These are Aizawl, Baran, Bhilwara, Bundi, Cachar, Champhai, Chandel, Chittaurgarh, Churachandpur, Darrang, Dhalai, East Garo Hills, East Kameng, Guna, Hailakandi, Jaipur, Jhalawar, Karimganj, Kolasib, Kota, Lalitpur, xii CLIMATE CHANGE AND INDIA: ADAPTATION GAP (2015) Lawngtlai, Lunglei, Mamit, North Tripura, Papum Pare, Sagar, Saiha, Sawai Madhopur, Serchhip, Sheopur, Shivpuri, Sivasagar, South Tripura and West Tripura. There are 408 districts for similar profile for precipitation and this are spread across various states of India. 22 districts which are following RCP 8.5 profile for both temperature and precipitation together are Aizawl, Baran, Bhilwara, Bundi, Cachar, Champhai, Chandel, Chittaurgarh, Churachandpur, Dhalai, East Garo Hills, Hailakandi, Jhalawar, Karimganj, Kolasib, Kota, Lunglei, Mamit, North Tripura, Serchhip, South Tripura and West Tripura |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:13764&r=env |
| By: | Dirk Schoenmaker; Georg Zachmann |
| Abstract: | The issue Global warming leads to more and more-intense disasters, such as storms, flooding and droughts. The low and middle-income countries around the equator are especially vulnerable to these extreme weather events which could damage a large part of their production capacity. The temporary loss of tax revenues and increase in expenditures to reconstruct factories and infra-structure might put vulnerable countries into a downward fiscal and macro- economic spiral. While protecting each country against the most-extreme possible events is neither possible nor cost-efficient, a global climate risk pool could help the most-affected countries recover from the initial macroeconomic shock. Policy challenge The optimal response to climate change is a mix of deep greenhouse-gas emissions cuts, investment to reduce the adverse impacts of climate change and endurance of some climate-related events against which protection would be too expensive. Extreme climate events related to global warming will happen somewhat randomly and could have a huge cost for the most vulnerable countries. A global climate risk pool, with contributions from all countries, could help these vulnerable countries to recover from such events and might thus smooth the way towards a broader climate deal. As extreme events, such as storm surges, will increase because of climate change, the pool can only insure events that significantly exceed the trend line. The idea of a climate risk pool Global warming increases the chance of extreme weather risks, which should be insured against as an element in global solidarity and to ensure that vulnerable countries’ fiscal capacities and incoming investment can be maintained as far as possible. Pooling risk can thus avoid vicious cycles initiated by rare local events. Climate-related risks include the occurrence of very different natural disasters, such as floods, droughts, hurricanes or heat-waves. All of these need to be insured against – primarily by private sector insurance. Some of the support from developed countries for adaptation in developing countries would be well spent on improving the access of the poorest to private insurance, for example through capacity building in the underdeveloped financial sectors of developing countries. But local and regional climate events will not only affect companies and individuals that might buy some form of insurance in order to protect their assets. Such events might in extremis wipe out significant parts of the infrastructure and productive capacity and hence fiscal capacity of a developing country, because they will result in lower tax revenues and high rebuilding costs. Developing countries cannot insure against such events on a market basis, nor would it be sensible to divert scarce fiscal resources away from infrastructure investment (including adaptation) into accumulating a financial buffer for such situations. International risk pooling is the only sensible strategy. Otherwise investors might shy away from all potentially affected countries, because of unpredictability in how they will respond to climate-related crises – for example, fiscal squeezes caused by extreme-weather disasters could lead to tax hikes or one-off levies, or even to government defaults. The scope of our proposed global climate risk pool is to protect vulnerable countries against such ‘fiscal shocks’ following extreme weather events. This global pool can build on experiences with regional insurance pools for natural disasters such as the African Risk Capacity and the Caribbean Catastrophe Risk Insurance Facility. Identifying extreme events in times of climate change Climate related disaster-insurance is an instrument for risk reduction that can protect developing and least developed economies - it operates through the provision of security against losses and damage caused by climate change. The principle of insurance is generally based on diversification of loss risk among people and across time. However, in the case of climate-related disasters, insurance cannot be reliably based on historic data because the frequency and magnitude of some types of events are expected to increase in some regions. Climate change is a structural shift and its main effects (sea level rise, changing regional climate) will not happen gradually, but through repeated shocks. So any insurance approach will have to reliably tell apart, which effects are ‘extreme events’ that can be insured against and which effects are ‘below the trend’– eg what is a flood and what is a sea-level rise. An upward trend in storm surges, as illustrated in Figure 1, might lead to a greater frequency of events that would be considered ‘extreme’ today. But in fifty years, these occurrences might be considered ‘normal’ if they are not above the trend line. However, establishing the new trend is still fraught with uncertainty. For sea-level rise, for example, bottom-up modelling preferred by the Intergovernmental Panel on Climate Change projects up to a 1 metre global sea level rise, while extrapolation of historic trends projects up to 2 metres (Jones, 2013). |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polbrf:11275&r=env |
| By: | Percy E. SAJISE (Bioversity International Southeast Asia Regional Center for Graduate Study and Research in Agriculture (SEARCA)) |
| Abstract: | The importance of biodiversity conservation and its sustainable use for the realisation of the ASEAN vision of promoting sustainable development and a green economy is well recognised. However, the current state of biodiversity in general, and agro-biodiversity in particular, in the region is a matter of serious concern. There has been significant progress in the expansion of Protected Areas in the region, as well as the setting up of both in situ and ex situ biodiversity conservation programmes. Nonetheless, urgent steps still need to be taken at the community, national and regional levels to ensure biodiversity conservation and its sustainable use. This paper provides an analysis of the opportunities and constraints of biodiversity conservation in natural and agricultural ecosystems. This analysis has been used to identify important strategies and initiatives to promote community empowerment, as well as national strengthening and regional collaboration to enhance biodiversity conservation and its sustainable use for the realisation of the ASEAN vision. |
| Keywords: | biodiversity, agro-biodiversity, resilience, sustainability, International Treaty on Plant Genetic Resources for Food and Agriculture, Convention on Biological Diversity |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-81&r=env |
| By: | Giglio, Stefano W; Maggiori, Matteo; Ströbel, Johannes; Weber, Andreas |
| Abstract: | The optimal investment to mitigate climate change crucially depends on the discount rate used to evaluate the investment’s uncertain future benefits. The appropriate discount rate is a function of the horizon over which these benefits accrue and the riskiness of the investment. In this paper, we estimate the term structure of discount rates for an important risky asset class, real estate, up to the very long horizons relevant for investments in climate change abatement. We show that this term structure is steeply downward-sloping, reaching 2.6% at horizons beyond 100 years. We explore the implications of these new data within both a general asset pricing framework that decomposes risks and returns by horizon and a structural model calibrated to match a variety of asset classes. Our analysis demonstrates that applying average rates of return that are observed for traded assets to investments in climate change abatement is misleading. We also show that the discount rates for investments in climate change abatement that reduce aggregate risk, as in disaster-risk models, are bounded above by our estimated term structure for risky housing, and should be below 2.6% for long-run benefits. This upper bound rules out many discount rates suggested in the literature and used by policymakers. Our framework also distinguishes between the various mechanisms the environmental literature has proposed for generating downward-sloping discount rates. |
| Keywords: | asset pricing; climate change; cost-benefit analysis; declining discount rates; environmental economics; real estate |
| JEL: | G11 G12 R30 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10958&r=env |
| By: | ZhongXiang Zhang (College of Management and Economics, Tianjin University) |
| Abstract: | China has realized that for its own sake and from the international community’s perspective, it cannot afford to continue along the conventional path of encouraging economic growth at the expense of the environment. Accordingly, the country has placed ecological goals at the same level of priority as policies on economic, political, cultural and social development. Specifically, to meet the grand goal involves not only capping China’s nationwide coal consumption to let it peak before 2020 and carbon emissions peak around 2030, but also putting in place a variety of flagship programs and initiatives, prices and policies. This paper argues that the 2030 carbon emissions peak goal is ambitious but achievable and concludes by arguing why China’s anti-pollution outcomes this time might be different from the previous ones. |
| Keywords: | low-carbon economy; carbon emissions peaks; coal consumption; carbon pricing; energy prices; resource tax reform; renewable energy; China |
| JEL: | H23 P28 Q42 Q43 Q48 Q53 Q54 Q58 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1511&r=env |
| By: | Philipp M. Richter; Hanna Brauers |
| Abstract: | Shortly before the upcoming UN climate summit, Angela Merkel wrote in a German newspaper: “With good reason, it is expected from governments and politicians, that they do not longer close their eyes to the pressing scientific results that climate protection requires rapid and vigorous action.” She further calls for a clear negotiation outcome: “The greenhouse gas emissions do not only have to be stabilized, but have to be reduced as quickly as possible.” These words could well have been written today, however, they were actually published on March 26, 1995; at a time, when Mrs. Merkel still was Germany’s Federal Minister of the Environment and designated president of the first climate summit. After 20 years of UN climate talks, the world’s attention is now firmly on the 21st COP (Conference of the Parties) in Paris that will be held from November 30 until December 11, 2015. These climate negotiations are generally perceived as the last chance to reach a global agreement that can prevent severe climate change. In this DIW Roundup we take a closer look at the upcoming COP21, discuss the negotiation status and highlight the pivotal elements currently discussed. Furthermore, we touch upon the economic theory on International Environmental Agreements and present milestones of past climate summits. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwrup:86en&r=env |
| By: | Miguel Cárdenas Rodríguez; Laura Dupont-Courtade; Walid Oueslati |
| Abstract: | This paper investigates the relationship between local air pollution and urban structure with an emphasis on urban fragmentation. Using a unique dataset of 249 Large Urban Zones (LUZ) across Europe, a Bayesian Model Averaging selection method is employed to empirically identify the determinants of within-LUZ concentration of three air pollutants: NO2, PM10 and SO2 for the year 2006. Several indices of land use are considered among possible determinants. These are supplemented by a dataset on various economic, demographic and meteorological variables that can explain the variation of air pollution. The results of this econometric analysis support the hypothesis that urban structure has significant effects on pollution concentration. In particular, they suggest that fragmented urban areas experience higher concentrations of NO2 and PM10 and that densely populated urban areas suffer from higher SO2 concentration. The findings suggest that policies favouring continuous urban areas may result in environmental improvements.<BR>Ce rapport s’intéresse à la relation entre la pollution atmosphérique locale et la structure des villes en s’attachant plus particulièrement à la fragmentation urbaine. On applique une méthode d'analyse bayésienne des modèles pour identifier, à partir d’un ensemble de données unique couvrant 249 zones urbaines élargies (LUZ) d’Europe, les facteurs qui déterminent les concentrations de trois polluants atmosphériques (NO2, PM10 et SO2) dans ces zones, pour l’année 2006. Plusieurs indices d’occupation des sols figurent parmi les possibles déterminants. Ils sont complétés par un ensemble de données sur différentes variables économiques, démographiques et météorologiques qui pourraient expliquer les variations de la pollution atmosphérique. Les résultats de cette analyse économétrique confirment l’hypothèse selon laquelle la structure du tissu urbain a des effets importants sur les concentrations de polluants. En particulier, les résultats indiquent des concentrations plus élevées de NO2 et de PM10 dans les espaces urbains fragmentés et des concentrations plus élevées de SO2 dans les zones urbaines densément peuplées. Ces résultats donnent à penser que la mise en oeuvre de politiques favorisant la continuité de l’espace urbain pourrait être bénéfique pour l’environnement. |
| Keywords: | air pollution, Bayesian model averaging, fragmentation, urban sprawl, étalement urbain, pollution atmosphérique |
| JEL: | Q52 Q58 R52 |
| Date: | 2015–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:96-en&r=env |
| By: | Odozi, John C. |
| Abstract: | The negative effect of Climate Change (CC) on agriculture across Africa has been well established and hence the global policy interest. In Nigeria, crop farming is climate dependent and farmholders often employ measures that are sub-optimal against adverse conditions of climate. This raises the vulnerability of farming to CC uncertainty. For a long time, knowledge of CC perception by farmholders dominated the existing literature. The study employed econometric techniques to generate information on the net economic damages and benefits of climate change. Climate change impact was found to be huge for the whole country with impact variation across agricultural zones. It concludes that the ability of smallholder farms to sustain continual output of crops for local and regional markets depend critically on effective adaptation measures that seek to maintain optimal conditions of climate for agricultural production and government effective response. |
| Keywords: | Climate change; Ricardian valuation; sustainable adaptation practices; agricultural resources; farm productivity and governance |
| JEL: | Q15 Q51 Q54 Q57 |
| Date: | 2015–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68188&r=env |
| By: | Anne Stenger (Laboratoire d'Economie Forestière, INRA - AgroParisTech; BETA, Bureau d’Economie Théorique et Appliquée, UMR 7522 CNRS Université de Strasbourg.); Marco Buso (Laboratoire d'Economie Forestière, INRA - AgroParisTech; University of Padova, department of economics and management) |
| Abstract: | The impact of climate change on economic activities is becoming an increasingly impor- tant issue that must be adequately taken into account by private and public stakeholders. In this paper, we study the optimal public and/or private governance necessary to adapt natural resources owned by private agents to the new weather conditions. We compare the private case with two types of public-private governances where the government inter- venes by paying part of the adaptation costs, or through contingent transfers on the basis of verifiable outcomes. We conclude that in most cases, without government intervention, the private agent underinvests. However, public intervention can be excessively costly for the society (public finance distortion). Moreover, comparing the two different public-private governances, we conclude that the best way for the government to intervene strictly depends on the type of adaptation the private agent wants to apply. |
| Keywords: | climate change, adaptation, externality, PPPs |
| JEL: | D86 D82 D62 L33 H11 C61 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:lef:wpaper:2015-14&r=env |
| By: | Poulomi Ganguli; Devashish Kumar; Auroop R. Ganguly |
| Abstract: | Thermoelectric power production at risk, owing to current and projected water scarcity and rising stream temperatures, is assessed for the contiguous United States at decadal scales. Regional water scarcity is driven by climate variability and change, as well as by multi-sector water demand. While a planning horizon of zero to about thirty years is occasionally prescribed by stakeholders, the challenges to risk assessment at these scales include the difficulty in delineating decadal climate trends from intrinsic natural or multiple model variability. Current generation global climate or earth system models are not credible at the spatial resolutions of power plants, especially for surface water quantity and stream temperatures, which further exacerbates the assessment challenge. Population changes, which are difficult to project, cannot serve as adequate proxies for changes in the water demand across sectors. The hypothesis that robust assessments of power production at risk are possible, despite the uncertainties, has been examined as a proof of concept. An approach is presented for delineating water scarcity and temperature from climate models, observations and population storylines, as well as for assessing power production at risk by examining geospatial correlations of power plant locations within regions where the usable water supply for energy production happens to be scarcer and warmer. Our analyses showed that in the near term, more than 200 counties are likely to be exposed to water scarcity in the next three decades. Further, we noticed that stream gauges in more than five counties in the 2030s and ten counties in the 2040s showed a significant increase in water temperature, which exceeded the power plant effluent temperature threshold set by the EPA. Power plants in South Carolina, Louisiana, and Texas are likely to be vulnerable owing to climate-driven water stresses. |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1511.08449&r=env |
| By: | Chuku, Chuku |
| Abstract: | In this study, we argue that conventional methods of measuring agricultural productivity which only uses information about marketed inputs and outputs does not give a true representation of how sustainable the activities of the sector are. Motivated by the Solow-type growth accounting framework, we use the Tornqvist index formula to construct input, output and TFP indices for Nigerian agriculture between 1980 and 2010. We account for environmental externalities by incorporating off-farm damage costs of soil erosion based on different assumptions about possible scenarios of the extent and trajectory of damage costs. The results show that when externalities are not accounted for, productivity in the Nigerian agricultural sector is overestimated. This conclusion is robust to the different assumptions about damage cost scenarios made. The implication is that reducing off-farm erosion damages through improved soil conservation practices will significantly improve productivity and sustainability in the Nigerian agriculture sector. |
| Keywords: | Tornqvist TFP, environmental externalities, soil erosion, USLE |
| JEL: | D24 O13 Q16 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68165&r=env |
| By: | Luke Kemp (Fenner School of Environment and Society, The Australian National University) |
| Abstract: | The issue of US ratification of international environmental treaties is a recurring obstacle for environmental multilateralism, including the climate regime. Despite the perceived importance of the role of the US to the success of any future international climate agreement, there has been little direct coverage in terms of how an effective agreement can specifically address US legal participation. This paper explores potential ways of allowing for US legal participation in an effective climate treaty. Possible routes forward include the use of domestic legislation such as section 115 (S115) of the Clean Air Act (CAA), and the use of sole-executive agreements, instead of Senate ratification. Legal participation from the US through sole-executive agreements is possible if the international architecture is designed to allow for their use. Architectural elements such as varying legality and participation across an agreement (variable geometry) could allow for the use of sole-executive agreements. Two broader models for a 2015 agreement with legal participation through sole-executive agreements are constructed based upon these options: a modified pledge and review system and a form of variable geometry composed of number of opt-out, voting based protocols on specific issues accompanied with bilateral agreements on mitigation commitments with other major emitters through the use of S115 and sole-executive agreements under the Montreal Protocol and Chicago Convention (Critical Mass Governance). While there is no single solution, Critical Mass Governance appears to provide the optimum combination of tools to effectively allow for US legal participation whilst ensuring an effective treaty. |
| Keywords: | climate regime; ratification; US; climate policy; UNFCCC |
| JEL: | Q54 Q56 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1513&r=env |
| By: | Elisabete A. Silva; Ransford A. Acheampong |
| Abstract: | This report provides an overview of spatial and land-use planning systems in OECD countries1 focusing on: (i) the governance systems across countries, (ii) the institutional and legal frameworks for spatial planning, and (iii) the various policy instruments used at different levels of territorial governance to articulate spatial development objectives, manage physical development and protect the environment. The report draws on available academic literature and policy documents. The analysis shows a strong relationship between governance models and authority and competences for spatial planning. Spatial plans at various spatial scales are used to create the preconditions for harmonising socio-economic development goals with environmental protection imperatives. Environmental assessment constitutes another key regulatory instrument. National plans, programmes, regional development and land-use plans as well as sector plans and policies are subjected to Strategic Environmental Assessment. Individual projects resulting from these policy instruments are subjected to Environmental Impact Assessment in most countries. In all countries, environmentally-related permits work together with environmental assessments to ensure that environmental considerations are taken into account in the siting of industrial installations and mega-infrastructure projects that would have significant impacts on the environment. The main challenges associated with environmental assessment in most countries include the political nature of the assessment process, the cost (time and money) of assessment particularly to businesses, limited consultation periods, limited technical capacity of institutions, the endeavour for independence and quality of the assessment and the absence of robust legislative frameworks.<BR>Ce rapport propose un tour d’horizon des systèmes d’aménagement de l’espace et d’urbanisme dans les pays de l’OCDE2, qui met l’accent sur : (i) les systèmes de gouvernance des différents pays, (ii) les cadres institutionnels et juridiques de l’aménagement de l’espace, et (iii) les divers instruments employés aux différents échelons de gouvernance territoriale pour définir les objectifs de développement territorial, gérer le milieu physique et protéger l’environnement. Le rapport fait fond sur les travaux universitaires publiés et les documents d’orientation disponibles. L’analyse montre un lien étroit entre les modèles de gouvernance et l’autorité et les compétences en matière d’aménagement de l’espace. Les plans d’aménagement sont appliqués aux niveaux national et infranational pour intégrer les considérations sociales, économiques et environnementales dans les décisions d’allocation des ressources foncières et de répartition des activités. L’évaluation environnementale constitue un autre instrument réglementaire essentiel. Les plans et programmes nationaux, les plans régionaux d’aménagement et d’urbanisme ainsi que les politiques et plans sectoriels sont soumis à une évaluation environnementale stratégique. Les différents projets qui résultent de ces instruments font quant à eux l’objet d’une étude d’impact sur l’environnement dans la plupart des pays. Tous les pays ont couplé les autorisations liées à l’environnement à des évaluations environnementales, afin de faire en sorte que les considérations d’environnement entrent en ligne de compte dans le choix du site d’implantation des installations industrielles et des grandes infrastructures susceptibles d’avoir des incidences significatives sur l’environnement. Dans la plupart des pays, les difficultés que soulève l’évaluation environnementale tiennent surtout à la nature politique du processus d’évaluation, aux coûts qu’il induit (en temps et en argent), notamment pour les entreprises, à la brièveté des périodes de consultation, aux capacités techniques limitées des institutions et à l’absence de cadres législatifs solides. |
| Keywords: | governance, environmental impact assessment (EIA), land use, urbanisme |
| JEL: | Q58 R50 R52 R58 |
| Date: | 2015–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:94-en&r=env |
| By: | Anders Skonhoft (Department of Economics, Norwegian University of Science and Technology) |
| Abstract: | During the last few decades, the number of large carnivores (wolf, bear, lynx and wolverines) has increased significantly in Scandinavia. As a result of more predation of livestock, conflicts with livestock farmers have deepened. We model this conflict using sheep farming as an example, and in instances in which farmers are given compensation for the predation loss. The compensation scheme is composed of a fixed per animal loss value (ex-post), but also a compensation just for the presence of the carnivores (ex-ante). Ex-post compensation payment is practiced in many countries where farmers are affected by killed and injured livestock, but also damages to crops. Ex-ante payment implies payment for environmental services (PES) and is also widely practiced. In the first part of the paper, the stocking decision of a group of farmers is analyzed. In a next step, the Directorate for Natural Resource Management (DNRM), managing the carnivores and compensation scheme, is introduced. The strategic interaction between the sheep farmers and DNRM is modelled as a Stackelberg game with DNRM as the leader. We find that it is not beneficial for DNRM to use ex-post, but only ex-ante compensation. The solution to the game is compared to the social planner solution, and numerical illustrations indicate that the efficiency loss of the ex-ante compensation scheme to be small. |
| Keywords: | Carnivore conservation, sheep farming, compensation, Stackelberg game |
| JEL: | Q20 Q18 |
| Date: | 2015–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:nst:samfok:16915&r=env |
| By: | Laure Kuhfuss (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - Institut national de la recherche agronomique (INRA) - Centre international de hautes études agronomiques méditerranéennes [CIHEAM] - CNRS - Centre National de la Recherche Scientifique, UM1 - Université Montpellier 1); Julie Subervie (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - Institut national de la recherche agronomique (INRA) - Centre international de hautes études agronomiques méditerranéennes [CIHEAM] - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Agri-environmental schemes (AES) are a central component of the environmental policy of the European Union. Despite widespread interest and investment in AESs, few of these pro- grams have been carefully evaluated and doubts are often expressed about the effectiveness of voluntary programs. The purpose of this article is to estimate the additional effects of AESs targeting nonpoint source pollution from pesticides, focusing on one emblematic case study: herbicide use in vineyards. We use original data collected from winegrowers participating in AESs in the south of France, and we use exogenous variation in the timing of the implemen- tation of the AESs as a natural experiment. We show that the quantity of herbicides used by participants in the programin 2012 was around 30%belowwhat theywould have usedwithout the program, while the impact was significantly higher in 2011 - around 50% - presumably be- cause of higher weed pressure. Although significant, these impacts remain smaller than what had been expected by policymakers. Focusing on the “zero herbicide between the vine rows” option, which is both the most often chosen as well as the least stringent among the mea- sures,we moreover showthe presence of windfall effects. Simple extrapolation of these results suggests that this level of effectiveness may not be sufficient to ensurewater quality in thewa- tersheds targeted by the AES. |
| Keywords: | agri-environmental scheme,herbicides,natural experiment,nonpoint source pollution,pesticides,water quality |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01148583&r=env |
| By: | Giles Atkinson; Susana Mourato |
| Abstract: | While the basic principles of cost-benefit analysis (CBA) are long-standing, the challenges entailed in applying these principles are constantly evolving. This paper reviews recent developments in environmental CBA since the publication of an OECD volume on this topic by Pearce et al. (2006). The character and direction of these developments also evolves over time and the current review reflects this process.<BR>Si les principes fondamentaux de l’analyse coûts-bénéfices (ACB) sont établis depuis longtemps, les problèmes liés à l’application de ces principes, en revanche, évoluent constamment. Ce document examine les récents développements en matière d’ACB environnementale intervenus depuis la publication par l'OCDE d’un ouvrage de Pearce et al. (2006) sur ce sujet. La nature et le sens de ces développements évoluent aussi dans le temps, et la présente étude prend en compte ce processus. |
| Keywords: | environmental policy, cost-benefit analysis, politique environnementale, analyse coûts-avantages, évaluation des politiques |
| JEL: | H43 Q51 Q53 Q54 Q58 |
| Date: | 2015–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:97-en&r=env |
| By: | Harry Clarke (University of Melbourne) |
| Abstract: | The economics of global climate mitigation is discussed when there is imperfect knowledge of future climatic changes, of policy effectiveness and of the policy responses by different countries. Uncertainty is accounted for by using heuristics derived from classical decision rules. These heuristics provide plausible policy rules that depend on only limited information. They emphasize the possibility of “getting it wrong” in terms of the appropriate scale of policy response and from policy failure itself. The minimax rule or Precautionary Principle, which targets “worst case” situations, is not useful unless policies are effective with certainty. However the widespread presumption that policy action is warranted if climate-induced losses without action are “large" relative to costs of policy can be justified using minimax regret reasoning. The global analysis is extended to individual national decision-making when nations jointly play a game against nature with policy spillovers. Simultaneous moves game solutions as well as heuristics are provided and indicate how policy actions are best determined for individual countries rather than for a global authority. |
| Keywords: | climate risks and uncertainties; mitigation policy |
| JEL: | D84 Q54 C70 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1512&r=env |
| By: | Laure Kuhfuss (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - Institut national de la recherche agronomique (INRA) - Centre international de hautes études agronomiques méditerranéennes [CIHEAM] - CNRS - Centre National de la Recherche Scientifique, UM1 - Université Montpellier 1); Raphaële Préget (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - Institut national de la recherche agronomique (INRA) - Centre international de hautes études agronomiques méditerranéennes [CIHEAM] - CNRS - Centre National de la Recherche Scientifique); Sophie Thoyer (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - Institut national de la recherche agronomique (INRA) - Centre international de hautes études agronomiques méditerranéennes [CIHEAM] - CNRS - Centre National de la Recherche Scientifique, Montpellier SupAgro - Centre International d'Etudes Supérieures Agronomiques); Nick Hanley (University of St Andrews) |
| Abstract: | Using a choice experiment, this paper shows that the introduction of a conditional collective bonus in an agri-environmental scheme (AES) can improve farmers’ participation and increase land enrolment for lower overall budgetary costs. This monetary bonus is paid per hectare of enrolled land in addition to the usual agri-environmental payment if a given threshold is reached in terms of farmers’ participation in the region or catchment of interest. Using a choice experiment, we estimate the preferences of wine growers in the South of France for such a bonus. We show that it contributes to increased expectations of farmers on others’ participation, therefore changing the pro-environmental social norm and initiating group dynamics towards the adoption of less pesticide- intensive farming practices over time. |
| Keywords: | behaviour,choice experiment,collective incentive,payment for environmental services,social norm,agri-environmental schemes |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01148581&r=env |
| By: | William M. Shobe (University of Virginia) |
| Abstract: | A review of the Virginia Center for Coal and Energy Research cost estimates for complying with proposed federal rules limiting greenhouse gas emissions from existing power plants. The report contains a number of serious errors, greatly limiting its usefulness in evaluating state policy options. |
| Keywords: | VCCER; clean power plan; virginia;energy; climate change |
| JEL: | Q4 Q5 |
| Date: | 2015–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:vac:report:rpt15-01&r=env |
| By: | John P. Weche (Monopolies Commission and Leuphana University Luneburg, Germany) |
| Abstract: | Empirical studies on the link between green investment and other business investment at the firm level either focus on innovation specific types of investment or fail to consider the simultaneity of investment decisions. The analysis to be presented here offers a broad focus on different types of environmental protection investment and explicitly considers simultaneity issues, using newly created panel data for German manufacturing firms. Germany is an ideal case for testing the crowding-out hypothesis, due to its high level of environmental regulation and a significant presence of command-and-control style measures, which are especially under debate as a source of crowding-out. The estimation of a behavioral investment model supports a crowdingout of other business investment through environmental protection investment in general as well as its subcategories of add-on measures and investments in renewable energy. However, only the latter subcategory causes a crowding-out at the industry level. |
| Keywords: | green investment; business investment; renewable energy; crowding-out; manufacturing; Germany |
| JEL: | O32 O33 Q42 Q55 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:350&r=env |
| By: | Aidan A. Cronin; Chander Badloe; Harriet Torlesse; Robin K. Nandy |
| Abstract: | Despite rapid economic growth in Asia, serious health, nutrition and development gaps persist, including inadequate services and inequitable access in the water, sanitation and hygiene (WASH) sector. We show that the WASH sector has ample justification for increased focus and investment to increase health and nutrition impact, but appropriate prioritisation and quality implementation of interventions are required to address these gaps. The Sustainable Development Goals present opportunities for an increased focus. We argue that the key components required to accelerate change include strengthened data availability, quality and use, institutional and policy reform for greater cross-sectoral integration and clear accountabilities at national and local level if countries are to achieve universal access with equity, sustainability and quality. |
| Keywords: | water;sanitation;hygiene;Sustainable Development Goals (SDGs) |
| Date: | 2015–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:een:appswp:201518&r=env |
| By: | Apichai SUNCHINDAH (Policy Adviser/Development Specialist) |
| Abstract: | ASEAN has experienced periodic episodes of transboundary haze pollution resulting from land and forest fires caused by seasonal burning to clear vegetation on the ground for various purposes. Some of these incidents were severe like in mid- 2013 and 2015 for parts of Indonesia, Malaysia, Singapore, and Thailand as well as in early 2015 for portions of Lao PDR, Myanmar, and Thailand. Despite more than a decade since the ASEAN Haze Agreement came into force, the problem still recurs and sometimes with serious consequences to health, transportation, tourism, and other activities. What is urgently needed is a reframing of the way the issue is being currently addressed, i.e. mostly tackling at the tail-end of the problem of putting out the fires after they have been lit rather than preventing or curbing the illegal burning practices at source. It also represents balancing economic development initiatives with environmental protection and international relations concerns |
| Keywords: | ASEAN, transboundary haze pollution, reframing |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-82&r=env |
| By: | Charu Grover (Centre for International Trade and Development,Jawaharlal Nehru University); Sangeeta Bansal (Centre for International Trade and Development,Jawaharlal Nehru University) |
| Abstract: | Environmental quality is often a credence good and consumers are unable to distinguish between green and brown products. The paper aims to investigate the role of certification in providing information about product quality and reducing market inefficiencies when the certification process is imperfect. We consider a duopoly in a vertically differentiated product model where firms compete in quantities. The papers shows that in the absence of labelling, the brown firm drives out the green firm if the cost of producing green product is sufficiently high. If both firms produce positive quantities in the market, the green firm covers a higher market share and obtains larger revenue. We then characterise pooling and separating equilibrium under imperfect certification contingent on certification fee. The paper shows that under imperfect certification, it is not optimal to subsidize certification. |
| URL: | http://d.repec.org/n?u=RePEc:ind:citdwp:15-03&r=env |
| By: | Paul J. Burke; Hua Liao |
| Abstract: | China's dependence on coal is a major contributor to local and global environmental problems. In this paper we estimate the price elasticity of demand for coal in China using a panel of province-level data for 1998-2012. We find that provincial coal demand has become increasingly price elastic. As of 2012 we estimate that this elasticity was in the range -0.3 to -0.7 in point estimate terms when responses over two years are considered. The results imply that China's coal market is becoming more suited to price-based approaches to reducing emissions. The elimination of coal consumption subsidies could reduce national coal use and related emissions by around 2%. |
| Keywords: | coal, price elasticity, demand, China, provincial |
| JEL: | Q58 Q40 |
| Date: | 2015–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:85&r=env |
| By: | Emmanuel Benjamin; Matthias Blum |
| Abstract: | This study examines factors that determine the participation of smallholder farmers in certified agroforestry programs involving payments for ecosystem services (PES) in the mount Kenyan region, Kenya. A random utility model and logit regression was used to test a set of nonmonetary and monetary factors that influence participation in the international small group tree planting programme (TIST). This study employs survey data compiled in 2013 on 210 randomly selected smallholders; equally split between TIST and non-TIST members. The findings suggest that the spread of information via formal and informal networks as well as credit constraints are three important drivers of participating in the TIST program. Conversely, participation in TIST is not influenced by farm size, proximity to market, and level of education. Given the importance of smallholder poverty alleviation and credit market accessibility in the presence of climate change, our findings suggest that sustainable development policies should focus on strengthening the social capital and informal networks. |
| Keywords: | Agroforestry program, Network, Spillover, Payment for ecosystem services (PES), Adoption, Information, Sub-Saharan Africa |
| JEL: | D8 O1 O3 Q1 Q2 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:qub:wpaper:1503&r=env |
| By: | Frank Jotzo (Crawford School of Public Policy, The Australian National University); Salim Mazouz (EcoPerspectives Pty Ltd) |
| Abstract: | In this paper we propose a market mechanism for regulated exit of highly emissions intensive power stations from the electricity grid. The starting point is that there is surplus capacity in coal fired power generation in Australia. In the absence of a carbon price signal, black coal generation capacity may leave the market instead of high emitting brown coal power stations. We lay out options for a mechanism of regulated power station closure using a market mechanism. Plants bid competitively over the payment they require for closure, the regulator chooses the most cost effective bid, and payment for closure is made by the remaining power stations in proportion to their carbon dioxide emissions. This could overcome adverse incentive effects for plants to stay in operation in anticipation of payment for closure and solve the political difficulties and problems of information asymmetry that plague government payments for closure and direct regulation for exit. We explore the issues theoretically and provide empirical illustrations. These suggest that closure of a brown coal fired power station in Australia could yield emissions savings at costs that are lower than the social benefits. The analysis in this paper is applicable to other countries. |
| Keywords: | greenhouse gas emissions; electricity; brown coal; early retirement; regulation; market mechanism; contract for closure |
| JEL: | Q48 Q58 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1510&r=env |
| By: | Stefano Bosi; David Desmarchelier; Lionel Ragot |
| Abstract: | We consider a competitive Ramsey economy where a pollution externality affects both consumption demand and labor supply, and we assume the stock of pollution to be persistent over time. Surprisingly, when pollution jointly increases the consumption demand (compensation effect) and lowers the labor supply (leisure effect ), multiple equilibria arise near the steady state (local indeterminacy) through a Hopf bifurcation (limit cycle). This result challenges the standard view of pollution as a fow to obtain local indeterminacy, and depends on the leisure effect which renders the pollution accumulation process more volatile. |
| Keywords: | pollution, endogenous labor supply, limit cycle, Ramsey model. |
| JEL: | E32 O44 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2015-36&r=env |
| By: | Daniel Spring; Tom Kompas |
| Abstract: | Invasive species eradication programs can fail by applying management strategies that are not robust to potentially large but non-quantified risks. A more robust strategy can succeed over a larger range of possible values for non-quantified risk. This form of robustness analysis is often not undertaken in eradication program evaluations. The main non-quantified risk initially facing Australia's fire ant eradication program was that the invasion had spread further than expected. Earlier consideration of this risk could have led to a more robust strategy involving a larger area managed in the program's early stages. This strategy could potentially have achieved eradication at relatively low cost without significantly increasing known and quantified risks. Our findings demonstrate that focusing on known and quantifiable risks can increase the vulnerability of eradication programs to known but non-quantified risks. This highlights the importance of including robustness to potentially large but non-quantified risks as a mandatory criterion in evaluations of invasive species eradication programs. |
| Keywords: | invasive species;eradication;robustness |
| Date: | 2015–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:een:appswp:201538&r=env |
| By: | Frauke Urban; Johan Nordensvard; Giuseppina Siciliano; Bingqin Li |
| Abstract: | There is a shortage of empirical studies on the relationship between Chinese hydropower dams and social sustainability. Comparative research on Chinese-funded and Chinese-built hydropower projects is rare. This article aims to fill parts of this gap by discussing these issues in relation to Chinese overseas hydropower dams in Ghana (Bui Dam) and Cambodia (Kamchay Dam). Both projects are built by Sinohydro and financed by ExIm Bank. This article draws on in-depths interviews and focus group discussions with local communities affected by the dams, institutional actors in Ghana and Cambodia, Chinese actors, and dam builders. The article uses an environmental justice perspective as an analytical framework. The article concludes that the dam projects could improve their social sustainability framework in practice and theory; social benchmarking should be introduced and social policies need to be improved to be in line with international social standards on hydropower projects. |
| Keywords: | social sustainability;hydropower;China;Ghana;Cambodia |
| Date: | 2015–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:een:appswp:201543&r=env |
| By: | Gerlagh, Reyer (Tilburg University, Center For Economic Research); van der Heijden, Eline (Tilburg University, Center For Economic Research) |
| Abstract: | We experimentally study decision-making in a novel dynamic coordination game. The game captures features of a transition between externality networks. Groups consisting of three subjects start in a stable benchmark equilibrium with network externality. Over seven rounds, they can transit to an alternative stable equilibrium based on the other network. The alternative network has higher payoffs, but the transition is slow and costly. Coordination is required to implement the transition while minimizing costs.<br/>In the experiment, the game is repeated five times, which enables groups to learn to coordinate over time. We compare a neutral language treatment with a ‘green framing’ treatment, in which meaningful context is added to the instructions. We find the green framing to significantly increase the number of profitable transitions, but also to inhibit the learning from past experiences, and thus it reduces coherence of strategies. Consequently, payoffs in both treatments are similar even though the green framing results in twice as many transitions.<br/>In the context of environmental policy, the experiment suggests general support for ‘going green’, but we also find evidence for anchoring of beliefs by green framing; proponents and opponents stick to their initial strategies. |
| Keywords: | cost of transition; lab experiment; dynamic stag hunt game; framing |
| JEL: | C73 C92 O44 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:c3b6b46c-0fb0-4098-8251-d271d17b23e2&r=env |
| By: | Michael G. Pollitt |
| Abstract: | This paper seeks to explore the nature of ‘Good’ Energy Policy by offering a multi-disciplinary social science and humanities perspective on policy making. The objective in doing this is to understand how to get from where we are today to a ‘better’ energy policy. We begin by discussing what we mean by ‘policy’. We then go on to characterise and challenge the technologists’ approach to energy policy. Next we discuss some key intellectual starting points that explain why policy making in this area is so difficult. We then turn to a set of multi-disciplinary social science and humanities perspectives on energy policy that together form promising areas for research. These are: perception; quantification; well-being; public trust; role of the state; competence and hubris in delivery; and parallels with healthcare. We close by discussing how these perspectives can illuminate whether a policy is ‘good’, ‘bad’ or something in between. |
| Keywords: | energy policy, mult-discipinary, perspective |
| JEL: | H54 L98 |
| Date: | 2015–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1537&r=env |
| By: | David Throsby |
| Abstract: | Amongst the range of possible strategies to deal with ongoing development challenges facing the Pacific Island economies, one that has some potential is a policy focus on stimulating the creative or cultural industries. This article reviews the rise in interest around the world in the concept of the so-called creative economy and its role in sustainable development. This interest has particular relevance at the present time in the light of international efforts to raise the profile of culture in development, especially with the replacement in 2015 of the Millennium Development Goals with a new set of sustainable development objectives. The article outlines the current state of the cultural industries' contribution to growth in the Pacific region, and discusses opportunities and obstacles affecting their further development. The article concludes by identifying some important considerations to be taken into account in the design of effective policy strategies in this area in the future. |
| Keywords: | creative economy;cultural industries;sustainable development;intangible heritage;Pacific Island economies |
| Date: | 2015–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:een:appswp:201530&r=env |
| By: | William Orlando Escobar Caicedo; David Quitian Reyes |
| Abstract: | El crecimiento de la economía del país viene atado necesariamente a un incremento de la demanda eléctrica, la cual debe ser garantizada por parte del Estado; la Ley 1715 de 2014 plantea la necesidad de generar nuevas fuentes de energía que sean sostenibles económica y ambientalmente, y que brinden apoyo a la actual oferta de generación de energía. Si bien Colombia tiene un porcentaje alentador de cubrimiento de la demanda energética del 97,21% es necesario lograr la prestación del servicio en todo el territorio geográfico del país especialmente en las zonas de difícil acceso, esto con el fin de disminuir la brecha económica que existe entre las urbes y el territorio rural. Actualmente para llegar a estas zonas de difícil acceso se utilizan generadores de energía de alto impacto ambiental y económico, como las plantas diesel, que si bien cubren la demanda en estas zonas, la calidad del servicio es baja y los costos de funcionamiento son elevados, es por esto que se debe estimular y generar la producción de energía eléctrica por fuentes renovables no convencionales que disminuyan tanto la contaminación ambiental como los costos necesarios para la generación de energía. |
| Keywords: | Energías renovables, costos unitarios, factor de planta, intermitencia |
| JEL: | H41 L51 Q28 |
| Date: | 2015–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:col:000176:014064&r=env |