nep-env New Economics Papers
on Environmental Economics
Issue of 2016‒01‒18
twenty papers chosen by
Francisco S. Ramos
Universidade Federal de Pernambuco

  1. The environmental Kuznets curve after 25 years By David I. Stern
  2. Revisiting the emissions-energy-trade nexus: Evidence from the newly industrializing By Ahmed, Khalid; Shahbaz, Muhammad; Kyophilavong, Phouphet
  3. Driving Forces of CO2 Emissions in Emerging Countries: LMDI Decomposition Analysis on China and India’s Residential Sector By Yeongjun Yeo; Dongnyok Shim; Jeong-Dong Lee; Jorn Altmann
  4. Climate Change Policy under Polar Amplification By William Brock; Anastasios Xepapadeas
  5. Dominion Virginia Power and Clean Power Plan Costs: A brief review of the Dominion Power 2015 Integrated Resource Plan compliance cost estimates By William M. Shobe
  6. A Tale of Two Diversities By Chloé Mulier; Pierre Courtois; Charles Figuières
  7. The effects of innovation policies on firm level patenting By Marit E. Klemetsen
  8. Self-enforcing environmental agreements and trade in fossil energy deposits By Thomas Eichner; Rüdiger Pethig
  10. Buy coal to mitigate climate damage and benefit from strategic deposit action By Thomas Eichner; Rüdiger Pethig
  11. Do Global CO2 Emissions from Fuel Consumption Exhibit Long Memory? A Fractional Integration Analysis By José Belbute; Alberto Marvão Pereira
  12. Long-run evolution of the global economy - Part 2: Hindcasts of innovation and growth By Timothy J. Garrett
  13. Gender Equality Results Case Study - India: Urban Water Supply and Environmental Improvement Project By Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB)
  14. At Sea Simulation of the Operational and Economic Impacts of the Landing Obligation on Irish Demersal Fisheries By Ronan Cosgrove; Norman Graham; Richard Curtin; Sara-Jane Moore; Eoghan Kelly; Michael Keatinge
  15. Consumers’ Response to Sustainability Labeling in Wild Caught Fish By Katrin Zander; Doreen Bürgelt; Inken Christoph-Schulz; Petra Salamon; Daniela Weible
  16. Forest Resources for Rural Household Food and Nutrition Security: The Case of Eastern Province of Zambia By Mofya-Mukuka, Rhoda; Simoloka, Asunta
  17. Buy coal for preservation and act strategically on the fuel market By Thomas Eichner; Rüdiger Pethig
  18. Organic Salmon – Considered a Fisheries or Agricultural Product Among Consumers? By Ankamah-Yeboah Isaac; Max Nielsen; Rasmus Nielsen
  19. Too hot to hold: the effects of high temperatures during pregnancy on birth weight and adult welfare outcomes By Hu, Zihan; Li, Teng
  20. Outward Foreign Direct Investments Patterns of Italian Firms in the EU ETS By Simone Borghesi; Chiara Franco; Giovanni Marin

  1. By: David I. Stern (Crawford School of Public Policy, The Australian National University)
    Abstract: The environmental Kuznets curve (EKC) has been the dominant approach among economists to modeling aggregate pollution emissions and ambient pollution concentrations over the last quarter century. Despite this, the EKC was criticized almost from the start and decomposition approaches have been more popular in other disciplines working on global climate change. More recently, convergence approaches to modeling emissions have become popular. This paper reviews the history of the EKC and alternative approaches. Applying an approach that synthesizes the EKC and convergence approaches, I show that convergence is important for explaining both pollution emissions and concentrations. On the other hand, while economic growth has had a monotonic positive effect on carbon and sulfur emissions, the EKC holds for concentrations of particulates. Negative time effects are important for sulfur emissions. The EKC seems to be most useful for modeling the ambient concentrations of pollutants it was originally applied to.
    Keywords: air pollution; economic growth; environmental Kuznets curve; convergence; climate change
    JEL: Q53 Q56
    Date: 2015–12
  2. By: Ahmed, Khalid; Shahbaz, Muhammad; Kyophilavong, Phouphet
    Abstract: This paper applies Pedroni's panel cointegration approach to explore the causal relationship between trade openness, carbon dioxide emissions, energy consumption and economic growth for the panel of newly industrialized economies (i.e. Brazil, India, China and South Africa) over the period of 1970–2013. Our panel cointegration estimation results found majority of the variables cointegrated and confirm the long-run association among the variables. The Granger causality test indicates bi-directional causality between carbon dioxide emissions and energy consumption. A uni-directional causality is found running from trade openness to carbon dioxide emission and energy consumption, and economic growth to carbondioxide emissions. The results of causality analysis suggest that the trade liberalization in newly industrialized economies induces higher energy consumption and carbon dioxide emissions. Furthermore, the causality results are checked using an innovative accounting approach which includes forecast-error variance decomposition test and impulse response function. The long-run coefficients are estimated using fully modified ordinary least square (FMOLS) method and results conclude that the trade openness and economic growth reduce carbon dioxide emissions in the long-run. The results of FMOLS test sound the existence of environmental Kuznets curve hypothesis. It means, trade liberalization induces carbon dioxide emission with increased national output, but it offsets that impact in the long-run with reduced level of carbon dioxide emissions.
    Keywords: Newly industrialized economies; Gross domestic production (GDP); Carbon dioxide emissions; Trade liberalization; Energy consumption
    JEL: O1 O10
    Date: 2016–01–01
  3. By: Yeongjun Yeo (College of Engineering, Seoul National University); Dongnyok Shim (College of Engineering, Seoul National University); Jeong-Dong Lee (College of Engineering, Seoul National University); Jorn Altmann (College of Engineering, Seoul National University)
    Abstract: The main objective of this paper is to identify and analyze the key drivers behind changes of CO2 emissions in the residential sectors of the emerging economies, China and India. This paper also aims to draw policy implications in terms of finding challenges and opportunities to reduce residential CO2 emissions in both countries. For the analysis, we investigate to what extent changes in residential emissions are due to changes in energy emissions coefficients, energy consumption structure, energy intensity, households’ income, and population size. We decompose the changes in residential CO2 emissions in China and India into these five contributing factors from 1990 to 2011 by applying the Logarithmic Mean Divisia Index (LMDI) method. According to our results, the increase in per capita income level is the biggest contributor to the increase of residential CO2 emissions, while the energy intensity effect had the largest effect on CO2 emissions reduction in the residential sectors in both countries. This implies that investments for energy savings, technological improvements, and energy efficiency policies were effective in mitigating CO2 emissions. It is also found that the change in CO2 emission coefficients for fuels, which is the ratio of CO2 emissions arising from consumption of fuels to the consumption level slowed down the increase of residential emissions. In addition, results demonstrate that changes in the population and energy consumption structure drove the increase in CO2 emissions.
    Keywords: CO2 Emissions, Emerging Economy, Residential Sector, Logarithmic Mean Divisia Index (LMDI) Method.
    JEL: C02 C15 C43 C65 O32 O33 Q01 Q48 Q55 Q56 R11 R22
    Date: 2015–12
  4. By: William Brock; Anastasios Xepapadeas
    Abstract: Polar amplification is an established scientific fact which has been associated with the surface albedo feedback and to heat and moisture transport from the Equator to the Poles. In this paper we unify a two-box climate model, which allows for heat and moisture transport from the southern region to the northern region, with an economic model of welfare optimization. Our main contribution is to show that by ignoring spatial heat and moisture transport and the resulting polar amplification, the regulator may overestimate or underestimate the tax on GHG emissions. The direction of bias depending on the relations between marginal damages from temperature increase in each region. We also determine the welfare cost when a regulator mistakenly ignores polar amplification. Finally we show the adjustments necessary to the market discount rate due to transport phenomena as well as how our two-box model can be extended to Ramsey-type optimal growth models. Numerical simulations confirm our theoretical results.
    Keywords: Polar amplification, spatial heat and moisture transport, optimal policy, emission taxes, market discount rate
    JEL: Q54 Q58
    Date: 2016–01–05
  5. By: William M. Shobe (University of Virginia)
    Abstract: Dominion Virginia Power's 2015 Integrated Resource Plan filed with the State Corporation Commission presents cost estimates for complying with the proposed federal regulations, known as the Clean Power Plan (CPP), that force reductions in greenhouse gas emissions from existing power plants. The IRP incorrectly attributes to the CPP costs that would occur with or without the CPP. This and other modeling choices result in substantially overstated estimates of compliance costs.
    Keywords: Dominion Power; energy; clean power plan; Virginia; climate change
    JEL: Q4 Q5
    Date: 2015–01–08
  6. By: Chloé Mulier (LAMETA); Pierre Courtois (INRA-LAMETA); Charles Figuières (INRA-LAMETA)
    Abstract: Efficient management of biodiversity aims at allocating conservation efforts in order to maximize diversity. Defining a diversity criterion is however far to be trivial; there is not one but several indices that can be used as biodiversity measures. This paper elicits and compares two in situ criterions for biodiversity conservation, based on two biodiversity indices stemming from different disciplines: Weitzman's index in economics and Rao's index in ecology. Both indices combines differently pieces of information about (1) species survival probability, and (2) measures of dissimilarity between species. In order to truly have in situ protection criterions, we add another layer of information about (3) the ecological interactions between species. Considering a simple three species ecosystem, we show that choosing one criterion or the other has policy implications, for they sometimes deliver diverging protection recommendations. We unravel the role played by the elements (1), (2) and (3) in the ranking, which allows us to highlight some specificities of the in situ criterions. For example, other things equal, Weitzman's in situ ranking tends to favor "robust" species, while Rao's in situ ranking gives priority to "fragile" species.
    Keywords: conservation priorities, ecological interactions, biodiversity indices
    JEL: C6 Q5
    Date: 2015–12
  7. By: Marit E. Klemetsen (Statistics Norway)
    Abstract: This paper examines the impacts of R&D tax credits and direct R&D subsidies on Norwegian firms' patenting, with a particular focus on environmental patenting. Whereas direct subsidies are aimed at projects with low private and high social return, tax credits do not discriminate between projects or technologies. We find that both direct subsidies and tax credits have significant positive effects on patenting in general. Although direct subsidies have triggered more patents, tax credits are more efficient in the sense that they have triggered more patents relative to the typical subsidy amount received. With regard to environmental patenting, we find no significant effects of tax credits, whereas the effects of direct subsidies are large and significant. A possible explanation is that environmental innovations face the environmental externality, greater knowledge externalities and require funding that is willing to take more risks and allow more patience. Tax credits currently favor small and medium sized firms and firms with relatively low R&D investments. For large firms, we find large and significant effects of direct subsidies, but no significant effects of tax credits.
    Keywords: R&D tax credits; SkatteFUNN; direct R&D subsidies; environmental innovation; SMEs; Poission count model; fixed effects
    JEL: C54 D22 O31 O38 Q55
    Date: 2015–12
  8. By: Thomas Eichner; Rüdiger Pethig
    Keywords: climate coalition, deposit, fuel, Nash, self-enforcing IEA
    JEL: C72 Q38 Q58
    Date: 2015
  9. By: Sneha Master
    Abstract: Green Accounting is basically adoption of valuation of natural capital integration in planning for development. Incorporating green accounting into national economic accounts could provide a measure of sustainability; however, considerable advanced methods of measurement and valuation are needed. There are, of course, no substitutes for the life-sustaining services of nature and the question of when and how to account for this fact is the source of many ongoing debates in green accounting. Key words: Green accounting, accounting, legal, Critical
    Date: 2015–09
  10. By: Thomas Eichner; Rüdiger Pethig
    Keywords: climate coalition, fossil fuel, deposits, extraction, deposit policy
    JEL: Q31 Q38 Q55
    Date: 2015
  11. By: José Belbute (University of Évora, Department of Economics and CEFAGE-UE, Portugal); Alberto Marvão Pereira (Department of Economics, College of William and Mary, Williamsburg)
    Abstract: In this paper we use an ARFIMA approach to measure the degree of fractional integration of aggregate world CO2 emissions and its five components – coal, oil, gas, cement, and gas flaring. We find that all variables are stationary and mean reverting, but exhibit long-term memory. With aggregate CO2 emissions as a reference, our results suggest that both coal and oil combustion emissions have the weakest degree of long-range dependence, while emissions from gas, and gas flaring have the strongest. With evidence of long memory, we conclude that transitory policy shocks are likely to have long-lasting effects. Although the effects of any active policy on CO2 emissions take longer to disappear, they preserve their temporary nature. Accordingly, permanent effects on CO2 emissions require a more permanent policy stance. In this context, if one were to rely only on testing for stationarity and non-stationarity, one would likely conclude in favor of non-stationarity, and therefore that even transitory policy shocks have permanent effects. Our fractional integration analysis highlights that this is not the case.
    Keywords: CO2 emissions, Long memory, ARFIMA model.
    JEL: C22 O13 Q41
    Date: 2015
  12. By: Timothy J. Garrett
    Abstract: Long-range climate forecasts use integrated assessment models to link the global economy to greenhouse gas emissions. This paper evaluates an alternative economic framework outlined in part 1 of this study (Garrett, 2014) that approaches the global economy using purely physical principles rather than explicitly resolved societal dynamics. If this model is initialized with economic data from the 1950s, it yields hindcasts for how fast global economic production and energy consumption grew between 2000 and 2010 with skill scores > 90 % relative to a model of persistence in trends. The model appears to attain high skill partly because there was a strong impulse of discovery of fossil fuel energy reserves in the mid-twentieth century that helped civilization to grow rapidly as a deterministic physical response. Forecasting the coming century may prove more of a challenge because the effect of the energy impulse appears to have nearly run its course. Nonetheless, an understanding of the external forces that drive civilization may help development of constrained futures for the coupled evolution of civilization and climate during the Anthropocene.
    Date: 2016–01
  13. By: Asian Development Bank (ADB); Asian Development Bank (ADB) (South Asia Department, ADB); Asian Development Bank (ADB) (South Asia Department, ADB); Asian Development Bank (ADB)
    Keywords: india, madhya pradesh, gender, gender equality, case study, urban water supply, environment improvement, water management, sanitation, sanitation infrastructure, wastewater management
    Date: 2015–06
  14. By: Ronan Cosgrove (Irish Sea Fisheries Board (BIM). Fisheries Division, Crofton Road, Dún Laoghaire, Ireland); Norman Graham (Marine Institute, Fisheries Science Service (FSS), Rinville, Oranmore, Co. Gaiway, Ireland); Richard Curtin (Irish Sea Fisheries Board (BIM). Fisheries Division, Crofton Road, Dún Laoghaire, Ireland); Sara-Jane Moore (Marine Institute, Fisheries Science Service (FSS), Rinville, Oranmore, Co. Gaiway, Ireland); Eoghan Kelly (Marine Institute, Fisheries Science Service (FSS), Rinville, Oranmore, Co. Gaiway, Ireland); Michael Keatinge (Irish Sea Fisheries Board (BIM). Fisheries Division, Crofton Road, Dún Laoghaire, Ireland)
    Abstract: The Landing Obligation for demersal species will commence in 2016 in EU waters. The implementation of this regulation may impact fleet profitability by both increasing costs and reducing revenues. This study field tested operational and economic impacts of the LO in two demersal trawl fisheries in the Celtic Sea. Tactical alterations such as changes in fishing grounds assisted in reducing catches of undersize fish in a mixed demersal fishery but may also have led to reductions in catches of marketable fish and profitability. Utilisation of more selective gear greatly reduced catches of juvenile fish and prolonged fishing effort before choking occurred in a Nephrops fishery. Choke species are likely, however, to remain problematic in this fishery in other areas, and when catches of below minimum conservation reference size Nephrops are relatively high. Demonstration of major increases in economic returns under a likely quota uplift scenario in the Nephrops fishery highlights the importance of such measures in maintaining ongoing fleet economic viability in the face of major challenges posed by the LO.
    Date: 2015
  15. By: Katrin Zander (Thuenen Institute of Market Analysis, Bundesallee 50, D-38116 Braunschweig); Doreen Bürgelt (Thuenen Institute of Market Analysis, Bundesallee 50, D-38116 Braunschweig); Inken Christoph-Schulz (Thuenen Institute of Market Analysis, Bundesallee 50, D-38116 Braunschweig); Petra Salamon (Thuenen Institute of Market Analysis, Bundesallee 50, D-38116 Braunschweig); Daniela Weible (Thuenen Institute of Market Analysis, Bundesallee 50, D-38116 Braunschweig)
    Abstract: Increasing shares of fish products are sold as sustainably caught. This contribution tackles consumers’ specific knowledge on, interest in and expectations about sustainable fisheries and its products, their awareness of existing sustainability labels on fish as well as the purchase relevance of these labels in Germany. We conducted in total 12 focus groups with fish consumers in different German cities. The results show that consumers expect sustainable fisheries to avoid by-catches, overfishing and not to use dynamite. Knowledge about fisheries was mostly low and for many of the discussants this topic was new. When asked in an unprompted manner for their awareness of different labels of sustainably caught wild fish, the label of the Marine Stewardship Council was the only one known by some of the participants. It turned out that participants were skeptical about food labeling and standard setting in general. Accordingly, many participants stated not to look for sustainability labels when purchasing fish products. In order to tackle with consumers’ limited knowledge of fish and low interest in additional information, communication of sustainability in fisheries should be short, simple and reliable. Sustainability standards which clearly differentiate from noncertified fisheries are required.
    Keywords: consumer behaviour, consumer attitudes, sustainable fisheries; consumer behaviour, consumer attitudes, sustainable fisheries
    JEL: Q13 Q22
    Date: 2015
  16. By: Mofya-Mukuka, Rhoda; Simoloka, Asunta
    Abstract: Zambia is among the countries with the highest levels of under-nutrition in the world (see IFPRI 2014), and these levels have remained high—around 40%—even when the country has achieved significant growth in agricultural production. About 60% of Zambia’s population lives in the rural areas where poverty levels are estimated to be as high as 75%. This aspect alone makes most rural households highly dependent on agriculture, the natural forests, and woodlands for their livelihoods including food provision and income generation.
    Keywords: Food Consumption/Nutrition/Food Safety, Food Security and Poverty,
    Date: 2015–12
  17. By: Thomas Eichner; Rüdiger Pethig
    Keywords: climate coalition, fossil fuel, deposits, extraction, fuel caps
    JEL: Q31 Q38 Q55
    Date: 2015
  18. By: Ankamah-Yeboah Isaac (Department of food and Resource Economics, Faculty of Science, University of Copenhagen, Denmark); Max Nielsen (Department of food and Resource Economics, Faculty of Science, University of Copenhagen, Denmark); Rasmus Nielsen (Department of food and Resource Economics, Faculty of Science, University of Copenhagen, Denmark)
    Abstract: The year 2016 is groundbreaking for organic aquaculture producers in EU, as it represents the deadline for implementing a full organic life cycle in the aquaculture production. Such a shift induces production costs for farmers and if it should be profitable, they must receive higher prices. This study identifies the price premium on organic salmon in the Danish retail sale sector using consumer panel scanner data for households by applying the hedonic price model. A premium of 20% for organic salmon is found. Since this premium is closer to organic agriculture products than to ecolabelled capture fisheries products, it indicates that consumers consider organic salmon as an agriculture product more than fisheries product.
    Keywords: price premium, organic seafood, fisheries ecolabel, salmon; price premium, organic seafood, fisheries ecolabel, salmon
    Date: 2015
  19. By: Hu, Zihan; Li, Teng
    Abstract: Exposure to high temperatures during pregnancy is generally associated with low birth weight---a proxy for endowment. But whether such early life shock is further related to welfare losses in adulthood is still unknown. Utilizing random temperature fluctuations across 123 counties in China, we examine the relationships between high temperatures during pregnancy and birth weight and later outcomes. One standard deviation of high temperature days during pregnancy triggers about 0.17 kilograms loss of birth weight, and further in adulthood 1.63 cm decrease in height and 0.86 years less of schooling. Health and intelligence outcomes are adversely affected as well. The impacts are concentrated in the first and third trimesters. Such effects should become part of the calculations of the costs of global warming. Back-of-the-envelope predictions suggest that at the end of the 21st century newborns on average weigh 54.36-210.44 grams less. And the losses in height and education years are 0.52-2.02 centimeters and 0.26-1.01 years, respectively. We also argue these patterns are more likely consistent with physiological effects than with income effects, because total precipitation and high temperatures in the growing season of one year before birth have no significant effects.
    Keywords: High temperatures during pregnancy, birth weight, adult welfare outcomes, global warming
    JEL: I12 I21 Q51 Q54
    Date: 2016–01–01
  20. By: Simone Borghesi (University of Siena, Italy.); Chiara Franco (Catholic University of Sacred Heart, Milano, Italy.); Giovanni Marin (IRCrES-CNR, Milano, Italy.)
    Abstract: We consider the role played by the EU Emission Trading System (EU ETS) as a possible driver of outward Foreign Direct Investments (FDI henceforth). In particular, we aim at assessing whether EU ETS has any effect on outward FDI patterns of Italian firms. Using a novel panel dataset of about 59,000 firms covering the first two phases of the EU ETS and the pre-EU ETS period, we are able to observe the patterns of FDI by destination country of firms, distinguishing between those with plants covered by the EU ETS and other firms. Results show that, on average, firms in the EU ETS do not increase their presence in other countries. However, EU ETS firms operating in sectors particularly exposed to international competition increase their outward FDI towards countries not covered by the EU ETS.
    Keywords: EU ETS, FDI, carbon leakage
    JEL: F23 L23 Q50
    Date: 2016–01

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