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on Environmental Economics |
| By: | Nepal, Rabindra; Tisdell, Clem; Jamasb, Tooraj |
| Abstract: | Global warming and other adverse climate change impacts induced by anthropogenic carbon dioxide emissions is a major public policy concern around the world. This paper examines the impacts of market-based economic reforms on per capita CO2 emissions in the European and Central Asian transition economies where environmental degradation was pervasive prior reforms. A dynamic panel data model is employed for this purpose for 28 countries covering 22 years from 1990-2012. Our results suggest that reforms in competition policy and corporate governance are the significant driver of emissions reductions in the region. Therefore, advances in competition policy and governance reforms are desirable given the available scope to extend these reforms. The Kyoto Protocol had no significant effect in reducing emissions levels while the relationship between economic growth and emissions seems weak based on our results. The results indicate that reducing energy use by increasing energy efficiency and investments in renewable energy are necessary to reduce the carbon emissions level and mitigate the adverse impacts of climate change in the region. |
| Keywords: | transition, CO2 emissions, reforms, environmental policy, climate change, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q57, Q54, P27, P28, |
| Date: | 2017–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uqseee:253076&r=env |
| By: | Wagner, Ulrich J.; De Preux, Laure |
| Abstract: | Carbon dioxide (CO2) emissions are known to cause global climate change but no damage to the local environment. However, because CO2 is often jointly produced with other substances that pollute the environment, CO2 abatement may generate ancillary benefits, especially for human health. Previous research suggests that these co-benefits can offset a substantial share of the economic costs of mitigation policies. This paper conducts the first empirical test of this hypothesis in the context of the European Emissions Trading Scheme (EU ETS) for CO2. The econometric analysis exploits comprehensive microdata on discharges of more than 90 different pollutants into air, water and soil, at more than 28,000 commercial installations in 31 European countries. It is found that the EU ETS decreased air releases of some pollutants while increasing water releases of other pollutants. Moreover, in some cases the patterns of spatial redistribution are strongly correlated with income, population size or age. The implications for the efficiency and environmental justice of the EU ETS are discussed. |
| JEL: | H23 Q54 Q58 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145800&r=env |
| By: | Murnaghan, Kitty |
| Abstract: | During a time in which the subject of climate change is deemed high on the list of priorities of many governments, it is important to assess to what extent policies in this field are achieving meaningful results. The link between energy usage and global warming is clear and today in the European Union the use of renewable resources is being promoted more than ever before. The move towards a renewables based economy has clear benefits over a fossil fuel based one with regards to climate change and the environment, however if the implementation of renewables is not monitored and regulated then this is not a given by any means. Of the renewable resources, bioenergy has a high level of importance in the EU. For this reason, this paper will make a comprehensive evaluation of the EU's biofuel policy in order to assess what the driving forces behind the regulation of this resource are, and how they affect to what extent it is successful or not. In order to do this, firstly the impacts of current EU bioenergy consumption will be assessed, to determine whether it is achieving the stated and desired climate goals or not. Findings will show that in fact the current formulation of Europe's Renewable Strategy creates pressure to meet binding targets for renewable usage and the resultant rapid increase in the demand for bioenergy has caused a number of negative social and ecological impacts to arise. Therefore in light of this, the current systems in place at the EU level meant to regulate the use of bioenergy and ensure it is implemented in a sustainable way will be critically analysed in order to find out how such negative impacts have been able to occur. The final section will then look into the driving forces responsible for regulation of this kind through a case study of Germany and Indonesia. |
| Keywords: | European Union energy policy,agrofuel,biofuel,renewable energy,sustainability criteria |
| JEL: | Q16 Q28 Q21 Q56 F23 K32 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:812017&r=env |
| By: | Weche Gelübcke, John P.; Stoever, Jana |
| Abstract: | We investigate the impact of environmental regulation on firm performance and investment behavior. Exploiting the case of a German water withdrawal regulation that is managed on the state level, we analyze firms’ reactions to an increase in the water tax using a regression-adjusted difference-in-differences approach. We analyze the individual firm’s response to a change in environmental regulation, distinguishing between add-on and integrated environmental investments. This allows us to include intra-firm innovations into our analysis, which are likely to be of importance for increasing resource-efficiency. Our results show that the regulation in question shows no sign of affecting firms’ overall competitiveness. The results imply that the predicted negative impact of the regulation on firms’ economic performance that was brought up before the introduction of the tax, does not seem to weigh heavily in this case. Nevertheless, when placed into a sustainable competitiveness context, the regulation considered does not qualify as an appropriate policy tool for fostering green growth. |
| JEL: | O31 Q55 Q58 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145671&r=env |
| By: | Hargita, Yvonne; Rüter, Sebastian |
| Abstract: | The international community has committed itself to adopt a global climate agreement in Paris in 2015, which shall enter into force in 2020 and shall be legally-binding for all. In advance of the negotiations, parties shall submit the so-called Intended Nationally Determined Contributions (INDC), providing the voluntary national emission reduction pledges post 2020. For the purposes of § 14 of the Lima Call for Climate Action parties may also provide information on whether and in what manner removals are taken into account. Removals are synonymous for the land use (LU) sector that can serve as a carbon sink or source, depending on the national preconditions and the sector's management. Climate negotiations in the past have shown that the accounting rules that result from the special role of the LU sector have a major impact on the accounting of emissions and removals (in the sum: net-removals), and thus on the pledged overall emission reduction targets. Since the international community has yet not been able to agree on binding accounting rules for post-2020, every party can decide on its own, how it considers net-emissions from LU in its INDC. Countries with large forest areas could significantly weaken their overall level of ambition by applying national profitable rules. With our analysis of the LU sector in relevant Non-Annex I-INDCs, we critically reflect the potential role of forests and the REDD+ mechanism for the national reduction targets. The analysis shows that the assessed parties have taken advantage of the missing common rules and designed their reduction targets in a variety of ways. This variety risks transparency, completeness and comparability of information and complicates the assessment of ambition. The remaining issues that could not be answered with the data provided confirmed the need for independent technical review of emission data and assumptions behind future emission development by UNFCCC experts. These reviews could assure that the quality of pursuing negotiations of reduction targets would not be compromised. At the present state, the inclusion of the LU sector and its impact on future reduction commitments remain a source of uncertainty. |
| Keywords: | Paris Agreement,forest,land use,Brazil,India,Indonesia,UNFCCC,INDC,Non-Annex I,REDD+,2020,2030,Pariser Klimaabkommen,Wald,Landnutzung,Brasilien,Indien,China,Indonesien |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:jhtiwp:50&r=env |
| By: | Dafermos, Yannis; Nikolaidi, Maria; Galanis, Giorgos |
| Abstract: | This paper develops a stock-flow-fund ecological macroeconomic model that combines the stock-flow consistent approach of Godley and Lavoie with the flow-fund model of Georgescu-Roegen. The model has the following key features. First, monetary and physical stocks and flows are explicitly formalised taking into account the accounting principles and the laws of thermodynamics. Second, Georgescu-Roegen’s distinction between stock-flow and fund-service resources is adopted. Third, output is demand-determined but supply constraints might arise either due to environmental damages or due to the exhaustion of natural resources. Fourth, climate change influences directly the components of aggregate demand. Fifth, finance affects macroeconomic activity and the materialisation of investment plans that determine ecological efficiency. The model is calibrated using global data. Simulations are conducted to investigate the trajectories of key environmental, macroeconomic and financial variables under (i) different assumptions about the sensitivity of economic activity to the leverage ratio of firms and (ii) different types of green finance policies. |
| Keywords: | Ecological macroeconomics; stock-flow consistent modelling; laws of thermodynamics; climate change; finance |
| Date: | 2016–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:gpe:wpaper:15769&r=env |
| By: | Santeramo, Fabio Gaetano; Carlucci, Domenico; De Devitiis, Biagia; Nardone, Gianluca; Viscecchia, Rosaria |
| Abstract: | Achieving a low-carbon and sustainable economy is a long-term goal that EU aims at achieving in the next few decades: the potential role of bioeconomy is likely to make the difference, and in particular, the EU aquaculture and the seafood processing industry has the potential to contribute substantially to the emergence of bioeconomies (for instance through new – niche - markets for bio-based products such as algae, etc). In this particular framework, understanding how to enhance cleaner and more sustainable consumption patterns is preliminary to the transition towards more equitable and sustainable markets. The present analysis investigates the role of consumers’ attitudes with respect to sustainable attributes (namely food safety and respect of the environment) in order to suggest on their potential role to catalyze the transition toward bioeconomies. Up to date, empirical investigations on this issue are limited to few markets, and studies on aquaculture are particularly scant. The gap is reduced by the present analysis: it has been implemented a survey on fish consumers to investigate how their attitudes toward food safety and environmental issues tend to influence consumption choices, and it is shown that those attitudes are important determinants of consumers choices. Put differently, a cleaner and more sustainable supply chain (i.e through a safer, and environmental friendly product) is likely to enhance consumption of oysters. To the extent that policy makers, producers, and taxpayers are interested in enhancing sustainable bioeconomies, understanding the relevance of attitudes toward food safety and environmental sustainability is an important and pressing goal. The analysis, novel in its application to a high quality product, speaks in this direction and will help understanding how to accelerate the transition to sustainable bioeconomies. |
| Keywords: | Attitudes, Consumption, Food safety, Environment, Seafood, Sustainability |
| JEL: | Q11 Q18 Q22 Q28 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76789&r=env |
| By: | Frankovic, Ivan |
| Abstract: | We study the effect of climate-induced health risks within a continuous time OLG economy with a realistic demography and endogenous mortality. Climate change impacts the economy through two channels. First, a degrading environmental quality increases mortality, affecting the demand for health care. Second, production losses are caused through deteriorating climate conditions and lead to reductions in income. We explore how individuals respond to these climate change impacts with respect to their life-cycle decisions and assess the overall effect on aggregate health care demand. We put special focus on age-specific vulnerabilities of climateinduced health risks and explore the response to climate change across age-groups. We solve the model numerically and show that health care demand is subject to two opposing forces. While climate-induced mortality increases demand for medical care, reduced income tends to lower health spending, particularly among the elderly. Moreover, we find that age-specific vulnerabilities to climate change considerably shape the effect on aggregate health care demand. Our analysis, thus, highlights the important role of a full life-cycle perspective in the estimation of climate-induced health costs. |
| Keywords: | climate change,climate-induced health risks,life-cycle model,health care,value of life |
| JEL: | D91 I12 I15 J11 J17 Q54 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuweco:022017&r=env |
| By: | Singh, Rajesh; Weninger, Quinn |
| Abstract: | We study production capacity utilization and emission permit utilization in a model where firms jointly produce a valued good and an environmental bad, pollution. Firms are ex ante identical but experience random productivity shocks after factor employment. A regulator imposes a cap-and-trade policy to control pollution emissions. Trade in emission permits entails transactions costs which follow two specifications: constant per unit trading costs or fixed trading costs. Under constant per unit trading costs, the equilibrium outcome depends only on the total unit trading costs; the incidence of costs borne by buyers and sellers does not matter. Under fixed costs, both buyers' and sellers' costs matter. Under proportional costs permit trade always occurs, with either full or partial market clearing, as long as the total trading costs are below the permit trade surplus. With fixed costs, trade is either partial or non-existent. The implication is that firms fully utilize their production capacity for a range of proportional trading costs; capacity is never fully utilized under fixed costs. Under proportional costs, trade is impeded most, even with small costs, when the emission cap is either relatively high or low. There exists a non-monotonic relationship between the aggregate emissions cap and a lower bound for trading costs that obstruct or preclude trade. Under fixed costs, a similar relationship between emission cap and the cost threshold that precludes trade holds only if the output variance is exogenously fixed. Otherwise, the higher the emission cap the higher is this cost threshold. In contrast to proportional costs where capacity utilization decreases with productivity variance, the result is the opposite under fixed costs. |
| Date: | 2016–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genstf:201607060700001021&r=env |
| By: | Jean Huge; Katherine Vande Velde; Francisco Javier Benitez Capistros; Jan Harold J.H. Japay; Behara Satyanarayana; Mohammad M. Nazrin Ishak; Melissa Quispe M.Q. Zuniga; Bin Husain B.H. Mohd Lokman; Sulong S. Ibrahim; Nico Koedam; Farid Dahdouh-Guebas |
| Abstract: | The sustainable management of natural resources requires the consideration of multiple stakeholders’ perspectives and knowledge claims, in order to inform complex and possibly contentious decision-making dilemmas. Hence, a better understanding of why people in particular contexts do manage natural resources in a particular way is needed. Focusing on mangroves, highly productive tropical intertidal forests, this study's first aim is to map the diversity of subjective viewpoints among a range of stakeholders on the management of Matang Mangrove Forest in peninsular Malaysia. Secondly, this study aims to feed the reflection on the possible consequences of the diversity of perspectives for the future management of mangroves in Malaysia and beyond. The use of the semi-quantitative Q methodology allowed us to identify three main discourses on mangrove management: i. the optimization discourse, stressing the need to improve the current overall satisfactory management regime; ii. the ’change for the better’ discourse, which focuses on increasingly participatory management and on ecotourism; and iii. the conservative ‘business as usual’ discourse. The existence of common points of connection between the discourses and their respective supporters provides opportunities for modifications of mangrove management regimes. Acknowledging this diversity of viewpoints, reflecting how different stakeholders see and talk about mangrove management, highlights the need to develop pro-active and resilient natural resource management approaches. |
| Keywords: | Discourse; Malaysia; Mangrove management; Matang; Q methodology |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/246478&r=env |
| By: | Rudik, Ivan |
| Abstract: | Integrated assessment models (IAMs) are economists' primary tool for analyzing the optimal carbon tax. Damage functions, which link temperature to economic impacts, have come under fire because of their assumptions that may produce significant, and ex-ante unknowable misspecifications. Here I develop novel recursive IAM frameworks to model damage uncertainty. I decompose the optimal carbon tax into channels capturing parametric damage uncertainty, learning, and misspecificationconcerns. Damage learning and using robust control to guard against potentialmisspecifications can both improve ex-post welfare if the IAM's damage function is misspecified. However, these ex-post welfare gains may take decades or centuries to arrive. |
| Date: | 2016–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genstf:201611130800001011&r=env |
| By: | Gerigk, Joschka |
| Abstract: | In this paper, I analyze incomplete enforcement in a political economy model. I use a contest framework to explain changes in lobbying behavior when special interest groups anticipate the incomplete enforceability of environmental regulation. In this setting, I compare two instruments, namely an abatement standard and an emission tax. Regulation of a polluting output is proposed and two lobby groups - representing the interests of producers and environmentalists, respectively - seek to influence the government in order to prevent or support the implementation of the regulation. I develop a general framework to demonstrate that the lobbying efforts are determined not only by the stringency of the proposed policy - as determined by the level of the tax or abatement standard - but, importantly, also by its enforceability. Using common functional specifications, I then show that, when an emission tax is proposed, incomplete enforcement may not only reduce the industry's opposition to regulation compared to a situation with full enforcement, but it may, despite the possibility of untruthful reporting, also reduce expected environmental damage. When instead an abatement standard is proposed, however, the effects of regulatory stringency and enforceability are ambiguous, rendering unequivocal policy recommendations for this case impossible. |
| JEL: | D72 L51 Q58 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145920&r=env |
| By: | Ruf, Julia Anna |
| Abstract: | This paper provides a policy analysis of the EU Emissions Trading System and its crisis. The aim of the research is to give an answer to the question why the EU Emissions Trading System is in crisis and cannot be revised in an effective way. Therefore, the policy process of the revision of the EU Emissions Trading System for its third phase is analysed. The research is based on the theoretical assumptions of the historical-materialist policy analysis, which also serves as an analytical tool. The main result of the analysis is that the framing of neoliberalism has shaped the construction and the further revisions of the system. For this reason, the EU Emissions Trading System can be considered to be in crisis because it is based on neoclassical assumptions, which are not suitable for tackling the issue of climate change. Revisions will not lead to a success of the system as long as it is based on neoclassical economics. However, the current strength of neoliberalism makes a turning away unlikely. |
| Keywords: | EU Emissions Trading System,Crisis,Revision,Neoliberalism,Historical-Materialist Policy Analysis |
| JEL: | O13 Q48 Q54 Q58 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:822017&r=env |
| By: | François Cohen; Matthieu Glachant; Magnus Söderberg |
| Abstract: | Using household-level data from the American Housing Survey, this paper assesses the cost of adapting housing to temperature increases. The authors account for both energy use adjustments and capital adjustments through investments in weatherization and heating and cooling equipment. The authors’ best estimate of the present discounted value of the cost for adapting to the A2 ‘business-as-usual’ climate scenario by the end of the century is US$5,600 per housing unit, including both energy and investment costs. A more intense use of air conditioners will be compensated for by a reduction in heating need, leading to a shift from gas to electricity consumption. |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp263&r=env |
| By: | Hillebrand, Marten; Hillebrand, Elmar |
| Abstract: | This paper develops a dynamic general equilibrium model with an arbitrary number of different regions to study alternative climate policies and the consequences of climate change. Countries differ with respect to their state of economic development, factor endowments, and climate damages and trade on global markets for capital and exhaustible resources. Our main theoretical result derives an optimal climate policy consisting of an optimal emissions tax and an optimal transfer policy. The optimal climate tax can be determined explicitly in our framework and is independent of any weights attached to the interests of different countries. These weights only determine optimal transfers which distribute tax revenues across countries. We infer that the real political issue is not the amount of taxation required to reduce global warming but how the burden of climate change should be shared via transfer payments between different countries. To offer some guidance on this matter, we conduct a numerical simulation study which analyzes the optimal transfers between OECD and Non-OECD countries. |
| JEL: | H23 Q43 Q54 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145903&r=env |
| By: | Congressional Budget Office |
| Abstract: | How much will hurricane damage increase in coming years because of climate change and coastal development? This report examines the implications for the federal budget and three approaches for decreasing the pressure for federal spending. |
| JEL: | H50 H84 Q40 Q54 Q58 |
| Date: | 2016–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:515181&r=env |
| By: | Congressional Budget Office |
| Abstract: | How much will hurricane damage increase in coming years because of climate change and coastal development? This report examines the implications for the federal budget and three approaches for decreasing the pressure for federal spending. |
| JEL: | H50 H84 Q40 Q54 Q58 |
| Date: | 2016–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:515182&r=env |
| By: | Congressional Budget Office |
| Abstract: | How much will hurricane damage increase in coming years because of climate change and coastal development? This report examines the implications for the federal budget and three approaches for decreasing the pressure for federal spending. |
| JEL: | H50 H84 Q40 Q54 Q58 |
| Date: | 2016–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:515180&r=env |
| By: | Kene Boun My; Benjamin Ouvrard |
| Abstract: | We provide an experimental test of the theoretical predictions obtained in Ouvrard and Spaeter (2016). A public goods experiment is proposed in which the subjects can contribute to reduce the level of pollution, which is stochastic. A nudge (announcement of the socially optimal contribution) and a tax are implemented to improve the level of contributions. The environmental sensitivity and optimism of the subjects are also elicited. Our first result shows that the implementation of the nudge does not perform as well as the implementation of the tax. The reaction to the nudge depends directly on individuals’ environmental sensitivity, contrary to the reaction to the tax. Secondly, the nudge performs well with highly sensitive subjects only during the first half of its implementation. Lastly, the efficiency analysis shows that the implementation of the nudge significantly decreases the groups’ welfare for the least sensitive subjects, in comparison to the baseline. In sum, these results tend to corroborate the predictions obtained in Ouvrard and Spaeter (2016). |
| Keywords: | incentives, nudge, environmental sensitivity, optimism, tax. |
| JEL: | C91 H41 Q58 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2017-06&r=env |
| By: | Jussila Hammes , Johanna (VTI) |
| Abstract: | Previous research shows that a Cost-Benefit Analysis (CBA) is most often not conducted ahead of decisions about environmental, energy and climate policy in Sweden. Our point of departure is the observation that civil servants can have real authority (Maskin & Tirole, 2004). We proceed to construct a theoretical model that explains why bureaucrats may choose not to conduct a CBA. We show that given the initial policy chosen by an agenda setter, those bureaucrats who choose to stay put working with the policy are those whose policy preferences are closest to the initial policy. Moreover, bureaucrats over time adjust their preferences in the direction of the initial policy. Those bureaucrats who strongly disagree with the initial policy choose to quit instead of taking the cognitive costs associated with the initial policy. A CBA might call the initial policy into question. The civil servants then have an incentive not to conduct a CBA and take on the cognitive costs associated with having to adjust their attitudes in a new direction. Only in the presence of a binding governmental budget constraint may the civil servants have an incentive to conduct a CBA. |
| Keywords: | Bureaucrats; Career concerns; CBA; Cognitive dissonance; Environmental policy; Norms |
| JEL: | D61 D73 H41 |
| Date: | 2017–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2017_005&r=env |
| By: | Peter, Jakob (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Elberg, Christina (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Bettzüge, Marc Oliver (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Höffler, Felix (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | In light of progressing climate change, both Germany as well as the two U.S. federal states California and Texas have enacted decarbonization strategies based on renewable energies. At the same time, the policy instruments to pursue their goals differ substantially. This comparative study identifies similarities and differences in policy structures as well as the penetration of variable renewable resources. It shows a fast deployment of wind and solar power in Germany at comparatively high cost. At the same time, it reveals that the two U.S. markets could ameliorate the investment conditions for renewable energy via three measures: 1. Reduction of institutional obstacles and transaction costs, 2. Introduction of CO2-pricing (Texas) or increasing CO2-pricing (California), 3. additional support schemes for wind and solar, if substantive reasons for additional support prevail. |
| Keywords: | Comparative Analysis; Decarbonization; RES Deployment; Energy Sector Regulation |
| JEL: | L94 N70 Q42 Q48 |
| Date: | 2015–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2015_009&r=env |
| By: | Arvid Bring; Eric Sjöberg |
| Abstract: | A growing body of evidence suggests a link between climate and conflict. In contrast, the link between climate and cooperation remains much less investigated, although it has been studied in the context of transboundary river basins. Even for transboundary waters, however, earlier results have not decisively answered whether the effect of climate on conflict or on cooperation is stronger. Here we concurrently investigate both cooperation and conflict in transboundary river basins across the world as two potential responses to changes in climatic factors. Our results indicate that one-standard deviation changes in climate variables affect cooperation more than conflict in absolute terms, although effects on conflict are large in relative terms. Furthermore, lower water availability is associated with worse outcomes both through fewer cooperation events and more frequent conflicts. While higher temperatures are associated with more frequent cooperation, the projected decrease in precipitation and soil moisture projected for many regions of the globe may offset positive effects of temperature, and reinforcing cooperative activities should therefore be a policy priority. It is clear that including a full set of potential responses – positive, negative and none - are needed to understand the climatic influence on regional human cooperation and conflict. We encourage further studies that investigate such full-spectrum effects also for other situations than transboundary river basins. |
| Keywords: | Climate and conflict, Transboundary rivers, Water resources, International river basins, Econometrics, Cooperation. JEL Classification: Q25, Q54, Q56 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:uta:papers:2017_02&r=env |
| By: | Lemoine, Derek; Rudik, Ivan |
| Abstract: | Uncertainty is critical to questions about climate change policy. Recently developed recursive integrated assessment models have become the primary tool for studying and quantifying the policy implications of uncertainty. The first wave of recursive models has made valuable, pioneering efforts at analyzing disparate sources of uncertainty. We decompose the channels through which uncertainty affects policy and quantify them in a recursive extension of a benchmark integrated assessment model. We argue that frontier numerical methods will enable the next generation of recursive models to better capture the information structure of climate change and to thereby ask new types of questions about climate change policy |
| Date: | 2016–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genstf:201610010700001015&r=env |
| By: | Falcke, Florian (RWTH Aachen University); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)) |
| Abstract: | In early 2019, the market stability reserve (MSR), a volume-based regulatory regime for tackling the surplus in emission allowances (EUAs) in the EU Emissions Trading System (EU ETS), will enter into force. The MSR will take EUAs out of the market when the amount of banked and thus unused EUAs exceeds an upper threshold and will release EUAs into the market when the amount of banked EUAs falls under a lower threshold. Over the last years, the design of the MSR has been the topic of controversial discussion. Among other concerns, scientists are afraid that the MSR may increase price volatility and uncertainty, which in turn may enhance specula-tive activity. In this paper we analyze the effect of the MSR on the behavior of a speculator with market power. For this purpose, the interlinked electricity and carbon market is modeled with an open-source agent-based model, which is expanded by adding the banking behavior of the spec-ulator. The results indicate that with the MSR mechanism being active in the EU ETS, both speculative banking activity and speculator profit increase. We further test the hypothesis that the MSR mechanism itself could be used by a speculator to increase his returns, leading to the conclusion that while this is theoretically possible, it is unlikely to actually happen. The results obtained can help to understand future behavior of market participants in the EU ETS. |
| Keywords: | Global warming; Climate change mitigation; EU ETS; Speculation |
| JEL: | D84 G18 Q48 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2016_009&r=env |
| By: | Elum, Zelda; Modise, David; Marr, Ana |
| Abstract: | The world has responded to climate change phenomenon through two broad response mechanisms (mitigation and adaptation strategies) with the aim of moderating the adverse effects of climate change and/or to exploit any arising beneficial opportunities. The paper aims to examine the trend in climate parameters, farmers’ perception of climate change, constraints faced in production and to identify the strategies (if any) that farmers have adopted to cope with the effects of changing climate. A one-way analysis of variance, percentage analysis and Garrett ranking technique were applied to a set of primary data collected from 150 randomly sampled farmers with the aid of questionnaires in three purposively selected provinces through the months of June to August 2015. The analytical results of obtained recent weather data revealed that the climate parameters have significantly changed over time and these were substantiated by farmers’ experiences. The farmers are engaging in various climate-response strategies, among which, the planting of drought-tolerant varieties is most common. Therefore, it is important to enhance farmers’ access to improved drought-tolerant seeds and efficient irrigation systems. Also observed, is that the lack of awareness of insurance products and inability to afford insurance premiums were the principal reasons majority of the farmers did not have insurance. These present a need to strengthen insurance adoption among farmers through various supporting programmes that may include premium subsidies and media outreach. The paper under one platform provides evidence of changing climate, farmers’ responses towards mitigating perceived adverse effects of the changed climate, and South Africa’s national policy on adaptation and mitigation. |
| Keywords: | Perception; Climate change; Vulnerability; Mitigation; Adaptation; farmers; South Africa |
| Date: | 2016–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:gpe:wpaper:16050&r=env |
| By: | Rudik, Ivan |
| Abstract: | Many environmental standards are expressed in terms of intensity rather than absolute levels. In some cases, intensity standards are associated with tradable credit markets to mitigate the firms’ compliance costs. I develop a jurisdictional model of credit trading under an intensity standard, framed in terms of a Renewable Portfolio Standard for electric utilities. I find that jurisdictions of firms with high costs of compliance may actually be better off by not allowing inter-jurisdictional credit trading. Counterintuitively, increasing the stringency of the intensity standard under credit trading can have the opposite of the intended effect and decrease renewable electricity generation. |
| Date: | 2016–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genstf:201602020800001013&r=env |
| By: | Cienna C. Thomas; Vanessa Loodts; Laurence Rongy; Anne De Wit |
| Abstract: | Upon dissolution of carbon dioxide (CO2) into deep saline aquifers, various chemical reactions are likely to take place between dissolved CO2 and reactants dissolved in the brine, which may drastically impact the mixing of stored CO2 in the reservoir. Our objective is to understand how the nature of the dissolved chemical reactants affects the convective dynamics generated by the dissolution of CO2 into the host phase. To do so, we study experimentally in a Hele-Shaw cell the reactive and convective dissolution of gaseous CO2 into aqueous solutions of bases MOH where M+ is an alkali metal cation. We quantify the effect of the counter-ion M+ on the convective dynamics. Using a schlieren optical setup, we compare the convective patterns in pure water to those in different alkaline solutions of various concentrations. For any reactant MOH studied, the fingering instability develops faster in the reactive case than in pure water, and convection is enhanced if the concentration of the reactant is increased. Furthermore, changing the counter-ion M+ modifies the onset time and the non-linear development of the fingering instability. We explain these experimental results by theoretically analyzing the reaction–diffusion density profiles developing in the solution. We find that changing the counter-ion M+ of the base modifies the density profile, not only through solutal effects but also through differential diffusivity effects. This highlights that the spectator ion M+, despite not participating actively in the acid–base reaction, impacts the development of the hydrodynamic instability. Our results suggest that, in the context of CO2 sequestration, the details of the chemical composition of the storage site should be taken into account for more accurate modeling of the reactive transport of dissolved CO2. |
| Keywords: | CO2 sequestration; Convective dissolution; Fingering; Reactive dissolution |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/246598&r=env |
| By: | Zeenatul Islam (Department of Economics, University of Rajshahi, Rajshahi); Mohammad Alauddin (School of Economics, The University of Queensland); Md. Abdur Rashid Sarker (Department of Economics, University of Rajshahi, Rajshahi) |
| Abstract: | The existing literature pays inadequate attention to any rigorous analysis of perceived severity of climate-driven crop losses, their determinants and implications. The present study fills this gap in three ways. It investigates farmers’ perception about the severity of loss for three rice crops, identifies their determinants and explores policy implications. In doing so, it employs an ordered probit model to data from 1,800 farm households from districts typifying drought- prone and groundwater depleted areas of Bangladesh. Perceived severity of rice production losses was not uniform for all rice crops being higher for the rain-fed crops and appeared broadly consistent with available evidence. Severity of perceived crop loss was associated with geophysical factors, household characteristics, institutional and market accessibility, and household adaptation strategy. Household resource endowment had no perceptible effect on production loss. The impact of these factors was specific to the crop and severity of perceived loss. This study has several policy implications involving market, R & D and institutional support based options. Strengthening support systems for institutional and market accessibility, and science driven adaptation strategy including generation and wider dissemination of drought tolerant rice varieties, and enhancing farmers’ capacity to change rice varieties on a regular basis constitute focal areas. |
| Keywords: | Loss severity; Ground water depletion; Drought severity; Ordered probit; Accessibility; Adaptation strategy |
| JEL: | O13 Q54 C35 |
| Date: | 2017–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:579&r=env |
| By: | Robinson, Nathaniel P.; Cox, Cindy M.; Koo, Jawoo |
| Abstract: | This study was undertaken to assess the utility of remotely sensed net primary productivity (NPP) data to measure agricultural sustainability by applying a new methodology that captures spatial variability and trends in total NPP and in NPP removed at harvest. The sustainable intensification of agriculture is widely promoted as a means for achieving the Sustainable Development Goals (SDGs) and transitioning toward a more productive, sustainable, and inclusive agriculture, particularity in fragile environments. Yet critics claim that the 17 SDGs and 169 targets are immeasurable and unmanageable. We propose adoption of satellite-estimated, time-series NPP data to monitor agricultural intensification and sustainability, as it is one indicator potentially valuable across several SDGs. To illustrate, we present a unique monitoring framework and a novel indicator, the agricultural appropriation of net primary productivity (AANPP) and analyze spatial trends in NPP and AANPP across the continent of Africa. AANPP focuses on the proportion of total crop NPP removed at harvest. We estimate AANPP by overlaying remotely sensed satellite imagery with rasterized crop production data at 10-by-10-kilometer spatial resolution; we explore variation in NPP and AANPP in terms of food and ecological security. The spatial distribution of NPP and AANPP illustrates the dominance of cropping systems as spatial drivers of NPP across many regions in West and East Africa, as well as in the fertile river valleys across North Africa and the Sahel, where access to irrigation and other technological inputs are inflating AANPP relative to NPP. A comparison of 2000 and 2005 datasets showed increasing AANPP in African countries south of the Sahara—particularly in Mozambique, Angola, and Zambia—whereas NPP either held stable or decreased considerably. This pattern was especially evident subnationally in Ethiopia. Such trends highlight increasing vulnerability of populations to food and ecological insecurity. When combined with other indicators and time-series data, the significance of NPP and the capacity of spatially explicit datasets have far-reaching implications for monitoring the progress of sustainable development in a post-2015 world. |
| Keywords: | productivity, intensification, sustainable agriculture, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1584&r=env |
| By: | Gunther Capelle-Blancard; Patricia Crifo; Marc-Arthur Diaye; Rim Oueghlissi; Bert Scholtens |
| Abstract: | What are the determinants of borrowing cost in international capital markets? Apart from macroeconomic fundamentals, are there any qualitative factors that might capture sovereign bond spreads? In this paper we consider to what extent Environmental, social and governance (ESG) performance can affect sovereign bond spreads. First, countries with good ESG performance tend to have less default risk and thus lower bond spreads. Moreover, the economic impact is stronger in the long-run, suggesting that ESG performance is a long-lasting phenomenon. Second, we examine the financial impact of separate ESG dimensions, and find that the environmental dimension appears to have no financial impact whereas governance weighs more than social factors. Third, we examine cross-countries differences and show that ESG performance has a more significant and stronger impact in the Eurozone than elsewhere in OECD countries. Fourth, we include evidence from the global financial crisis and find stronger influence of country sustainability performance during crisis period. |
| Keywords: | ESG performance, sovereign bond yield spreads. |
| JEL: | G11 F34 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2017-7&r=env |
| By: | Michelsen, Claus; El-Shagi, Makram; Rosenschon, Sebastian |
| Abstract: | The impact of environmental regulation on market diffusion and market entry of "green'', innovative buildings in the housing market is studied using a unique data set of German residential buildings. Particularly, we analyze how energy efficiency regulation, in terms of minimum standards, affects energy-requirements in newly constructed buildings over time in both, the high and low quality housing segment. The data we use consists of a large sample of German apartment houses built between 1950 and 2005. We develop a new measure for regulation intensity and apply a panel-error-correction regression model to energy requirements of low and high quality housing. Our findings suggest that regulation is effective and significantly impacts technology adoption in low quality housing. Moreover, we find that regulation indirectly also positively affects energy efficiency in the high quality housing markets. This suggests that tighter building codes have a substantial impact on both, the entry and the diffusion of ``green'' buildings in the housing market. |
| JEL: | D20 Q40 R30 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145534&r=env |
| By: | Piñeiro, Valeria; Thomas, Jenny; Elverdin, Pablo |
| Abstract: | Gold mining is the main economic activity in Madre de Dios, Peru. Despite efforts, the state has not yet managed to identify a formalization process achievable for small operators. In addition, many small-scale miners are driven by poverty and need income to provide for their basic needs. Because participation in small-scale mining is largely driven by poverty, it is likely that, in the longer term, much artisanal mining activity will disappear naturally if, through economic development, more attractive work options become available. This paper reviews the importance of illegal mining in Madre de Dios and the potential for development of the agriculture sector. It also analyzes three different policy scenarios: (1) government spending to rectify the environmental damage in the region caused by illegal mining, (2) development of the agricultural sector in the region, and (3) a final scenario with both environmental restoration and agricultural development. Results show that additional government spending in Madre de Dios does not significantly affect the rest of the country and that investment in agriculture can achieve structural change in the gross domestic product of Madre de Dios. Development of the agricultural sector also slightly increases household incomes in Madre de Dios. |
| Keywords: | mining, extraction, agricultural development, environmental management, sustainable development, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1582&r=env |
| By: | Janda, Karel; Tan, Tianhao |
| Abstract: | This paper starts with a brief literature review of sustainable energy literature with focus on economic aspects of sustainability. This is followed by description of energy situation in Central Europe and East Asia with a focus on sustainable energy resources. Our analysis of energy sector describes energy sector and both fossil and renewable fuel energy supply with particular emphasize on electricity. |
| Keywords: | Renewable Energy; Central Europe; East Asia |
| JEL: | Q42 R11 |
| Date: | 2017–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76717&r=env |
| By: | Hollingsworth, Alex; Rudik, Ivan |
| Abstract: | Renewable portfolio standards (RPSs) are state level policies that require in-state electricity providers to procure a minimum percentage of electricity sales from renewable sources. Using theoretical and empirical models, we show how RPSs induce out-of-state emissions reductions through inter-state trade of the credits used for RPS compliance. When one state passes an RPS, it increases demand for credits sold by firms in other (potentially non-RPS) states. We find evidence that increasing a state’s RPS decreases coal generation and increases wind generation in outside states through this tradable credit channel. We perform a welfare simulation to evaluate the aggregate benefits of the reductions in local coal-fired pollutants induced by RPSs. Our estimates suggest that a 1 percentage point increase a state’s RPS results in up to $100 million in gross benefits towards the United States as a whole. However, there is substantial heterogeneity in the total benefits caused by increases in different states’ RPSs. |
| Date: | 2016–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genstf:201610280700001012&r=env |
| By: | Walz, Rainer; Gotsch, Matthias; Gandenberger, Carsten; Peters, Anja; Günther, Edeltraud |
| Abstract: | [Hintergrund ...] In jüngster Zeit hat die Beschäftigung mit Transformationen hin zu einer Green Economy nicht nur im wissenschaftlichen Bereich, sondern auch in der politischen und gesellschaftlichen Diskussion zugenommen. So finden z. B. im Rahmen des Fachforums Nachhaltiges Wirtschaften, welches im Rahmen der Leitinitiative des FONA-Forschungsprogramms ins Leben gerufen und in die Hightech-Strategie der Bundesregierung eingebunden ist, Diskussionen und Austausch zwischen Politik, Wirtschaft, Wissenschaft und Zivilgesellschaft statt. Umso mehr ist es ein Anliegen, diese Diskussionen durch wissenschaftliche Auswertungen zu unterstützen. Daher wurde im Rahmen des Vorhabens „Wissenschaftliche Koordination Nachhaltiges Wirtschaften“ (NAWIKO), das den gleichnamigen Förderschwerpunkt des BMBF begleitet, vom Fraunhofer ISI eine „Metastudie zur Transformation der deutschen Wirtschaft hin zu einer Green Economy“ durchgeführt, in die Frau Prof. Dr. Günther mit einem Unterauftrag zur Auswertung einer Befragung der TU Dresden eingebunden wurde. Im Fokus der Metastudie standen die Auswertung von Daten und Studien zu Unternehmensperspektiven, zur Konsumentenperspektive, und schließlich Ansatzpunkte zur Entwicklung eines Indikatorensystems für Transformationen. Die verschiedenen Arbeitspakete der Studie sollen helfen, bestehende Wissenslücken zu schließen und neue Fragestellungen zu identifizieren. Im Folgenden werden die Ergebnisse der Arbeiten zusammengefasst und übergreifende Ergebnisse und Handlungsempfehlungen abgeleitet. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s032017&r=env |
| By: | Janda, Karel; Tan, Tianhao |
| Abstract: | This paper provides overview of all sustainable energy resources in two geographic areas- Central Europe and East Asia. Comparison of renewable energy sources in these two areas was not done before. We cover newly emerging important renewable energy sources of wind power, solar energy and bioenergy together with somehow less investigated geothermal sources. Our analysis includes also a well established hydroelectricity and nuclear energy. While nuclear energy is not a renewable resource, it was included into this analysis to provide complete coverage of all competitive energy sources with respect to carbon-based fossil fuels. We provide both descriptive and econometric analysis complemented with appropriate case studies. |
| Keywords: | Renewable Energy; Central Europe; East Asia |
| JEL: | Q42 R11 |
| Date: | 2017–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76719&r=env |
| By: | Mesagan, Ekundayo |
| Abstract: | This study focused on the role foreign direct investment plays in the relationship between quality environment and economic growth in Nigeria from 1970 to 2013. The ordinary least squares technique was employed and the key variables include carbon emission, human capital, per capita income, FDI, trade openness, interest rate, inflation rate and the interaction term between environment and FDI. The result showed that all the variables are stationary at first difference and that long run relationship exists among them. It is observed that FDI ratio and environment negatively impact GDP over the period, but the interaction between FDI and environment positively impact economic growth. It is recommended that the country should reform its environmental policies to attract proper and appropriate technology to boost its economic progress as suggested by the interaction term in the model. |
| Keywords: | Environment; Economic Growth; Foreign Direct Investment; Nigeria. |
| JEL: | F18 F21 O12 |
| Date: | 2015–08–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76722&r=env |
| By: | Ceballos, Francisco |
| Abstract: | This paper develops a novel methodology to estimate the degree of spatial basis risk for an arbitrary rainfall index insurance instrument. It relies on a widelyused stochastic rainfall generator, extendedto accommodate nontraditional dependence patterns—in particular spatial upper-tail dependence in rainfall—through a copula function. The methodology is applied to a recentlylaunched index product insuring against excess rainfall in Uruguay. The model is first calibrated using historical daily rainfall data from the national network of weather stations, complemented with a unique,high-resolution dataset from a dense network of 34 automatic weather stations around the study area. The degree of downside spatial basis risk is then estimated by Monte Carlo simulations and the results are linked to both a theoretical model of the demand for index insurance and to farmers’ perceptions about the product. |
| Keywords: | rain, rainfall patterns, insurance, weather, precipitation, risk management, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1595&r=env |
| By: | Kussel, Gerhard; Larysch, Tobias |
| Abstract: | Mit einem Anteil von rund 30% am Endenergieverbrauch und etwa 20% an den CO2-Emissionen haben private Haushalte in Deutschland einen großen Einfluss auf die Umwelt. Gleichzeitig sind private Haushalte ein zentraler Adressat für politische Interventionen zur Bekämpfung des Klimawandels. Vor diesem Hintergrund hat die Politik zahlreiche Maßnahmen zur Verringerung des Energiekonsums und zur Förderung regenerativer Energietechnologien ergriffen. Diese politischen Maßnahmen bedürfen einer sorgfältigen Evaluierung ihrer Effektivität und Kosteneffizienz, um kostspielige Redundanzen durch sich überlappende Instrumente zu vermeiden. Eine solche Evaluation umwelt- und energiepolitischer Maßnahmen erfordert eine umfangreiche Datenbasis. Besonders im Bereich der privaten Haushalte waren solche Daten in Deutschland bislang nicht verfügbar. Die Reagibilität deutscher Haushalte auf Maßnahmen zur Bekämpfung des Klimawandels war daher weitgehend unbekannt. Das Sozial-Ökologische Panel stellt daher umfagreiche Informationen zum Energieverbrauch und Umweltverhalten privater Haushalte bereit, die für die Wissenschaft frei zugänglich sind. Auf diesen Daten aufbauend können dann ökonometrische Schätzungen und Analysen verschiedener Präferenzindikatoren sowie des Anpassungsverhaltens privater Haushalte an den Klimawandel durchgeführt werden. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwimat:110&r=env |
| By: | Claudio Morana (Department of Economics, Statistics and Management, University of Milan-Bicocca, Italy; CeRP-Collegio Carlo Alberto, Italy; The Rimini Centre for Economic Analysis, Italy); Giacomo Sbrana (NEOMA Business School, France) |
| Abstract: | The paper investigates the linkages between temperature anomalies, radiative forcing and ENSO. By means of a new flexible trend modeling approach, we uncover a nonlinear linkage between radiative forcing and global temperature anomalies. The nonlinear trend closely tracks the low frequency evolution in temperature anomalies, also accounting for the mid-end 1990s level switch, the 1998-2013 "warming hiatus" and the current steepening in trend temperatures. Radiative forcing is also found to account for trend dynamics in the Southern Oscillation Index (SOI), therefore providing support for the view that global warming might affect natural variability oscillations such as ENSO, and therefore enhance their disruptive effects. We also document the feature of time-varying volatility of temperature anomalies and SOI, which is well described by an IGARCH process. By means of a new dynamic conditional correlation model (SP-DCC), we finally document the presence of time-varying conditional correlations relating temperature anomalies across various zones and SOI. The correlation pattern is found to be consistent with the effects of ENSO events in the Tropics and their teleconnections. |
| Keywords: | Temperature anomaly, global warming, warming hiatus, radiative forcing, ENSO, El Niño, conditional heteroskedasticity, semiparametric dynamic conditional correlation model |
| JEL: | C32 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:17-06&r=env |
| By: | Claudio, Morana; Giacomo, Sbrana |
| Abstract: | The paper investigates the linkages between temperature anomalies, radiative forcing and ENSO. By means of a new flexible trend modeling approach, we uncover a nonlinear linkage between radiative forcing and global temperature anomalies. The nonlinear trend closely tracks the low frequency evolution in temperature anomalies, also accounting for the mid-end 1990s level switch, the 1998-2013 "warming hiatus" and the current steepening in trend temperatures. Radiative forcing is also found to account for trend dynamics in the Southern Oscillation Index (SOI), therefore providing support for the view that global warming might affect natural variability oscillations such as ENSO, and therefore enhance their disruptive effects. We also document the feature of time-varying volatility of temperature anomalies and SOI, which is well described by an IGARCH process. By means of a new dynamic conditional correlation model (SP-DCC), we finally document the presence of time-varying conditional correlations relating temperature anomalies across various zones and SOI. The correlation pattern is found to be consistent with the effects of ENSO events in the Tropics and their teleconnections. |
| Keywords: | Temperature anomaly, global warming, warming hiatus, radiative forcing, ENSO, El Niño, conditional heteroskedasticity, semiparametric dynamic conditional correlation model. |
| JEL: | C32 |
| Date: | 2017–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:361&r=env |
| By: | Zaklan, Aleksandar |
| Abstract: | Independence of installation-level emissions from endowments of allowances allocated for free constitutes a necessary condition for the cost-effectiveness of a cap-and-trade system. A causal relationship between allocations and emissions suggests the presence of an endowment effect induced by free allocation and indicates a loss in cost effectiveness. The issue is relevant to the EU's Emissions Trading System (EU ETS), where a large share of the total allocation occurs for free. This paper tests for the presence of an endowment effect among European electricity sector plants as regulated under the EU ETS by evaluating whether growth in plant-level emissions of power generators changed due to a switch from free allocation to full auctioning. To overcome the endogeneity of allocations I exploit a natural experiment inducing exogenous variation in the allocation of allowances to power producers. While electricity producers located in EU-15 countries were subject to full auctioning starting in 2013, free allocation continued under the so-called 10c rule in eight member states. I apply a matched difference-in-differences research design to a unique EU-wide plant-level dataset of emissions and technical characteristics, constructing a synthetic control group. I find no evidence of a general endowment effect. However, there is some evidence in favor of an endowment effect for a sub-sample of small emitters. |
| JEL: | Q54 Q58 C22 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145682&r=env |
| By: | Agarwal, Sandip; Jacobs, Keri L.; Weninger, Quinn |
| Abstract: | In the spring of 2014, we conducted a survey of Iowa crop producers to (1) learn about common nutrient management practices, and (2) to elicit farmers' subjective beliefs about the weather and crop growth uncertainty they face when making nutrient management decisions. The survey is part of a larger study that seeks to uncover the subjective or perceived relationship between nitrogen application practices, e.g., quantity, timing, application method, and crop yield outcomes. This paper provides a rationale for measuring subjective beliefs in the context of decision making under uncertainty and discusses specific design elements of the 2014 survey instrument. We provide summary statistics for the information that was gathered and discuss lessons learned from the pilot study. |
| Date: | 2016–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genstf:201601010800001005&r=env |
| By: | Cenacchi, Nicola; Lim, Youngah; Sulser, Timothy B.; Islam, Shahnila; Mason-D’Croz, Daniel; Robertson, Richard D.; Kim, Chang-Gil; Wiebe, Keith D. |
| Abstract: | As the effects of climate change set in, and population and income growth exert increasing pressure on natural resources, food security is becoming a pressing challenge for countries worldwide. Awareness of these threats is critical to transforming concern into long-term planning, and modeling tools like the one used in the present study are beneficial for strategic support of decision making in the agricultural policy arena. The focus of this investigation is the Republic of Korea, where economic growth has resulted in large shifts in diet in recent decades, in parallel with a decline in both arable land and agricultural production, and a tripling of agricultural imports, compared to the early 2000s. Although these are recognized as traits of a rapidly growing economy, officials and experts in the country recognize that the trends expose the Republic of Korea to climate change shocks and fluctuations in the global food market. This study uses the IMPACT (International Model for Policy Analysis of Agricultural Commodities and Trade) economic model to investigate possible future trends of both domestic food production and dependence on food imports, as well as the effects from adoption of agricultural practices consistent with a climate change adaptation strategy. The goal is to help assess the prospects for sustaining improvements in food security and possibly inform the national debate on agricultural policy. Results show that historical trends of harvested area and imports may continue into the future under climate change. Although crop models suggest negative long-term impacts of climate change on rice yield in the Republic of Korea, the economic model simulations show that intrinsic productivity growth and market effects have the potential to limit the magnitude of losses; rice production and yield are projected to keep growing between 2010 and 2050, with a larger boost when adoption of improved technologies is taken into consideration. At the same time, food production and net exports from the country’s major trading partners are also projected to increase, although diminished by climate change effects. In sum, these results show that kilocalorie availability will keep growing in the Republic of Korea, and although climate change may have some impact by reducing the overall availability, the effect does not appear strong enough to have significant consequences on projected trends of increasing food security. |
| Keywords: | resource management, economic development, prices, nutrition, malnutrition, commodities, trade, food supply, food security, climate change, technological changes, commodity markets, international trade, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1586&r=env |
| By: | Tesfatsion, Leigh |
| Abstract: | The primary goal of these introductory notes is to promote the clear presentation and rigorous analysis of dynamic economic models, whether expressed in equation or agent-based form. A secondary goal is to promote the use of state-space modeling with its respect for historical process, for cause leading to effect without top-down imposition of global constraints. If economic modelers truly wish to respect the rationality of decision-makers, they should have the courage of their convictions; they should not be doing for their modeled decision-makers what in reality these decision-makers must do for themselves. |
| Date: | 2016–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genstf:201602220800001018&r=env |
| By: | Svizzero, Serge; Tisdell, Clem |
| Abstract: | Although much information has been gathered during the last decade (as a result of archaeological excavations and satellite imaging) many unresolved issues remain about desert kites. These include the precise function of these huge archaeological stone structures which are widely distributed throughout southwestern Asia. According to the common vision, kites were hunting structures used to drive and to mass-kill large herds of wild ungulates. We qualify this view by analyzing the morphology of kites, the behavior of the targeted prey, and the logistical constraints associated with the mass-killing of ungulates. This leads us to conclude that as hunting structures, kites could also have been used for passively trapping animals. We believe it to be likely that kites were used (individually or collectively) for multiple purposes, which may have altered with the passage of time. An important use (at one stage in the existence of many kites) may have been for the mustering of livestock (especially sheep and goats), and for the capture of some wild or feral species of animals suitable for domestication. Some kites may also have been utilized for religious purposes or for cultural ceremonies. |
| Keywords: | desert kites, drive structure, Early Bronze Age, ethology, hunting strategies, livestock domestication, southwest Asia, tended facilities, wild ungulates, zooarchaeology, Land Economics/Use, Z13, |
| Date: | 2017–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uqseee:253077&r=env |
| By: | Vestal, Mallory K.; Guerrero, Bridget L.; Golden, Bill B.; Harkey, Logan D. |
| Abstract: | Agriculture plays a vital role in the growth and development of the High Plains Region of the United States. With the development and adoption of irrigation technology, this region was transformed into one of the most agriculturally productive regions in the world (Peterson et al., 2003). The primary source of irrigation in this region is the Ogallala Aquifer. Currently, water from the aquifer is being used at a much faster rate than natural recharge can occur, resulting in a high rate of depletion from this finite resource. Depletion of scarce water resources will have a significant economic impact on the long-term sustainability of the region. The objective of this study is to evaluate the impact alternative prices and discount rates have on groundwater policy recommendations. Deterministic models of groundwater withdrawals were developed and used in order to analyze and evaluate the impact of high, average, and low crop prices in a status quo scenario as well as a policy scenario reducing irrigated acreage allocation. Furthermore, this study analyzes the effects and associated consequences of alternative discount rates on net and total revenue. As indicated by results of this study, alternative prices, costs, and discount rates utilized in a model have an effect on policy effectiveness. Considering the declining levels of saturated thickness seen in the results of this study, the analysis of alternative discount rates and the associated policy recommendations is merited. |
| Keywords: | irrigation, acreage reduction, policy, Ogallala Aquifer, Environmental Economics and Policy, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea17:253033&r=env |
| By: | Nora Lustig (Stone Center for Latin American Studies, Department of Economics, Tulane University, Commitment to Equity Institute (CEQI).) |
| Abstract: | Achieving the Sustainable Development Goals will require fiscal resources to deliver the floors in social protection, social services and infrastructure embedded in them. A significant portion of these resources is expected to come from tax collection in developing countries. Raising additional revenues domestically, however, may leave a significant portion of the poor with less cash to buy food and other essential goods. The demand for additional resources must be balanced against the competing need to protect poor households from becoming poorer as a result of taxes. |
| Keywords: | fiscal incidence, social spending, inequality, poverty, Sustainable Development Goals |
| JEL: | D31 H22 H50 I38 Q01 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:tul:ceqwps:1361&r=env |