|
on Environmental Economics |
|
Issue of 2016‒07‒09
fifty-six papers chosen by Francisco S. Ramos Universidade Federal de Pernambuco |
| By: | Fischer, Carolyn (Resources for the Future) |
| Abstract: | Globally and locally, government support policies for green goods (like renewable energy) are much more popular internationally than raising the cost of bads (as through carbon taxes). These support policies may encourage downstream consumption (renewable energy deployment) or upstream development and manufacturing of those technologies. The use of subsidies — particularly upstream ones — is disciplined by World Trade Organization agreements, and its subsidies code lacks exceptions for transboundary externalities such as human health or resource conservation, including those related to combating global climate change. The strategic trade literature has devoted little attention to the range of market failures related to green goods. This paper considers the market for a new environmental good that when consumed downstream may provide external benefits such as reduced emissions. The technology is traded internationally but provided by a limited set of upstream suppliers that may operate in imperfect markets, such as with market power or external scale economies. We examine the national incentives and global rationales for offering production and consumption subsidies in producer countries, allowing that some of the downstream market may lie in nonregulating third-party countries. Although technology producer countries can benefit from restraints on upstream subsidies, global welfare is higher without them, and market failures imply that optimal subsidies are even higher. We supplement the analysis with numerical simulations of the case of renewable energy, exploring optimal subsidies for the major renewable energy producing and consuming regions and the cost of restrictions on upstream subsidies. |
| Keywords: | International Trade, Subsidies, Imperfect Competition, Externalities, Emissions Leakage |
| JEL: | F13 F18 H21 Q5 |
| Date: | 2016–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-16-12&r=env |
| By: | Stefano Carattini (Haute école de gestion de Genève, University of Applied Sciences Western Switzerland and Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science); Alessandro Tavoni (Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science) |
| Abstract: | The market for voluntary carbon offsets has grown steadily in the last decade, yet it remains a very small niche. Most emissions from business travel are still not offset. This paper exploits a unique dataset examining the decision to purchase carbon offsets at two academic conferences in environmental and ecological economics. We find that having the conference expenses covered by one's institution increases the likelihood of offsetting, but practical and ethical reservations as well as personal characteristics and preferences also play an important role. We draw lessons from the effect of objections on the use of offsets and discuss the implications for practitioners and policy-makers. Based on our findings, we conclude that ecological and environmental economists should be more involved in the design and use of carbon offsets. |
| Keywords: | Voluntary Carbon Offsetting, Public Goods, Ecological Economics, Environmental Economics |
| JEL: | D6 H8 Q4 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2016.43&r=env |
| By: | de Laat, Joost; Jayachandran, Seema; Lambin, Eric F.; Stanton, Charlotte |
| Abstract: | This paper evaluates a Payments for Ecosystem Services (PES) program in western Uganda that offered forest-owning households cash payments if they conserved their forest. The program was implemented as a randomized trial in 121 villages, 60 of which received the program for two years. The PES program reduced deforestation and forest degradation: Tree cover, measured using high-resolution satellite imagery, declined by 2% to 5% in treatment villages compared to 7% to 10% in control villages during the study period. We find no evidence of shifting of tree-cutting to nearby land. We then use the estimated effect size and the social cost of carbon to value the delayed CO2 emissions, and compare this benefit to the program's cost. |
| Keywords: | climate change; conditional cash transfers; deforestation; REDD+ |
| JEL: | O13 Q54 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11349&r=env |
| By: | Prasenjit Banerjee (University of Manchester); Rupayan Pal (Indira Gandhi Institute of Development Research); Jason F. Shogren (University of Wyoming) |
| Abstract: | Honor and stigma play a role in environmental protection. Environmental honors are bestowed on people and firms who go out of their way to do right by the environment. Similarly, environmental stigma is put on people or firms who are publicly taken to task for their poor environmental record. We design a voluntary incentive mechanism by incorporating honor and stigma to induce heterogeneous firms to protect the environment at less cost. We encounter a motivational costs incurred by the green firm-it loses its leadership rents. Our result suggests (i) an additional social reward is needed for a green firm; and (ii) the brown firm may sacrifice information rent. |
| Keywords: | Mechanism, reputation, environmental risk, honor, stigma, social norm |
| JEL: | D03 Q52 Q58 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2016-017&r=env |
| By: | Asian Development Bank (ADB); Asian Development Bank (ADB) (Economic Research and Regional Cooperation Department, ADB); Asian Development Bank (ADB) (Economic Research and Regional Cooperation Department, ADB); Asian Development Bank (ADB) |
| Abstract: | Unsustainable budgetary cost of selling oil, gas, and coal at low prices has propelled energy subsidy reform in developing Asian economies. This report measures the size of associated subsidies on these fossil fuels including direct transfers, tax exemptions, subsidized credit, and losses of state enterprises in India, Indonesia, and Thailand. An analysis of complex interactions between economic, social, energy, and environmental issues shows that the initial rise in energy prices due to a reduction or removal of the subsidies will nudge households and businesses to shift to alternative fuels, make investment in clean energy attractive, increase energy supply, reduce energy shortages, and cut greenhouse gas emissions. Using the money freed up from subsidies to compensate poor households and to increase government budgets will offset the negative effects of the initial price rise, promote sustainable energy use, and help allay the fears of reform. |
| Keywords: | India; Indonesia; Thailand; energy; fossil fuel subsidies; greenhouse gas emissions; energy use; economic impacts; social programs and developing Asia |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt157816-2&r=env |
| By: | Nataraj, Shanthi; Harrison, Ann E.; Martin, Leslie A.; Hyman, Ben |
| Abstract: | India has a multitude of environmental regulations but a history of poor enforcement. Between 1996 and 2004, India's Supreme Court required 17 cities to enact Action Plans to reduce air pollution through a variety of command-and-control (CAC) environmental regulations. We compare the impacts of these regulations with the impact of changes in coal prices on establishment-level pollution abatement, coal consumption, and productivity growth. We find that higher coal prices reduced coal use within establishments, with price elasticities similar to those found in the US. In addition, higher coal prices are associated with lower pollution emissions at the district level. CAC regulations did not affect within-establishment pollution control investment or coal use, but did impact the extensive margin, increasing the share of large establishments investing in pollution control and reducing the entry of new establishments. For reducing SO2 emissions, our results suggest that higher coal prices were more effective in improving environmental outcomes than command and control measures. |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:1133&r=env |
| By: | Koichiro Ito; Shuang Zhang |
| Abstract: | We develop a framework to estimate willingness to pay (WTP) for clean air from defensive investment. Applying this framework to product-by-store level scanner data on air purifier sales in China, we provide among the first revealed preference estimates of WTP for clean air in developing countries. A spatial discontinuity in air pollution created by the Huai River heating policy enables us to analyze household responses to long-run exposure to pollution. Our model allows heterogeneity in preference parameters to investigate potential heterogeneity in WTP among households. We show that our estimates provide important policy implications for optimal environmental regulation. |
| JEL: | L0 Q0 Q5 Q51 Q52 Q53 Q56 Q58 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22367&r=env |
| By: | Stefano Carattini; Andrea Baranzini; Philippe Thalmann; Frédéric Varone; Frank Vöhringer |
| Abstract: | Turning greenhouse gas emissions pledges into domestic policies is the next challenge for governments. We address the question of the acceptability of cost-effective climate policy in a real-voting setting. First, we analyze voting behavior in a large ballot on energy taxes, rejected in Switzerland in 2015 by more than 2 million people. Energy taxes were aimed at completely replacing the current value-added tax. We examine the determinants of voting and find that distributional and competitiveness concerns reduced the acceptability of energy taxes, along with the perception of ineffectiveness. Most people would have preferred tax revenues to be allocated for environmental purposes. Second, at the same time of the ballot, we tested the acceptability of alternative designs of a carbon tax with a choice experiment survey on a representative sample of the Swiss population. Survey respondents are informed about environmental, distributional and competitiveness effects of each carbon tax design. These impacts are estimated with a computable general equilibrium model. This original setting generates a series of novel results. Providing information on the expected environmental effectiveness of carbon taxes reduces the demand for environmental earmarking. Making distributional effects salient generates an important demand for progressive designs, e.g. social cushioning or recycling via lump-sum transfers. The case of lump-sum recycling is particularly striking: it is sufficient to show its desirable distributional properties to make it one of the most preferred designs, which corresponds to a completely novel result in the literature. We show that providing proper information on the functioning of environmental taxes can close both the gap between acceptability ex ante and ex post and the gap between economists’ prescriptions and the preferences of the general public. |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp243&r=env |
| By: | Schusser, Sandra (CERE and the Department of Forest Economics, SLU); Jaraite, Jurate (CERE and the Department of Economics, Umeå University) |
| Abstract: | The European Union's Emissions Trading System (EU ETS) and the Swedish-Norwegian Tradable Green Certicate System (Swedish-Norwegian TGC system) are two market-based instruments that have the overlapping goal to mitigate greenhouse gas (GHG) emissions by shifting economies to cleaner energy sources. Understanding the price signals and interactions of these two newly created markets is essential for all decisions makers, regulators and direct market participants, who aim to reach the predefined environmental policy goals in the most efficient manner. The interaction between these policy instruments has been widely examined from the theoretical perspective. This research contributes to the literature by empirically examining the interplay between the prices of three markets: (1) the price of tradable green certificates in the Swedish-Norwegian TGC system, (2) the price of carbon in the EU ETS and (3) the price of electricity in Nord Pool. We use a multivariate vector-autoregression (VAR) approach to take into account the endogenous relationships between these prices. To date, our empirical results do not support the theoretical considerations that the impacts of carbon price on green certicate prices and on renewable electricity production are negative. Contrary, we find that, to date, increases in carbon prices positively affect green certificate prices at least in the short-run. |
| Keywords: | Renewable energy; Electricity; Green certificates; Emissions trading; EU ETS; interactions; tradable green certificates; Sweden; VAR model |
| JEL: | Q28 Q41 Q42 Q48 |
| Date: | 2016–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2016_010&r=env |
| By: | Shouro Dasgupta (Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo sui Cambiamenti Climatici); Enrica De Cian (Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo sui Cambiamenti Climatici) |
| Abstract: | In this review we synthetize the existing contributions that use econometric approaches to examine the influence of institutions and governance on environmental policy, environmental outcomes, and investments. The paper describes how the relationship between institutions and various response variables related to environmental performance and environmental policy have been conceptualized and operationalized in the literature, and it summarizes the main findings. The second part of the paper outlines avenues for future research in the specific context of energy and climate change. We identify various opportunities for empirical work that have recently emerged with the growing availability of data in the field of green investments, climate, and energy policy. Expanding the current empirical literature towards these research topics is of scientific and policy relevance, and can provide important insights on the broader field of sustainability transition and sustainable development. |
| Keywords: | Institutions, Environmental Performance, Environmental Policy, Investments |
| JEL: | O10 Q5 Q00 P16 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2016.41&r=env |
| By: | Fischer, Carolyn (Resources for the Future) |
| Abstract: | Industrial policy has long been criticized as subject to protectionist interests; accordingly, subsidies to domestic producers face disciplines under World Trade Organization agreements, without exceptions for environmental purposes. Now green industrial policy is gaining popularity as governments search for low-carbon solutions that also provide jobs at home. The strategic trade literature has largely ignored the issue of market failures related to green goods. I consider the market for a new environmental good (such as low-carbon technology) whose downstream consumption provides external benefits (such as reduced emissions). Governments may have some preference for supporting domestic production, such as by interest-group lobbying, introducing a political distortion in their objective function. I examine the national incentives and global rationales for offering production (upstream) and deployment (downstream) subsidies in producer countries, allowing that some of the downstream market may lie in nonregulating third-party countries. Restraints on upstream subsidies erode global welfare when environmental externalities are large enough relative to political distortions. Climate finance is an effective alternative if political distortions are large and governments do not undervalue carbon costs. Numerical simulations of the case of renewable energy indicate that a modest social cost of carbon can imply benefits from allowing upstream subsidies. |
| Keywords: | Green Industrial Policy, Emissions Leakage, Externalities, International Trade, Renewable Energy, Subsidies |
| JEL: | F13 F18 H21 Q5 |
| Date: | 2016–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-16-13&r=env |
| By: | Aslihan Arslan (FAO-ESA); Federico Belotti (CEIS,University of Rome "Tor Vergata"); Leslie Lipper (FAO-ESA) |
| Abstract: | Food security in Tanzania is projected to deteriorate as a result of climate change. In spite of the efforts to promote agricultural practices to improve productivity and food security, adoption rates of such practices remain low. Developing a thorough understanding of the determinants of adoption and updating our understanding of the impacts of these technologies under the site-specific effects of climate change are crucial to improve food security. This paper addresses these issues by using a novel data set that combines information from two large-scale household surveys with geo-referenced historical rainfall and temperature data in order to understand the determinants of the adoption of a set of agricultural practices and their impacts on maize productivity under weather shocks in Tanzania. The specific practices analyzed are: maize-legume intercropping, soil and water conservation practices (SWC), the use of organic fertilizers, inorganic fertilizers and high yielding maize varieties. We find strong complementarities between these practices both in terms of adoption and yield impacts. Long-run variability in rainfall decreases the adoption of fertilizers (both organic and inorganic) and increases that of improved seeds. Access to information and extension increase the incentives to adopt modern inputs as well as SWC. Farmers in areas where the cropping season’s rainfall has been highly variable and temperature has been unexpectedly high have significantly lower maize yields. SWC emerges as one of the most important practices in increasing yields with significant benefits by itself, in combination with other practices, under average weather conditions as well as under rainfall and temperature shocks. The shocks we analyze are expected to increase under climate change, underlining the importance of policies to buffer food security from the estimated effects of climate change. This paper contributes to evidence base to support policies to advance food security under climate change by underlining the importance of integrating site-specific analyses of climatic variables and their interactions with promoted practices in policy design and targeting. |
| Keywords: | Technology adoption, productivity analysis, climate change, panel data, Tanzania. |
| JEL: | C23 C33 Q12 Q15 Q16 Q54 |
| Date: | 2016–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:388&r=env |
| By: | Sophie BERNARD (Polytechnique Montreal) |
| Abstract: | This paper studies the impact of environmental policies when firms can adjust product design as they see fit. In particular, it considers cross relationships between product design dimensions. For example, when products are designed to be more durable, this may add production steps and increase pollutant emissions during production. More generally, changes applied to one dimension can affect the cost or environmental performance of other dimensions. In this theoretical model, a firm interacts with consumers and a regulator. Before the production stage, the firm must choose the levels of three design dimensions: 1) energy performance during production, 2) energy performance during use, and 3) durability. Depending on the assumptions, the dimensions are said to be complementary, neutral, or competitive. The regulator can promote greener designs by applying targeted environmental taxes on emissions during production or consumption. The main results shed light on the consequences of modifying public policies. When some design dimensions are competitive, a targeted emission tax can result in environmental burden shifting, with an overall increase in pollution. This paper also explores the social optimum and the development of second-best policies when some policy instruments are imperfect. Under given conditions, a government would want to regulate and constraint the level of durability. |
| Keywords: | green design, environmental policies, durability |
| JEL: | L10 O13 Q53 Q55 Q58 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:epm:wpaper:2016-01&r=env |
| By: | Habla, Wolfgang (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | This paper demonstrates that unintended effects of climate policies (Green Paradox effects) also arise in general equilibrium when countries compete for mobile factors of production (capital and resources/energy). Second, it shows that countries have a rationale to use strictly positive source-based capital taxes to slow down resource extraction. Notably, this result comes about in the absence of any revenue requirements by the government, and independently of the elasticity of substitution between capital and resources in production. Third, the paper generalizes the results obtained by Eichner and Runkel (2012) by showing that the Nash equilibrium entails inefficiently high pollution. |
| Keywords: | Green Paradox; factor mobility; interjurisdictional competition; resource extraction; substitutability between capital and resources; capital taxation |
| JEL: | E22 H23 H77 Q31 Q58 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0668&r=env |
| By: | Natalia Zugravu-Soilita (CEMOTEV, Université de Versailles Saint-Quentin-en-Yvelines) |
| Abstract: | We investigate the causal effects of trade intensity in environmental goods (EGs) on air and water pollution by treating trade, environmental policy and income as endogenous. We estimate a system of reduced-form, simultaneous equations on extensive data, from 1995 to 2003, for transition economies that include Central and Eastern Europe and the Commonwealth of Independent States. Our empirical results suggest that although trade intensity in EGs (pooled list) reduces CO? emissions mainly through an indirect income effect, it increases water pollution because the income-induced effect does not offset the direct harmful scale-composition effect. No significant effect is found for SO2 emissions with respect to the list of aggregated EGs. In addition to diverging effects across pollutants, we show that results are sensitive to EGs’ classification: e.g., cleaner technologies and products, end-of-pipe products, environmentally preferable products, etc. For instance, a double profit—environmental and economic—is found only for “cleaner technologies and products” in the models explaining greenhouse gases emissions. Interesting findings are discussed for imports and exports of various classifications of EGs. Overall, we cannot support global and uniform trade liberalization for EGs in a sustainable development perspective. Regional or bilateral trade agreements taking into account the states’ priorities could act as building blocks towards a global, sequentially achieved liberalization of EGs. |
| Keywords: | trade liberalization, environmental goods, environmental policy, pollution, transition countries |
| JEL: | F13 F14 F18 Q56 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2016.16&r=env |
| By: | Bento, Antonio (University of Southern California, Sol Price School of Public Policy and NBER); Kanbur, Ravi; Leard, Benjamin |
| Abstract: | Incorporating carbon offsets in the design of cap-and-trade programs remains a controversial issue because of its potential unintended impacts on emissions. At the heart of this discussion is the issue of crediting of emissions reductions. Projects can be correctly, over- or under-credited for their actual emissions reductions. We develop a unified framework that considers the supply of offsets within a cap-and-trade program that allows us to compare the relative impact of over-credited offsets and under-credited emissions reductions on overall emissions under different levels of baseline stringency and carbon prices. In the context of a national carbon pricing scheme that includes offsets, we find that the emissions impacts of over-credited offsets can be fully balanced out by under-credited emissions reductions without sacrificing a significant portion of the overall supply of offsets, provided emissions baselines are stringent enough. In the presence of high predicted business-as-usual (BAU) emissions uncertainty or low carbon prices, to maintain the environmental integrity of the program, baselines need to be set at stringent levels, in some cases below 50 percent of predicted BAU emissions. As predicted BAU emissions uncertainty declines or as the carbon market achieves higher equilibrium prices, however, less stringent baselines can balance out the emissions impacts of over-credited offsets and under-credited emissions reductions. These results imply that to maintain environmental integrity of offsets programs, baseline stringency should be tailored to project characteristics and market conditions that influence the proportion of over-credited offsets to under-credited emissions reductions. |
| Keywords: | Carbon Offsets, Crediting, Environmental Integrity |
| Date: | 2016–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-16-11&r=env |
| By: | Wichman, Casey J. (Resources for the Future); Taylor, Laura O.; von Haefen, Roger H. |
| Abstract: | Although prescriptive policies are commonly employed by resource managers to encourage conservation, economists tend to advocate for pricing mechanisms on efficiency grounds. However, many environmental management contexts involve resources whose prices are regulated by utility commissions or federal oversight. As such, the use of pricing tools to encourage conservation is politically challenging. This is particularly true with water resource management. Efficiency would dictate that price should reflect long-run marginal cost of provision, including scarcity rents, which is typically greater than regulated market prices (Mansur and Olmstead 2012). As such, nonprice strategies, also referred to as prescriptive policies, have become popular demand management tools for water conservation during periods of drought when the short-run reliability of water resource systems is at risk. These strategies can take the form of restrictions on outdoor water use (Castledine et al. 2014; Renwick and Green 2000), information campaigns (Coleman 1999), social comparisons (Ferraro and Price 2013), or financial incentives for technology adoption (Bennear et al. 2013; Renwick and Archibald 1998). A noteworthy case where nonprice (and to a lesser degree, price) policies have been adopted to reduce water consumption is that of California, where Governor Jerry Brown recently issued an executive order that mandates a 25 percent reduction in urban potable water use to combat the ongoing statewide drought. |
| Keywords: | water demand, nonprice policies, price regulation, conservation, drought |
| JEL: | Q25 D12 H42 L51 L95 |
| Date: | 2016–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-16-10&r=env |
| By: | Cooke, Roger M. (Resources for the Future); Golub, Alexander; Wielicki, Bruce A.; Mlynczak, Martin G.; Young, David F.; Baize, Rosemary R. |
| Abstract: | One of the critical uncertainties in estimating future climate change is climate sensitivity. Climate sensitivity uncertainty is driven by uncertain low cloud feedback in the climate system. Low cloud feedback is very closely related to decadal changes in the effect of low clouds on reflected solar radiation or shortwave cloud radiative forcing. This study computes the real option value of higher accuracy cloud radiative forcing measurements using the Inter Agency Memo on the Social Cost of Carbon, thereby extending a previous study of real option value based on observing decadal rate of temperature rise. The real option values for measuring cloud radiative forcing are roughly double that of measuring decadal temperature rise. This reflects the fact that triggering on temperature generally occurs earlier with less pronounced differences between the new and existing observing systems. |
| Date: | 2016–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-16-19&r=env |
| By: | G. Cornelis van Kooten |
| Abstract: | California was the first jurisdiction to mandate a reduction in greenhouse gas (GHG) emissions by 80% below 1990 levels by 2050. This target was subsequently endorsed by the G8 in 2009 and the European Commission in 2014, and is the guiding principle of the 2015 Paris Agreement. To achieve these targets will require near elimination of fossil fuels and/or a technological breakthrough that might be considered a black swan event. Eschewing nuclear power, countries are relying on renewable energy sources to meet future energy needs. In this paper, I examine the prospects of reducing GHG emissions by 80% by first summarizing extant global energy sources and production, trends and projections of energy demand, and the potential mix of future energy sources. I consider the role of conservation and then focus on the electricity sector to determine how wind and biomass could contribute to the 80% target. I conclude that these ambitious targets cannot be attained without nuclear power. |
| Keywords: | Climate change; intermittent energy; biofuels; nuclear power; fossil fuels |
| JEL: | H41 L51 L94 Q42 Q48 Q54 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:rep:wpaper:2016-05&r=env |
| By: | Zhang, Xin (Peking University); Zhang, Xiaobo (Peking University); Chen, Xi (Yale University) |
| Abstract: | This paper estimates the monetary value of cutting PM2.5, a dominant source of air pollution in China. By matching hedonic happiness in a nationally representative survey with daily air quality data according to exact dates and locations of interviews in China, we are able to estimate the relationship between local concentration of particulate matter and individual happiness. By holding happiness constant, we calculate the tradeoff between the reduction in particulate matter and income, essentially a happiness-based measure of willingness-to-pay for mitigating air pollution. We find that people on average are willing to pay ¥539 ($88, or 3.8% of annual household per capita income) for a 1 μg/m3 reduction in PM2.5 per year per person. |
| Keywords: | willingness to pay, hedonic happiness, air pollution, China |
| JEL: | Q51 Q53 I31 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10028&r=env |
| By: | Jean-Thomas Bernard (Department of Economics, University of Ottawa, Ottawa, ON); Md. Jakir Hussain (Department of Economics, University of Ottawa, Ottawa, ON); Mishaal Masud Sinha (Department of Economics, University of Ottawa, Ottawa, ON) |
| Abstract: | In this paper we capitalize on our access to plant level data in examining the relative changes in emissions of three major pollutants | Biochemical Oxygen Demand (BOD), Total Suspended Solids (TSS), and Greenhouse Gas (GHG) | for Canadian pulp and paper mills covering the period from 2005 to 2013. Over this eight-year period emissions of these three pollutants decreased by 31.0%, 35.5% and 42.5%, respectively, for the plants included in our sample. Access to plant data allows us to investigate the roles played by some specific factors, such as changes in output, emission intensity, allocation of production among surviving plants, and plant closures, in contributing to the abrupt decline in emissions. Information on fairly homogeneous groups of plants, formed on the basis of production processes and output mixes, reveals a diverse picture of the roles played by these factors. For our analytical framework we adapt the factor decomposition technique proposed by Levinson (2015) to plant data. Our findings suggest that output change has been the main factor behind the reduction in emissions at the industry level, and that improvement of emission intensity by surviving plants | the so-called technique effect | brought a small, yet positive contribution. However, production shift among surviving plants and plant closure had almost no effects. Moreover, there are no indications that market operations determining plant output and plant survival led to lower emissions. |
| Keywords: | Biochemical Oxygen demand (BOD), Total Suspended Solids (TSS), Greenhouse Gas (GHG) Emissions, technique effect, pulp and paper industry |
| JEL: | Q55 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:1604e&r=env |
| By: | Arvaniti, Maria (CERE and the Department of Economics, Umeå University) |
| Abstract: | Building upon the work of Pindyck(2012), I show how different assumptions regarding the utility and damage functions can support the immediate adoption of a stringent abatement policy. I employ an additive rather than a multiplicative form for the utility function and a damage function that accounts for extreme climate change. Using the distribution for temperature change and the economic impact provided by Pindyck (2012), based on information from the IPCC (2007) and recent IAMs, I estimate a simple measure of “willingness to pay". My specifications lead to significantly higher estimations for the WTP than in Pindyck and in some extreme cases to a value close to 1. Although one could not strongly argue which is the right specification for the model, the analysis suggests that seemingly small differences in modelling can have very different policy implications. |
| Keywords: | environmental policy; climate change; uncertainty; catastrophic outcomes; willingness to pay |
| JEL: | Q54 |
| Date: | 2016–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2016_011&r=env |
| By: | Holger Breinlich; Anson Soderbery; Greg C. Wright |
| Abstract: | This paper investigates whether importing intermediate goods improves firm-level environmental performance in a developing country, using data from the Indonesian manufacturing sector. We build a simple theoretical model showing that trade integration of input markets entails energy efficiency improvements within importers relative to nonimporters. To empirically isolate the impact of firm participation in foreign intermediate input markets we use ‘nearest neighbour’ propensity score matching and difference-indifference techniques. Covering the period 1991-2005, we find evidence that becoming an importer of foreign intermediates boosts energy efficiency, implying beneficial effects for the environment. |
| Keywords: | Services Trade, Trade Liberalization, Import Competition |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:16/07&r=env |
| By: | Emilie Bécault (GGS, KU Leuven); Axel Marx (GGS, KU Leuven) |
| Abstract: | The main objective of this working paper is to take a preliminary look at how climate finance to developing countries has been developing outside the multilateral realm and at times, even independently from states. To this end, we first provide a review of the core concepts used in the academic and policy discourses on global climate finance, and then proceed by mapping three types of non-multilateral financing initiatives: bilateral, private and hybrid. While we found significant evidence that the non-multilateral realm of climate finance to developing countries is growing both in scope and in diversity, there remains substantial obstacles to properly tracking and monitoring international climate financial flows to developing countries. In addition, our analysis suggests that a central question in current and future UN climate negotiations should be how to better link private finance to public funding institutions and instruments to scale up funding for adaptation activities in developing countries most vulnerable to the effects of climate change. |
| Keywords: | climate finance, climate flows, climate change, public-private partnerships, climate-related development aid, climate financing initiatives |
| JEL: | F55 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:nam:befdwp:0109&r=env |
| By: | Burtraw, Dallas (Resources for the Future); McCormack, Kristen |
| Abstract: | The initial distribution of emissions allowances is usually thought to be independent of the emissions outcome, but free allocation can affect the efficiency and fairness of allowance trading. Inefficiency may result from thin allowance markets, poor price discovery, and regulatory or organizational complexities that hinder recognition of opportunity costs and innovation. Concerns about fairness may result from lack of access to allowances for some entities and lack of transparency with respect to transfers of substantial value in the program. We explore the role of consignment auctions in mitigating these concerns. These revenue-neutral auctions return revenue to the original allowance holders, whose compliance obligations can be met by reacquiring allowances through purchase. Consignment auctions have minimal administrative costs and do not necessarily involve government. Experience indicates that they can play an important role in a new market. EPA and states could consider consignment auctions in planning for the Clean Power Plan. |
| Keywords: | Climate Change, Clean Air Act, Clean Power Plan, Emissions Markets, Cap and Trade, Allocation, Environmental Markets |
| JEL: | H44 Q53 D23 |
| Date: | 2016–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-16-20&r=env |
| By: | Chang, Tom (University of Southern California); Graff Zivin, Joshua (University of California, San Diego); Gross, Tal (Columbia University); Neidell, Matthew (Columbia University) |
| Abstract: | We investigate the effect of pollution on worker productivity in the service sector by focusing on two call centers in China. Using precise measures of each worker's daily output linked to daily measures of pollution and meteorology, we find that higher levels of air pollution decrease worker productivity by reducing the number of calls that workers complete each day. These results manifest themselves at commonly found levels of pollution in major cities throughout the developing and developed world, suggesting that these types of effects are likely to apply broadly. When decomposing these effects, we find that the decreases in productivity are explained by increases in time spent on breaks rather than the duration of phone calls. To our knowledge, this is the first study to demonstrate that the negative impacts of pollution on productivity extend beyond physically demanding tasks to indoor, white-collar work. |
| Keywords: | pollution, productivity |
| JEL: | J22 J24 Q51 Q53 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10027&r=env |
| By: | Houévoh Amandine R. Gnonlonfin (LEAD, Université de Toulon) |
| Abstract: | This study investigates the preventive effect and substitution effect of the Municipal Solid Waste (MSW) pricing policy in France. We examine the relationship between quantities of MSW and incentive taxes with the use of a panel of 96 French metropolitan departments between 2005 and 2011, and we use panel data and Heckman two-step estimation in order to consider sample selection. We perform the analysis for the collection of MSW and six technologies of management of the waste, namely recycling materials, composting, incineration with and without energy recovery, landfilling and dumping. We estimate the elasticity of the collection of MSW and the elasticity of these technologies in relation to three incentive taxes of the French pricing system by considering the endogeneity of municipality’s decisions about both local incentive tax and technology choice. The results confirm that the French MSW pricing system has a preventive and a substitution effect and show that these effects are complementary. |
| Keywords: | municipal solid waste pricing system, user fee, Extend Producer Responsibility, tax on elimination, preventive effect, substitution effect |
| JEL: | H21 H23 Q53 Q56 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2016.18&r=env |
| By: | Alem, Yonas (Department of Economics, School of Business, Economics and Law, Göteborg University); Maurel, Mathilde (CNRS-Centre d'Economie de la Sorbonne, and FERDI); Millock, Katrin (CNRS-Paris School of Economics) |
| Abstract: | There is solid scientific evidence predicting that a large part of the developing world will suffer a greater incidence of extreme weather events, which may increase the incidence of displacement migration. We draw on the new economics of migration to model migration decisions of smallholder and rain-dependent farm households in rural Ethiopia and investigate both the ex-ante and ex-post impacts of climate variables. Using detailed household survey panel data matched with rainfall data, we show that weather variability - measured by the coeffcient of variation of rainfall - has a strong positive impact on the probability of sending a migrant. This implies that households engage in migration to cope with risk ex-ante. We also find evidence suggesting that rainfall shocks have ex-post impact on households' likelihood of migration, but the effect is not statistically significant at the conventional levels. Instrumental variables probit regression results also show that controlling for endogeneity of income using a credible instrument is important to identify its impact on the decision to send a migrant. Our findings have important implications for policies aiming to improve the capacity of vulnerable households to adapt to climate change. |
| Keywords: | climate change; drought; Ethiopia; household survey; migration; rainfall. |
| JEL: | O15 Q54 R23 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0665&r=env |
| By: | Abramczuk, Łukasz; Augustyńska-Grzymek, Irena; Czułowska, Magdalena; Jabłoński, Konrad; Józwiak, Wojciech; Skarżyńska, Aldona; Zieliński, Marek; Ziętara, Wojciech; Żekało, Marcin |
| Abstract: | Households engaged in agricultural production and agricultural holdings of natural persons with characterisitics of enterprises. Economic standing and investment activity of agricultural holdings particularly vulnerable to agricultural drought and other holdings in 2006-2013. Organisation and efficiency of Polish agricultural holdings specialising in field crops against holdings from selected countries. Gross margin from selected agricultural products in 2014 – regional approach. The smallest and the largest domestic agricultural entities of natural persons not covered by the monitoring of the Polish FADN in 2010-2013. |
| Keywords: | households, agricultural production, agricultural holdings, economic standing, investment activity, organization, efficiency, Polish agricultural holdings, field crops, gross, agricultural products, domestic agricultural entities, Polish FADN, climate change, agricultural policy, Agribusiness, Agricultural and Food Policy, Agricultural Finance, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iafepr:236931&r=env |
| By: | Gallier, Carlo; Langbein, Jörg; Vance, Colin |
| Abstract: | We conduct a framed field experiment in Indonesian fishing communities with an eye towards evaluating the potential of Territorial Use Rights for Fisheries (TURFs) for preserving coral reef fisheries. Conducted in three culturally distinctive sites, the study assembles groups of five fishers who participate in a common-pool resource game. We implement the game with randomly assigned treatments in all sites to explore whether the extraction decision varies according to three recommended non-binding extraction levels originating from (1) a democratic process, (2) a group leader or (3) an external source that recommends a socially optimal extraction level. In one of the sites - that having the highest levels of ethnic and religious diversity - we find that democratic decision-making as well as information originating from outside the community promotes the cooperative behavior that underpins TURFs, a result that is robust to regressions controlling for individual and community attributes. The absence of treatment effects in the remaining two sites highlights that a set of formal rules may have different consequences in different communities, depending on underlying values and norms. |
| Keywords: | Framed field experiment,Commons dilemmas,Coral reefs,Self-governance |
| JEL: | C93 H43 L31 Q32 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16046&r=env |
| By: | Gibson, Fiona; Pannell, David; Boxall, Peter; Burton, Michael; Johnston, Robert; Kragt, Marit; Rogers, Abbie; Rolfe, John |
| Abstract: | Natural hazards have a wide range of impacts, including on factors that are normally unpriced because they are not bought and sold in markets. Key examples include impacts on human health, the environment, ecosystem services and other outcomes relevant to social welfare. Economists seek to quantify these impacts in financial-equivalent terms in order to be able to compare them with market impacts and include them in Benefit: Cost Analysis (BCA) of policies and strategies to mitigate risks. Estimating these so-called non-market values can be difficult. This paper reviews the methods available for doing so, presents a comprehensive list of the non-market values that might be affected by natural hazards and reviews the existing literature that estimates non-market values relevant to natural hazards. We find that there are few applications specifically in a natural hazard context. We conclude with a discussion on the limitations of non-market valuation in the natural hazard context. |
| Keywords: | natural hazard, mitigation, non-market valuation, intangibles, Environmental Economics and Policy, Q51, |
| Date: | 2016–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uwauwp:236941&r=env |
| By: | Amundsen, Eirik Schrøder (Department of Economics, University of Bergen); Nese, Gjermund (Norwegian Competition Authority.) |
| Abstract: | A market for Tradable Green Certificates (TGCs) is strongly interwoven in the electricity market as the producers of green electricity are also the suppliers of TGCs. Therefore, strategic interaction may result. We formulate an analytic equilibrium model for simultaneously functioning electricity and TGC markets, and focus on the role of market power (i.e. Stackelberg leadership). One result is that a certificate system faced with market power may collapse into a system of per unit subsidies. Also, the model shows that TGCs may be an imprecise instrument for regulating the generation of green electricity. |
| Keywords: | Renewable energy; Electricity; Green Certificates; Market power |
| JEL: | C70 Q28 Q42 Q48 |
| Date: | 2016–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2016_004&r=env |
| By: | Weisbach, David (The University of Chicago Law School); Kortum, Sam |
| Abstract: | We consider the economics and the design of border adjustments (BAs) under a carbon tax. BAs are taxes on imports and rebates on exports on the emissions from the production of a good. They are thought to be a method of reducing inefficiencies from a unilateral carbon price, such as shifts in the location of production, known as leakage. After examining the basic economics of BAs, we examine three design issues: which goods BAs should apply to, which emissions from the production of those goods should be taxed, and from and to which countries BAs should apply. We conclude that BAs will impose high administrative costs and need strong welfare justifications. |
| Keywords: | carbon taxes, leakage, border adjustments |
| Date: | 2016–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-16-09&r=env |
| By: | Basak Bayramoglu (Economie Publique, INRA, AgroParisTech, Université Paris-Saclay); Michael Finus (Department of Economics, University of Bath); Jean-François Jacques (Université Paris-Est, ERUDITE, and LEDa-CGEMP, Université Paris-Dauphine) |
| Abstract: | We study the strategic interaction between mitigation (public good) and adaptation (private good) strategies in a climate agreement. We show that these two strategies are strategic substitutes considering various definitions of substitutability. Moreover, adaptation may cause mitigation levels between different countries to be no longer strategic substitutes but complements. We analyze under which conditions this leads to more succesful self-enforcing agreements. We argue that our results extend to many important externality problems involving public goods. |
| Keywords: | C71, D62, D74, H41, Q54 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2016.17&r=env |
| By: | Roson,Roberto; Sartori,Martina |
| Abstract: | Climate change damage (or, more correctly, impact) functions relate variations in temperature (or other climate variables) to economic impacts in various dimensions, and are at the basis of quantitative modeling exercises for the assessment of climate change policies. This document provides a summary of results from a series of meta-analyses aimed at estimating parameters for six specific damage functions, referring to: sea level rise, agricultural productivity, heat effects on labor productivity, human health, tourism flows, and households'energy demand. All parameters of the damage functions are estimated for each of the 140 countries and regions in the Global Trade Analysis Project 9 data set. To illustrate the salient characteristics of the estimates, the change in real gross domestic product is approximated for the different effects, in all regions, corresponding to an increase in average temperature of +3°C. After considering the overall impact, the paper highlights which factor is the most significant one in each country, and elaborates on the distributional consequences of climate change. |
| Keywords: | Climate Change Economics,Science of Climate Change,Climate Change Mitigation and Green House Gases,Wetlands,Health Monitoring&Evaluation |
| Date: | 2016–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7728&r=env |
| By: | Gray, Wayne B. (Clark University); Linn, Joshua; Morgenstern, Richard D. |
| Abstract: | To estimate the potential impact of California’s cap-and-trade program on the state’s energy-intensive, trade-exposed manufacturing industries, this paper uses confidential plant-level Census data to model the effect of historical energy prices on plant-level output, employment, and value added, both inside and outside California, holding constant foreign energy prices. Simulation of the model for an assumed compliance cost of $10 per metric ton of carbon dioxide equivalent (CO2) in California and zero outside the state yields 0 to 3 percent short-term (one year) impacts for almost a third of the industries studied with no output-based rebating. The largest losses are estimated in glass container manufacturing (17 percent), paperboard mills (14 percent), automobile manufacturing (13 percent), iron and steel mills and ferroalloy manufacturing (12 percent), and poultry processing (11 percent); these industries are among the most energy intensive of those studied. Estimated losses for another group of five industries are about 10 percent. These losses should be compared to an overall average one year loss of about 5.7 percent across all the California energy-intensive, trade-exposed industries studied. Simulations of higher compliance costs (up to $22 per metric ton of CO2) result in correspondingly larger losses. Over the long run, defined as a five-year period, the results suggest that increases in California's energy prices relative to those in nearby states have smaller effects than those effects seen over 1 year. Over this longer period, the largest output losses are below 1 percent, with most industries experiencing output losses below 0.1 percent, although for a variety of technical reasons the authors offer caution when interpreting the industry-specific long-run results. |
| Keywords: | Carbon Price, Competitiveness, Leakage |
| JEL: | D21 H23 J23 |
| Date: | 2016–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-16-17&r=env |
| By: | Tiongco, Marites M.; Vista, Arvin; Cororaton, Caesar B.; Inocencio, Arlene B.; Manalang, Anna Bella S. |
| Abstract: | To avert the continued deterioration of Philippine forests and its negative consequences on the environment, the Aquino administration executed the National Greening Program (NGP) as the reforestation initiative of the government from 2011 to 2016. This study focuses on the scoping and process evaluation of the NGP using household survey, key informant interviews, and focus group discussions data gathered from the randomly chosen sites in the provinces of Zambales, Negros Occidental, and Dinagat Islands. Key results showed that the NGP household recipients experienced some marginal increase in average real income, though it was not statistically significant. The same is true when comparing NGP household recipients versus non-NGP household recipients. Propensity score matching results revealed that the effects of NGP on the local people have evidently induced bigger household size, higher number of working household members, and positive perception on NGP activities. In summary, there is no "one-size fits all" NGP strategy that would increase the likelihood of success. Recommended modification in the next program on Natural Forest and Landscape Restoration Program can focus on adjustments in allocated budget for forest development per hectare, revisions of incentives appropriate in a given reforestation site, and increased support to forest protection of existing forests, among many other suggested actions. |
| Keywords: | Philippines, National Greening Program (NGP), reforestation, Department of Environment and Natural Resources (DENR), forest development, impact assessment, propensity score matching |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:phd:rpseri:dp_2016-27&r=env |
| By: | Johannes Emmerling (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy); Laurent Drouet (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy); Lara Aleluia Reis (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy); Michela Bevione (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy); Loic Berger (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy Bureau Fédéral du Plan, Belgium); Valentina Bosetti (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy, Bocconi University, Italy); Samuel Carrara (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy); Enrica De Cian (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy); Gauthier De Maere D'Aertrycke (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy, Engie, Belgium); Tom Longden (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy, University of Technology Sydney, Australia); Maurizio Malpede (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy); Giacomo Marangoni (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy); Fabio Sferra (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy, Climate Analytics, Germany); Massimo Tavoni (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy, Politecnico di Milano, Italy); Jan Witajewski-Baltvilks (Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy, Institute for Structural Research, Poland); Petr Havlik (International Institute for Applied Systems Analysis (IIASA), Austria) |
| Abstract: | This paper describes the WITCH - World Induced Technical Change Hybrid - model in its structure, calibration, and the implementation of the SSP/RCP scenario implementation. The WITCH model is a regionally disaggregated hard-linked model based on a Ramsey type optimal growth model and a detailed bottom-up energy sector model. A particular focus of the model is the modeling or technical change and RnD investments and the analysis of cooperative and non-cooperative climate policies. Moreover, the WITCH 2016 version now includes land-use change modeling based on the GLOBIOM model, and air pollutants, as well as detailed modeling of the transport sector and the possibility for stochastic modeling. This version has been also used to implement the Shared Socioeconomic Pathways (SSPs) set of scenarios and RCP based climate policies to provide a new set of climate scenarios. In this paper, we describe in detail the mathematical formulation of the WITCH model, the solution method and calibration, as well as the implementation of the five SSP scenarios. This report therefore provides detailed information for interested users of the model, and for understanding the implementation of the different “worlds" of the SSP. |
| Keywords: | Integrated Assessment Model, SSPs, Climate Change, Scenarios |
| JEL: | Q54 C63 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2016.42&r=env |
| By: | Kris Bachus (HIVA, KU Leuven) |
| Abstract: | This research paper presents a conceptual framework to analyze the reporting and mapping of climate finance. In particular, the paper discusses the most relevant concepts and definitions with respect to climate-related development finance. It presents a comprehensive overview of the most important methodologies used to report and map climate finance and discusses the strengths and weaknesses of each methodology. In a second paper (due in 2016), we will use this conceptual framework to draw up a comprehensive overview of the current reporting on official climate-related development finance in Belgium, distinguishing between the different levels of governance. Based on this mapping exercise, we will then identify potential gaps in the reporting of official climate-related development finance in Belgium. |
| Keywords: | climate finance, climate flows, climate-related development finance, climate change, UNFCCC |
| JEL: | F35 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:nam:befdwp:0104&r=env |
| By: | Kris Bachus (HIVA, KU Leuven); Kristine Van Herck (HIVA, KU Leuven); Lize Van Dyck (HIVA, KU Leuven) |
| Abstract: | This research paper provides an overview of the main international climate finance and governance bodies, such as the Green Climate Fund (GCF), where Belgium was a Board member in 2015. The specific objectives of the study are to provide a comprehensive overview of the financial instruments that a donor can use to make contributions to the GCF taking into account the aim of the GCF and the institutional context (“upstream financial instruments”), the financial instruments that the Board of the GCF and national and regional intermediaries can use to mobilize private finance (“instream financial instruments”) and the financial instruments that the Board of the GCF can use to finance projects (“downstream financial instruments”). |
| Keywords: | Green Climate Fund, climate finance, climate flows, climate-related development finance, climate change, UNFCCC |
| JEL: | F35 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:nam:befdwp:0108&r=env |
| By: | Brown, Zachary; Connor, Lawson; Rejesus, Rod; Jose, Yorobe |
| Abstract: | This paper proposes the application of an econometric methodology developed in the environmental and urban economics literatures for studying spatial congestion and agglomeration to the context of agricultural pest control and technology adoption. The methodology allows the identification of spillover effects, either from bioeconomic feedbacks or social interactions, in discrete choice econometric models. We apply this framework to study area-level adoption and potential feedbacks from individuals’ decisions to adopt pesticidal transgenic corn, using a panel dataset from the Philippines. In a conceptual model, we show that a bioeconomic feedback through pest suppression will manifest as congestion effect. Identification in the econometric model is achieved by combining fixed effect conditional logit estimation with instrumental variable (IV) methods. Applying this econometric approach, we find evidence for a congestion spillover associated with the adoption of transgenic corn in the Philippines. |
| Keywords: | Crop Production/Industries, Environmental Economics and Policy, Industrial Organization, Risk and Uncertainty, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea16:239267&r=env |
| By: | Linn, Joshua (Resources for the Future); Yang, Jun; Liu, Antung A.; Qin, Ping |
| Abstract: | To reduce pervasive problems of traffic congestion and air pollution, many cities in developing countries have considered restricting vehicle ownership. There is no empirical evidence on these programs’ efficacy and costs, but other prior work suggests that not having a car increases the cost of commuting and limits the set of job opportunities. However, these prior studies do not address the endogeneity of car ownership. We leverage a unique policy, the Beijing license plate lottery, to estimate the effect of restricting vehicles on distance traveled and commuting time, while addressing the endogeneity of car ownership. We find that adding a car has little impact on total distance traveled or time spent traveling, but a large impact on mode of travel. While reducing car ownership by 20 percent and car travel distance by 10 percent in Beijing, this policy has not added significantly to overall distances traveled or commute times. |
| Date: | 2016–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-16-18&r=env |
| By: | Kwasek, Mariola; Prandecki, Konrad; Zegar, Józef Stanisław |
| Abstract: | SUSTAINABLE DEVELOPMENT, AGRICULTURE, RURAL AREAS, PRODUCTIVITY, PROFITABILITY, SUSTAINABLE AGRICULTURE, ECONOMIC FOOD AVAILABILITY, FOOD SECURITY, POLAND |
| Keywords: | Agribusiness, Agricultural and Food Policy, Agricultural Finance, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iafepr:236943&r=env |
| By: | Greer Gosnell; John List; Robert Metcalfe |
| Abstract: | Understanding motivations in the workplace remains of utmost import as economies around the world rely on increases in labor productivity to foster sustainable economic growth. This study makes use of a unique opportunity to "look under the hood" of an organization that critically relies on worker effort and performance. By partnering with Virgin Atlantic Airways on a field experiment that includes over 40,000 unique flights covering an eight-month period, we explore how information and incentives affect captains' performance. Making use of more than 110,000 captain-level observations, we find that our set of treatments-which include performance information, personal targets, and prosocial incentives-induces captains to improve efficiency in all three key flight areas: pre-flight, in-flight, and post-flight. We estimate that our treatments saved between 266,000-704,000 kg of fuel for the airline over the eight-month experimental period. These savings led to between 838,000-2.22 million kg of CO2 abated at a marginal abatement cost of negative $250 per ton of CO2 (i.e. a $250 savings per ton abated) over the eight-month experimental period. Methodologically, our approach highlights the potential usefulness of moving beyond an experimental design that focuses on short-run substitution effects, and it also suggests a new way to combat firm-level externalities: target workers rather than the firm as a whole. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:feb:framed:00412&r=env |
| By: | Boskovic, Branko (University of Alberta); Nøstbakken, Linda (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | Regulation often evolves, and affected consumers or firms may adjust their behavior in anticipation of potential changes to regulation. Using shifting land use regulation boundaries and oil lease prices from Canada, we estimate the effect of anticipated regulatory change on the value of land. We find that anticipated rezoning decreases the price of unregulated leases. Based on our estimates, not accounting for anticipation underestimates the total cost of the regulation by nearly one-third. Overall, the evidence suggests that anticipation effects are signi cant and that the cost of anticipated regulation is capitalized into land values. |
| Keywords: | Regulation; anticipation; land values; zoning; oil leases; endangered species. |
| JEL: | D44 Q30 Q52 Q58 |
| Date: | 2016–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2016_009&r=env |
| By: | Chemla, Gilles; Hennessy, Christopher |
| Abstract: | According to conventional wisdom, RCTs and natural experiments represent especially credible bases for econometric inference, facilitating evidence-based policymaking. We assess credibility in dynamic settings, examining robustness of evidence derived from an exogenous first-stage randomization applied to measure zero subjects. If government is able (unable) to alter policy in response, experimental evidence is contaminated (uncontaminated) by ex post policy endogeneity: Measured responses depend upon the government objective function into which the evidence will be fed. Similarly, if government perceives experimental evidence as credible (non-credible), the very act of observation changes (does not change) agent behavior. Thus, paradoxically, the experimental evidence is contaminated if and only if government is willing and able to use it. Ex post endogeneity causes measured responses to hinge upon (unknown) parameters of the governmental objective function, as well as a priori beliefs regarding the causal parameters to be estimated. Moreover, heterogeneous causal effect parameters induce endogenous belief heterogeneity. This link between beliefs and causal effect parameters makes it difficult, and potentially impossible, to isolate the latter using experimental evidence. Finally, we show treatment-control differences in RCTs are contaminated unless stock variable accumulation cost functions satisfy strong functional form assumptions: zero fixed costs, equality of buy and sell prices, and quadratic adjustment costs. |
| Keywords: | firms; government; investment; natural policy experiments; pollution; randomized controlled trials |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11361&r=env |
| By: | Lazkano, Itziar (Dept. of Economics, Norwegian School of Economics and Business Administration); Nøstbakken, Linda (Dept. of Economics, Norwegian School of Economics and Business Administration); Pelli, Martino (Université de Sherbrooke) |
| Abstract: | We analyze the role of electricity storage for technological innovations in electricity generation. We propose a directed technological change model of the electricity sector, where innovative rms develop better electricity storage solutions, which a ect not only the relative competitiveness between renewable and nonrenewable electricity Sources but also the ease with which they can be substituted. Using a global rm-level data set of electricity patents from 1963 to 2011, we empirically analyze the determinants of innovation in electricity generation, and the role of storage in directing innovation. Our results show that electricity storage increases innovation not only in renewables but also in conventional technologies. This implies that efforts to increase innovation in storage can benefit conventional, fossil fuel- red electricity plants as well as increasing the use of renewable electricity. |
| Keywords: | Innovation; Directed technical change; Electricity storage; Electricity markets; Power generation |
| JEL: | O30 O40 O50 Q20 Q30 Q40 Q50 |
| Date: | 2016–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2016_011&r=env |
| By: | Edwin Zaccai |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/232157&r=env |
| By: | Ross, Heather (Resources for the Future) |
| Abstract: | Establishing a public-private agency to operate the US Strategic Petroleum Reserve, a common arrangement in other member nations of the International Energy Agency (IEA), can improve the reserve’s performance as an oil shock buffer in a systemically volatile market by strengthening its coordination with other government and commercial stockholdings and transportation infrastructure. Requiring oil companies to purchase and maintain oil in the reserve sufficient, in concert with other stocks, to meet the IEA’s 90-day strategic stockholding standard can protect the reserve from loss of functionality as a result of future federal budget–driven drawdowns or inadequate operating funds. The fee paid on oil production and imports to purchase the oil in the reserve will introduce an essential price corrective in the domestic oil market. Most important, it will release the large store of value locked in the little-used reserve to combat, through essential clean energy R&D, a monumentally bigger energy threat — climate change. |
| Keywords: | Oil, Climate, Clean Energy R&D, Mission Innovation, Strategic Petroleum Reserve |
| Date: | 2016–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-16-14&r=env |
| By: | Stefano F. Verde; Christoph Graf; Thijs Jong and Claudio Marcantonini |
| Abstract: | Focusing on the industrial sector of the EU ETS, this study identifies and analyses the entries and the exits of installations into and from the system over the period 2005-2013. The overall number of exits was notable relative to the number of installations, and significantly greater than that of the entries. Further, we estimate a hazard model for the risk of an installation exiting the EU ETS, which identifies a number of different factors referring to the installation, the firm, and the economy, explaining the occurrence of this event. In addition to these, an “end-of-phase effect” is found, whereby the chances of exit were significantly higher in the final years of the EU ETS Phases I and II. This effect, related to the rules concerning the closure of an installation and the withdrawal of the relative allowances, is detrimental to the allocative efficiency of the system and, therefore, to its cost-effectiveness in emissions abatement. The evidence provided by the study and some of its methodological aspects may be useful for future attempts to identify investment leakage in the EU ETS. |
| Keywords: | EU ETS, entries and exits, manufacturing sector, hazard model, end-of-phase effect |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2016/19&r=env |
| By: | Sushama Murty (University of Exeter and Jawaharlal Nehru University); R. Robert Russell (University of California, Riverside) |
| Abstract: | We study the link between the by-production approach of Murty, Russell, and Levkoff [2012 J. Environ. Econ.] (MRL) and the axiomatic approach of Murty [2015 Econ. Theory] to modelling emission-generating technologies. We show that the by-production technology of MRL, obtained as an intersection of two independent sub-technologies, satisfies all the Murty axioms. Conversely, a technology satisfying all these axioms decomposes into two independent sub- technologies having the MRL features. These two sub-technologies, reflect, respectively, the relations between goods in intended-output production designed by human engineers, on the one hand, and the emission-generating mechanism of nature governed by material-balance considerations, on the other. In either approach, the technology can be functionally represented by two radial distance functions with well-defined properties. These distance functions can also serve as measures of technological and environmental efficiency. We exploit the link between the by-production and axiomatic approaches to offer preliminary suggestions about suitable functional forms for the empirical estimation of the two distance functions. |
| URL: | http://d.repec.org/n?u=RePEc:ind:citdwp:16-01&r=env |
| By: | Bertolotti, María Isabel |
| Abstract: | La República Argentina suscribió diversos acuerdos internacionales que atañen a la actividad pesquera, creando ingentes demandas de conocimiento, asociadas a la sostenibilidad de los Recursos y del Ambiente Marino y a la incorporación del Enfoque Ecosistémico en la Pesca (EEP). El concepto de desarrollo sostenible expresa un proceso, que debe resultar simultáneamente sostenible en las diferentes dimensiones: social, económica, ambiental, cultural, institucional. La sostenibilidad y en especial el desarrollo sostenible se cuentan entre los conceptos más ambiguos y controvertidos de la literatura, por lo tanto es necesario abordar el análisis de la evaluación de la sostenibilidad, considerando las cuatro brechas limitantes para su aplicación práctica: la brecha conceptual, la brecha cognitiva, la brecha social y la brecha competitiva. Se tiende a cerrar la brecha conceptual entre economía y ecología, aceptando que el sistema socioeconómico y el sistema ambiental forman parte de un único sistema pesquero, a partir de un planteo positivo de la relación sociedad y ambiente, en el cual se consideran tanto las políticas públicas, como las expectativas sociales y los intereses económicos, en una gestión sostenible de los recursos pesqueros. Para cerrar la brecha cognitiva se deben garantizar los conocimientos necesarios para entender las interrelaciones del sistema pesquero, para ello se requiere no sólo de datos; sino de datos con relevancia, información estructurada con coherencia y sistemáticamente; con conocimiento científico, y también con conocimiento práctico de las comunidades involucradas; sin omitir que la disponibilidad de datos y sus costos, figuran entre los principales problemas de la selección de indicadores. En este contexto se inserta el debate sobre indicadores de sostenibilidad de las dimensiones, social y económica, los principios en que se sustentan y los objetivos perseguidos. Los principales aspectos a considerar en el ámbito del Enfoque Ecosistémico en la Pesca (EEP) según FAO (2010) son: "el contexto socioeconómico del sistema pesquero, incluido el empleo y los medios de vida, la situación económica de las pesquerías, el comercio y los mercados mundiales, los efectos distributivos y la equidad, la pobreza y la vulnerabilidad y las cuestiones de género". |
| Keywords: | Pesca Responsable; Desarrollo Sostenible; Indicadores; |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:nmp:nuland:2498&r=env |
| By: | Jean-christophe PEREAU; Lauriane MOUYSSET; Luc DOYEN |
| Abstract: | This article studies the sustainability of market-based instrument such as tradable permits for the management of a renewable aquifer used in agriculture production. Based on a dynamic hydro-economic model, a water agency aims at satisfying a food security constraint within a tradable permit scheme in the presence of myopic heterogeneous agents. We identify analytically the viability kernel that defines the states of the resource yielding inter-temporal feasible paths able to satisfy the set of constraints over time. We then illustrate the results with numerical simulations based on the data from Gisser and Sanchez (1980).\r\nKeywords: Groundwater, Agriculture, |
| Keywords: | Groundwater, Agriculture, Irrigation, Food security, Individual permits, Sustainability, Dynamic model, Viability kernel. |
| JEL: | Q25 C61 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2016-14&r=env |
| By: | Amundsen, Eirik Schrøder (Department of Economics, University of Bergen, Norway); Jensen, Frank (Department of Food and Resource Economics, University of Copenhagen) |
| Abstract: | This paper considers the problem of a water management authority faced with the threat of a drought that hits at an uncertain date. Three management policies are investigated: i) a laissez-faire (open-access) policy of automatic adjustment through a zero marginal private net benefit condition, ii) a policy of optimal dynamic management ignoring the threat of the drought and relying on automatic adjustments through a zero marginal social net benefit condition, iii) an economically optimal dynamic policy taking account of the threat of a drought. In particular, we show that the optimal pre-drought steady-state equilibrium stock size of water under policy iii) is smaller than under policy ii) and, hence, a precautionary stock size should not be built up prior to the drought. |
| Keywords: | Drought; Groundwater management; uncertainty |
| JEL: | Q20 Q22 |
| Date: | 2016–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2016_005&r=env |
| By: | Amundsen, Eirik Schrøder (Department of Economics, University of Bergen); Bye, Torstein (Statistics Norway/Norwegian University of Life Sciences) |
| Abstract: | We formulate a model with black, green and white certificates markets that function in conjunction with an electricity market. The markets function well in the sense that a common equilibrium solution exist, where all targets are satisfied (e.g. share of green electricity and share of energy saving/efficiency increase.) The equilibrium solution adapts to changing targets (e.g. harsher target on energy saving), but it is in general impossible to tell whether this will lead to more, less, or unchanged consumption of ”black”, ”green” or ”white” electricity. These, markets give thus a poor guidance for future investments in green and white electricity. In order to get clear cut results, specific assumptions of parameter values and functional forms are needed. An example of this, based on a calibrated model founded on Norwegian data, is provided in the article. Also, gains and losses in terms of consumer’s and producer’s surpluses are calculated. |
| Keywords: | Renewable energy; Electricity; Green Certificates; White Certificates |
| JEL: | C70 Q28 Q42 Q48 |
| Date: | 2016–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2016_006&r=env |
| By: | Porter,Catherine; White,Emily Jennifer |
| Abstract: | This paper analyzes the potential to combine catastrophe risk modelling (CAT risk modeling) with economic analysis of vulnerability to poverty using the example of drought hazard impacts on the welfare of rural households in Ethiopia. The aim is to determine the potential for applying a derived set of damage (vulnerability) functions based on realized shocks and household expenditure/consumption outcomes, onto a forward-looking view of drought risk. The paper outlines the CAT risk modeling framework and the role of the vulnerability module, which describes the response of an affected exposure to a given hazard intensity. The need to explicitly account for different household characteristics that determine vulnerability within our model is considered, analogous to how a CAT risk model would differentiate damage functions for buildings by different classes of construction. Results for a regression model are presented, estimating ex-post drought impacts on consumption for heterogeneous household types (e.g. with cattle, safety-net access, illness). Next, the validity/generalizability of the derived functions are assessed, to infer applicability of the derived relationships within a CAT risk modelling framework. In particular, the analysis focuses on external validity: whether the relationships established in the dataset can be used for forecasting outside of the sample used for analysis. The model is stress-tested using statistical methods of resampling. This involves randomly splitting the data into ?training? and"testing"datasets. The tests show consistency of results across the datasets. Finally, future plans are outlined with regard to developing a fuller catastrophe risk model to combine with the consumption results. |
| Keywords: | Climate Change Economics,Regional Economic Development,Hazard Risk Management,Statistical&Mathematical Sciences,Rural Poverty Reduction |
| Date: | 2016–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7717&r=env |