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on Environmental Economics |
| By: | Reis, Lara Aleluia (Fondazione Eni Enrico Mattei); Emmerling, Johannes (Fondazione Eni Enrico Mattei); Tavoni, Massimo (Fondazione Eni Enrico Mattei); Raitzer, David (Asian Development Bank) |
| Abstract: | Developing Asia has the world’s fastest greenhouse gas emissions growth. This study uses an economy–energy–climate model to assess the effects of Paris Agreement pledges on Asia, in comparison with business as usual (BAU) and more ambitious scenarios. Results confirm that pledges must be strongly increased in ambition to achieve the Paris Agreement’s goal of less than 2 degrees Celsius (2°C) warming. The policy costs of Asia’s pledges are found to be less than 1% of gross domestic product (GDP) through 2050, while 2°C scenarios may cost less than 2% of GDP. However, costs are sensitive to assumptions about international carbon markets and mitigation timing, with costs for 2°C scenarios doubling in the absence of carbon trade, and increasing the later that mitigation is initiated. Under the 2°C scenarios, annual average energy supply investments are about $300 billion above the BAU levels through 2050. Mitigation policy may substantially reduce air pollution mortality, with up to 600,000 fewer deaths in Asia annually by 2050. When costs, benefits of avoided climate change, and cobenefits are considered together, investment in mitigation policy is found to have substantial economic returns for the region—if action is taken rapidly and international carbon market mechanisms are implemented. |
| Keywords: | climate change; energy; greenhouse gas; mitigation; Paris Agreement |
| JEL: | C61 D58 Q52 Q53 Q54 |
| Date: | 2016–12–23 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0504&r=env |
| By: | Francesco Bosello (University of Milan, FEEM and CMCC); Carlo Orecchia (FEEM and CMCC); David A. Raitzer (Asian Development Bank) |
| Abstract: | Southeast Asia is one of the most vulnerable regions of the world to the impacts of climate change. At the same time, the region is also following a trajectory that could make it a major contributor to greenhouse gas emissions in the future. Understanding the economic implications of policy options for low carbon growth is essential to formulate instruments that achieve the greatest emissions reductions at lowest cost. This study focuses on five developing countries of Southeast Asia that collectively account for 90% of regional emissions in recent years—Indonesia, Malaysia, the Philippines, Thailand, and Viet Nam. The analyses are based on the CGE economy-energy-environment model ICES under an array of scenarios reflecting business as usual, fragmented climate policies, an approximately 2.4°C post 2020 global climate stabilization target, termed 650 parts per million (ppm) carbon dioxide (CO2) equivalent (eq), and an approximately 2°C global target (termed 500 ppm CO2 eq). Averted deforestation through reducing emissions from forest degradation and deforestation (REDD) is included in some scenarios. The study shows that global and coordinated action is found to be critical to the cost effectiveness of emissions stabilization policies. A 650ppm stabilization scenario (below 3°C in 2100) has a similar cost to the region to current fragmented targets, but achieves much higher levels of emissions reductions. However, only some of the countries have short-term emissions targets that are consistent with a stabilization scenario at 650ppm: these are Indonesia, Philippines and Viet Nam. None of the countries’ mid-term targets are coherent with more ambitious stabilization scenario at 500ppm. |
| Keywords: | Climate Change Mitigation, Asian Economies, Computable General Equilibrium Models |
| JEL: | Q54 Q58 C68 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2016.75&r=env |
| By: | Le, Thai-Ha (RMIT University); Chang, Youngho (Nanyang Technological University); Park, Donghyun (Asian Development Bank) |
| Abstract: | We examine the role of governance and vulnerability to climate change in green growth using a global panel data set of 122 countries in 2000‒2012. We find that, as expected, governance has a positive effect on environmental performance and vulnerability to climate change has a negative effect. This suggests that promoting good governance and reducing climate change vulnerability can contribute to a cleaner environment. We find qualitatively similar results for the subsample of high-income countries, but governance does not have a significant effect for the subsamples of upper-middleincome, lower-middle-income, and low-income countries. One possible interpretation is that high-income countries have environmental policies which are strong enough to protect the environment, whereas other countries have relatively weak environmental policies which need to be strengthened. |
| Keywords: | air quality; governance; green growth; PM2.5; vulnerability to climate change |
| JEL: | Q56 |
| Date: | 2016–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0500&r=env |
| By: | Sovacool, Benajmin (Aarhus University) |
| Abstract: | This working paper assesses the positive cobenefits of promoting green and clean energy in Asia. It first defines what is meant by “clean” energy across the four technological systems of cooking, renewable electricity, energy efficiency, and urban transport. Then, drawn from a synthesis of peer-reviewed articles, it summarizes at least four general types of cobenefits of investing in these systems: (i) diversification and enhanced energy security, (ii) jobs and green growth, (iii) displaced pollution and associated cost savings, and (iv) enhanced resilience and adaptive capacity to things like climate change and natural disasters. It also offers some insight to possible challenges and trade-offs that must be managed when attempting to capture cobenefits. The paper then focuses on four case studies of cobenefits that have been delivered in practice: liquefied petroleum gas stoves in Indonesia, renewable electricity generation in the People’s Republic of China, energy efficiency in Japan, and mass transit in Singapore. The paper concludes with insights for energy analysts and policy makers. |
| Keywords: | climate; change |
| JEL: | Q54 |
| Date: | 2016–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0502&r=env |
| By: | Casey, Gregory; Galor, Oded |
| Abstract: | We provide evidence that lower fertility can simultaneously increase income per capita and lower carbon emissions, eliminating a trade-off central to most policies aimed at slowing global climate change. We estimate the effect of lower fertility on carbon emissions, accounting for the fact that changes in fertility patterns affect carbon emissions through three channels: total population, the age structure of the population, and economic output. Our analysis proceeds in two steps. First, we estimate the elasticity of carbon emissions with respect to population and income per capita in an unbalanced yearly panel of cross-country data from 1950–2010. We demonstrate that the elasticity with respect to population is nearly seven times larger than the elasticity with respect to income per capita and that this difference is statistically significant. Thus, the regression results imply that 1% slower population growth could be accompanied by an increase in income per capita of nearly 7% while still lowering carbon emissions. In the second part of our analysis, we use a recently constructed economic-demographic model of Nigeria to estimate the effect of lower fertility on carbon emissions, accounting for the impacts of fertility on population growth, population age structure, and income per capita. We find that by 2100 C.E. moving from the medium to the low variant of the UN fertility projection leads to 35% lower yearly emissions and 15% higher income per capita. These results suggest that population policies could be part of the approach to combating global climate change. |
| Keywords: | Climate Change, Demography, Economic Growth |
| JEL: | J11 O40 Q50 |
| Date: | 2017–01–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76164&r=env |
| By: | Anna Alberini (University of Maryland, FEEM and Centre for Energy Policy and Economics, ETH Zürich); Milan Šcasný (Charles University Environment Center); Andrea Bigano (FEEM, CMCC and Far East Federal University) |
| Abstract: | The implementation of decarbonization policies depends crucially on the public’s willingness to pay for them. We use stated preference methods to investigate the public’s preferences for such policies. We ask three research questions. First, does the willingness to pay (WTP) for each ton of CO2 emissions reductions depend on the policies and on individual characteristics of the respondents? Second, how extensive is the variation associated with these factors? Third, what factors affect support for or opposition to a carbon tax? Based on the responses to discrete choice experiments from a sample of Italians, we find that the WTP per ton of CO2 ranges between € 6 and 130, depending on whether the public program is based on taxes, incentives, information-based approaches or standards. Further allowing for individual characteristics of the respondents, such as gender or education, and knowledge of climate change, results in a 300% change in WTP, holding the policy instrument the same. We conclude that the variation associated with the policy instrument is approximately of the same order of magnitude as that associated with individual characteristics of the respondents. |
| Keywords: | Climate Change Mitigation, WTP per ton of CO2 Emissions Reduced, Choice Experiments |
| JEL: | Q41 Q48 Q54 Q51 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2016.80&r=env |
| By: | Adriana Maria Magalhães de Moura; Gustavo Luedemann; Júlio César Roma; Nilo Luiz Saccaro Junior; José Roberto de Lima |
| Abstract: | O desafio de estruturar uma governança ambiental no nível internacional resultou na criação de diversos acordos de meio ambiente voltados para os interesses comuns envolvidos na gestão dos recursos naturais entre os países. Nas últimas décadas, houve uma proliferação de acordos dessa natureza, o que tornou meio ambiente a segunda área com maior número de acordos internacionais no mundo (atrás apenas de comércio internacional), um indicativo da crescente importância dada à temática ambiental nas arenas internacionais. Entre esses acordos, destacam-se os resultantes da Conferência das Nações Unidas sobre Meio Ambiente e Desenvolvimento (Rio-92): a Convenção-Quadro das Nações Unidas sobre Mudança do Clima, a Convenção sobre Diversidade Biológica e a Convenção das Nações Unidas de Combate à Desertificação. Este texto apresenta uma síntese sobre o estado de implementação destas convenções no Brasil, com foco na estrutura de governança (arcabouço institucional e legal), bem como nas ações realizadas para o atendimento dos compromissos decorrentes destes acordos. São apontadas as principais lacunas de implementação existentes e alguns dos desafios a serem ainda enfrentados no processo de internalização no país das convenções analisadas. The challenge of performing environmental governance at the international level has resulted in the creation of several environmental agreements focused on the common interests involved in the management of natural resources among countries. In recent decades, there has been a proliferation of such agreements, which made the environment the second area with the largest number of international agreements in the world (second only to international trade), which indicates the growing importance given to environmental issues in international arenas. Among these agreements, we highlight the result of the United Nations Conference on Environment and Development (Rio-92): the United Nations Framework Convention on Climate Change, the Convention on Biological Diversity and the United Nations Convention to Combat Desertification. This paper presents an overview of the status of implementation of these conventions in Brazil, focusing on the governance framework (institutional and legal), as well as on the actions taken to meet the commitments arising from these agreements. Main gaps and some of the challenges to be faced in the implementation of the analyzed conventions in Brazil are also identified. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:2259&r=env |
| By: | Christoph Böhringer (University of Oldenburg); Xaquín Garcia-Muros (Basque Centre for Climate Change (BC3), Students); Ignacio Cazcarro (Basque Centre for Climate Change (BC3)); Iñaki Arto (Basque Centre for Climate Change (BC3)) |
| Abstract: | Despite recent achievements towards a global climate agreement, climate action to reduce greenhouse gas emissions remains quite heterogeneous across countries. Energy-intensive and trade-exposed (EITE) industries in industrialized countries are particularly concerned on stringent domestic emission pricing that may put them at a competitive disadvantage with respect to producers of similar goods in other countries without or only quite lenient emission regulation. This paper focuses on climate policy analysis for the United States of America (US) and compares the economic implications of four alternative protective measures for US EITE industries: (i) output-based rebates, (ii) exemptions from emission pricing, (iii) energy intensity standards, and (iv) carbon intensity standards. Based on simulations with a large-scale computable general equilibrium model for the global economy we quantify how these protective measures affect competitiveness of US EITE industries. We find that while protective measures can attenuate adverse competitiveness impacts measured in terms of common sector-specific competitiveness indicators, they run the risk of making US emission reduction much more costly than uniform emission pricing stand-alone. In fact, the cost increase is associated with negative income effects such that the gains of protective measures for EITE exports may be more than compensated through losses in domestic EITE demand. |
| Keywords: | unilateral climate policy, competitiveness, computable general equilibrium |
| JEL: | D21 H23 D58 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:zen:wpaper:67&r=env |
| By: | Francesco Bosello (University of Milan, FEEM and CMCC); Giacomo Marangoni (FEEM and CMCC); Carlo Orecchia (FEEM and CMCC); David A. Raitzer (Asian Development Bank); Massimo Tavoni (Politecnico di Milano, FEEM and CMCC) |
| Abstract: | Southeast Asia is at a time one of the most vulnerable region to the impacts of a changing climate, with millions of its inhabitants still trapped in extreme poverty without access to energy and employed in climate-sensitive sectors, and, potentially, one of the world’s biggest contributors to global warming in the future. Fortunately, major Southeast Asian countries are also implementing policies to improve their energy and carbon efficiency and are discussing if and how to extend these further. The present study aims to assess the implications for energy consumption, energy intensity and carbon intensity in the Southeast Asia region of a set of short-term and long-term de-carbonization policies characterized by different degrees of ambition and international cooperation. The analysis applies two energy-climate-economic models. The first, the fully dynamic Integrated Assessment model WITCH, is more aggregated in the sectoral and country representation, but provides a detailed technological description of the energy sector. The second, the ICES Computable General Equilibrium model, offers a richer sectoral breakdown of the economy and of international trade patterns, but is less refined in the representation of technology. The joint application of these two complementary models allows the capture of distinct and key aspects of low- carbon development paths in Southeast Asia. |
| Keywords: | Climate Change Mitigation, Asian Economies, Computable General Equilibrium Models |
| JEL: | Q54 Q58 C68 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2016.76&r=env |
| By: | Balangue, Tonie O. |
| Abstract: | This paper assesses the National Greening Program (NGP) process as implemented in the field and the environmental impacts. The municipalities of Sta. Cruz in Zambales, Basilisa in Dinagat Island, and Hinobaan in Negros Occidental were randomly selected from all the NGP sites. The methodology employed consisted of key informant interviews and focus group discussions for the survey, mapping, and planning (SMP); assessment of capability building, plantation quality assurance, seedling production, planting, and protection and maintenance; and actual impact measurements on the ground through sampling. Results showed that the required NGP processes were not fully complied with. However, the required survival rates of 85 percent were satisfied through replanting. The environmental impacts were gaining positive momentum through reduced temperature, soil build-up, soil fertility, soil moisture, wildlife, stumpage build-up, and carbon sequestration. Impacts on disaster risk reduction and climate change fell short due to lack of a suitable design. Recommendations to further improve NGP implementation include, among others, conduct of a full-blown SMP and feasibility study, compliance to required processes and standards, inclusion of a reforestation access road, linking reforestation to a business plan, and capability building of reforestation partners. |
| Keywords: | Philippines, National Greening Program (NGP), reforestation, survival rates, disaster risk reduction, climate change adaptation/mitigation |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2016-11&r=env |
| By: | Christoph Böhringer (University of Oldenburg - Economic Policy; Centre for European Economic Research (ZEW)); Jan Schneider (University of Oldenburg); Emmanuel Asane-Otoo (University of Oldenburg) |
| Abstract: | Carbon-based import tariffs are discussed as policy measures to reduce carbon leakage and increase the global cost-effectiveness of unilateral CO2 emission pricing. We assess how the potential of carbon tariffs to increase cost-effectiveness of unilateral climate policy depends on the magnitude and composition of carbon embodied in trade. For our assessment, we combine multi-region input-output (MRIO) analysis with computable general equilibrium (CGE) analysis based on data from the World Input-Output Database (WIOD) for the period 1995 to 2007. The MRIO analysis confirms that carbon embodied in trade has sharply increased during this period. Yet, the CGE analysis suggests that the effectiveness of carbon tariffs in reducing leakage and improving global-cost effectiveness of unilateral climate policy does not increase over time, whereas the potential to shift the economic burden of CO2 emissions reduction from abating developed regions to non-abating developing regions increases substantially. |
| Keywords: | carbon tariffs, unilateral climate policy, computable general |
| JEL: | Q58 D57 D58 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:zen:wpaper:65&r=env |
| By: | Cai, Yongyang; Brock, William; Xepapadeas, Anastasios |
| Abstract: | This paper extends the stochastic DSICE model of Cai et al. (Cai et al. 2015a, 2015b) to include the case of spatial transport of heat and moisture from the Equator to the Poles. This well-known and important phenomenon in climate science has been neglected in popular IAM’s, e.g. RICE and DICE (Nordhaus 2010, 2013). Spatial transport leads to another well-known phenomenon in climate science called polar amplification where a one degree increase in the global yearly mean temperature anomaly causes a more than one degree increase of the yearly mean temperature anomaly in the high latitudes (Langen and Alexeev 2007). This extension allows us to compare the optimal paths of key quantities like the Social Cost of Carbon (SCC), emissions, abatement, and damages and their uncertainty bands when heat and moisture transport are neglected as in the received literature on IAMs to when this important phenomenon documented by climate science is included. We view our paper as a first step towards adding additional aspects of climate dynamics like heat and moisture transport across latitudes and polar amplification to the existing literature on IAMs. |
| Keywords: | Integrated Assessment Model, spatial transition, climate policy, social cost of carbon, tipping point, Epstein-Zin preference, Environmental Economics and Policy, Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy, Q54, Q58, C61, C63, |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:assa17:251833&r=env |
| By: | Emiko Inoue |
| Abstract: | Innovation is expected to become an essential element in overcoming climate change issue. To examine the factors that might induce such innovation, this study focuses on environmental disclosure and scrutinises how it influences innovation activity. Utilising firm-level panel datasets from EU corporations (fiscal years 2000-08) that were constructed based on the Carbon Disclosure Project data and the EU Industrial R&D Investment Scoreboard, I estimate dynamic panel models using the system GMM estimator. The potential endogeneity issue is addressed in the models. Innovation activity is measured by R&D investment. The results show that corporations that implement a specific environmental disclosure action, namely, disclosing Scope 3 GHGemissions, are more likely to invest in R&D. This study sugg ests that supply chain management is crucial for corporations to enhance their innovation activity. In addition,this study reveals that a policy that stimulates corporate incentives to disclose Scope 3 GHG emissions may be a key to enhancing innovation activity. Since communication between corporations and other stakeholders, which may be enhanced by environmental disclosure , is a significant factor in encouraging corporate innovation activity, it is important to construct a system wherein environmental disclosure is evaluated objectively and corporations with strong environmental performance are adequately rewarded. |
| Keywords: | innovation;Environmental disc losure;Voluntary action;Endog eneity;Climate change |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-16-012&r=env |
| By: | Fujii, Tomoki (Asian Development Bank Institute) |
| Abstract: | Scientists estimate that anthropogenic climate change leads to increased surface temperature, rising sea levels, and more frequent extreme weather and climate events, among others. We investigate how climate change can potentially change vulnerability to poverty using a panel data set in Indonesia. We focus on the effect of drought and flood, two of the commonly observed disasters there. Our simulation results indicate that vulnerability to poverty in Indonesia may increase substantially as a result of climate change. |
| Keywords: | Climate change; poverty; vulnerability; Indonesia |
| JEL: | I32 O10 |
| Date: | 2016–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0622&r=env |
| By: | Ravi Bansal; Marcelo Ochoa; Dana Kiku |
| Abstract: | To study the welfare implications of rising temperature we propose a temperature-augmented long-run risks model that accounts for the interaction between temperature, economic growth and risk. The model simultaneously matches the projected temperature path, the observed consumption growth dynamics, discount rates provided by the risk-free rate and equity market returns, and the negative elasticity of equity prices to temperature risks documented in the data. We use the calibrated model to quantify the social cost of carbon (SCC) and to frame the optimal climate policy. We show that a preference for early resolution of uncertainty and long-run impact of temperature on growth imply a significant SCC and motivate early actions to abate global warming. |
| JEL: | E0 G0 Q0 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23009&r=env |
| By: | Christoph Böhringer (University of Oldenburg - Economic Policy; Centre for European Economic Research (ZEW)); Xaquín Garcia-Muros (Basque Centre for Climate Change (BC3), Students); Mikel Gonzalez-Eguino (Basque Centre for Climate Change (BC3)); Luis Rey (Basque Centre for Climate Change (BC3)) |
| Abstract: | Intensity standards have gained substantial momentum as a regulatory instrument in US climate policy. Based on numerical simulations with a large-scale computable general equilibrium model we show that intensity standards may rather increase than decrease counterproductive carbon leakage. Moreover, standards can lead to considerable welfare losses compared to emission pricing via carbon taxation or an emissions trading system. The tradability of standards across industries is a mechanism that can reduce these negative effects. |
| Keywords: | unilateral climate policy; carbon leakage; intensity standards; computable general equilibrium |
| JEL: | D21 H23 D58 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:zen:wpaper:61&r=env |
| By: | Sands, Ronald D.; Malcolm, Scott A.; Suttles, Shellye A.; Marshall, Elizabeth |
| Abstract: | Dedicated energy crops, such as switchgrass in the United States, have received much attention as potential renewable feedstocks for liquid fuels or bioelectricity; however, markets do not presently exist for large-scale use of this resource. This study examines three policy scenarios that could create a market for bioelectricity using dedicated energy crops: a subsidy for bioelectricity generation, a national Renewable Portfolio Standard (RPS), and a national cap-and-trade policy to limit carbon dioxide (CO2) emissions. Model results suggest that energy crops as a share of total cropland by region would be greatest in the Northern Plains, Southeast, and Appalachia. Even though the impact of energy crop production on land use across scenarios is similar by design, the impacts on other model outputs are quite different, including the mix of electricity-generating technologies, the price of electricity, CO2 emissions, and the cost relative to a no-policy reference scenario. For example, the price of electricity increases with cap-and-trade but declines with a bioelectricity subsidy. In all scenarios, U.S. CO2 emissions decrease relative to the reference scenario. Emissions reductions are greatest in the cap-and-trade scenario, but significant reductions are also obtained with an RPS. |
| Keywords: | bioenergy, land use, energy crops, scenarios, renewable portfolio standard, climate policy, Agricultural and Food Policy, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersrr:252445&r=env |
| By: | Edward J. Balistreri (Colorado School of Mines - Division of Economics and Business); Christoph Boehringer (University of Oldenburg); Thomas F. Rutherford (University of Wisconsin - Madison) |
| Abstract: | Alternative perspectives on the structure of international trade have important implications for the evaluation of climate policy. In this paper we assess climate policy in the context of three important alternative trade formulations. First is a Heckscher‐Ohlin model based on trade in homogeneous products, which establishes the traditional neoclassical view on comparative advantage. Second is an Armington model based on regionally differentiated goods, which constitutes a popular specification for numerical simulations of trade policy. Third is a Melitz model based on monopolistic‐competition and firm heterogeneity. This heterogeneous‐firms framework is adopted in many contemporary theoretic and empirical investigations in international trade. As we show in this paper, the three alternative trade formulations have important implications for the assessment of climate policy with respect to competitive effects for energy‐intensive production (and hence carbon leakage) as well as the transmission of policy burdens across countries. |
| Keywords: | Heterogeneous firms, carbon leakage, competitiveness |
| JEL: | F12 F18 Q54 Q56 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:zen:wpaper:57&r=env |
| By: | Christoph Böhringer (University of Oldenburg); Brita Bye (Statistics Norway - Research Department); Taran Faehn (Statistics Norway - Research Department); Knut Einar Rosendahl (Norwegian University of Life Sciences; Statistics Norway - Research Department) |
| Abstract: | We investigate how carbon taxes combined with output-based rebating (OBR) in an open economy perform in interaction with the carbon policies of a large neighboring trading partner. Analytical results suggest that whether the purpose of the OBR policy is to compensate firms for carbon tax burdens or to maximize welfare (accounting for global emission reductions), the second-best OBR rate should be positive in most cases. Further, it should fall with the introduction of carbon taxation in the neighboring country, particularly if the neighbor refrains from OBR. Numerical simulations for Canada with the US as the neighboring trading partner, indicates that the impact of US policies on the second-best OBR rate will depend crucially on the purpose of the domestic OBR policies. If the aim is to restore the competitiveness of domestic emission-intensive, trade exposed (EITE) firms at the same level as before the introduction of its own carbon taxation for a given US carbon policy, we find that the domestic optimal OBR rates are relatively insensitive to the foreign carbon policies. If the aim is to compensate the firms for actions taken by the US following a Canadian carbon tax, the necessary domestic OBR rates will be lower if also the US regulates its emissions, particularly if the US refrains from OBR. If the goal is rather to increase the efficiency of Canadian policies in an economy-wide sense by accounting for carbon leakage, the US policies have but a minor reducing impact on domestic optimal OBR rates. |
| Keywords: | carbon leakage, second-best optimal carbon policies, output-based rebates |
| JEL: | Q43 Q54 H2 D61 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:zen:wpaper:59&r=env |
| By: | Rainald Borck; Jan Brueckner |
| Abstract: | This paper presents the first investigation of the effects of optimal energy taxation in an urban spatial setting. Rather than exploring the effects of a carbon tax, our approach is to derive the supplements to existing taxes that are needed to support the social optimum. We then analyze the effects of these taxes on urban spatial structure. Emissions are generated by housing consumption and commute trips, and the optimal tax structure has a tax on commuting, housing floor space, and land. These taxes reduce the extent of commuting and the level of housing consumption while increasing building heights, generating a more-compact city with a lower level of emissions per capita. |
| Keywords: | emissions; energy; taxation; monocentric city |
| JEL: | Q4 Q5 R1 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa16p714&r=env |
| By: | Roberto Ponce (Universidad del Desarrollo); Ramiro Parrado (Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo sui Cambiamenti Climatici); Alejandra Stehr (Universidad de Concepción); Francesco Bosello (FEEM, CMCC and University of Milan) |
| Abstract: | This paper analyzes the economic impacts of changes in water availability due to climate change. We develop a new modeling approach as an alternative to include water as a production factor within a global CGE model. We tailor the structure of the ICES model to characterize the key features of the world economy with a detailed representation of the agricultural sector. In order to reach this objective, a new database has been built to explicitly consider water endowments, precipitation changes, and unitary irrigation costs. Results suggest different economic consequences of climate change depending on the specific region. Impacts are related to change in crop production, endowment demands, and international trade. |
| Keywords: | CGE Models, Climate Change, Agriculture, Irrigation, Water Resources |
| JEL: | C68 Q54 Q15 Q25 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2016.79&r=env |
| By: | Lu Wang (Beijing Institute of Technology and Georgia Institute of Technology); Alice Favero (Georgia Institute of Technology); Marilyn Brown (Georgia Institute of Technology) |
| Abstract: | This study used the GT NEMS model to analyze how the proposed federal regulation on carbon emissions will impact investments in the U.S. electricity generating capacity at the federal and Census Division level for 2016-2030. Results show that in order to reduce emissions by 32% by 2030, cumulative investments will increase from 399 to 414 billion USD by 2030. Under the scenario which addresses carbon leakage - covering new and existing power plants - cumulative investment will reach 475 billion USD by 2030. Addressing carbon leakage will affect not only the size of the investments but also the direction: when only existing power plants are covered investments in natural gas remains almost unchanged (123 billion USD) relative to the Reference case; while under the scenario that covers all power plants, investment in natural gas will be 24% lower and the investments in renewable will be 64% higher than the Reference. Carbon regulation will produce not only losers and winners among energy sources but also among U.S. states. While the South and Midwest states will experience much higher increase in cumulative investments with respect to the national average; Northeast and West states will reduce their overall investments by 2030 under the policy scenarios. |
| Keywords: | Clean Power Plan, Climate Change Mitigation Policy, Investment, Electricity, United States |
| JEL: | Q42 Q43 Q48 Q58 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2016.77&r=env |
| By: | Felix Wilmsen; Friederike Gesing (University of Bremen) |
| Abstract: | Urban areas and cities have received growing recognition in transnational climate governance as crucial sites of emission sources, and as governmental and administrative actors with significant influence on carbon-intense infrastructures (Bulkeley & Betsill 2013; Schroeder et al. 2013). Since the late 1980s, greenhouse gas emission inventories have been conducted for cities and metropolitan regions as a means of developing reduction measures and monitoring their effects. Early approaches were characterized by great discrepancies between methodologies that were specifically designed for particular local needs. Subsequently, various transnational actors began to develop standardized tools by adapting existing methodologies developed for the national level and for corporations to the needs of cities and municipalities. So far, no municipal emission inventory protocol has been recognized as a globally agreed standard. The field received new momentum in 2014, when the two transnational city networks ICLEI and C40 Cities joined under the newly established Compact of Mayors initiative, and announced the Global Protocol for Community-Scale Greenhouse Gas Emission Inventories (GPC). This paper provides a genealogy of the GPC by comparing several municipal inventory protocols. The analysis suggest that if understood as a means of strengthening the political claims of transnational actors, the GPC can indeed be expected to have considerable impact on the global climate policy arena. However, despite its considerable effort, the protocol ultimately does not bring much new to the table in technical terms, as it does not solve known issues of geographic-plus emissions accounting. Therefore, the GPC is characterized as a new passage point on an old road. |
| Keywords: | cities and climate change, emissions accounting, emissions reporting, non-state actors, transnational municipal networks, standardization, transnational climate governance |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:zen:wpaper:68&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:dpaper:dp_2016-27&r=env |
| By: | Dacuycuy, Connie B. |
| Abstract: | Using fixed effects estimators to remove unobserved heterogeneity and instrumental variable technique to address the endogeneity of income, this paper analyzes the effect of weather events on welfare in the Philippines. It finds that, one, treating income as an exogenous variable underestimates the effect of income on the household's resource allocation. Two, there are more expenditure shares for which income is endogenous using the tropical cyclone data than using the heat index deviation data as instruments. Three, households choose cheaper foods but just as nutritious when they are frequently hit by tropical cyclones. Four, the presence of children affects most of the food items, and it has the biggest effect on non-alcoholic beverages, such as juice and coffee, while the presence of the elderly affects only a few expenditure items, such as education and medical care. Based on the results, specific recommendations are forwarded. In broader terms, the study points to the desirability of greater forms of investment in resilience against weather events and climate change. At the household level, poverty is a binding constraint to good investment in resilience against weather events and the government has to continue its efforts toward poverty reduction. To this end, the government should ensure that the Department of Social Welfare and Development internal and external convergence strategy is successfully implemented. |
| Keywords: | Philippines, weather events, welfare, fixed effects, Department of Social Welfare and Development |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2016-34&r=env |
| By: | Luna, Maria Paz G. |
| Abstract: | The National Greening Program (NGP) comes after a dip in the country's forest cover and a decade after a large reforestation program was judged to be unsustainable. Large-scale reforestation globally has met with limited success but as a jump-start mechanism that carpet bombed large denuded areas with reforestation effort, the NGP seems to have succeeded in at least two of its measured metrics. As a bonus, the uniformity and strict monitoring of the program, both in survival rates and financial flows, can be used to clean up the Department of Environment and Natural Resources bureaucracy if complaints can be acted on swiftly, and results are communicated to complainants. To ensure efficiency and sustainability, a succeeding program would need to diversify methods based on scale, existing forest cover, and implementer's motivations; use strategic policy interventions and targeted protection measures; and be implemented by an organization with a clear reforestation and forest production mandate and with skills for dispute resolution, organizing, and efficient technology transfer. Digital media would also have to be taken advantage of for mapping, public buy-in, crowd-sourced strategies, and methods and transparency. |
| Keywords: | Philippines, National Greening Program (NGP), reforestation, forestry law enforcement, tree planting, geotagging trees, forestry agency |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2016-29&r=env |
| By: | Crespo Cuaresma, Jesus; Danylo, Olha; Fritz, Steffen; McCallum, Ian; Obersteiner, Michael; See, Linda |
| Abstract: | We use satellite data on forest cover along national borders in order to study the determinants of deforestation differences across countries. We combine the forest cover information with data on homogeneous response units, which allow us to control for cross-country geoclimatic differences when assessing the drivers of deforestation. Income per capita appears to be the most robust determinant of differences in cross-border forest cover and our results present evidence of the existence of decreasing effects of income on forest cover as economic development progresses.(authors' abstract) |
| Keywords: | deforestation; environmental Kuznets curve; national borders |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus005:4823&r=env |
| By: | Battaglini, Marco; Harstad, Bard |
| Abstract: | In recent decades, democratic countries have signed hundreds of international environmental agreements (IEAs). Most of these agreements, however, are weak: they generally do not include effective enforcement or monitoring mechanisms. This is a puzzle in standard economic models. To study this phenomenon, we propose a positive theory of IEAs in which the political incumbents negotiate them in the shadow of reelection concerns. We show that, in these environments, incumbents are prone to negotiate treaties that are simultaneously overambitious (larger than what they would be without electoral concerns) and weak (might not be implemented in full). The theory also provides a new perspective for understanding investments in green technologies, highlighting a channel through which countries are tempted to rely too much on technology instead of sanctions to make compliance credible. We present preliminary evidence consistent with these predictions. |
| Keywords: | elections; environmental agreements; international agreements; political economy; sanctions; technology. |
| JEL: | D72 F55 Q58 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11713&r=env |
| By: | Matthew J. Kotchen |
| Abstract: | This paper contributes to the understanding of how to maximize the impact of publicly provided climate finance to leverage the private sector. Agencies seeking to promote private investment in support of climate change mitigation and adaptation may have a choice between subsidizing projects or pilot projects. Pilots are either scaled down versions of full projects or an experimental phase that generates better information about whether a full project is likely to succeed or fail. Drawing on insights about the value of experimentation for entrepreneurship and raising private capital, the theoretical model developed herein provides guidance about when subsidizing projects or pilots is more efficient. |
| JEL: | G18 H2 Q4 Q5 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23023&r=env |
| By: | Lee, Minsoo (Asian Development Bank); Villaruel, Mai Lin (Asian Development Bank); Gaspar, Raymond (Asian Development Bank) |
| Abstract: | Using the Burke, Hsiang, and Miguel (2015) framework, we examine the nonlinear response effect of economic growth to historic temperature and precipitation fluctuations. We confirm that aside from the significant effect of rising temperature on agricultural production, industrial production and investment endeavors also serve as other potential channels through which temperature significantly affects overall economic productivity. We find the overall economic productivity of developing Asia to be at least 10% lower by 2100 relative to business as usual. We also empirically analyze policy measures and factors that could help countries mitigate consumption volatility driven by climate change-related events. Consistent with several microlevel findings, financial inclusiveness helps households mitigate consumption volatility amid temperature change. Likewise, government plays a critical role in moderating the negative impact of rising temperature in both output and consumption. |
| Keywords: | climate change; consumption volatility; developing Asia; global warming |
| JEL: | I30 Q54 Q58 |
| Date: | 2016–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0501&r=env |
| By: | Schlicht, Ekkehart |
| Abstract: | The “iteration argument” presented in Schlicht (1996) shows that the allocation of property rights may generate inefficiencies, contrary to what the “Coase Theorem,” as commonly understood, asserts. The argument may be summarized by saying that markets (and bargaining) cease to function properly if several people are entitled and prepared to engage in the same externality-ridden activity and each of them has to be bribed individually from being the first offender. Given that the harm from pollution does not rise linearily with the amount of pollution, the sum-total of the damages produced when all of the potential offenders engage in the harmful activity may be smaller than the sum-total of the bribes which must be offered to prevent each potential offender from starting the offensive activity, even if the ensuing social damages exceed the associated private returns and an inefficient outcome is obtained. If pollution without permission by the community is not permitted, a different – and in this case efficient – outcome results. This note illustrates the argument by means of a simple example. It is an excerpt of Schlicht (1997). |
| Keywords: | claims; contract enforcement; contracts; entitlements; interactions; motivation; norms; obligations; rights |
| JEL: | D02 D04 D23 D62 H23 K11 O50 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:31703&r=env |
| By: | Porciuncula, Alma D.; Erfe, Doreen Carla E.; Navarro, Adoracion M. |
| Abstract: | Past and present administrations have implemented water supply and sanitation (WSS) programs to increase the number of households with access to safe drinking water and sanitary toilet facilities. This study examines the President's Priority Program for Water and the Sagana at Ligtas na Tubig Para sa Lahat Program. It finds underachievement of targets, which was a result of institutional framework weaknesses, capacity and governance constraints, and fundamental gaps in program implementation. Given the remaining unmet needs in WSS, the study recommends that an improved successor program that also has a nationwide scope be designed. It also provides recommendations on how to improve the overall implementation of the successor program, the grant allocation and prioritization, the stakeholder participation, and funds management and disbursement. In addition, it presents a possible framework for a monitoring and evaluation plan of future WSS programs and a database that can be used in the future for ranking and prioritization, monitoring, and estimation of investment requirements. |
| Keywords: | Philippines, impact evaluation, water supply, sanitation, process evaluation, water supply and sanitation (WSS), Salintubig, LGU-CSO engagement |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2016-22&r=env |
| By: | Israel, Danilo C.; Bunao, David Feliks M. |
| Abstract: | The paper looks into the current socioeconomic research on resilience to natural disasters among urban households, firms, and communities in the Philippines. It reviews the related analytical frameworks, methodologies, and empirical studies already available with the end purpose of identifying research gaps and recommending studies and actions that can be undertaken to address them. The paper explains that the Philippines and Manila, at present, are among the least resilient countries and cities in the world, respectively. It also shows that there are foreign and locally developed analytical frameworks and methodologies on urban resilience that have been used in research. Furthermore, it found that there are already a number of empirical studies covering resilience of households, firms, and communities, particularly to natural disasters, than have been conducted in specific urban areas like Metro Manila and other Philippine cities. From the review, the paper identifies some gaps in the current research on urban resilience and recommends specific researches and related activities that can be undertaken in the future. |
| Keywords: | Philippines, resilience, Metro Manila, natural disasters, urban resilience, socioeconomic studies, households, firms, communities, empirical studies |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2016-41&r=env |
| By: | Amit Batabyal; Hamid Beladi |
| Abstract: | The n total consumers in the market for a particular good are made up of b brown and g green consumers so that b+g=n. The b brown (g green) consumers are not (are) environmentally conscious and hence they prefer to buy a new (remanufactured) good denoted by N and R respectively. By strategically purchasing or not purchasing the N and the R goods, the brown and the green consumers attempt to create a dominant market share for their preferred good. In this setting, we study three issues. First, we delineate the game between the brown and the green consumers in normal form and then solve for the Nash equilibrium when n=2 and b=1. Second, we find all the Nash equilibria of this game between brown and green consumers when n>2 is an even number and b=g=n/2. Finally, we increase the cost of purchasing the new and the remanufactured goods and then study how this increase affects the answers obtained for the above two issues. |
| Keywords: | Brown Consumer; Green Consumer; Market Share; New Good; Remanufactured Good |
| JEL: | D11 Q20 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa16p77&r=env |
| By: | Alano, Emmanuel (Asian Development Bank); Lee, Minsoo (Asian Development Bank) |
| Abstract: | Climate-related natural disaster shocks are expected to rise as the earth is getting warmer, which will adversely affect growth prospects globally. Current robust estimates of the effects of typhoons and droughts point to both short- and long-term declines in national incomes compared to predisaster trends and economic effects likely to persist up to 2 decades. Using the typhoon landfalls and damage in Asia, we analyze the wind–damage relationship and find damages to gross domestic product increase by 2.3% for an increase in maximum wind speed. The extreme projected temperature rise in Representative Concentration Pathway (RCP) 8.5 will result in higher damage by more than 50% in 2100. Vulnerable developing Asian economies could expect dampened growth with significant impacts on agriculture and tourism, a concern that may roll back years of development gains and exacerbate inequality. To cope with increasing disaster risks, both short-term adaptation strategies like relocation, government transfers, and other social safety nets, as well as long-term strategies like disaster insurance or similar ex ante mechanisms are needed. |
| Keywords: | Asia; climate impact; drought; natural disaster; typhoon |
| JEL: | I30 Q54 |
| Date: | 2016–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0503&r=env |
| By: | Nick Hanley (School of Geography and Sustainable Development, University of St. Andrews); Mikolaj Czajkowski (University of Warsaw, Department of Economics, Poland) |
| Abstract: | We examine the value of Stated Preference (SP) valuation methods as part of the environmental economist’s toolbox.We review a number of policy design issues where we believe SP methods have advantages over alternative approaches. We also discuss the role of SP methods in exploring aspects of peoples’ preferences and values which have wider implications for economics and behavioral sciences: (a) the effects of information, learning and knowledge; (b) testing the standard model of compensatory, rational choice; (c) the influence of behavioural levers such as social norms; and (d) the role of “deep” drivers of preference heterogeneity, such as personality and emotions. We also review what is known about the extent to which hypothetical choices reveal something about people’s true preferences. Finally, we speculate on some areas where SP methods may be useful in the future. |
| Keywords: | stated preferences, non-market valuation, environmental economics methods, information, choice, social norms, preference heterogeneity |
| JEL: | Q51 D6 H4 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:sss:wpaper:2017-01&r=env |
| By: | C. Conti (Sapienza University of Rome); M. L. Mancusi (Catholic University (Milan) and CRIOS, Bocconi University); F. Sanna-Randaccio (Sapienza University of Rome); R. Sestini (Sapienza University of Rome); E. Verdolini (Fondazione CMCC and Fondazione Eni Enrico Mattei) |
| Abstract: | A major concern regarding innovation in clean technologies in the EU is that the fragmentation of its innovation system may hinder knowledge flows and, consequently, spillovers across member countries. A low intensity of knowledge flows across EU states can negatively impact their technological base, suppressing opportunities for further innovations and hindering the movement towards the technological frontier. This paper evaluates the fragmentation of the EU innovation system in the field of renewable energy sources (RES) by examining the intensity and direction of knowledge spillovers over the years 1985-2010. We modify the original double exponential knowledge diffusion model to provide information on the degree of integration of EU countries’ innovation efforts and to assess how citation patterns changed over time. We show that EU RES inventors have increasingly built “on the shoulders of the other EU giants”, intensifying their citations to other member countries and decreasing those to domestic inventors. Furthermore, the EU strengthened its position as source of RES knowledge for the US. Finally, we show that this pattern is peculiar to RES, with other traditional (i.e. fossil-based) energy technologies behaving in a completely different way. |
| Keywords: | Knowledge Spillovers, Renewable Energy Technologies, Fossil Energy Technologies, EU Innovation |
| JEL: | Q55 Q58 Q42 O31 O33 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2016.71&r=env |
| By: | Heinz Welsch (University of Oldenburg; ZenTra - Center for Transnational Studies); Jan Kühling (University of Oldenburg; ZenTra - Center for Transnational Studies) |
| Abstract: | This paper uses data for more than 260,000 individuals in 34 European countries, 2002-2013, to study how nations’ socio-demographic, economic, and environmental similarity and geographic, institutional, cultural and economic proximity affect the transnational diffusion of environment-related preferences. We measure environmental preferences by the importance people attach to environmental preservation (environmentalism) and to wealth and possession (materialism). We find that nations’ environmental preferences differ less if nations are more similar in terms of their socio-demographic, economic, and environmental conditions, and more proximate in terms of geography, common institutions and culture, and intensity of trade relations. The importance of the various dimensions of similarity and proximity differs between environmentalism and materialism. In particular, greater institutional proximity (EU membership) is associated with greater similarity in environmentalism, whereas greater cultural proximity (belonging to the Nordic, Western, Eastern, and Mediterranean region) is associated with greater similarity in materialism. The intensities of watching entertainment TV and information TV affect environmentalism and materialism differently. |
| Keywords: | preference diffusion; environmentalism; materialism; similarity; economic proximity |
| JEL: | A13 Q51 Z31 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:zen:wpaper:64&r=env |
| By: | Arief Yusuf; Martin Daniel Siyaranamual; Aisyah Amatul Ghina; Megananda Suryana |
| Abstract: | Despite the increasing number of studies on self-reported happiness, due to data availability, only a few studies from developing countries exist. Moreover, eventhough climate is among the most important input to human activities, only a handfull of studies explicitly associate it with self-reported wellbeing. This paper combines a survey of 17,000 individuals representing 85% of Indonesian population and GIS data on local climate to establish a causation between climate variables (temperature and rainfalls) on individual subjective well-being. We found that happiness is not associated with temperature, as expected because tropical country like Indonesia does not have much temperature variation. However, rainfall is found to significantly associated with self-reported happiness. We found that the relationship is not linear, where higher rainfall is associated with more happiness but it reduces it after some point. Policy implications are discussed. |
| Keywords: | climate; subjective-well-being; happiness; Indonesia |
| JEL: | R19 Q29 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa16p165&r=env |
| By: | Nick Hanley (University of St Andrews, School of Geography and Geosciences); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw) |
| Abstract: | We examine the value of Stated Preference (SP) valuation methods as part of the environmental economist’s toolbox. We review a number of policy design issues where we believe SP methods have advantages over alternative approaches. We also discuss the role of SP methods in exploring a few aspects of peoples’ preferences and values which have wider implications for economics and behavioral sciences: (a) the effects of information, learning and knowledge; (b) testing the standard model of compensatory, rational choice; (c) the influence of behavioural levers such as social norms; and (d) the role of “deep” drivers of preference heterogeneity, such as personality and emotions. We also review what is known about the extent to which hypothetical choices reveal something about people’s true preferences. Finally, we speculate on some areas where SP methods may be useful in the future. |
| Keywords: | stated preferences, non-market valuation, environmental economics methods, information, choice, social norms, preference heterogeneity |
| JEL: | Q51 D6 H4 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2017-01&r=env |
| By: | Eskander, Shaikh M.S.U. (London School of Economics); Fankhauser, Samuel (London School of Economics); Jha, Shikha (Asian Development Bank) |
| Abstract: | We investigate the economic response of households to natural disasters in Bangladesh and Pakistan. In particular, we explore to what extent households adjust their income and employment strategies and savings in response to exposure to floods and storms. Using two unique panel datasets, we find evidence of autonomous adjustments in both countries. In Bangladesh, farmers move away from farm to nonfarm employment as a coping strategy to tackle immediate reductions in their total household income from exposure to disasters, whereas nonfarmers increase their off-farm labor supply. Such adjustments in employment strategies are stronger among the storm-affected households than the flood-affected households. On the other hand, although farmers in Pakistan move away from agriculture as an immediate response to disasters, they eventually come back to agriculture within a year of disaster exposure. We also identify that such adjustments in employment and income strategies help farmers to overcome the immediate losses from disaster exposure as the disasteraffected households from both Bangladesh and Pakistan exhibit at least no decrease in their savings behavior. We discuss policy implications in terms of developing nonfarm employment opportunities to reduce the future harms of disaster and financing economic migration to reduce income vulnerability. |
| Keywords: | Bangladesh; income; natural disasters; Pakistan; savings |
| JEL: | D13 D64 Q15 Q24 Q54 |
| Date: | 2016–12–23 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0505&r=env |
| By: | Briones, Roehlano M. |
| Abstract: | This study implements an updated set of projections for Philippine agriculture, which addresses the following key issues: (1) the proper modeling of land allocation to better analyze the implications of land scarcity under climate change; (2) the impact of climate change, agricultural productivity growth, and trade liberalization on agriculture; (3) the indirect impacts of climate change and agricultural productivity growth on the rest of the economy; and (4) the impact of productivity growth in manufacturing and services on agriculture, including on agricultural wages. To address the first and second issues, the study provides a new approach toward modeling land allocation, and updated projections for agriculture to 2030 using the extended Agricultural Model for Policy Evaluation (AMPLE). The study will address the third and fourth issues by extending AMPLE into a computable general equilibrium (CGE) version, called AMPLE – CGE, which is still being developed. This report documents the compilation of the AMPLE – CGE data set, namely, the 2013 Social Accounting Matrix. |
| Keywords: | Philippines, area allocation, quasi-fixed factor, partial equilibrium model, constant elasticity of transformation, Agricultural Model for Policy Evaluation (AMPLE), computable general equilibrium (CGE), Philippine agriculture, Social Accounting Matrix, agricultural productivity |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2016-38&r=env |
| By: | Löschel, Andreas; Lutz, Benjamin Johannes; Managi, Shunsuke |
| Abstract: | We investigate the effect of the European Union Emissions Trading System (EU ETS) on the economic performance of manufacturing firms in Germany. Our difference-in-differences framework relies on several parametric conditioning strategies and nearest neighbor matching. As a measure of economic performance, we use the firm specific distance to the stochastic production frontier recovered from official German production census data. None of our identification strategies provide evidence for a statistically significant negative effect of emissions trading on economic performance. On the contrary, the results of the nearest neighbor matching suggest that the EU ETS rather had a positive impact on the economic performance of the regulated firms, especially during the first compliance period. A subsample analysis confirms that EU ETS increased the efficiency of treated firms in at least some two-digit industries. |
| Keywords: | Control of Externalities,Emissions Trading,Economic Performance,Manufacturing,Difference-in-Differences,Nearest Neighbor Matching,Stochastic Production Frontier |
| JEL: | Q52 D22 Q38 Q48 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cawmdp:91&r=env |