nep-env New Economics Papers
on Environmental Economics
Issue of 2017‒03‒12
twenty papers chosen by
Francisco S. Ramos
Universidade Federal de Pernambuco

  1. Renewable Natural Gas as a Solution to Climate Goals: Response to California's Low Carbon Fuel Standard By Scheitrum, Daniel
  2. Renewable and Non-Renewable Electricity Consumption, Carbon Emissions and GDP: Evidence From Mediterranean Countries By Fateh Belaïd; Maha Harbaoui Zrelli
  3. How do travellers respond to health and environmental policies to reduce air pollution? By Caroline Orset
  4. The Perils of Modelling How Migration Responds to Climate Change By Feng, Bo; Partridge, Mark; Rembert, Mark
  5. Carbon Dioxide Emissions and Economic Growth: An Assessment based on Production and Consumption Emission Inventories By Fernández-Amador, Octavio; Francois, Joseph; Oberdabernig, Doris; Tomberger, Patrick
  6. Unilateral Supply Side Policies and the Green Paradox By Mark Schopf
  7. Environmental policy and directed technological change: evidence from the European carbon market By Raphael Calel; Antoine Dechezlepretre
  8. Agricultural production and pollutant runoffs in QuŽbecÕs Chaudi re river watershed: what are the potential environmental gains? By Lota D. Tamini; Bruno Larue; Gale E. West; Moise K.Ndegue Fongue
  9. Innovation in Clean Coal Technologies: Empirical Evidence from Firm-Level Patent Data By Wetzel, Heike; Kruse, Jürgen
  10. Buy coal for preservation and act strategically on the fuel market By Pethig, Rüdiger; Eichner, Thomas
  11. Economic Valuation of Rural Wetlands and Household Food Security: A Case Study from the North-West Bangladesh By Wadood, Syed Naimul; Ali, Ayub
  12. Lobbying over Exhaustible-Resource Extraction By Achim Voss; Mark Schopf
  13. Risk perception of climate change: Empirical evidence for Germany By Frondel, Manuel; Simora, Michael; Sommer, Stephan
  14. Optimal Tariffs and Firm Technology Choice: An Environmental Approach By Steffen, Nico
  15. CLIMATE ECONOMICS Opportunities for advances in climate change economics By Burke, M; Craxton, M; Kolstad, CD; Onda, C; Allcott, H; Baker, E; Barrage, L; Carson, R; Gillingham, K; Graf-Zivin, J; Greenstone, M; Hallegatte, S; Hanemann, WM; Heal, G; Hsiang, S; Jones, B; Kelly, DL; Kopp, R; Kotchen, M; Mendelsohn, R; Meng, K; Metcalf, G; Moreno-Cruz, J; Pindyck, R; Rose, S; Rudik, I; Stock, J; Tol, RSJ
  16. Factores influyentes en la vulnerabilidad ante desastres en Bolivia 1980-2012. By Mariana García del Castillo; Hernán Naranjo Mejía
  17. Managing an Accumulative Inorganic Pollutant: An Optimal Tax Prescription for the Social Planner By Onyimadu, Chukwuemeka
  18. Jacobian spillovers in environmental technological proximity: the role of Mahalanobis index on European patents within the Triad By Aldieri, Luigi; Kotsemir, Maxim; Vinci, Concetto Paolo
  19. Trade in environmental goods: how important are trade costs elasticities? By Lota Dabio Tamini; Sorgho Zakaria
  20. As contas econômicas ambientais da água: lições aprendidas para sua implementação no Brasil By Martínez-Lagunes, Ricardo

  1. By: Scheitrum, Daniel
    Abstract: Natural gas is a growing portion of transportation fuel consumed in California. While natural gas has a slight environmental benefit relative to the use of conventional liquid fuels, such as gasoline and diesel, the environmental performance of natural gas can be greatly improved by procurement from renewable sources. Yet renewable natural gas (RNG) production is too expensive to compete with fossil natural gas in the absence of policy intervention. I consider the impacts of the LCFS policy on four pathways of RNG production: (1) dairy manure, (2) municipal solid waste, (3) wastewater treatment plants, and (4) landfill gas. Using a novel dataset of California RNG supply estimates, I construct a static, multi-market, partial equilibrium model of the California fuels markets to evaluate the supply response of RNG to existing California fuel policy, the Low Carbon Fuel Standard (LCFS). I also evaluate policy response of natural gas from fossil sources, gasoline, ethanol, diesel, and biodiesel fuels. Additionally, I apply a method of modeling consumer fuel switching to accurately reflect the extent to which fuel substitution is possible in the short term. I assess the economic surplus, climate, and RNG response to the LCFS policy and compare the policy efficiency of the LCFS to a hypothetical carbon tax. My findings indicate that the LCFS policy is sufficient to incentivize substantial quantities of RNG production; enough to supply the entire market for vehicular natural gas. Further, the LCFS is less efficient than a carbon tax, but when combined with a price ceiling, the policy approaches the efficiency of a carbon tax as the LCFS policy become more stringent.
    Keywords: renewable natural gas, methane abatement, fuel standards, multi-market partial equilibrium
    JEL: Q18 Q4 Q42 Q5
    Date: 2017–02–28
  2. By: Fateh Belaïd (University Paris-Est); Maha Harbaoui Zrelli
    Abstract: The imperative to reduce Co2 emissions is stronger than ever. According to many studies, renewable energy (electricity) has one of the most significant cost-effective potentials for reducing energy-related greenhouse gas emissions. Increasing the supply of renewable energy would allow for the replacement of carbon-intensive energy sources and significantly reduce pollutant emissions. The major focus of this article is to investigate the causal relationship between renewable and non-renewable electricity consumption, GDP and CO2 emissions for the North and South shores of Mediterranean over the period 1980-2012. Panel unit root tests, cointegration technique allowing cross-section dependence among the panel and causality tests are used to investigate this relationship. The results provide panel empirical evidence that there is a short-run bidirectional causality between GDP, renewable electricity consumption and CO2 emissions; and between non-renewable electricity consumption, GDP and renewable electricity consumption. As for the long-run causal relationship, the result indicates that there is bidirectional causality between non-renewable electricity consumption and CO2 emissions. However, there is evidence of unidirectional causal relationship running from GDP to CO2 emissions and non-renewable electricity consumption; from renewable electricity consumption to CO2 emissions. The findings imply that non-renewable electricity consumption and economic growth stimulate CO2 emissions in Southern and Northern Mediterranean countries while renewable electricity reduces it. Therefore, expansion of renewable energy sources is a strategic plan for addressing energy security and reducing carbon emissions to protect the environment for future generations.
    Date: 2016–08
  3. By: Caroline Orset
    Abstract: Despite the various measures taken to reduce air pollution in France, the French continue to use high emitting vehicles. We propose to evaluate the traveller's willingness to pay (WTP) for four means of transport: two high emitting vehicles (taxi diesel and personal diesel car) and two low-emission vehicles (rented electric vehicle and public transport). We get that individuals prefer personal cars. We propose different health and environmental policies to encourage people to adopt low-emission vehicles. Successive messages revealing the effects of air pollution on health and the environment are provided to individuals in a different order. We find that the information and order of information affect the WTP of individuals. This information campaign increases demand for low-emission vehicles, but demand for high emitting vehicles is somewhat affected. Indeed, individuals prefer to ignore information, they behave as in the theory of the tragedy of the commons. We then propose a system of tax subsidies and a standard subsidy system. These two policies drive individuals to switch from high emitting vehicles to low-emission vehicles. The regulator will have to choose between an incentive intervention (with a system of tax subsidies) and a coercive intervention (with a standard subsidy system).
    Keywords: Air Pollution; Information campaign; Mean of transport; Standard-subsidy system; Tax-subsidy system; Traveller's willingness to pay
    JEL: Q53 H23 I18
    Date: 2017–03–02
  4. By: Feng, Bo; Partridge, Mark; Rembert, Mark
    Abstract: The impact of climate change has drawn growing interests from both researchers and policymakers. Yet, relatively little is known with respect to its influence on interregional migration. The surge of extreme weather conditions could lead to the increase of forced migration from coastal to inland regions, which normally follows different patterns than voluntary migration. However, recent migration models tend to predict unrealistic migration trends under climate change in that migration would flow towards the areas most adversely affected. Given the great uncertainty about the magnitude and distribution of severe weather events, it is almost impossible to foresee migration directions by simply extrapolating from the data on how people have responded in the past to climate and weather. For example, weather events will likely be far outside of what has been observed. Other issues include a poor climate measures and a poor understanding of how climate affects migration in an entirely different structural environment. Unintended consequence of public policies also contributes to the complication of predicting future migration pattern. In this paper, we survey the limitations of existing climate change literature, explore insights of regional economic studies, and provide potential solutions to those issues.
    Keywords: Climate Change; Migration; Prediction
    JEL: C53 Q54 R23
    Date: 2016–11–01
  5. By: Fernández-Amador, Octavio; Francois, Joseph; Oberdabernig, Doris; Tomberger, Patrick
    Abstract: Working with a new dataset on comparable global CO2 production and consumption inventories spanning the 1997–2011 period, we investigate the relationship between real gross domestic product (GDP) per capita and CO2 emissions per capita associated with both production and consumption activities. By including linkages between production-based emissions in one country and final consumption in another (via cross-border value chains), we focus on the entire carbon chain. We estimate polynomial and threshold models, accounting for reverse causality and identification problems. We find that the income-elasticity for both inventories is regime-dependent and reflects small carbon efficiency gains from economic development. Carbon foot- prints show larger income-elasticities, while national policy instruments targeting production can clearly be circumvented by carbon embodied in intermediate trade. This implies problems of environmental sustainability that may require consumption-based policy instruments.
    JEL: F18 F64 O44 Q54 Q56
    Date: 2017–02
  6. By: Mark Schopf (University of Paderborn)
    Abstract: This paper deals with possible foreign reactions to unilateral carbon supply reducing policies. It differentiates between demand and supply side reactions as well as between intra- and intertemporal shifts of greenhouse gas emissions. Ritter & Schopf (2014) integrate stock-dependent marginal physical extraction costs into Eichner & Pethig’s (2011) general equilibrium carbon leakage model. Using this model, we change the policy instrument from an emissions trading scheme to a deposit preserving system. The results are as follows: Under similar conditions than those derived by Ritter & Schopf (2014), the weak green paradox and the strong green paradox arise. In case of acting today, these conditions are tightened due to the energy market channel of carbon leakage. In case of acting tomorrow, the change in the physical user cost of extraction additionally influences the effectiveness of the carbon supply reducing policies. In both cases, it can be more effective to preserve the deposits with the lowest marginal physical extraction costs first.
    Keywords: Carbon Leakage; Green Paradox; General Equilibrium Model
    JEL: Q31 Q32 Q54
    Date: 2016–05
  7. By: Raphael Calel; Antoine Dechezlepretre
    Abstract: This paper investigates the impact of the European Union Emissions Trading System (EU ETS) on technological change, exploiting installations-level inclusion criteria to estimate the System's causal impact on firms' patenting. We find that the EU ETS has increased low-carbon innovation among regulated firms by as much as 10%, while not crowding out patenting for other technologies. We also find evidence that the EU ETS has not impacted patenting beyond the set of regulated companies. These results imply that the EU ETS accounts for nearly a 1% increase in European low-carbon patenting compared to a counterfactual scenario.
    Keywords: directed technological change; EU emissions trading system; policy evaluation
    JEL: C14 O3 Q55 Q58
    Date: 2016–03
  8. By: Lota D. Tamini; Bruno Larue; Gale E. West; Moise K.Ndegue Fongue
    Abstract: Despite imposition of strict environmental standards in Quebec, the impact of agricultural activities on water quality remains a concern, particularly in the Chaudi re-Appalaches region.This regionÕs intensive animal and plant productions lead to excess phosphorus, nitrogen and sediments.This paper analyzes the environmental efficiency of agricultural producers in the Chaudi re river watershed, located south of Quebec City. We adopt a stochastic approach applied to parametric distance functions to data collected from 210 farms. Results show that, on average, crop producers are more efficient than livestock producers. In terms of emissions of phosphorus and nitrogen, the environmental efficiencies of producers are similar, at 0.804 and 0.820 respectively.For sediment runoff, however, the environmental efficiencies are lower on average, at 0736. Overall, the agricultural producers from this watershed could have achieved productivity gains in excess of 20%, while simultaneously reducing their emissions of pollutants.
    Keywords: Hyperbolic distance function; Stochastic frontier analysis; Environmental efficiency
    JEL: C23 D24 L94
    Date: 2016
  9. By: Wetzel, Heike; Kruse, Jürgen
    Abstract: This article empirically analyzes supply-side and demand-side factors expected to affect innovation in clean coal technologies. Patent data from 93 national and international patent offices is used to construct new firm-level panel data on 3,648 clean coal innovators over the time period 1978 to 2009. The results indicate that on the supply-side a firm’s history in clean coal patenting and overall propensity to patent positively affects clean coal innovation. On the demand-side we find strong evidence that environmental regulation of emissions, that is CO2, NOX and SO2 , induces innovation in both efficiency improving combustion and after pollution control technologies.
    JEL: C33 O31 Q55
    Date: 2016
  10. By: Pethig, Rüdiger; Eichner, Thomas
    Abstract: In Harstad’s (2012) model, climate damage only hits one group of countries, called the coalition, and the coalition’s climate policy consists of capping own fuel de- mand and supply combined with the purchase of fossil fuel deposits for preserva- tion. Harstad’s Theorem 1 states that if the deposit market clears the coalition’s strategic fuel-cap policy implements the first-best. The present paper reconstructs that efficiency result and argues that the deposit market equilibrium as defined in Harstad (2012) fails to be attained, unless the non-coalition countries act cooper- atively on the deposit market. Without such cooperation, the coalition’s strategic action on the fuel market distorts the allocation to its own favor.
    JEL: Q31 Q38 Q54
    Date: 2016
  11. By: Wadood, Syed Naimul; Ali, Ayub
    Abstract: Wetland ecosystem plays an important role in Bangladesh’s rural economy by contributing to household income generation and food security of the neighboring areas. We have examined this issue with regards to the North-Western region of Bangladesh-- we have selected one particular wetland in the district of Pabna (Podmobil) to estimate direct economic benefits from its multiple uses as well as contributions to household food security. We find that one major issue is neighboring households’ access to the wetlands (i.e., open-access wetlands as opposed to privately-leased wetlands). We conducted a household structured questionnaire survey among the surrounding population of Podmobil. The questionnaire survey reveals that the loss of access to the wetland caused by changes in the management practices of Podmobil adversely affected particularly poorer households’ food security since they could not participate in the new leasing arrangements and experienced a reduced access to this wetland. These results are important for wetland conservation and preservation policy formulation with regards to household food security in the rural areas.
    Keywords: Wetlands, Direct Use Value, Probit Regression Model, Open Access, Food Security
    JEL: I3 I31 Q22 Q24 Q25 Q5 Q56 Q57
    Date: 2016–05
  12. By: Achim Voss (University of Hamburg); Mark Schopf (University of Paderborn)
    Abstract: Consider a lobby group of exhaustible-resource suppliers, which bargains with the government over the extraction of an exhaustible resource and over contribution payments. We characterize the equilibrium extraction path and the development of contribution payments in time. The latter relates to the development of the conflict of interest between profit-maximization and welfare-maximization. Due to stock pollution damages, the government prefers a lower level of cumulative extraction than the lobby group in the long run. In the meantime, the resource suppliers’ aim to maximize profits implies that equilibrium extraction may be too slow to maximize welfare, while flow-pollution damages imply that it may be too fast.
    Keywords: Environmental Policy; Exhaustible Resources; Political Economy; Lobbying; Nash Bargaining; Dynamic Programming
    JEL: D72 Q31 Q38 Q58
    Date: 2016–05
  13. By: Frondel, Manuel; Simora, Michael; Sommer, Stephan
    Abstract: The perception of risks associated with climate change appears to be a key factor for the support of climate policy measures. Using a generalized ordered logit approach and drawing on a unique data set originating from two surveys conducted in 2012 and 2014, each among more than 6,000 German households, we analyze the determinants of individual risk perception associated with three kinds of natural hazards: heat waves, storms, and floods. Our focus is on the role of objective risk measures and experience with these natural hazards, whose frequency is likely to be affected by climate change. In line with the received literature, the results suggest that personal experience with adverse events and personal damage therefrom are strong drivers of individual risk perception. @Die Wahrnehmung von Risiken, die mit dem Klimawandel einhergehen, wird als wesentlicher Faktor für die Unterstützung von Klimaschutzmaßnahmen in der Bevölkerung erachtet. Auf Basis eines Generalized-Ordered-Logit Ansatzes und eines Datensatzes, der auf zwei Erhebungen aus den Jahren 2013 und 2015 unter jeweils mehr als 6000 Haushalten beruht, werden in diesem Papier die Determinanten der individuellen Risikowahrnehmung von drei Naturereignissen analysiert: Hitzewellen, Stürme und Überschwemmungen. Im Fokus der Analyse befinden sich die Rolle von objektiven Risikomaßen und die persönliche Erfahrung mit solchen Ereignissen. In Übereinstimmung mit der empirischen Literatur deuten unsere Ergebnisse darauf hin, dass persönliche Erfahrung mit diesen Ereignissen und dadurch erlittene Schäden die individuelle Risikoeinschätzung stark beeinflusst.
    Keywords: Damage experience,natural hazards,generalized ordered logit
    JEL: D81 H31 Q54
    Date: 2017
  14. By: Steffen, Nico
    Abstract: This paper introduces the additional dimension of environmental concerns by a government into a setting of rent-extracting strategic trade policy with endogenous firm investment into production technologies. It considers the presence of imperfect competition, namely Cournot competition. The simple analysis highlights the importance of investment incentives caused by tariffs. Furthermore, the implications from traditional tariff considerations can be completely different to the ones derived with an environmentally conscious government. It is shown that an importing country now prefers to impose discriminatory instead of uniform tariffs in a dynamic setting with endogenous technology choices, in order to induce the exporting firms to choose a technology that exhibits lower costs in terms of emissions.
    JEL: F18 F13 Q58
    Date: 2016
  15. By: Burke, M; Craxton, M; Kolstad, CD; Onda, C; Allcott, H; Baker, E; Barrage, L; Carson, R; Gillingham, K; Graf-Zivin, J; Greenstone, M; Hallegatte, S; Hanemann, WM; Heal, G; Hsiang, S; Jones, B; Kelly, DL; Kopp, R; Kotchen, M; Mendelsohn, R; Meng, K; Metcalf, G; Moreno-Cruz, J; Pindyck, R; Rose, S; Rudik, I; Stock, J; Tol, RSJ
    Date: 2016–04–15
  16. By: Mariana García del Castillo (Centro de Generación de Información y Estadísticas, Universidad Privada Boliviana); Hernán Naranjo Mejía (Centro de Investigaciones Económicas y Empresariales, Universidad Privada Boliviana)
    Abstract: The economic loss caused by the lack of control in climatic risk all over the world represents a great percentage of the GDP. These effects are stronger in developing countries due to a great amount of influencing factors. Natural disasters represent in Bolivia not only difficulties to reach growth goals but also political and economic stability. Likewise, floods, droughts and other climate events, imply a high opportunity cost. In order to explain the vulnerability that Bolivia faces, factors that may have influence over it were analyzed. Therefore, an econometric model was estimated showing the existence of long term relationships between the variables public investment and the trade balance with the level of vulnerability in the country measured by the quantity of death and affected people due to adverse climatic events as a proportion of the entire population.
    Keywords: Natural Disasters, Vulnerability, Resilience, Public Investment, Bolivia.
    JEL: C10 O10
    Date: 2016–06
  17. By: Onyimadu, Chukwuemeka
    Abstract: The paper strives to postulate a possible optimal policy path for a social planner who is concerned with managing the stock of an accumulative pollutant within the society. Using Hamiltonian functions in a dynamic optimizing problem, the paper was able to show that the policy path that will minimize the damages of an accumulative pollutant depends on the steady state of the accumulative pollutant as compared to the level of the accumulative pollutant present within the society. This relationship between the steady state and level of accumulative pollutant determines both abatement levels and pollution tax: policy tool kits for the social planner. The paper concludes that the social planner should advocate for a tax regime that is below the steady state tax level which will imply lower optimal abatement levels initially. The tax can then be increased over time to ensure increased abetment of the stock pollutant.
    Keywords: Accumulative Pollutant, Dynamic Optimization, Pollution, Social Welfare, Pollution Abatement, Environmental Abatement Tax
    JEL: Q3 Q5
    Date: 2015–08
  18. By: Aldieri, Luigi; Kotsemir, Maxim; Vinci, Concetto Paolo
    Abstract: The aim of this paper is to investigate the role of Jacobian externalities stemmed from different technological sectors for international firms engaged both in environmental and in dirty activi- ties. Firms’ innovation, measured, as the development of new patents, is a key factor behind the achievement of desired economic performances. Empirical literature usually deals with the inte- gration between ecological efficiency and product value enhancement. The results of these stud- ies lead to the lack of integrated innovation adoption behind environmental productivity per- formance. In this work, we analyse the integration between more environmental goals in an original way, by applying different methodologies to compute technological proximity, based on the Mahalanobis approach. To this end, we use information from 240 large international firms, located in three economic areas: USA, Japan and Europe and we select their environmental and dirty patents from European Patent Office data.
    Keywords: Innovation; Technology spillovers; Environmental relatedness.
    JEL: O32 O33 Q5
    Date: 2017–03
  19. By: Lota Dabio Tamini; Sorgho Zakaria
    Abstract: Negotiations on the liberalization of environmental goods (EGs) and services within the WTO Doha Round (mandated in November 2001) are facing specific challenges. Conflicting interests and differing perceptions of the benefits of increased trade in EGs were reflected in different approaches proposed for determining EGs. Using import data of 34 OECD member countries and from a sample of 167 countries, from 1995 to 2012, we discuss the trade effect of reducing barriers on EGs. We analyze the lists of EGs proposed by the Asia-Pacific Economic Cooperation (APEC) and the Organisation for Economic Co-operation and Development (OECD) using a Translog gravity model. We found that removing tariff barriers for EGs will have a modest impact because for the biggest importers and exporters, elasticities of trade costs are very low while for most trading relationships they are very high, making it difficult for exporters to maintain their markets. Overall, our results suggest that, because of their substantial effect on international trade, future negotiations on EGs should also address the issues of standards and nontariff barriers (NTBs).
    Keywords: Environmental Goods, Translog, Gravity, Trade costs elasticity, Import share
    JEL: F11 F12 F15
    Date: 2016
  20. By: Martínez-Lagunes, Ricardo
    Abstract: O presente documento constitui uma síntese muito sucinta do estado da arte em matéria de Contas Econômicas Ambientais da Água, também denominadas Contas da Água, com ênfase na aplicação para a América Latina e especificamente para o caso do Brasil. Este documento se fundamentou nas apresentações e debates ocorridos durante o Seminário: “Contas Econômicas Ambientais da Água como Subsídio para as Políticas Públicas e o Monitoramento dos Objetivos de Desenvolvimento Sustentável”, realizado em 26 e 27 de novembro de 2014 no Rio de Janeiro, Brasil, no âmbito da Jornada dos Objetivos de Desenvolvimento Sustentável realizada pelo Ministério do Meio Ambiente (MMA).
    Date: 2017–02

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