nep-env New Economics Papers
on Environmental Economics
Issue of 2016‒07‒30
thirty-one papers chosen by
Francisco S. Ramos
Universidade Federal de Pernambuco

  1. Institutions and the Environment: Existing Evidence and Future Directions By Dasgupta, Shouro; De Cian, Enrica
  2. Climate Feedbacks in DICE-2013R - Modeling and Empirical Results By Heiko Wirths; Joachim Rathmann; Peter Michaelis
  3. What Drives the Potential Supply of Timber Residues from Private Lands? By Dulys, Elena; Swinton, Scott; Klammer, Sarah
  4. Will be there New CO2 Emitters in the Future? Evidence of Long-run Panel Co-integration for N-11 Countries By Nasre Esfahani, Mohammad; Rasoulinezhad, Ehsan
  5. Climate Change and Firm Valuation: Evidence from a Quasi-Natural Experiment By Philipp KRÜGER
  6. Empirically-Constrained Climate Sensitivity and the Social Cost of Carbon By Kevin Dayaratna; Ross Mckitrick; David Kreutzer
  7. Measuring unilateral and multilateral gains from tackling current economic inefficiencies in CO2 reductions: Theory and evidence By Sushama Murty
  8. Energy Saving Potential of Natural Ventilation in China: The Impact of Ambient Air Pollution By Chen, Yujiao; Malkawi, Ali; Liu, Zhu; Freeman, Richard Barry; Tong, Zheming
  9. Temperature Effects are more Complex than Degrees: A Case Study on Residential Energy Consumption By Lee, Gi-Eu
  10. Technology strategies for low-carbon economic growth : a general equilibrium assessment By Sue Wing,Ian Newel James; Timilsina,Govinda R.
  11. Pricing electricity and supporting renewables in Heavily Energy Subsidized Economies By David Newbery
  12. Are diverse ecosystems more valuable? A conceptual framework for economic valuation of biodiversity By Bartkowski, Bartosz
  13. Forming a Majority Coalition for Carbon Taxes Under a State-Contingent Updating Rule By Ross McKitrick; Jamie Lee
  14. Complexity and the Economics of Climate Change: a Survey and a Look Forward By Tomas Balint; Francesco Lamperti; Antoine Mandel; Mauro Napoletano; Andrea Roventini; Alessandro Sapio
  15. Transitioning towards a low-carbon economy in Mexico: An application of the ThreeMe model By Gissela Landa
  16. Arsenic Contamination of Drinking Water and Mental Health By Chowdhury, Shyamal; Krause, Annabelle; Zimmermann, Klaus F.
  17. Water footprint and carbon footprint: Disparate relatives By Gawel, Erik
  18. Monitoring Abatement in the Presence of an Import Quota on CERs By Sabine Aresin
  19. Measures, drivers and effects of green employment : evidence form US local labor markets, 2006-2014 By Francesco Vona; Giovanni Marin
  20. Reduced Allowability and the Allocation of Emission Abatement By Sabine Aresin
  21. The Impact of Drinking Water Quality and Sanitation Behavior on Child Health: Evidence from Rural Ethiopia By Usman, Muhammed Abdella; Gerber, Nicolas; von Braun, Joachim
  22. Viable Nash Equilibria in the Problem of Common Pollution By Raouf Boucekkine; Noël Bonneuil
  23. Responding to Global Challenges in Food, Energy, Environment and Water: Risks and Options Assessment for Decision-Making By R. Quentin Grafton, Mahala McLindin, Karen Hussey, Paul Wyrwoll, Dennis Wichelns, Claudia Ringler, Dustin Garrick, Jamie Pittock, Sarah Wheeler, Stuart Orr, Nathanial Matthews, Erik Ansink, Alice Aureli, Daniel Connell, Lucia De Stefano, Kate Dowsley, Stefano Farolfi, Jim Hall, Pamela Katic, Bruce Lankford, Hannah Leckie, Matthew McCartney, Huw Pohlner, Nazmun Ratna, Mark Henry Rubarenzya, Shriman Narayan Sai Raman, Kevin Wheeler and John Williams
  24. The impact of pollution abatement investments on production technology: new insights from frontier analysis By Jean Pierre Huiban; Camilla Mastromarco; Antonio Musolesi; Michel Simioni
  25. Can Stress Tolerant Variety Help Reduce Rice Yield Loss from Climate Extremes? Evidence from Chinese Rice Farms By Tang, Liqun; Zhou, Jiehong; Yu, Xinhua
  26. Climate change impacts on agriculture and internal migrations in Brazil By Joaquim Bento de Souza Ferreira Filho; Mark Horridge
  27. Directional multivariate extremes in environmental phenomena By Lillo, Rosa E.; Laniado, Henry; Michele, Carlo de; Torres, Raúl
  28. "The Falling Sperm Counts Story": A Limit to Growth? By Johanna Etner; Natacha Raffin; Thomas Seegmuller
  29. Political Rebound Effects as Stumbling Blocks for Socio-ecological Transition By Karl Aiginger
  30. Effects of Sea Level Rise on Economy of the United States By Monika Novackova; Richard S. J. Tol
  31. Nonparametric Estimation of Efficiency in the Presence of Environmental Variables By Cinzia Daraio; Leopold Simar; Paul W. Wilson

  1. By: Dasgupta, Shouro; De Cian, Enrica
    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, Environmental Economics and Policy, O10, Q5, Q00, P16,
    Date: 2016–07–04
  2. By: Heiko Wirths (University of Augsburg, Department of Economics); Joachim Rathmann (University of Augsburg, Department of Applied Computer Science); Peter Michaelis (University of Augsburg, Department of Economics)
    Abstract: Climate feedback mechanisms that have the potential to intensify global warming have been omitted almost completely in the integrated assessment of climate change and the economy so far. With the present paper we try to narrow this gap in literature. We discuss different types of feedback mechanisms and show how to incorporate them into the mathematical setup of the well-known integrated assessment model DICE-2013R. Subsequently, we choose the permafrost carbon feedback (PCF) as specific application for an empirical analysis. We calibrate the parameters for our modified version of the DICE-2013R model and compute the optimal emission mitigation rates that maximize welfare accounting for the impact of the PCF. Finally, we quantify the economic losses resulting from a mitigation policy which ignores this feedback mechanism. Our empirical results generally indicate that accounting for the PCF leads to an increase in the optimal mitigation rates.
    Keywords: integrated assessment, DICE model, climate feedbacks, permafrost
    JEL: O44 Q54 Q58
    Date: 2016–07
  3. By: Dulys, Elena; Swinton, Scott; Klammer, Sarah
    Abstract: Timber residues, a wood production byproduct, are a low cost source of biomass that avoids the environmental and food market consequences of other energy feedstocks. We studied the effect that price, acreage owned, bio-energy attitudes, environmental amenities, and environmental disamenities have on the decision to harvest for non-commercial private forest owners in northern Michigan and Wisconsin. Over 60% of landowners were willing to provide timber residues at timber harvest or stand improvement (tree thinning) at prices starting at just $15 per acre. Important drivers of willingness to supply timber residues include the price offered for timber residue, single-species forest acreage owned, duration on land, and the aversion to environmental disamenities. The propensity to supply timber residues was highest among educated owners of larger scale, single-species forest who made less than $133,000/year.
    Keywords: Bioenergy, timber residue, willingness to accept, non-industrial private forest, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, Q23, Q42,
    Date: 2016–07–26
  4. By: Nasre Esfahani, Mohammad; Rasoulinezhad, Ehsan
    Abstract: This article tries to explore the long-run nexus between oil consumption, gross domestic product (GDP) and carbon dioxide (CO2) emissions in the next eleven (N-11) countries over the period 1980-2013, by using the panel c-ointegration, the panel dynamic ordinary least squares (DOLS) and the panel fully modified ordinary least squares (FMOLS) approaches.The empirical findings indicate that there is a bidirectional long-run linkage between oil consumption - GDP per capita and oil consumption - CO2 emissions. Moreover the inverted U-shaped linkage between the square of GDP per capita and CO2 emissions, supports the existence of environmental kuznets curve hypothesis. With estimations through the panel DOLS and FMOLS, the long-run elasticity of oil consumption per capita to CO2 emissions per capita is calculated about 0.96% and positive which is in contrast to the coefficient sign of its elasticity to GDP per capita (−0.48%). Moreover, the elasticity of GDP per capita and CO2 emissions per capita to oil consumption per capita are −0.32% and 0.94%, respectively. These findings prove the negative contribution of non-renewable energy (oil) consumption per capita to GDP per capita in the N-11 group. Furthermore, due to the bidirectional long-run relationships between oil consumption and CO2 emissions, these 11 countries should find the efficient energy policies which are in line with CO2 mitigation and reaching a higher GDP per capita growth.
    Keywords: Oil Consumption Per Capita, Gross Domestic Product Per Capita, Carbon Dioxide, Emissions Per Capita
    JEL: Q43 Q47
    Date: 2015–09–20
  5. By: Philipp KRÜGER (University of Geneva and Swiss Finance Institute)
    Abstract: In this paper, I estimate the effect of mandatory greenhouse gas (GHG) emissions disclosure on corporate value. Using the introduction of mandatory GHG emissions reporting for firms listed on the Main Market of the London Stock Exchange as a source of exogenous variation, I find that firms most heavily affected by the regulation experience significantly positive valuation effects. Increases in value are strongest for large firms and for firms from carbon intensive industries (e.g., oil and gas). Valuation increases are driven by capital market effects such as higher liquidity and lower bid -- ask spreads for the most affected firms.
    Keywords: Mandatory disclosure regulation, greenhouse gas emissions, climate change, valuation, difference-in-differences, value
    JEL: D22 G18 G28 G38 K22 K32 L51 M48 Q52 Q54
  6. By: Kevin Dayaratna (Heritage Foundation, Washington DC.); Ross Mckitrick (Department of Economics and Finance, University of Guelph); David Kreutzer (Heritage Foundation, Washington DC.)
    Abstract: Integrated Assessment Models (IAMs) require parameterization of both economic and climatic processes. The latter includes Equilibrium Climate Sensitivity (ECS), or the temperature response to doubling CO2 levels, and Ocean Heat Uptake (OHU) efficiency. ECS distributions in IAMs have been drawn from climate model runs that lack an empirical basis,and in Monte Carlo experiments may not be constrained to consistent OHU values. EmpiricalECS estimates are now available, but have not yet been applied in IAMs. We incorporate a new estimate of the ECS distribution conditioned on observed OHU efficiency into two widely-used IAMs. The resulting Social Cost of Carbon (SCC) estimates are much lower than those from models based on simulated parameters. In the DICE model the average SCC falls by 30-50% depending on the discount rate, while in the FUND model the average SCC falls by over 80%. The span of estimates across discount rates also shrinks substantially
    Keywords: Social Cost of Carbon, Climate Sensitivity, Ocean Heat Uptake, Carbon Taxes, Integrated Assessment Models
    JEL: Q54 Q58 H23
    Date: 2016
  7. By: Sushama Murty (Department of Economics, University of Exeter and Jawaharlal Nehru University)
    Abstract: We develop a methodology for (a) constructing unilateral pro t (producer surplus)- increasing and emission-decreasing policy reforms and (b) measuring marginal abatement cost (MAC), when countries operate inefficiently in meeting their self-imposed emission caps and when instantaneous radical jumps from their inefficient status-quos to their emission-constrained optima are infeasible due to existing institutional and political constraints. Data from 118 countries combined with the theoretical methodology developed reveals that (a) allocative inefficiencies are pervasive, (b) our proposed unilateral-efficiency increasing reform can result in more than 8% increase in global profit and 30% reduction in net global emission of CO2 - the biggest gainers being USA, China, Japan, Russia, India, and several countries from western European, and (c) MACs range from zero to 3,000 USD per ton of carbon (USDptc) in 94% of countries in our sample. MAC is more than (resp., less than) 1,000 USDptc in 80% of OECD (resp., 61% of non-OECD) countries. While MACs are zero for many countries in the former Soviet block, they are more than 2,000 USDptc for countries in western Europe. These differences in MACs imply considerable scope for multilateral efficiency improvements in meeting voluntary emission reduction targets through international emission trading and other international climate initiatives.
    Keywords: allocative ineciencies under an emission cap, marginal and non-marginal efficiency-improving policy reforms, marginal abatement costs, ability to abate, reduction in profit.
    JEL: Q5 Q54 Q58
    Date: 2016
  8. By: Chen, Yujiao; Malkawi, Ali; Liu, Zhu; Freeman, Richard Barry; Tong, Zheming
    Abstract: Natural ventilation (NV) is a key sustainable solution for reducing the energy use in buildings, improving thermal comfort, and maintaining a healthy indoor environment. However, the energy savings and environmental benefits are affected greatly by ambient air pollution in China. Here we estimate the NV potential of all major Chinese cities based on weather, ambient air quality, building configuration, and newly constructed square footage of office buildings in the year of 2015. In general, little NV potential is observed in northern China during the winter and southern China during the summer. Kunming located in the Southwest China is the most weather-favorable city for natural ventilation, and reveals almost zero loss due to air pollution. Building Energy Simulation (BES) is conducted to estimate the energy savings of natural ventilation in which ambient air pollution and total square footage must be taken into account. Beijing, the capital city, displays limited per-square-meter saving potential due to the unfavorable weather and air quality for natural ventilation, but its largest total square footage of office buildings makes it become the city with the greatest energy saving opportunity in China. Our analysis shows that the aggregated energy savings potential of office buildings at 35 major Chinese cities is 112 GWh in 2015, even after allowing for a 43 GWh loss due to China’s serious air pollution issue especially in North China. 8–78% of the cooling energy consumption can be potentially reduced by natural ventilation depending on local weather and air quality. The findings here provide guidelines for improving current energy and environmental policies in China, and a direction for reforming building codes.
    Date: 2016
  9. By: Lee, Gi-Eu
    Abstract: An emerging body of research about climate change impacts is exploring temperature effects on human activities. However, most studies use simple identification strategies that only explore one or two attributes relating to temperature or to its abnormalities. These simple strategies limit the understanding of temperature effects, and there is debate about the effectiveness of simple identification strategies. To better understand complex temperature effects on human activities, this study uses residential energy consumption as an example and develops identification strategies to capture the temperature effects resulting from temporal patterns (temperature fluctuation), abnormality (temperature departure from normal), and the interdependence among these attributes. For comparison, we use the same data set and model specification as in Deschênes and Greenstone (2011) except for specifications to capture complex temperature effects. We construct variables to capture additional temperature attributes and create the interaction terms among these attributes and temperature levels. Our findings verify the existence of complex temperature effects on energy consumption, and our paper may provoke the discussion of different strategies to better capture climate impacts on human activities.
    Keywords: Complex Temperature Effects, Residential Energy Consumption, Climate Change, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q41, Q54,
    Date: 2016–08–02
  10. By: Sue Wing,Ian Newel James; Timilsina,Govinda R.
    Abstract: This paper investigates the potential for developing countries to mitigate greenhouse gas emissions without slowing their expected economic growth. A theoretical frame- work is developed that unifies bottom-up marginal abatement cost curves and partial equilibrium techno-economic simulation modeling with computational general equilibrium (CGE) modeling. The framework is then applied to engineering assessments of energy efficiency technology deployments in Armenia and Georgia. The results facilitate incorporation of bottom-up technology detail on energy-efficiency improvements into a CGE simulation of the economy-wide economic costs and mitigation benefits of technology deployment policies. Low-carbon growth trajectories are feasible in both countries, enabling reductions of up to 4 percent of baseline emissions while generating slight increases in GDP (1 percent in Armenia and 0.2 percent in Georgia). The results demonstrate how MAC curves can paint a misleading picture of the true potential for both abatement and economic growth when technological improvements operate within a system of general equilibrium interactions, but also highlight how using their underlying data to identify technology options with high opportunity cost elasticities of productivity improvement can lead to more accurate assessments of the macroeconomic consequences of technology strategies for low-carbon growth.
    Date: 2016–07–11
  11. By: David Newbery
    Abstract: Heavily Energy Subsidized Economies, defined as having budgetary subsidies above 1.5% of GDP, on average in 2014 spent 4% of GDP on subsidizing energy. Resource rents permit administratively undemanding transfers to citizens to maintain political support. Once in place, benefitting groups will resist their removal, despite the resulting inefficient consumption and the lock-in risk caused by sustained low energy prices. Collapsing energy prices that deliver severe fiscal shocks combined with growing concerns over climate change damage make carefully designed reforms both urgent and politically more acceptable. Understanding their political logic suggests designing reforms that compensate the most vocal interest groups and there is evidence that this is increasingly recognized. The paper presents evidence on the magnitude and impacts of oil gas and electricity subsidies, and discusses how the electricity sector can be weaned of subsidies while reducing its carbon emissions.
    Keywords: Energy subsidies, interest group politics, reforming electricity tariffs, PV
    JEL: H23 H53 Q41 Q48 Q54
    Date: 2016–07–06
  12. By: Bartkowski, Bartosz
    Abstract: Biodiversity is an important environmental public good. However, the literature suggests that it is not clear how its economic value should be estimated; there is no established framework for doing this. This paper summarises concepts of biodiversity value from the ecological and economic literatures and combines them to a comprehensive and consistent framework. It is argued that biodiversity is the main carrier of insurance value, option value and spill-over value, and also influences the aesthetic appreciation of ecosystems. On that basis, an extension of the TEV framework is proposed to incorporate biodiversity values better. Furthermore, a number of specific challenges of biodiversity as an economic good are identified and used as criteria to inform the choice of suitable valuation methods.
    Keywords: biodiversity,economic valuation,insurance value,option value,TEV
    Date: 2016
  13. By: Ross McKitrick (Department of Economics and Finance, University of Guelph); Jamie Lee (Department of Economics and Finance, University of Guelph)
    Abstract: Uncertainty and political polarization over global warming make it difficult to achieve a stable majority coalition supporting carbon taxes, especially since expectations about the future optimal values sharply diverge. We present an alternative approach in which the tax path is not announced in advance but is set to track observed future temperatures. Agents thus form expectations which imply the tax path will be correlated with their preferred price trajectory. Whereas greater variance in beliefs about future global warming undermines support for a compromise policy, the state-contingent proposal attracts majority support irrespective of the divergence of views, and even has robustness properties to strategic voting by dishonest agents.
    Keywords: Carbon tax, State-contingent model, Majority voting, Climate change, Uncertainty
    JEL: Q54 Q58 H23 D72
    Date: 2016
  14. By: Tomas Balint; Francesco Lamperti; Antoine Mandel; Mauro Napoletano; Andrea Roventini; Alessandro Sapio
    Abstract: We provide a survey of the micro and macro economics of climate change from a complexity science perspective and we discuss the challenges ahead for this line of research. We identify four areas of the literature where complex system models have already produced valuable insights: (i) coalition formation and climate negotiations, (ii) macroeconomic impacts of climate-related events, (iii) energy markets and (iv) diffusion of climate-friendly technologies. On each of these issues, accounting for heterogeneity, interactions and disequilibrium dynamics provides a complementary and novel perspective to the one of standard equilibrium models. Furthermore, it highlights the potential economic benefits of mitigation and adaptation policies and the risk of under-estimating systemic climate change-related risks.
    Keywords: climate change, climate policy, climate economics, complex systems, agent-based models, socio-economic networks
    Date: 2016–10–07
  15. By: Gissela Landa (Observatoire français des conjonctures économiques)
    Abstract: This document offers an empirical application of the notion of energy transition to the Mexican economy and it takes the next step of simulating medium- and long-term impacts of proposed and future energy and fiscal policy on the environment and the Mexican economy. The starting point of the analysis is the ThreeME framework, a Multi-sectoral Macroeconomic Model based on Keynesian theory. It is designed to address the dynamics of global economic activity, energy system development and carbon emissions causing climate change. The ThreeME model is well- suited for policy assessment purposes in the context of developing economies as it informs the transitional effects of policy intervention. In particular, disequilibrium can arise in the form of involuntary unemployment, the inertia of technical systems and rigidity in labor and energy markets as a result of delayed market clearing in the goods markets and slow adjustment between prices and quantities over the simulation time path.
    Keywords: environment; low carbon; model
    JEL: Q4 Q43
    Date: 2015–11
  16. By: Chowdhury, Shyamal; Krause, Annabelle; Zimmermann, Klaus F.
    Abstract: This paper investigates the effect of drinking arsenic contaminated water on mental health. Drinking water with an unsafe arsenic level for a prolonged period can lead to arsenicosis and associated illness. Based on rich and newly collected household survey data from Bangladesh, we construct several measures for arsenic contamination that include the actual arsenic level in the respondent’s tubewell (TW), and past institutional arsenic test results as well as their physical and mental health. To account for potential endogeneity of water source, we take advantage of the quasi-randomness of arsenic distribution and employ the pre-1999 use of TW as an instrument and structural modelling as alternatives for robustness checks. We find that suffering from an arsenicosis symptom is strongly negatively related to mental health, even more so than from other illnesses. Calculations of the costs of arsenic contamination reveal that the average individual would need to be compensated for suffering from an arsenicosis symptom by an amount of money over 10 percent of annual household income.
    Keywords: Arsenic, Water Pollution, Mental Health, Subjective Well-Being, Environment, Bangladesh, Environmental Economics and Policy, Health Economics and Policy, Q53, I10, I31,
    Date: 2016–07
  17. By: Gawel, Erik
    Keywords: environmental accounting,carbon footprint,trade,resources policy,water footprint,virtual water
    JEL: Q56 Q58
    Date: 2016
  18. By: Sabine Aresin
    Abstract: I analyze whether or not a monitoring problem regarding abroad abatement can justify the import quotas on abroad emission certiï¬ cates applied by several emission trading schemes. For this purpose I extend the Becker (1968) Crime and Punishment model by heterogeneity in the observability of compliance. I do so by incorporating a ï¬ rm’s cost minimizing choice of domestic and abroad CO2 abatement into a monitoring framework in which ï¬ rms have to meet an exogenously set emission standard. I ï¬ nd that the government can implement the ï¬ rst best abatement allocation under incomplete information, however, under incomplete information this allocation is not socially optimal. Instead, the government should in the presence of a monitoring problem introduce an import quota for abroad abatement that shifts the allocation from abroad to domestic abatement.
    Keywords: Clean Development Mechanism, Import Quota on Certiï¬ ed Emission Reductions, Import Restrictions, Green House Gas Offset, Abatement, Monitoring, Incomplete Information, Information Asymmetry
    JEL: D21 D82 F53 Q58
    Date: 2015–11
  19. By: Francesco Vona (Observatoire français des conjonctures économiques); Giovanni Marin (Scuola Superiore Sant'Anna)
    Abstract: This paper explores the nature and the key empirical regularities ofgreen employment in US local labor markets between 2006 and 2014. Weconstruct a new measure of green employment based on the task contentof occupations. Descriptive analysis reveals the following: 1. the share of green employment oscillates between 2 and 3 percent, and its trend isstrongly pro-cyclical; 2. green jobs yield a 4 percent wage premium; 3.despite moderate catching-up across areas, green jobs remain more geographically concentrated than similar non-green jobs; and 4. the top greenareas are mostly high-tech. As regards the drivers, changes in environmental regulation are a secondary force compared to the local endowment of green knowledge and resilience in the face of the great recession. To assess the impact of moving to greener activities, we estimate that one additional green job is associated with 4.2 (2.4 in the crisis period) newjobs in non-tradable activities in the local economies.
    Keywords: Green employment; Local labor markets; Environmental regulation; Environmental technologies; Local multipliers
    JEL: J23 O33 Q52 R23
    Date: 2016–07
  20. By: Sabine Aresin
    Abstract: Introducing discounts on Certiï¬ ed Emission Reductions from the Clean Development Mechanism is often treated as if it only imposed a substitution effect on a ï¬ rm’s decision between domestic and abroad abatement. Applying a cost minimization approach with a representative ï¬ rm, I can show that reduced allowability generates a quantity effect in addition to the substitution effect. This quantity effect counteracts the substitution effect for abroad abatement. It may even cause abroad abatement to increase as a result of reduced allowability for Certiï¬ ed Emission Reductions. The results are robust to introducing a secondary market for emission credits, given endogenous prices.
    Keywords: Clean Development Mechanism, Import restrictions, Allowability, Green House Gas offset, Abatement
    JEL: D21 F53 Q58
    Date: 2015–11
  21. By: Usman, Muhammed Abdella; Gerber, Nicolas; von Braun, Joachim
    Abstract: This paper examines the impact of drinking water quality and sanitation behavior on child health in rural districts of Ethiopia. Using primary household survey data and microbiological water test for Escherichia coli, we use various estimation methods to quantify the impacts of water quality and sanitation behavior on diarrhea incidence among children under five years old. Our results show that uncontaminated household storage water and safe child stool disposal decrease incidence of child diarrhea by 16% and 23% respectively. In contrast, neighborhood concentration of pit latrine increases incidence of child diarrhea by 12%. The latter result casts serious doubt on the assumed health and social benefits of moving from open to fixed-location defecation. Creating open defecation free communities in rural areas is not enough to achieve the desired health benefits of sanitation. To protect rural households from the risk of contracting communicable diseases, existing pit latrines should be upgraded to make them safer to use – fly-proofed and hygienic. There is a need for appropriate policy actions to improve household drinking water quality and to change people’s behavior towards safe sanitation practices. Increasing access to clean water supply and providing means for safe excreta disposal will bring significant health and social gains. Moreover, promotion of hygiene education campaigns about household water treatment, safe water storage and handling, washing hands with soaps at critical times, and adequately removing child feces from the domestic environment can also help ensure that people preserve good health in their household and their community.
    Keywords: drinking water quality, sanitation, hygiene, child health, diarrhea, instrumental variable, rural Ethiopia., Consumer/Household Economics, Environmental Economics and Policy, Health Economics and Policy, Research Methods/ Statistical Methods, I1, D1, C36, Q53,
    Date: 2016–07
  22. By: Raouf Boucekkine (Aix-Marseille Université (AMSE), CNRS and EHESS; Senior member, Institut Universitaire de France); Noël Bonneuil (Institut national d’études démographiques, and Ecole des hautes études en sciences sociales)
    Abstract: Two countries produce goods and are penalized by the common pollution they generate. Each country maximizes an inter-temporal utility criterion, taking account of the pollution stock to which both contribute. The dynamic is in continuous time with possible sudden switches to less polluting technologies. The set of Nash equilibria, for which solutions also remain in the set of constraints, is the intersection of two manifolds in a certain state space. At the Nash equilibrium, the choices of the two countries are interdependent: different productivity levels after switching lead the more productive country to hasten and the less productive to delay the switch. In the absence of cooperation, efforts by one country to pollute less motivate the other to pollute more, or encourage the country that will be cleaner or less productive country after switching to delay its transition.
    Keywords: Pollution, Dynamic game, Nash, Viability theory.
    Date: 2016–06
  23. By: R. Quentin Grafton, Mahala McLindin, Karen Hussey, Paul Wyrwoll, Dennis Wichelns, Claudia Ringler, Dustin Garrick, Jamie Pittock, Sarah Wheeler, Stuart Orr, Nathanial Matthews, Erik Ansink, Alice Aureli, Daniel Connell, Lucia De Stefano, Kate Dowsley, Stefano Farolfi, Jim Hall, Pamela Katic, Bruce Lankford, Hannah Leckie, Matthew McCartney, Huw Pohlner, Nazmun Ratna, Mark Henry Rubarenzya, Shriman Narayan Sai Raman, Kevin Wheeler and John Williams
    Abstract: We analyse the threats of global environmental change, as they relate to food security. First, we review three discourses: (i) ‘sustainable intensification’, or the increase of food supplies without compromising food producing inputs, such as soils and water; (ii) the ‘nexus’ that seeks to understand links across food, energy, environment and water systems; and (iii) ‘resilience thinking’ that focuses on how to ensure the critical capacities of food, energy and water systems are maintained in the presence of uncertainties and threats. Second, we build on these discourses to present the causal, risks and options assessment for decision-making process to improve decision-making in the presence of risks. The process provides a structured, but flexible, approach that moves from problem diagnosis to better risk-based decision-making and outcomes by responding to causal risks within and across food, energy, environment and water systems.
    Keywords: food security, sustainable intensification, nexus, resilience, sustainable development
    Date: 2016–07–01
  24. By: Jean Pierre Huiban (INRA-ALISS, France); Camilla Mastromarco (University of Salento, Lecce, Italy); Antonio Musolesi (University of Ferrara, Italy); Michel Simioni (INRA, UMR 1110 MOISA, Montpellier, France)
    Abstract: This paper estimates the impact of pollution abatement investments on the production technology of firms by pursuing two new directions. First, we take advantage of recent econometric developments in productivity and eciency analysis and compare the results obtained with two complementary approaches: parametric stochastic frontier analysis and conditional nonparametric frontier analysis. Second, we focus not only on the average e ect but also on its heterogeneity across firms and over time and search for potential nonlinearities. We provide new results suggesting that the e ect of pollution abatement investments on the production process is heterogeneous both within firms and over time and also indicating that such an e ect is not monotonic. These results have relevant implications both for modeling and for the purposes of advice on environmentally friendly policy.
    Keywords: Pollution abatement investments, technology, stochastic frontier analysis, conditional nonparametric frontier analysis, full and partial order frontiers, generalized product kernels, infinite order cross-validated local polynomial regression.
    Date: 2016–07
  25. By: Tang, Liqun; Zhou, Jiehong; Yu, Xinhua
    Keywords: Climate extremes, rice, stress tolerant variety, yield, Crop Production/Industries, Food Consumption/Nutrition/Food Safety, Food Security and Poverty,
    Date: 2016
  26. By: Joaquim Bento de Souza Ferreira Filho; Mark Horridge
    Abstract: Recent internal migration flows in Brazil differ from historical patterns observed since the seventies. In the past internal migration typically flowed from states in Northeast Brazil and Minas Gerais towards the richer states of São Paulo and Rio de Janeiro. According to Brito and Carvalho (2006) between 1960 and 1990 about 8.1 million people left the Northeast and 3.8 million left Minas Gerais. This was the "normal" internal migration pattern in Brazil until the eighties, when, according to Brito and Carvalho (2006), a succession of economic crises and expansion of the agricultural frontiers changed the picture. Actually, during the nineties emigration from the Northeast region slowed down considerably; the region became a net recipient of population in recent years. At the same time, the Southeast states of São Paulo and Rio de Janeiro, the main destination for migrants until the end of the eighties, have recently lost population. Some of the migrants leaving the Southeast return to the Northeast, but many go to the dynamic new agricultural Center-west regions.
    Keywords: Computable General Equilibrium, Climate, Internal Migration
    JEL: C68 E17 Q54 R23
    Date: 2016–07
  27. By: Lillo, Rosa E.; Laniado, Henry; Michele, Carlo de; Torres, Raúl
    Abstract: Several environmental phenomena can be described by different correlated variables that must be considered jointly in order to be more representative of the nature of these phenomena. For such events, identification of extremes is inappropriate if it is based on marginal analysis. Extremes have usually been linked to the notion of quantile, which is an important tool to analyze risk in the univariate setting. We propose to identify multivariate extremes and analyze environmental phenomena in terms of the directional multivariate quantile, which allows us to analyze the data considering all the variables implied in the phenomena, as well as look at the data in interesting directions that can better describe an environmental catastrophe. Since there are many references in the literature that propose extremes detection based on copula models, we also generalize the copula method by introducing the directional approach. Advantages and disadvantages of the non-parametric proposal that we introduce and the copula methods are provided in the paper. We show with simulated and real data sets how by considering the first principal component direction we can improve the visualization of extremes. Finally, two cases of study are analyzed: a synthetic case of flood risk at a dam (a 3-variable case), and a real case study of sea storms (a 5-variable case).
    Keywords: Sea storms; Flood risk; Principal component analysis; Multivariate extremes; Copulas; Multivariate directional quantiles
    Date: 2016–07
  28. By: Johanna Etner (University Paris Ouest Nanterre la Défense, EconomiX and Climate Economics Chair); Natacha Raffin (University Paris Ouest Nanterre la Défense, EconomiX and Climate Economics Chair); Thomas Seegmuller (Aix-Marseille University (Aix-Marseille School of Economics)-CNRS-EHESS)
    Abstract: We develop an overlapping generations model of growth, in which agents differ through their ability to procreate. Based on epidemiological evidence, we assume that pollution is a cause of this health heterogeneity, affecting sperm quality. Nevertheless, agents with impaired fertility may incur health treatments in order to increase their chances of parenthood. In this set-up, we analyse the dynamic behaviour of the economy and characterise the situation reached in the long run. Then, we determine the optimal solution that prevails when a social planner maximises a Millian utilitarian criterion and propose a set of available economic instruments to decentralise the optimal solution. We underscore that to correct for both the externalities of pollution and the induced-health inefficiency, it is necessary to tax physical capital while it requires to overall subsidy mostly harmed agents within the economy. Hence, we argue that fighting against the sources of an altered reproductive health is more relevant than directly inciting agents to incur health treatments.
    Keywords: Pollution; Growth; Fertility; Health.
    JEL: O44 Q56 I18
    Date: 2016–07–04
  29. By: Karl Aiginger (WIFO)
    Abstract: This paper analyses why many citizens believe that the current social and economic system is far from optimal, but do not vote for a change in the desired direction in election processes. There is an increasing erosion of central political parties, and new populist parties are appearing at both extremes of the political spectrum. They are good at attracting angry and disappointed voters but are unable to offer consistent concepts that can produce a social economic system with efficiency, social inclusion and environmental sustainability. Since populist parties agree on what they do not want, and not where to go, both right-wing and left-wing parties are able to cooperate against the prevailing system.
    Date: 2016–07–20
  30. By: Monika Novackova; Richard S. J. Tol
    Abstract: We report the first ex post study of the economic impact of sea level rise. We apply two econometric approaches to estimate the past effects of sea level rise on the economy of the USA, viz. Barro type growth regressions adjusted for spatial patterns and a matching estimator. Unit of analysis is 3063 counties of the USA. We fit growth regressions for 13 time periods and we estimated numerous varieties and robustness tests for both growth regressions and matching estimator. Although there is some evidence that sea level rise has a positive effect on economic growth, in most specifications the estimated effects are insignificant. We therefore conclude that there is no stable, significant effect of sea level rise on economic growth. This finding contradicts previous ex ante studies.
    Date: 2016–07
  31. By: Cinzia Daraio (Department of Computer, Control and Management Engineering Antonio Ruberti (DIAG), University of Rome La Sapienza, Rome, Italy); Leopold Simar (Institut de Statistique,Biostatistique et Sciences Actuarielles, Universite' Catholique de Louvain, Louvain-la-Neuve, Belgium); Paul W. Wilson (Department of Economics and School of Computing, Division of Computer Science, Clemson University, Clemson, SC 29634)
    Abstract: This paper demonstrates that standard central limit theorem (CLT) results do not hold for means of nonparametric conditional efficiency estimators, and provides new CLTs that do hold, permitting applied researchers to estimate confidence intervals for mean conditional efficiency or to compare mean efficiency across groups of producers along the lines of the test developed by Kneip et al. (JBES, 2015b). The new CLTs are used to develop a test of the "separability" condition that is necessary for second-stage regressions of efficiency estimates on environmental variables. We show that if this condition is violated, not only are second-stage regressions meaningless,but also first-stage, unconditional efficiency estimates are without meaning. As such,the test developed here is of fundamental importance to applied researchers using non-parametric methods for efficiency estimation. Our simulation results indicate that our tests perform well both in terms of size and power. We present a real-world empirical example by updating the analysis performed by Aly et al. (R. E. Stat., 1990) on U.S. commercial banks; our tests easily reject the assumption required for two-stage estimation, calling into question results that appear in hundreds of papers that have been published in recent years.
    Keywords: technical efficiency ; conditional efficiency ; two-stage estimation ; separability ; data envelopment analysis (DEA) ; free-disposal hull (FDH).
    Date: 2016

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