nep-env New Economics Papers
on Environmental Economics
Issue of 2017‒04‒09
forty-one papers chosen by
Francisco S. Ramos
Universidade Federal de Pernambuco

  1. Towards the Green Economy – economic effects of the transition to a more efficient world By Ulrike Lehr; Philip Ulrich, Institute for Economic Structures Research (GWS), Heinrichstr. 30, D-49080 Osnabrück, Germany
  2. A Comparative Study of Urban Air Quality in Megacities in Mexico and Japan: Based on Japan-Mexico Joint Research Project on Formation Mechanism of Ozone, VOCs and PM2.5, and Proposal of Countermeasure Scenario By Wakamatsu, Shinji; Kanda, Isao; Okazaki, Yukiyo; Saito, Masahiko; Yamamoto, Mitsuhiro; Watanabe, Takuro; Maeda, Tsuneaki; Mizohata, Akira
  3. Can Paris deal boost SDGs achievement? An assesment of climate-sustainabilty co-benefits or side-effects By Lorenza Campagnolo; Fabio Eboli; Marinella Davide
  4. Irrigation freshwater withdrawal stress in future climate and socio-economic scenarios By Victor Nechifor-Vostinaru; Dr. Matthew Winning - UCL Institute for Sustainable Resources
  5. Combining Price and Quantity Controls under Partitioned Environmental Regulation By Sebastian Rausch; Jan Abrell
  6. There Did All the Markets Go!Or: Sustainable Carbon Markets and How to Get There By Sven Rudolph; Elena Aydos; Takeshi Kawakatsu; Achim Lerch
  7. Overview of Policy Actions and Observational Data for PM2.5 and O3 in Japan: A Study of Urban Air Quality Improvement in Asia By Akimoto, Hajime
  8. Climate Policy and the Energy-Water-Food Nexus: A Model Linkage Approach By Dirk Willenbockel; Claudia Ringler; Nikos Perez; Mark Rosegrant; Tingiu Zhu; Nathanial Matthews
  9. Alternative Green Payment Policies When Multiple Benefits Matter By Zhao, Jinhua; Kurkalova, Lyubov A.; Kling, Catherine L.
  10. Faraway, so Close: Coupled Climate and Economic Dynamics in an Agent-Based Integrated Assessment Model By Francesco Lamperti; Giovanni Dosi; Mauro Napoletano; Andrea Roventini; Alessandro Sapio
  11. The impact of climate change on crop production in Ghana: A Structural Ricardian analysis By Prince Etwire; David Fielding; Victoria Kahui
  12. Korea's Multilateral Trade Policies in the Changing Global Trade Landscape By Suh, Jin Kyo
  13. Economic growth and development with low-carbon energy By Sam Fankhauser; Frank Jotzo
  14. Modelling nature-based tourism’s impact on rural livelihoods and natural resources in Sikunga Conservancy, Namibia By Steven Gronau; Dr Etti Maria Winter; Prof Ulrike Grote
  15. The Effects and Implications of Green Public Procurement with Economy-wide Perspective: A Computable General Equilibrium approach By Yeongjun Yeo; Yeongjun Yeo; SHIN, Ki-yoon; Jeong-Dong Lee
  16. Toward an Accounting of the Values of Ethiopian Forests as Natural Capital By Narita, Daiju; Lemenih, Mulugeta; Shimoda, Yukimi; Ayana, Alemayehu N.
  17. Engaging with comparative risk appraisals: public views on policy priorities for environmental risk governance By Sophie A. Rocks; Iljana Schubert; Emma Soane; Edgar Black; Rachel Muckle; Judith Petts; George Prpich; Simon J. Pollard
  18. Simulating the Macroeconomic Impact of Future Water Scarcity By Roberto Roson; Richard Damania, the World Bank, Washington D.C.
  19. Income inequality and the international transfer of environmental values By Meya, Jasper N.; Drupp, Moritz A.; Hanley, Nick
  20. Comparison of liability sharing rules for environmental damage: An experiment with different levels of solvency. By Serge Garcia; Julien Jacob; Eve-Angéline Lambert
  21. A framework for Caribbean medium-term development By Hendrickson, Michael
  22. Output-based allocations in pollution markets with uncertainty and self-selection By Juan-Pablo Montero; Guy Meunier; Jean-Pierre Ponssard
  23. Energy Scenarios: The Value and Limits of Scenario Analysis By Sergey Paltsev
  24. Reduction of future disaster damages by learning from disaster experiences By Onuma, Hiroki; Shin, Kong Joo; Managi, Shunsuke
  25. The sustainable land management program in the Ethiopian highlands: An evaluation of its impact on crop production: By Schmidt, Emily; Tadesse, Fanaye
  26. Vulnerabilidad y adaptación de las ciudades de América Latina al cambio climático By Margulis, Sergio
  27. Adopting a Cleaner Technology: The Effect of Driving Restrictions on Fleet Turnover By Francisco Gallego; Juan-Pablo Montero; Hernán Barahona
  28. The Supply of Non-Renewable Resources By Julien Xavier Daubanes; Pierre Lasserre
  29. El Nexo entre el agua, la energía y la alimentación en América Latina y el Caribe: planificación, marco normativo e identificación de interconexiones prioritarias By Embid, Antonio; Martín, Liber
  30. Indústrias de Alto Potencial Poluidor no RS: importância econômica e localização By Queiroz Sperotto, Fernanda
  31. Urban Water Disinfection and Mortality Decline in Developing Countries By Bhalotra, Sonia; Venkataramani, Atheendar S.; Diaz-Cayeros, Alberto; Miller, Grant; Miranda, Alfonso
  32. Energy Consumption, Weather Variability, and Gender in the Philippines: A Discrete/Continuous Approach By Dacuycuy, Connie B.
  33. The Economics of Water Infrastructure Investment Timing and Location under Climate Change in Vietnam By David Corderi Novoa; Jay R. Lund; Jeffrey Williams
  34. Can agricultural credit scoring for microfinance institutions be implemented and improved by weather data? By Römer, Ulf; Mußhoff, Oliver
  35. Modeling Recreation Demand When the Access Point Is Unknown By Ji, Yongjie; Herriges, Joseph A.; Kling, Catherine L.
  36. Focusing on the Quality of EIS to Solve the Constraints on EIA Systems in Developing Countries: A Literature Review By Kamijo, Tetsuya; Huang, Guangwei
  37. A simple method to study local bifurcations of three and four-dimensional systems: characterizations and economic applications By Stefano Bosi; David Desmarchelier
  38. Natural Resources and Export Concentration: On the Most Likely Casualties of Dutch Disease By Dany Bahar; Miguel Angel Santos
  39. Promovendo a subericultura? A política florestal de Espanha e Portugal (1852-1914) By Carlos M. Faísca
  40. COBALT AND NICKEL MODIFIED MORDENITE-ZIRCONIA CATALYSTS FOR GAS CONDENSATE COMPONENTS ISOMERIZATION By Roman Starikov; Agayeva S.B., Abasov S.I., Aliyeva A.E., Starikov R.V., Mamedova M.T., Isayeva E.S., Imanova A.A., Iskenderova A.A., Zarbaliyev R . R., Nasirova F.M., Tagiyev D.B.
  41. Theories of (Un)sustainable Consumption By Spash, Clive L.; Dobernig, Karin

  1. By: Ulrike Lehr; Philip Ulrich, Institute for Economic Structures Research (GWS), Heinrichstr. 30, D-49080 Osnabrück, Germany
    Abstract: The challenges of climate change led to the claim to decarbonize economic activities. Most recently, the Stern Report (2006) and AR4 of the IPCC (2007) showed that the seeming dichotomy between economic growth and environmental protection can be bridged and that climate change mitigation is an economic opportunity and contributes to growth. Thus, UNEP 2011, OECD 2011, ILO 2012 coined the terms Green Economy, Green Growth and Green Jobs. Resource efficiency is an important pillar of a greener economy. It comprises energy efficiency and contributes to climate change mitigation, and (raw) material efficiency; thus contributing to the protection of water, soil, landscape and biodiversity as well. While efficiency increases autonomously due to price pressures, technological change and innovation, additional incentives are needed for a better internalization of the respective external effects such as pollution, emissions, destruction of wildlife and landscapes etc. Policies for the increase of resource efficiency therefore include price instruments such as fees on the use of certain raw materials as inputs. Additionally, grants to home owners to increase the energy efficiency in buildings, standards and labels are used. The objective of this contribution is to show the economic effects of selected resource policies on an aggregate and a sector specific level. A special focus lies on employment effects from the transition to a green, i.e. more resource efficient economy. The analysis is based upon simulation results obtained with the macroeconometric model PANTA RHEI. PANTA RHEI has a macroeconometric simulation and forecasting model at its core, which consistently describes the annual inter-industry flows between the 59 sectors, their contributions to personal consumption, government, equipment investment, construction, inventory investment, exports as well as prices, wages, output, imports, employment, labor compensation, profits, taxes, etc. for each sector as well as for the total economy. In the behavioral equations decision routines are modeled that are not explicitly based on optimization behavior of agents, but are founded on bounded rationality. The parameters in all equations in PANTA RHEI are estimated econometrically from time series data. Producer prices are the result of mark-up calculations of firms. Output decisions do not stem from an optimization process but follow observable historic developments, including observed inefficiencies. Employment is determined from the production volume and the real wage rate in each sector, which in return depends on labor productivities and prices. To examine the economic effects of additional efficiency measures in Germany our analysis applies PANTA RHEI to two scenarios: a business as usual scenario and a scenario with increased resource efficiency. Both scenarios are implemented in the macro-econometric model PANTA RHEI. The respective differences in economic indicators, such as employment, GDP etc. can then be attributed to the effort for increased efficiency in the scenario, since all other factors are held equal. Changes in volumes and prices are fully accounted for. The simulation model runs until 2030. The scenario includes different aspects of resource efficiency, such as energy efficiency in buildings, supported by a grant; energy efficiency and decrease of material inputs in industry supported by a consultancy program, energy efficiency in public buildings, supported by grants, subsidies for efficient appliances for low income households and a tax on building materials. The simulation yields positive results for both the economy and the environment. The advantageous development in the scenario with increased efficiency shows in additional GDP (0.6% in 2020; 0.4% in 2030). The construction sector gets different signals: increased efficiency in buildings means additional insulation and more activity in construction and the materials’ tax makes construction more expensive and lowers the said activities. The net effect in construction is positive growth, which is negative for the environment, but not as negative as without the tax. Energy productivity increases as does resource productivity in general. GHG emissions decrease as a consequence of increased energy efficiency and decreasing demand for energy. The growth effect increases demand and leads to a small (not overcompensating) rebound effect. Employment in most sectors increases. The construction sector sees an increase in employment by more than 3% compared to the reference scenario. The mining and quarrying sector, however, sees a lower level of employment compared to the reference.
    Keywords: Germany, Energy and environmental policy, Macroeconometric modeling
    Date: 2016–07–04
  2. By: Wakamatsu, Shinji; Kanda, Isao; Okazaki, Yukiyo; Saito, Masahiko; Yamamoto, Mitsuhiro; Watanabe, Takuro; Maeda, Tsuneaki; Mizohata, Akira
    Abstract: Photochemical ozone and black carbon are key substances both for regional air pollution and global climate change. These two pollutants are so-called SLCPs (Short-Lived Climate Pollutants). International comparison studies among megacities with widely different conditions are effective in clarifying the formation mechanisms of SLCPs. A comparison study in megacity areas of Japan and Mexico mainly focusing on ozone, VOCs (volatile organic compounds) and PM2.5 was conducted based on air pollution trend analysis and field measurements including vertical soundings of ozone and meteorological parameters. In this study, co-beneficial countermeasure scenarios based upon the obtained scientific data has been proposed. Photochemical ozone, EC (elemental carbon; a major SLCP), and NOx (nitrogen oxides) and VOCs (NOx and VOCs are implicit SLCPs) need to be controlled to improve the regional and global atmospher ic environment. In Japan, countermeasures including the whole Asian area wil l be necessary because there is considerable contribution from trans-boundary air pollution. In Mexico, regulation of VOCs including energy shift and diesel exhaust gas control will be effective. These findings will be utilized to formulate and/or evaluate ProAire (Program for Air Quality Improvement) for the three studied megacity areas of Mexico.
    Keywords: Mexico,SATREPS(Science and Technology Research Partnership for Sustainable Development),Ozone,VOCs (Volatile Organic Compounds),PM2.5,Countermeasures
    Date: 2017–03
  3. By: Lorenza Campagnolo; Fabio Eboli; Marinella Davide
    Abstract: The fall of 2015 will see a redefinition of international policy environment with the 21th UNFCCC Conference Of Parties (COP 21) in Paris and the adoption of the Sustainable Development Goals (SDGs) by United Nations. SDGs, the Millennium Development Goals follow-up, will set broader and more ambitious targets for both developed and developing countries encompassing all sustainability dimensions (economic, social, and environmental) and designing the pathway towards an inclusive green growth. The COP 21 agreement, defining new emission targets (Intended Nationally Determined Contributions - INDCs), will directly affect countries’ environmental performance, but also social and economic dimensions if we consider the possible use of climate policy revenues to reduce poverty prevalence (SDG 1) and malnutrition (SDG 2) or to extend access to electricity (SDG 7) or to lower the pressure on public debt (SDG 8). This paper aims at giving an ex-ante assessment of the co-benefits and side effects of this new policy setting and, in particular, to shed some light on the influence of COP21 agreement on achieving SDGs. Our analysis relies on a recursive-dynamic Computable General Equilibrium (CGE) model developed and enriched with indicators representative of each SDGs. CGE models have a flexible structure, and can capture trade‐offs and higher-order implications across sectors and countries that follows a shock or a policy. These models are well suited to assess the performance of economic indicators such as sectoral value added, GDP per capita, and public debt evolution; moreover, the CGE modelling literature of the past decades has highlighted that this is also a powerful tool to assess the evolution of some key environmental indicators, such as land use determined by land owners’ revenues maximisation or GHG and CO2 emissions directly linked to agents’ production and consumption choices (Böhringer and Löschel, 2006). Modelling social indicators in a CGE framework is a difficult task, especially when these imply dispersion measures such are poverty prevalence and inequality at the core of GOAL 1 and 10. In this case, we overcome the representative agent structure proper of CGE models empirically relying on the empirical literature and directly estimating the relations between indicators and endogenous variables of the model (Bourguignon et al., 2005; Ferreira et al., 2007; Montalvo and Ravallion, 2010). Extending the model with social and environmental indicators, in addition to the economic ones, allows assessing in an internally consistent framework how and at which extent changes in one sustainability sphere may affect the achievement of SDGs all around the world. Our framework considers 33 indicators covering 16 SDGs and classified into the three sustainability pillars. The analysis has world coverage, but for modelling reasons we aggregate the result in 40 countries/macro-regions. The historical records of indicators’ values rely on international databases (Commission on Sustainable Development of the United Nations, EU Sustainable Development Strategy, and World Development Indicators from World Bank) and are the starting point in our baseline scenario design. The baseline reproduces a Shared Socio-economic Pathways 2 (SSP2), consistent with a RCP4.5, and it is used as a benchmark to assess the effects of two mitigation scenarios anticipating the outcome of COP 21. The two proposed mitigation scenarios consider a coordinated effort to curb GHG emissions from 2020: 1.Post-Paris Global Trade (global ITS) scenario: the abatement pledges stated in the INDCs submitted ahead of the Paris Conference (COP 21) are effective for the committing countries. The global climate policy implementation envisions an international emission trading scheme (ITS). 2.Post Paris EU ETS scenario: in this scenario the European Union (EU28) implements an Emission Trading System (ETS) as already foreseen by the EU ETS domestic legislation, while all other countries achieve their targets unilaterally with a domestic carbon tax. Both scenarios are characterised by two different recycling schemes of the revenues collected from the carbon market or the carbon taxes: •revenues are redistributed internally in a lump sum; •revenues are used in part internally in EU28 and other developed countries and in part flow to a Development Fund benefiting LDCs: EU28 uses at least 50% of the revenues recycled to support clean energy in EU, 5% goes to the Development Fund and the rest is redistributed internally. The other committing countries allocate 1% of the carbon tax revenues to the Development Fund. In the LDCs revenues are recycled to achieve other SDGs, e.g. poverty and malnutrition reduction, access to education and electricity. This analysis will mainly focus on characterising the future trend of some social indicators, e.g. poverty prevalence and inequality, in the SSP2 baseline scenario, in addition to the usual economic and environmental indicators. Then, this baseline scenario will be used as a term of comparison to assess the impact of climate policy and different recycling scheme on environmental, social and economic indicators. Considering the INDCs as binding targets, COP21 agreement will determine a slight reduction of extreme poverty prevalence in the LDCs, but this outcome is mainly due to a leakage effect. The effect of climate policy on income distribution will be neutral and recycling carbon revenues with the creation of a Development Fund and a lump sum transfer to LDCs will have a negligible effect on poverty and inequality.
    Keywords: Global, but with a focus on LDCs, General equilibrium modeling, Developing countries
    Date: 2016–07–04
  4. By: Victor Nechifor-Vostinaru; Dr. Matthew Winning - UCL Institute for Sustainable Resources
    Abstract: Although perceived as an abundant resource, freshwater is disproportionally distributed across the globe determining 8% of the current population to live in severely water scarce regions. Irrigated agriculture, currently representing 70% of all freshwater withdrawals and thus a major source of water stress, could continue to expand its water requirements as a consequence of expected economic and population growth. In this research, future pressure over freshwater resources coming from irrigated crop production is captured by an Irrigation Withdrawal to Availability (IWA) indicator derived through a global Computable General Equilibrium framework. The metric is calculated for several socio-economic development pathways and considers technological evolution through differentiated irrigated and rainfed crop yield changes. The RESCU model employed explicitly uses freshwater as a factor in crop production, whilst clearly distinguishing between irrigated and rainfed production functions. Two scenarios are applied to three alternative SSPs (SSP1, SSP2, SSP5) - inherent yield improvements under a 'no climate change' assumption and yield changes due to climate change in the A1B carbon emissions pathway. Results show that freshwater withdrawals continue to expand in most of the regions that are currently water-stressed with the IWA increasing in some cases by more than 50% from 2004 levels. Other regions, such as China, benefit from yield improvements and thus shift from irrigated to rainfed crop production. Climate change leads to a further increase in the IWA for India and a decrease for Northern Africa, the rest of South Asia and the Middle East. The research uses a global dynamic recursive CGE model, RESCU (RESources CGE UCL). The opportunity to use a CGE framework is justified by the need to incorporate the effects of expected economic growth, evolution of factor supply and technological change over agricultural production. From a baseline output for each SSP scenario, the CGE model enables us to distinctly determine the impacts of productivity changes of inputs in crop production over freshwater demand. The model uses the GTAP 8.1 database for economic data. The GTAP regions are aggregated to 20 wider RESCU regions with a grouping done to reflect differences in terms of agro-ecological conditions and economic development. India and China are represented distinctly for a better distinction of their future freshwater challenges. The crop producing sectors are well represented in RESCU with each of the 8 crop types initially present in GTAP having distinct rainfed and irrigated production functions. Thus the GTAP database crop sectors are being split using rainfed and irrigated production information from the biophysical Global Crop Water Model GCWM (Siebert & Döll 2010). The value of irrigation is also disaggregated from the value of land used in irrigated crop production by using the value of lost production in a no irrigation world derived from the GCWM 'no irrigation' model run. Changes in freshwater demand in irrigation are thus captured at different levels: a) Changes in output of irrigated crops induced by economic growth b) Relative changes in output of different crop classes each with different irrigation water intensities c) Technological changes leading to input intensification or input efficiency gains. The research uses a global dynamic recursive CGE model, RESCU (RESources CGE UCL). The opportunity to use a CGE framework is justified by the need to incorporate the effects of expected economic growth, evolution of factor supply and technological change over agricultural production. From a baseline output for each SSP scenario, the CGE model enables us to distinctly determine the impacts of productivity changes of inputs in crop production over freshwater demand. The model uses the GTAP 8.1 database for economic data. The GTAP regions are aggregated to 20 wider RESCU regions with a grouping done to reflect differences in terms of agro-ecological conditions and economic development. India and China are represented distinctly for a better distinction of their future freshwater challenges. The crop producing sectors are well represented in RESCU with each of the 8 crop types initially present in GTAP having distinct rainfed and irrigated production functions. Thus the GTAP database crop sectors are being split using rainfed and irrigated production information from the biophysical Global Crop Water Model GCWM (Siebert & Döll 2010). The value of irrigation is also disaggregated from the value of land used in irrigated crop production by using the value of lost production in a no irrigation world derived from the GCWM ‘no irrigation’ model run. Changes in freshwater demand in irrigation are thus captured at different levels: - Changes in output of irrigated crops induced by economic growth - Relative changes in output of different crop classes each with different irrigation water intensities - Technological changes leading to input intensification or input efficiency gains The future freshwater withdrawal resulting from the model scenarios are then intersected with future freshwater availability (mean annual-run off) data coming from the ISI-MIP hydrological models. This allows for the computation of the indicators of irrigation water withdrawals relative to resource availability. The research produces a wide range of values for indicators of water stress induced by irrigated agriculture. This range reflects the spread of outcomes for socio-economic and technological changes anticipated in the climate change literature and the food production outlooks. Uncertainty with regards to global warming effects over freshwater availability is further incorporated through the use of results from multiple hydrological models. In terms of modelling advances, the RESCU model is one of the very few global CGE models to integrate freshwater as a distinct factor of production in agriculture. The further distinction between irrigated and rainfed crop production done through accounting rules which take climate conditions into consideration, pushes the CGE agriculture freshwater modelling beyond the current state-of-the-art. References Alcamo, J., Flörke, M. & Märker, M., 2007. Future long-term changes in global water resources driven by socio-economic and climatic changes. Hydrological Sciences Journal, 52(2), pp.247–275. Available at: Alexandratos, N. & Bruinsma, J., 2012. World agriculture towards 2030/2050: the 2012 revision. ESA Work. Pap, 3. Calzadilla, A., Rehdanz, K. & Tol, R.S.J., 2010. The economic impact of more sustainable water use in agriculture: A computable general equilibrium analysis. Journal of Hydrology, 384(3-4), pp.292–305. Available at: Flörke, M. et al., 2013. Domestic and industrial water uses of the past 60 years as a mirror of socio-economic development: A global simulation study. Global Environmental Change, 23(1), pp.144–156. Available at: Rosegrant, M.W., Cai, X. & Cline, S.A., 2002. Water and food to 2025, Available at: Schewe, J. et al., 2014. Multimodel assessment of water scarcity under climate change. Proceedings of the National Academy of Sciences of the United States of America, 111(9), pp.3245–50. Available at: Siebert, S. & Döll, P., 2010. Quantifying blue and green virtual water contents in global crop production as well as potential production losses without irrigation. Journal of Hydrology, 384(3-4), pp.198–217. Available at: UNESCO, 2014. World Water Development Report 2014, Water and Energy, Available at: Van Vuuren, D.P. et al., 2014. A new scenario framework for Climate Change Research: scenario matrix architecture. Climatic Change, 122(3), pp.373–386. Available at: 013-0906-1
    Keywords: Global multi-regional assessment, Impact and scenario analysis, General equilibrium modeling
    Date: 2016–07–04
  5. By: Sebastian Rausch; Jan Abrell
    Abstract: This paper analyzes hybrid emissions trading systems (ETS) under partitioned environmental regulation when firms’ abatement costs and future emissions are uncertain. We show that hybrid policies that introduce bounds on the price or the quantity of abatement provide a way to hedge against differences in marginal abatement costs across partitions. Price bounds are more efficient than abatement bounds due to their ability to exploit information on firms’ abatement technologies while abatement bounds can only address emissions uncertainty. We find that introducing hybrid policies in EU ETS reduces expected excess abatement costs of achieving targeted emissions reductions under EU climate policy by up to 89 percent. We also find that under partitioned regulation there is a high likelihood for hybrid policies to yield sizeable ex-post cost reductions. We complement our theoretical analysis of hybrid policies under partitioned environmental regulation with an empirical analysis of EU climate policy investigating the question to what extent introducing hybrid policies in the EU ETS could lower the costs of achieving EU's emissions reduction goals. To this end, we develop and apply a stochastic policy optimization model with equilibrium constraints for the European carbon market that is calibrated based on empirical MAC curves derived from a numerical general equilibrium model. The model incorporates two important sources of firm-level uncertainties in the ETS and non-ETS sectors that are relevant for the policy design problem of carbon mitigation: (1) uncertainty about future “no policy intervention” emissions, reflecting uncertain output, demand, or macroeconomic shocks, and (2) uncertainty about future abatement technologies. We find that hybrid ETS policies yield substantial savings in abatement costs relative to a pure quantity based (i.e., the currently existing) EU ETS policy. Under second-best conditions, i.e. when the regulator can ex-ante choose the allocation of the emissions budget across the partitions, an optimal hybrid policy reduces the expected excess costs–relative to a hypothetical, first-best state-contingent policy–by up to 56% (or up to billion $1.5 per year). A third-best hybrid policy, i.e. assuming an exogenously given split of the emissions budget, that reflects current EU climate policy is found to lower expected excess costs by up to 89% (or up to billion $12.1 per year). Overall, we find, however, that the ability of hybrid policies to reduce expected abatement costs diminishes if sectoral baseline emissions exhibit a strong positive correlation. Further, we find that hybrid policies with price bounds are more effective to reduce the abatement costs than hybrid policies with abatement bounds. Price bounds are advantageous as they can address both types of risks whereas abatement bounds can only hedge against emissions uncertainty. Our quantitative analysis suggests that hybrid policies with price bounds are highly likely to yield sizeable ex-post savings in abatement costs, depending on the correlation structure between sectoral “no intervention” emissions. If emissions are negatively (positively) correlated, the probability of ex-post costs savings is 0.67 (0.49). Hybrid polices with abatement bounds achieve ex-post cost reductions in 66 percent of cases if baseline emissions are negatively correlated, but they yield only negligible cost savings when baseline emissions are positively correlated. The reason for this is that abatement bounds fail to exploit information on firms’ abatement technology.
    Keywords: European Union, Energy and environmental policy, General equilibrium modeling
    Date: 2016–07–04
  6. By: Sven Rudolph; Elena Aydos; Takeshi Kawakatsu; Achim Lerch
    Abstract: “Where Did All the Markets Go?”1 was a question prominent amongst environmental economists in the 1990s when they realized the lack of market-based approaches in environmental policy practice with despair. Public Choice, the economic analysis of politics, answered that question by claiming a “market tendency for the political process to resist market mechanisms for rationing scarce environmental resources.”2 And, while recently climate policy cap-andtrade programs have spread across the globe and even different governance levels, most carbon markets’ ambition have to be considered insufficient. But despite of all criticism of the “The Brave New World of Carbon Trading“3, carbon markets offer a number of advantages over alternative policy instruments, and in view of the tremendous challenges of the Paris Agreement and the necessity to decarbonize the global economy within this century, any policy option should be (re-)considered without prejudices. Yet, exactly because there is no time to waste, carbon markets can only be considered a valuable policy option if they are both sustainable and political feasible; a contradiction? Can sustainable carbon markets ever be made politically feasible? We think: yes! In order to support this, first, we will summarize environmental economics’ arguments in favor of cap-and-trade and add a sustainability rationale for carbon markets, but from selected case studies we will also identify problems representative for many carbon markets in practice. We then identify the political barriers of sustainable carbon markets applying Public Choice reasoning. Last, we show how to overcome political obstacles and implement efficient, effective, and fair carbon markets by referring to best-practice examples and lessons from modern environmental governance literature.
    Date: 2017–04
  7. By: Akimoto, Hajime
    Abstract: Recent topics on PM2.5 and O3 in Japan have been briefly discussed in this paper. In the first part, Japan’s policy measures for PM2.5, including the establishment of Environmental Quality Standards (EQS) and monitoring stations, are described. Additionally, we discuss the monitoring data obtained and the exceedance of EQS in the years 2010-2013. The nationwide averaged data shows that sulfate and EC/OC are the most prominent components of PM2.5 and contribute almost equally to it . Secondly, long-term variation of O3 (Ox) and its precursors, NO2 and NMHC/VOC (non-methane hydrocarbon/volatile organic compound) are presented. The paradox of the increase in the average concentration of O3 in spite of the decrease in ambient concentrations of NO2 and VOC is discussed. The phenomenon was found to reflect three components: (1) a decrease in the NO titration effect, (2) an increase in transboundary transport, and (3) a decrease in in situ photochemical production. It is proposed t hat the integrated approach to mitigation measures for PM2.5 and O3 pollution should be considered within a framework of the SLCPs (short-lived climate pollutants) co-control policy.hat the integrated approach to mitigation measures for PM2.5 and O3 pollution should be considered within a framework of the SLCPs (short-lived climate pollutants) co-control policy.hat the integrated approach to mitigation measures for PM2.5 and O3 pollution should be considered within a framework of the SLCPs (short-lived climate pollutants) co-control policy.hat the integrated approach to mitigation measures for PM2.5 and O3 pollution should be considered within a framework of the SLCPs (short-lived climate pollutants) co-control policy.hat the integrated approach to mitigation measures for PM2.5 and O3 pollution should be considered within a framework of the SLCPs (short-lived climate pollutants) co-control policy.
    Keywords: PM2.5,03,Environmental Quality Standards (EQS),SLCPs co-control policy,03 paradoxical trend
    Date: 2017–01
  8. By: Dirk Willenbockel; Claudia Ringler; Nikos Perez; Mark Rosegrant; Tingiu Zhu; Nathanial Matthews
    Abstract: There is a growing recognition that the ambitious UN Sustainable Development Goals (SDG) to end hunger, achieve food security and promote sustainable agriculture (SDG 2), to ensure universal access to water and sanitation (SDG 6), to ensure universal access to affordable, reliable, sustainable and modern energy (SDG7) and to combat climate change and its impacts (SDG 13) are linked in complex ways. The emerging literature on the energy-water-food nexus highlights the need to take account of the trade-offs and synergies among the goals arising from these linkages, but also underscores the need for further research to understand the quantitative relevance of the various channels through which measures towards the attainment of the goals affect each other. The presence of multiple conceivable pathways to the achievement of the SDGs by 2030 as well as the numerous uncertainties surrounding medium- to long-run projections for the global food system call for a scenario approach to development policy planning, and the development of plausible scenarios needs to be informed by quantitative modelling that captures the key linkages between energy, water, food and climate policy in a stylized form. Dynamic standard global computable general equilibrium (CGE) models are able to capture the input-output linkages between agricultural, food processing and energy sectors and the impacts of population and economic growth on structural change, energy and food demand as well as the impacts of policy interventions, but due to their coarse regional aggregation structure they are not suitable to take account of physical water scarcity constraints in a persuasive manner. In contrast, existing partial equilibrium (PE) multi-market models of global agriculture can incorporate hydrological constraints at detailed regional scales and support a more disaggregated representation of agricultural commodities than CGE models, but fail to take systematic account of linkages between agriculture, energy and the rest of the economy. To capture the advantages of both modelling approaches, the present study links a global dynamic multisector CGE model with a global dynamic PE multi-market model of agricultural supply, demand and trade. The linked modelling framework facilitates a quantitative analysis of the wider implications of agricultural sector scenario projections by taking systematic account of linkages between agriculture and the rest of the economy and allows a rigorous theory-grounded general equilibrium welfare analysis of shocks to agriculture. Conversely, the linked approach supports a detailed analysis of the effects of shocks that initially hit non-agricultural sectors on agricultural variables and water security. In this paper, the approach is used to assess the impact of stylised climate change mitigation scenarios on energy prices, economic growth, food security and water availability. The modeling methodology links the global computable general equilibrium (CGE) model GLOBE-Energy with IFPRI’s International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT) version 3. IMPACT3 is a modular integrated assessment model, linking information from climate models, crop simulation models and water models to a global partial equilibrium multi-market model of the agriculture sector. IMPACT3 has been designed to support longer-term scenario analysis through the integration of these multidisciplinary modules to provide researchers and policymakers with a flexible tool to assess and compare the potential effects of changes in biophysical systems, socioeconomic trends, agricultural technologies, and policies. The core multimarket model simulates food supply and demand for 159 countries. Agricultural production is further disaggregated to include 320 food production units (FPUs), which are intersections of river basins and national boundaries, that is, an intersection of 154 river basins with 159 economic regions. The multimarket model simulates 62 agricultural commodity markets, covering all key food as well as key non-food crops, such as cotton. The water models in IMPACT3 include a global hydrology model (IGHM) that simulates snow accumulation and melt and rainfall-runoff processes at 0.5-degree latitude by 0.5-degree longitude resolution, a water basin supply and demand model (IWSM) that operates at the FPU level, and the IMPACT crop water allocation and stress model that estimates the impact of water shortages on crop yields, also at the FPU level. These three modules allow for an assessment of climate variability and change on water availability for the agriculture and other sectors, as well as for an assessment of changes in water demand, investment in water storage and irrigation infrastructure, and technological improvements on water and food security. In particular, the IGHM model simulates natural hydrological processes, thus estimating water availability, while the IWSM model simulates human appropriation of surface water and groundwater, considering water infrastructure capacity and policies, based on which we water stress calculations. The model can also simulate impact of changes in fertilizer prices on food supply and changes in energy prices on the demand for hydropower development and on groundwater pumping. GLOBE-Energy is a recursive-dynamic multi-region CGE model which features a detailed representation of the technical substitution possibilities in the power sector. The model is initially calibrated to the GTAP 8.1 database which represents the global economy-wide structure of production, demand and international trade at a regionally and sectorally disaggregated level for the benchmark year 2007. The model version employed in the present study distinguishes 24 commodity groups and production sectors, and 15 geographical regions. In the development of a dynamic baseline for the present study, the growth rates of labor-augmenting technical progress by region are calibrated such that the regional baseline GDP growth rates replicate the GDP growth assumed in the IMPACT baseline projections. Moreover, for agricultural commodities, the sectoral total factor productivity parameters are calibrated such that the baseline producer price paths are consistent with the corresponding aggregated IMPACT producer price projections. To ensure that the baseline projections for agricultural quantity variables generated by GLOBE are broadly in line with the corresponding aggregated IMPACT projections as well, the parameters of the household consumer demand system are calibrated to be consistent with the aggregated household income elasticities of demand for the matched food commodity groups assumed in IMPACT. The aggregate real income effects and changes in fertilier prices associated with energy-related climate change mitigation measures generated by GLOBE are then downscaled to the IMPACT regional aggregation level and passed back to IMPACT to analyse the detailed implications for agricultural variables, water and food security. The simulation analysis compares a baseline scenario using SSP2 (Shared Socio-Economic Pathway 2 – aka “middle of the road”) assumptions about population and GDP growth and no changes in fossil fuel taxes, with a stylized mitigation scenario. This mitigation scenario assumes a gradual linear phasing-in of additional taxes on the use of primary fossil fuels globally from 2016 onwards up to 2050 on top of baseline taxes such that the additional ad valorem tax wedges between producer and user prices reach 70, 50 and 30 percent for coal, crude oil and natural gas respectively by 2050. The resulting user price increases for the primary fossil fuels and refined petrol induce substitution effects towards renewable energy sources in production along with investments in more energy-efficient technologies as well as substitution effects towards less energy-intensive goods in final consumption. As a consequence, the demand for fossil fuels drops relative to the baseline and the producer prices for coal, crude oil and natural gas fall significantly, while the producer prices of refined petrol rise due to the increase in crude oil input costs. From a macroeconomic perspective, these price shifts entail terms-of-trade gains for regions that are net importers of the primary fossil fuels and corresponding terms-of-trade losses for the net importers of these fuels. Correspondingly, the aggregate real income reductions under this scenario are moderate to small for the net importing regions but more pronounced for the net exporters of primary fossil fuels. The provisional simulation results suggest only moderate indirect effects on agricultural prices and food security outcomes. While higher prices for chemical fertilizers and reduced groundwater pumping due to higher energy costs per se push crop prices up to some extent, the adverse real income effect on food demand pull crop prices in the opposite direction. The price effects are slightly more pronounced when the energy price increases are assumed to induce a significant increase in first-generation biofuel production relative to IMPACT baseline assumptions.
    Keywords: Global multi-region , Impact and scenario analysis, General equilibrium modeling
    Date: 2016–07–04
  9. By: Zhao, Jinhua; Kurkalova, Lyubov A.; Kling, Catherine L.
    Abstract: This study investigates the environmental impacts of several forms of policies that offer farmers subsides in return for the adoption of conservation tillage. The policies differ as to whether the tillage practice or one of several environmental benefits is targeted. We develop an Environmental Lorenz Curve which fully represents the performance of the targeting policies, and show that this curve can be directly used to help select the optimal targeting strategy for special classes of social welfare functions. The model is applied to the state of Iowa.
    Date: 2016–09–15
  10. By: Francesco Lamperti; Giovanni Dosi; Mauro Napoletano; Andrea Roventini; Alessandro Sapio
    Abstract: In this paper we develop the first agent-based integrated assessment model, which offers an alternative to standard, computable general-equilibrium frameworks. The Dystopian Schumpeter meeting Keynes (DSK) model is composed of heterogeneous firms belonging to capital-good, consumption-good and energy sectors. Production and energy generation leads to greenhouse gas emissions, which affect temperature dynamics in a non-linear way. Increasing temperature triggers climate damages hitting, at the micro-level, workers' labor productivity, energy efficiency, capital stock and inventories of firms. In that, aggregate damages are emerging properties of the out-of-equilibrium interactions among heterogeneous and boundedly rational agents. We find the DSK model is able to account for a wide ensemble of micro and macro empirical regularities concerning both economic and climate dynamics. Moreover, different types of shocks have heterogeneous impact on output growth, unemployment rate, and the likelihood of economic crises. Finally, we show that the magnitude and the uncertainty associated to climate change impacts increase over time, and that climate damages are much larger than those estimated through standard integrated assessment models. Our results point to the presence of tipping points and irreversible trajectories, thereby suggesting the need of urgent policy interventions.
    Keywords: Climate Change; Agent-Based Models; Integrated Assessment; Macroeconomic Dynamics; Climate Damages.
    Date: 2017–03–04
  11. By: Prince Etwire (Department of Economics, University of Otago, New Zealand); David Fielding (Department of Economics, University of Otago, New Zealand); Victoria Kahui (Department of Economics, University of Otago, New Zealand)
    Abstract: We apply a Structural Ricardian Model (SRM) to farm-level data from Ghana in order to estimate the impact of climate change on crop production. The SRM explicitly incorporates changes in farmers’ crop selection in response to variation in climate, a feature lacking in many existing models of climate change response in Africa. Two other novel features of our model are an estimate of the response of agricultural profits to differences in land tenure, and a comprehensive investigation of the appropriate functional form with which to model farmers’ responses. This final feature turns out to be important, since estimates of the effect of climate change turn out to be sensitive to the choice of functional form.
    Keywords: Structural Ricardian Model; climate change; Ghana
    JEL: O13 O55 Q12 Q54
    Date: 2017–04
  12. By: Suh, Jin Kyo (Korea Institute for International Economic Policy)
    Abstract: Global trade growth has been depressed since 2010. What is worse is that the WTO cut 2016 global trade growth forecast to 1.7%, down from its previous estimate of 2.8%. On the other hand, plurilateral negotiations are rapidly becoming widespread in the WTO negotiations. The first-ever universal, legally binding global climate deal was adopted by 195 countries. There is a rapid spread of increasing anger over globalization. Furthermore, the next WTO Ministerial Conference will be held in Buenos Aires, Argentina in early December 2017. However, the Trump administration is developing a national trade policy that would seek to diminish the influence of the WTO in the United States. What should the new direction for Korea's multilateral trade policy be in such a changing global trade environment? New directions of Korea's multilateral trade policies are suggested as follows. Korea has to make efforts to secure enough flexibility in the reduction of both total and product-specific AMS (aggregate measure of support), since AMS of rice accounts for more than 90% of the Total AMS of Korea. Second, Korea should actively participate in both the U.S.-led plurilateral discussions on fishery subsidies and multilateral negotiations led by the EU, if it is to reflect its interests in the process of rule-making on fishery subsidies. The new multilateral trade policy of Korea should aim to spread benefits of trade liberalization out to the whole stakeholders, particularly focusing on small and medium enterprises (SMEs). Korea should prepare for the proliferation of plurilateral negotiations led by developed countries. Finally, we have to think of environmental subsidies as green subsidies, which are allowed in the WTO system.
    Keywords: DDA; WTO; MC11
    Date: 2017–03–07
  13. By: Sam Fankhauser (Grantham Research Institute on Climate Change and Centre for Climate Change Economics and Policy, London School of Economics); Frank Jotzo
    Abstract: Energy is needed for economic growth, and access to cheap, reliable energy is an essential development objective. Historically most incremental energy demand has been met through fossil fuels, however in future that energy will have to be low-carbon and ultimately zero-carbon. Decarbonisation can and needs to happen at varying speeds in all countries, depending on national circumstances. This paper reviews the implications of a transition to low-carbon energy on economic growth and development in current low income countries. It sets out empirical findings about trajectories for energy intensity and emissions intensity of economic growth; explores pathways to accelerate decarbonisation; reviews the theoretical and empirical literature on economic costs and co-benefits of energy decarbonisation; and assesses analytical approaches. It discusses the opportunities that might arise in terms of a cleaner, more dynamic and more sustainable growth model, and the options for developing countries to implement a less carbon intensive model of economic development.
    Keywords: Economic growth, Developing countries, Decarbonisation, Low-emissions trajectories, Climate change mitigation, Emissions intensity
    JEL: Q43
    Date: 2017–03
  14. By: Steven Gronau; Dr Etti Maria Winter; Prof Ulrike Grote
    Abstract: Nature-based tourism is growing globally and seen as an economic development path for many countries. Namibia links nature-based tourism into the Community Based Natural Resource Management (CBNRM) concept; combining conservation, tourism and the improvement of livelihoods of rural communities that are yet not always complementary. They can also be conflicting. Through the CBNRM program local population is registered as a ‘conservancy’ (a territorial unit) which officially owns and manages collectively their natural resources, for finally encouraging and supporting tourism. Thus, communities have an incentive to manage their wildlife and natural resources sustainable to derive an economic benefit from tourism. Economic benefits from tourism can be mainly generated through enterprises, offering employments and cash incomes to rural communities. However, the degree of participation in tourism depends on the suitability with their existing livelihood system, involving trade-offs on the farm like households land and labor allocation, subsistence requirements and expenditures as well as the choice of different activities affected by seasonality. Finally, subject to different opportunity costs, leading to the question: (i) Is nature-based tourism a means to improve livelihoods of rural communities? Further, the number of tourists entering natural sites, like Zambezi, and spending cash in rural environments is influenced by regional attractiveness, which is conflicting with the increasing exploitation of natural resources from and within rural communities. This double sided demand for same resources also implies trade-offs, which are tried to be harmonized with the CBNRM program, thus arising the question: (ii) Does nature-based tourism have the potential to reduce overfishing? This paper aims to optimize these trade-offs constructing a mathematical programming model based in the Sikunga Conservancy. An optimization model was constructed for the Sikunga Conservancy to simulate a properly working CBNRM so that a communities social welfare criterion is maximized. Thus, the model can be viewed as a central planning model for optimal resource allocation aimed at maximizing social welfare for the Sikunga Conservancy community, while implying an adequately and collectively managed CBNRM. The mathematical programming model was constructed using General Algebraic Modelling System (GAMS) Software to reflect the livelihood system of the rural community and was run for the 197 sampled households (done in 2012). Two simulations are conducted: A reference and a CBNRM case. The reference case reproduces the livelihood system of the community in the Sikunga Conservancy, whereas the CBNRM case simulates an adequate managed CBNRM and analyzes the effects of nature-based tourism within the concept. In line with the goals of CBNRM to improve livelihoods as well as nutrition, nutritional requirements are increased in the simulation. CBNRM also aims at conserving wildlife and using natural resources sustainably. Due to Sikunga’s high dependence on fish resources for their livelihoods but also for angling tourism, the simulation puts the model under the umbrella of sustainable use of the fish resource. For this, a biological growth model was integrated that calculates a sustainable resource extraction by the conservancy. The simulation searches for reducing overfishing under consideration of household’s livelihood system as well as tourism as a possible means to foster sustainability (conservation management). It connects nature-based tourism with the CBNRM concept. Reference solution showed that Sikunga community’s livelihood activities are diversified and that nature-based tourism is an important source of income, with local fishing lodges offering employments within the conservancy over the whole year. Especially fish resources are of high regional importance for household’s subsistence consumption and cash income. However, fish stocks are being harvested over the rate of sustainable yield, contributing to the problem of overfishing in the Zambezi region. This in turn threats community’s livelihoods while heavily affecting the regional tourism sector, mainly consisting of recreational fishing (sport angling). Additionally, it was found that the community lacks for an adequate nutrition. Issues with continued malnourishment are likely to hinder development for the community including the success of CBNRM and their partnership with tourism operators, thus need to be considered for a potential well-working concept. Consequently a CBNRM case was run, that accounted for a proper management. The simulation focused on the conservation of fish resources which are fundamental for regions livelihoods as well as tourism number, demand and potential sector growth. Models solution showed that nature-based tourism is a means to improve livelihoods of rural communities. A marginal social welfare loss of the Sikunga community, due to a sustainable fish resource use implication, were stated to be harmonized with the potential conservancy benefits from nature-based tourism. Therefore the community needs to conserve their natural resources, especially fish, for being an attractive site for tourism, thus fostering further tourism numbers and related establishments, which are basically for conservancy wide benefit. However, this demands an appropriate CBNRM. Additionally, nutritional levels within the community increase in the solution what also confronts the slight decrease in social welfare. Further, the model showed that if CBNRM is well-managed, nature-based tourism have the potential to reduce overfishing. Nature-based tourism, embedded in a sustainable fish resource use, heavily decreases catch numbers of rural communities within conservancies. It offers rural households an alternative livelihood strategy in tourism, which can take care of the people who have to reduce their fishing activity.
    Keywords: Namibia, Optimization models, Developing countries
    Date: 2016–07–04
  15. By: Yeongjun Yeo; Yeongjun Yeo; SHIN, Ki-yoon; Jeong-Dong Lee
    Abstract: Nowadays, with increasing interests of demand-side innovation policy, there is needs for investigating public procurement policy aiming to strengthen the industrial competitiveness by expanding new markets with innovative activities. Public Procurement is regarded as the most effective policy for stimulating innovation in relevant sectors. Under this background, each countries in OECD spends about 15~20% of its GDP on public procurement, and most of the demands in industry and technology sector such as energy, environment, health, construction is stimulated by public procurement. Especially, in order to achieve both mitigating climate change and economic revitalization, the share of green public procurement which is public procurement for green products in total public procurement is enlarging among developed countries. Despite of the amount of public procurement, and policy significance and effectiveness, there is few study on the effects of public procurement for innovation and the macroeconomic analysis from public procurement. In addition, some empirical studies which investigated policy impact of green public procurement are also limited in partial equilibrium perspectives, and they did not show the integrated and macro-economic impact of public procurement. Therefore, with previous literature reviews, this study presents general equilibrium perspectives which can analyze environmental, economic, and social benefits from public procurement simultaneously. Based on the conceptual framework from the previous literature, this study will present empirical results of the impacts of green public procurement quantitatively by computable general equilibrium(CGE) model. To analyze the economic impacts of green public procurement, it is essential to represent the innovation activities and its contributions within the CGE model. For the analysis, we construct the knowledge-based social accounting matrix(SAM), which includes knowledge in factors of production and R&D investment under investment. In addition, we construct the knowledge-based CGE model to capture the innovation related activities, and its effects on the macroeconomic system. Main differences between the knowledge-based CGE model and conventional CGE model is that factors of production include knowledge, and investment includes R&D investment. Another difference is that industry-specific knowledge stock accumulated by R&D investment influences productivity of other industries through spillover effect. These features of knowledge-based CGE model enable us to understand various macro-economic effects of green public procurement(GPP) considering innovation related aspects. Although green public procurement(GPP) could have indirect and direct effects on the economy in terms of environmental, economic, and social perspectives, previous literature give us bounded information in understanding potential effects of the GPP. This is because most studies on the GPP are limited to a specific cases based on the theoretical or conceptual level, and analyzing its effect with partial equilibrium perspectives. Firstly, GPP can have environmental impacts through energy savings and reduction of greenhouse gases by reducing energy consumption with the procurement of energy efficient products by the public sectors. Each country including Korea has its own standards of energy efficiency for the products, and GPP is implemented as the government preferentially buy the products with high levels of energy efficiency. Secondly, the GPP can have economic impacts through creating and escalating the market, because the public sector take a role of lead consumer in green products and services. As a lead consumer, the public sector reduce market and technological uncertainties by specification of the demand of green technology and products. Thanks to the public sector, potential suppliers can escalate their pre-commercialization R&D and commercialization process. That is, GPP reduce the uncertainty across whole stage of production from development of new technology to diffusion of the products by specifying the information on demand for the industry, and it leads more innovation activity of suppliers and investment for the production. Therefore, this study aims to analyze the various impacts of green public procurement in environmental, and economic perspectives as discussed above. In addition, GPP’s main effects could appear in various pathways, including the environmental, economic, and social factors. Therefore, as an empirical study we will try to model those factors within the knolwedge-based CGE model.
    Keywords: South Korea, General equilibrium modeling, Impact and scenario analysis
    Date: 2016–07–04
  16. By: Narita, Daiju; Lemenih, Mulugeta; Shimoda, Yukimi; Ayana, Alemayehu N.
    Abstract: Ethiopia has experienced a long-term problem with deforestation. Despite the broad implications of such deforestation, or more generally of forests, on human life and economic activities, the accounting of a diverse range of forest values in Ethiopia is still in its infancy. This study aims to set a scope for such a comprehensive accounting of forest values in Ethiopia. Along with an overview of both quantitative and qualitative studies on forest values in Ethiopia, we conduct our own tentative estimation of Ethiopian forest values. Unlike the previous attempts at Ethiopian forest accounting, which are built on a direct extension of the SNA (System of National Accounts) framework, our estimation is based on a welfare-economic framework to evaluate changes in the value of forests as natural capital.
    Keywords: forest,natural capital,environmental accounting,ecosystem services
    Date: 2017–02
  17. By: Sophie A. Rocks; Iljana Schubert; Emma Soane; Edgar Black; Rachel Muckle; Judith Petts; George Prpich; Simon J. Pollard
    Abstract: Communicating the rationale for allocating resources to manage policy priorities and their risks is challenging. Here, we demonstrate that environmental risks have diverse attributes and locales in their effects that may drive disproportionate responses among citizens. When 2,065 survey participants deployed summary information and their own understanding to assess 12 policy-level environmental risks singularly, their assessment differed from a prior expert assessment. However, participants provided rankings similar to those of experts when these same 12 risks were considered as a group, allowing comparison between the different risks. Following this, when individuals were shown the prior expert assessment of this portfolio, they expressed a moderate level of confidence with the combined expert analysis. These are important findings for the comprehension of policy risks that may be subject to augmentation by climate change, their representation alongside other threats within national risk assessments, and interpretations of agency for public risk management by citizens and others.
    Keywords: environment; policy prioritization; strategic risk
    JEL: G32
    Date: 2017–03–17
  18. By: Roberto Roson; Richard Damania, the World Bank, Washington D.C.
    Abstract: In this paper, the macroeconomic implications of possible future water scarcity are assessed. In order to do so, the sustainability of a number of economic growth scenarios in terms of water resources are considered. The analysis is based on a comparison between potential demand for water and estimated water availability. Water supply is calculated using the Global Change Assessment Model (GCAM). Three different climatic Global Circulation Models (GCMs) were used as inputs—CCSM, FIO, and GISS—to feed the complex hydrologic model. The main output of this model is an estimate of runoffs and water inflows for many regions in the world. Sustainable (renewable) water supply is defined as the total yearly runoff (where necessary integrated by water inflow) within a given region, and scenarios are considered in which this is the only available source of water. Therefore, the possible exploitation of non-renewable water resources (e.g., the so-called “fossil water”) is implicitly ruled out, whereas the adoption of unconventional water supply means (desalination, recycling, harvesting) is indirectly accounted for as improvements in water efficiency (fresh water needed per unit of economic activity). Since demand for water is mostly an indirect demand, depending on the level of economic activity and income, a global general equilibrium model is used to conduct simulation experiments aimed at assessing changes in economic structure and trade flows, from which the demand for water is obtained. The economic model considers 14 macro-regions and 20 industries. The exercise is conducted for two future reference years, 2050 and 2100, but policy analysis focuses on 2050 only. Two “Shared Socio-economic Pathways” (SSP) were chosen to represent two plausible, but distinct, future economic reference pathways: SSP1, termed “Sustainability”, and SSP3, termed “Regional Rivalry”. SSP1 is characterized by the following narrative: “Sustainable development proceeds at a reasonably high pace, inequalities are lessened, technological change is rapid and directed toward environmentally friendly processes, including lower carbon energy sources and high productivity of land”. By contrast, SSP3 is characterized by the following narrative: “Unmitigated emissions are high due to moderate economic growth, a rapidly growing population, and slow technological change in the energy sector, making mitigation difficult. Investments in human capital are low, inequality is high, a regionalized world leads to reduced trade flows, and institutional development is unfavorable, leaving large numbers of people vulnerable to climate change and many parts of the world with low adaptive capacity”. Water demand projections are based on water intensity coefficients, that is, water per unit of output. These are obtained as ratios between sectoral water usage and output in the base calibration year. In turn, sectoral consumption has been estimated by elaborating information from various sources: the WIOD project (Dietzenbacher et el., 2013), Mekonnen and Hoekstra (2011), the European research project WASSERMed (Roson and Sartori, 2015), Mielke, Diaz Anadon and Narayanamurti (2010), the U.S. Energy Information Administration (2015). To estimate the regional “sustainable water supply”, results from the GCAM hydrologic model have been used. Water supply in each macro-region is expressed as the sum of yearly runoffs of all countries belonging to the region, averaged for three GCMs climate scenarios. We found that water consumption in the Middle East (and, to a lesser extent, in South Asia [India and neighboring countries]) already exceeds “sustainable” water consumption. This suggests that in these regions non-renewable water resources are being exploited, including unsustainable abstraction of groundwater. However, in 2050 and 2100 water resources become insufficient in several other regions, all located in Africa and Asia. This implies that for those regions, the strong economic development scenarios are incompatible with the estimated availability of water resources. Equivalently, the analysis highlights that water (or water scarcity) has been neglected in the definition of the Shared Socio-Economic Pathways, suggesting a potential inconsistency. How can the emerging water demand gap be accommodated in the water-constrained regions? Three complementary ways are envisaged: If water is a non-substitutable production factor, production should fall in all water-consuming industries by the same percentage of the excess demand gap. This gap is generally large, which would imply dramatic and unrealistic drops in production levels. In any case, at least some part of the demand gap (in this exercise 1/4 is assumed) translates into production cuts or, in economics jargon, into reductions of multi-factor productivity. As water becomes a scarcer resource, its explicit market price or its shadow cost would rise, reducing the relative competitiveness of water intensive activities. Within each industry in the large macro-regions, activities would then be reallocated in time and space (by specific policies or by market forces), and more efficient water techniques would be adopted. These mechanisms end up reducing the industrial water intensity coefficients, by increasing the overall water efficiency. It is assumed here that this effect can cover 3/4 of the demand gap (other parameter values have also been used to test robustness, but for brevity are not discussed here). In addition to efficiency-improving reallocations within industries, water would be reallocated between industries. This either requires establishing water markets or specific policies at the national or regional level. The inverse of the water intensity coefficient is the value of production per unit of water, that is, the water industrial productivity. Recognizing that perfect reallocations are improbable and unrealistic, policy scenarios are explored, where the cut in water consumption levels is not applied uniformly across all industries, but smaller reductions are applied where water is relatively more valuable (and vice versa). Three cases are discussed here: (1) no inter-industrial water reallocation [NO-WR], (2) mild [MILD] and (3) strong [STRONG] water reallocation. Without reallocation of water resources among sectors, water scarcity imposes a reduction to the world real GDP of -0.37% in the SSP1 and -0.49% in the SSP3. However there are large disparities across regions, with a large drop in income for some regions, but small gains in some other regions (e.g., Central America) due to improved terms of trade and relative competitiveness. A complete different picture emerges when some redistribution of water resources across sectors is allowed. Industrial water reallocations are guided by an equation where an elasticity parameter (with values set at 0, 0.1, 0.25 for the three policy scenarios) determines the sensitivity to the relative water productivity. With a limited reallocation of water (MILD) the reduction of global GDP is reduced by 42% in both scenarios, whereas regional reductions range from -22% to -67%. The results demonstrate that water remains a significant obstacle to growth and development in the context of a changing climate. It also forcefully illustrates that prudent management of water resources is likely sufficient to neutralize some of the undesirable impacts, and three main messages emerge from the analysis. First, scenarios of economic development that have been recently proposed to support the scientific analyses of climate change have ignored water availability. The underlying assumptions of sustained economic growth, especially for developing countries, would imply an excessive consumption of water, even when substantial improvements in water efficiency are envisaged. Second, and related to the previous point, the emerging water scarcity will mainly affect developing countries in Africa and Asia, hampering their prospects of economic growth. This means that water scarcity will increase economic inequality around the world.
    Keywords: Global, Energy and environmental policy, Growth
    Date: 2016–07–04
  19. By: Meya, Jasper N.; Drupp, Moritz A.; Hanley, Nick
    Abstract: How income and the valuation of environmental goods are related is a key question for science and policy, but the role of income inequality is often neglected. This paper studies how income inequality impacts the international transfer of environmental values-a practice called value or benefit transfer. Specifically, we apply theory-driven transfer factors to examine whether adjusting for income inequality can improve benefit transfer, drawing on a multi-country case study on water quality improvement. We find that income inequality adjustment reduces benefit transfer errors significantly, and by 1.5 percentage points on average. Adjusting for income inequality is particularly important when income is distributed more unequally at the policy site relative to the study site, yielding reductions in transfer errors of up to 25 percentage points. Our results are relevant for the practice of policy appraisal and environmental accounting, and more generally for the role of income inequality in non-market valuation.
    Keywords: benefit transfer,income,inequality,stated preference,transfer errors
    JEL: Q51 D63 H43 Q53 Q25
    Date: 2017
  20. By: Serge Garcia; Julien Jacob; Eve-Angéline Lambert
    Abstract: Civil liability is the legal requirement to compensate victims when damage is caused. When two firms jointly cause environmental damage, their liability depends on the applicable liability rule and on the solvency level of each firm. Under non-joint liability, each injurer is liable for part of the damage up to its financial capacity. Under joint and several liability, if damages cannot be recovered from one in jurer for insolvency reasons, they are borne by the other one to the extent that it is solvent. We theoretically and experimentally investigate the impact of these two liability rules in terms of incentives to care, varying according to the degree of (in)solvency of each firm. We show that when there is (at least) one insolvent firm, non-joint liability leads to higher social welfare than joint and several liability, whereas the latter should be preferred in the presence of solvent firms only.
    Keywords: Environmental damage; Liability Sharing; Multiple Tortfeasors; Abatement Efforts; Insolvency.
    JEL: K13 K32 Q53
    Date: 2017
  21. By: Hendrickson, Michael
    Abstract: This paper examines the key elements of a framework for Caribbean growth and development over the medium-term. The paper notes that while the Caribbean has made major adjustments in a challenging global environment, marked by slower demand, it needs to pursue a new sustainable development framework that integrates economic, social and environmental issues in a seamless way.
    Date: 2017–01
  22. By: Juan-Pablo Montero; Guy Meunier; Jean-Pierre Ponssard
    Abstract: We study pollution permit markets in which a fraction of permits are allocated to firms based on their output. Output-based allocations, which are receiving increasing attention in the design of carbon markets around the world (e.g., Europe, California, New Zealand), are shown to be optimal under demand and supply volatility despite the output distortions they may create. In a market that covers multiple sectors, the optimal design combines auctioned permits with output-based allocations that are specific to each sector and increasing in its volatility. When firms are better informed about the latter or must self select, the regulator resort to some free (i.e., lump-sum) allocations to sort firms out.
    JEL: D24 L13 H23 L74
    Date: 2016
  23. By: Sergey Paltsev
    Abstract: A need for low-carbon world has added a new challenging dimension for the long-term energy scenarios development. In addition to the traditional factors like technological progress, demographic, economic, political and institutional considerations, there is another aspect of the modern energy forecasts related to the coverage, timing, and stringency of policies to mitigate greenhouse gas emissions and air pollutants. The goal of this paper is to review the value and limits of energy scenarios and, in particular, to assess how the new low-carbon goals are reflected in the latest projections. This relatively new dimension of the scenarios means that in addition to the traditional factors like technology development, demographic, economic, political and institutional considerations, there is another aspect of the modern energy forecasts related to the coverage, timing, and stringency of policies to mitigate greenhouse gas emissions and air pollutants. The results from a long-term global energy-economic model, the MIT Economic Projection and Policy Analysis (EPPA) model, are compared with other major outlooks (like BP, ExxonMobil, IEA) and model-comparison exercises (represented in the IPCC scenario database). Considering the value and limits of the energy scenarios, it is obviously easier to find the limits of the forecasts. It is true not only about the energy projections, but also about other predictions of the future: financial, economic or political. Forecasts of all sorts are usually bad at predicting sudden changes. In terms of energy projections, fast growth of China’s energy appetite and its recent slowdown, fast development of unconventional oil and natural gas, fast deployment of renewables, all these events are missed by most scenarios. A move to a low-carbon energy future requires a drastic change in energy investment and the resulting mix in energy technologies. If history is any guide, energy scenarios overestimate the extent to which the future will look like the recent past. Energy scenarios are useful for decision-makers to assess the scale of the necessary transformation. However, the exact technology mix, paths to the needed mix, price and cost projections should be treated with a great degree of caution. The scenarios do not provide the exact numbers (or even close numbers), but they can be used as a qualitative analysis of decision-making risks associated with different pathways. We should recognize the energy system is complex, interconnected and affected by economic drivers. In turn, economists are notorious for their forecasting ability. Due to a long-lasting nature of energy infrastructure, energy system is not as fluid as economic system, and some trajectories in energy development are more persistent, but the same degree of carefulness should be applied to the long-term energy forecasts as to economic forecasts. Energy scenarios models are complex, but they do not reflect all the complexity, so they often provide imprecise projections. At the same time, without models nothing at all constrains the projections. While indeed energy scenarios are not suited for providing the exact number (or specific forecast), but practically decisions have to be made. The value of energy scenarios (and models that produce them) is not in their decision-making capabilities, but in their decision-support capabilities. Any single energy scenario is not going to provide a prediction of the future, and it cannot be used as a basis for policy-making. However, the results from numerous scenarios obtained from different modelling planforms provide useful information about potential risks and benefits of a particular potential policy or investment. When one has a model to make a scenario – an argument can be made about improvement, simplification, or bringing additional details. When one has just tea leaves to guess the future, there is no tool to advance the knowledge. Most of the energy scenarios offer plausible rather than most likely future. Perhaps the most important uncertainty about the future of energy is its interaction with the environment. The need for low-emitting technologies will shift the current technology mix, but the exact contribution of particular technology and the timing of this shift depend on many economic and political variables. Such uncertainty about the future costs and technologies supports a conclusion that governments should not try to pick the “winners”, rather the policy and investment focus should be on targeting emissions reductions from any energy source. Energy scenarios may not provide the exact projections, but they are the best available tool to assess the magnitude of challenges that lie ahead.
    Keywords: Global, Impact and scenario analysis, Energy and environmental policy
    Date: 2016–07–04
  24. By: Onuma, Hiroki; Shin, Kong Joo; Managi, Shunsuke
    Abstract: This paper examines the effect of a country’s own past disaster experiences and nearby countries’ past experiences on subsequent disaster damage. We use global disaster data from 1990-2010, which include disaster-related death tolls for both natural and technological disasters, that are further divided into sub-categories. Overall, we find evidence of a reduction effect of past disaster damage on future disaster damage. More detailed analyses show that an adaptation effect seems to be present for certain combinations of disaster types and levels of economic development. The results show that a country’s own experiences reduce future damage for natural disasters but that the marginal effect is larger for lower-income countries. On the other hand, for technological disasters, a robust impact was found only for higher-income countries. In terms of the disaster experiences of nearby countries, which is defined by countries in the same continent, an adaptation effect was found only for natural disasters, and the marginal impact was higher for higher-income countries.
    Keywords: Natural disaster, Technological disaster, Adaptation, Learning, Disaster experience, Economic development
    JEL: O1 Q54
    Date: 2016–09
  25. By: Schmidt, Emily; Tadesse, Fanaye
    Abstract: Agricultural productivity in the highlands of Ethiopia is threatened by severe land degradation, resulting in significant reductions in agricultural GDP. In order to mitigate ongoing erosion and soil nutrient loss in the productive agricultural highlands of the country, the government of Ethiopia initiated a Sustainable Land Management Program (SLMP) targeting 209 woredas (districts) in six regions of the country. This study evaluates the impact of SLMP on the value of agricultural production in select woredas by using a panel survey from 2010 to 2014. Whereas previous studies have used cross-sectional data and short timeframe field trials to measure sustainable land management (SLM) effects on agricultural productivity, this analysis exploits data collected over four years to assess impact. The results of this analysis show that participation by farmers in SLMP, regardless of the number of years of participation in the program, is not associated with significant increases in value of production. This may be due to several reasons. First, similar to previous studies, it is possible that longer term maintenance is necessary in order to experience significant benefits. For example, Schmidt and Tadesse (2014) report that farmers must maintain SLM for a minimum of seven years to reap benefits in value of production. Second, this analysis finds that value of production, as well as SLM investments, increased significantly in both treatment and non-treatment areas over the study period. Previous research has found that non-treatment neighbors learn from nearby program areas, and adopt technologies similar to programmed areas, which would dilute the impact measurement of program effects (Bernard et al. 2007; Angelucci and DiMaro 2010). Finally, it is important to note that kebeles that were not selected in the SLMP, but are downstream relative to a targeted kebele may receive indirect benefits through reduced flooding, increased water tables, etc. Thus, the impact of the SLMP may be underestimated in this analysis if non-program kebeles are benefiting indirectly from the program.
    Keywords: ETHIOPIA; EAST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA, sustainability; land management; land degradation; productivity; agricultural development; water management
    Date: 2017
  26. By: Margulis, Sergio
    Abstract: El objetivo de este estudio es realizar una revisión teórica y empírica de los procesos de mitigación y adaptación al cambio climático en áreas urbanas enfocándose en América Latina. De acuerdo con los resultados recientes de la Conferencia de las Partes (COP 21, por sus siglas en inglés) en París, se espera que muchas ciudades en América Latina y de otras partes del mundo preparen planes de acción climática. Sin embargo, de acuerdo con la con la revisión realizada, no existen muchas ciudades en la región que tengan planes consistentes con un fundamento técnico solido. La revisión abarca 12 planes de 11 ciudades y regiones metropolitanas, incluyendo 2 planes para Bogotá y su Región Metropolitana, São Paulo, Ciudad de México, Buenos Aires, Río de Janeiro, Lima, Santiago de Chile, Belo Horizonte, Montevideo, Quito y Cartagena.
    Date: 2016–12
  27. By: Francisco Gallego; Juan-Pablo Montero; Hernán Barahona
    Abstract: Driving restrictions —limits on car use based on the last digit of a car’s license plate— are increasingly popular forms of pollution and congestion control, notwithstanding the literature has shown they typically result in more pollution by moving the fleet composition toward higher-emitting vehicles. We study a design feature present in some restriction programs but much overlooked in the literature: that cleaner cars be exempted from the restriction. Based on evidence from Santiago- Chile’s 1992 program, we find this exemption feature to have a large impact on fleet composition toward cleaner vehicles. We also develop and calibrate for Santiago a vertical-differentiation model of the car market to show that driving restrictions that make optimal use of these exemptions can be way more effective in the fight against local air pollution than alternative instruments such as scrappage subsidies and gasoline taxes.
    JEL: J14 O12 L26 M53
    Date: 2016
  28. By: Julien Xavier Daubanes (Department of Food and Resource Economics, University of Copenhagen); Pierre Lasserre (Département des Sciences Économiques at Université du Québec À Montréal)
    Abstract: There exists no formal treatment of non-renewable resource (NRR) supply, systematically deriving quantity as function of price. We establish instantaneous restricted (fixed reserves) and unrestricted NRR supply functions. The supply of a NRR at any date and location not only depends on the local contemporary price of the resource but also on prices at all other dates and locations. Besides the usual law of supply, which characterizes the own-price effect, cross-price effects have their own law. They can be decomposed into a substitution effect and a stock compensation effect. We show that the substitution effect always dominates: A price increase at some point in space and time causes NRR supply to decrease at all other points. This new but orthodox supply setting extends to NRRs the partial equilibrium analysis of demand and supply policies. Thereby, it provides a generalization of many results about policy-induced changes on NRR markets. The properties of restricted and unrestricted supply functions are characterized for Hotelling (homogeneous) as well as Ricardian (non homogeneous) reserves, for a single deposit as well as for several deposits that endogenously come into production or cease to be active.
    Keywords: Allocating reserves; Supply theory; Substitution effect; Stock compensation effect; Green paradox; Spatial leakage
    JEL: Q38 D21 H22
    Date: 2017–03
  29. By: Embid, Antonio; Martín, Liber
    Abstract: Este documento analiza el Nexo entre agua, energía y alimentación en América Latina y el Caribe centrando su atención en el estado actual de la cuestión, la planificación para su implementación, la articulación del marco normativo y la identificación de interconexiones prioritarias para la región. Partiendo de una revisión de los antecedentes más relevantes del concepto del Nexo y su configuración actual a nivel global, se consideran los principales elementos para establecer el estado actual del debate en la región. Se contemplan, además, otros elementos relevantes, como la conexión del Nexo con los Objetivos de Desarrollo Sostenible (ODS), aspectos financieros relacionados con sus componentes y su importancia en la sociedad de riesgo.
    Date: 2017–03
  30. By: Queiroz Sperotto, Fernanda
    Abstract: The study analyzed the phenomenon of productive specialization in industrial activities of high pollution potential (HPP). The objectives of the analysis were (a) to evaluate, from secondary data, the current importance of HPP industries for the State Rio Grande do Sul (RS/Brazil); and (b) to map in the territory these industries and to observe the spatial concentration of these activities. Therefore, it was analyzed employment data, establishments, production and export of industrial HPP activities, in the period 2007 and 2014. Although the results did not indicate substantial changes over these eight years, it was possible to establish an overview of the industry HPP in RS, which will form the basis for future research on the formation of pollution havens in RS.
    Keywords: High Pollution Potential; Industry; Rio Grande do Sul (State of Brazil)
    JEL: Q5 R3
    Date: 2017–01
  31. By: Bhalotra, Sonia; Venkataramani, Atheendar S.; Diaz-Cayeros, Alberto; Miller, Grant; Miranda, Alfonso
    Abstract: Historically, improvements municipal drinking water quality contributed significantly to mortality decline in wealthy countries. However, water disinfection has not produced equivalent benefits in developing countries today. We investigate this puzzle by analyzing a large-scale municipal water disinfection program in Mexico in 1991 that dramatically increased access to chlorinated water. On average, we find that the program led to a 37 to 48% decline in diarrheal mortality among children and was highly cost-effective ($1,310 per life-year saved). However, age (degradation) of water pipes and insufficient complementary sanitation infrastructure attenuated these benefits. Countervailing behavioral responses, although present, appear to be less important.
    Date: 2017–03–22
  32. By: Dacuycuy, Connie B.
    Abstract: Using a discrete/continuous modeling approach, this paper analyzes energy use and consumption in the Philippines within the context of weather variability and gender. Consistent with energy stacking strategy where households use a combination of traditional and modern energy sources, this paper finds that households use multiple energy sources in different weather fluctuation scenarios. It also finds that weather variability has the highest effects on the electricity consumption of balanced and female-majority households that are female headed and in rural areas. Several policies are suggested.
    Keywords: Philippines, discrete/continuous approach, weather variability, gender, energy choice, energy consumption
    Date: 2017
  33. By: David Corderi Novoa; Jay R. Lund; Jeffrey Williams
    Abstract: The Dong Nai Delta in Vietnam has been projected to face long-term changes in physical conditions stemming from climate change. Sea level rise combined with changes in the hydrologic cycle will result in increased salinity conditions, causing significant damage to the current style of agricultural production. Adapting to these changes in salinity will require not only adjusting the cropping patterns, but also new water infrastructure investments. Two important questions arise for planners and practitioners. First, a balance needs to be found with regards to the appropriate timing of the investment. An important amount of investment is needed for new water infrastructure while salinity will increase gradually over time. Second, considerable trade-offs exist with respect to the location of the investment arising from the morphological characteristics of the delta. Constructing water infrastructure closer to the sea implies a higher investment cost. However, the additional benefits will be reduced since regions closer to the sea already have lower agricultural productivity due to greater salinity. This paper develops an economic model to analyse the optimal timing and location of water infrastructure investments in the Dong Nai Delta of Vietnam. This paper develops a dynamic programming model to analyze the timing and location of water infrastructure investments to control salinity in the Dong Nai Delta. Investment costs are estimated using engineering parameters. The benefits of water infrastructure are parameterized from an agricultural production model that uses positive mathematical programming to estimate the value of agricultural production as a function of salinity levels for each of the agricultural districts of the Delta. Each district has a different response to salinity in economic terms, resulting from diverse endowments of land, technology and crops being grown. The first model formulation assumes that salinity increases over a planning horizon of 40 years and finds the optimal timing (year) for building water infrastructure such that the value of agricultural production profits is maximized. The problem is formulated as a dynamic programming problem with one state variable and one control variable. I use a deterministic, discrete space and discrete control specification where time t is measured in years. The state variable represents salinity level at year t. The control variable is binary and represents the decision at year t on whether or not to build a sluice gate. The model is solved numerically for the optimal policy rule, i.e., the timing profile of sluice gate construction, using both value function iteration and backwards recursion. Sensitivity analysis is conducted with respect to the specification of the agricultural profit function, the salinity trend, the value of sluice gate construction, and the choice of discount rate. The model is then extended to incorporate investment location choice in the decision variable. Again, the problem is formulated as a dynamic programming problem with one state variable and one control variable, except that the control variable represents both time and space. The spatial links between regions are also included both in the transition equation and the net benefit function of the water infrastructure investment decision. This paper demonstrates the importance of economic analysis for long-term investments in water infrastructure. Optimization methods can be used to study the appropriate design of investment plans integrating economic, engineering and hydrologic aspects. The framework of analysis can be extended to incorporate additional aspects relevant for decision-makers such as alternative salinity protection measures, equity considerations of investment plans, or infrastructure financing options. This paper developed a methodological framework to analyze the economics of water infrastructure investment timing and location. The first question addressed in the modeling framework is the appropriate timing to build water infrastructure. Simulation results suggest that the optimal timing for investment differs considerably if the possibility of adjusting cropping patterns is considered. The possibility of adapting the agricultural system by introducing new salt resistant varieties delays also the optimal timing for investment when compared to a situation of no crop substitution. Other parameters such as a higher water infrastructure investment cost or a higher rate of salinity growth shift the economic viability of construction to later or earlier periods respectively. The second question addressed in this chapter is the tradeoffs associated with the spatial characteristics of the delta and the location of the investment. Simulation results suggest that abandoning regions closer to the sea and concentrating salinity control in upstream regions improves the value of the investment. These results critically depend on the resolution of the model in terms of region size and variability in infrastructure construction costs. Improving the resolution of the model, introducing equity considerations and the interaction between different infrastructure investments are areas for further research in the subject.
    Keywords: Vietnam, Developing countries, Optimization models
    Date: 2016–07–04
  34. By: Römer, Ulf; Mußhoff, Oliver
    Abstract: [Purpose] In recent years, the application of credit scoring in urban microfinance institutions became popular, while rural microfinance institutions, which mainly lend to agricultural clients, are hesitating to adopt credit scoring. The present study aims to explore whether microfinance credit scoring models are suitable for agricultural clients, and if such models can be improved for agricultural clients by accounting for precipitation. [...]
    Keywords: Microfinance,Credit scoring,Agricultural credit,Precipitation
    Date: 2017
  35. By: Ji, Yongjie; Herriges, Joseph A.; Kling, Catherine L.
    Abstract: Not observing where an individual enters a geographically large recreation area complicates the task of modeling recreation demand. Traditionally, analysts have arbitrarily defined distances on the basis of the midpoint of a river or beach segment or on the basis of the nearest access point. In this article, we draw on the aggregation literature to generate a consistent framework for incorporating information on site characteristics and travel costs gathered at a finer level than that used to obtain trip counts. We use Monte Carlo experiments to illustrate the performance of the traditional midpoint and nearest access point approximations. Our results suggest that, while the nearest access point approach often provides a good approximation to underlying preferences, use of the midpoint approach can lead to significant bias in the travel cost parameter and corresponding welfare calculations. Finally, we use our approach to model recreation demand for the major river systems in Iowa using data from the 2009 Iowa Rivers and River Corridors Survey.
    Date: 2016–02–15
  36. By: Kamijo, Tetsuya; Huang, Guangwei
    Abstract: The purpose of this study was to clarify the trends in the constraints on environmental impact assessment (EIA) systems and their recommendations in developing countries through a review of the past 30 years of relevant literature, and to propose solutions to improve these systems. EIA was introduced in many developing countries from the early 1980s. They have implemented EIA over the past 30 years and donors played a catalytic role in the application of EIA systems in developing countries. But weak enforcement has been a major problem. After compiling the brief history of EIA system in developing countries, the study built a sample of 82 documents produced between 1985 and 2016 on the EIA systems in developing countries, and examined the revealed constraints on the EIA system and its recommendations using quantitative text analysis. The constraints and recommendations changed before and after 2000 and, in particular, the ratio of constraints from report quality nearly double d. The study focused on improving the quality of the environmental impact statement (EIS) in order to solve the constraints on EIA systems, because the EIS is a product of the EIA process, and its quality is the fundamental indicator of an effective EIA system. At the same time, the study proposed to analyze the quality of EIS using statistical methods, and identify the determination factors influencing its quality. These factors could be concrete recommendations with evidence. Further research is needed to review the quality of EIS in developing countries, and analyze the quality of the data to propose concrete recommendations.
    Keywords: environmental impact assessment,developing countries,constraints,quantitative text analysis,environmental impact statement
    Date: 2017–03
  37. By: Stefano Bosi; David Desmarchelier
    Abstract: We provide necessary and sufficient conditions to detect local bifur- cations of three and four-dimensional dynamical systems in continuous time. We characterize not only the bifurcations of codimension one but also those of codimension two. The added value of this methodology rests on its tractability. To illustrate the simplicity of our approach, we provide two analytical applications of dimension three and four to environmental economics, complemented with numerical simulations.
    Keywords: local bifurcations, codimensions one and two, pollution, natural capital.
    JEL: C61 E32 O44
    Date: 2017
  38. By: Dany Bahar (Center for International Development at Harvard University); Miguel Angel Santos (Center for International Development at Harvard University)
    Abstract: The literature on Dutch disease is extensive when it comes to documenting the negative impacts of natural resource exports on non-resource tradable goods as an aggregate. Little has been said on the impact of natural resources on non-resource export concentration, either from a broad perspective or at the product level. We explore this relationship using a variety of non-resource export concentration indexes for the period 1985-2010. We find significant evidence indicating that countries with high share of natural resources in exports tend to have less diversified non-resource export baskets. Furthermore, using highly disaggregated data at the product level we study what type of products are more likely to thrive or suffer in resource rich countries. We find that capital intensive goods tend to have larger shares on the non-resource export basket when natural resources are high. We also find that homogeneous goods make for a larger share of the non-resource export basket the lower their technological sophistication. For differentiated goods the pattern is reversed: they tend to make for a larger share of the non-resource export basket, the higher they are in the technology scale.
    Keywords: Export diversification, Dutch disease, homogeneous products, heterogeneous products, skill intensity, capital intensity
    JEL: F14 F43 O11 O13 Q33
    Date: 2016–05
  39. By: Carlos M. Faísca
    Abstract: Portugal currently leads worldwide all the facets of the cork business, from the forest market, through manufacturing and the trade of cork products. This scenario is enhanced with the fact that in Portugal the cork oak trees have the best conditions for their development. However, up to 1930s, this role was played by other countries, especially by Spain, and is important to understand the factors that contributed to this situation. Recent historiography has highlighted the public policies pursued by Portugal during the Estado Novo, in comparison with those followed by the Franco regime, as one of the main reasons for the rise of the portuguese cork sector, which includes forestry policy. Therefore, it’s important to carry out a similar exercise for the chronology in question, thus the aim of this work is to analyze, in a comparative perspective, the nineteenth-century forest and cereal policies of Portugal and Spain, in the latter case due to the implications that cereal protectionism had towards the cork oak forests. Legislative sources, technical reports and official agricultural statistics were used, and it was concluded that there was no clear advantage derived from any agroforestry public policy by the spanish cork industry compared to the portuguese one. In the matter of fact, as we will demonstrate, both States procedured with great similarity.
    Keywords: Iberian Peninsula, forestry policy, cereal policy, cork production, cork industry
    JEL: Q23 Q18 N50 N53
    Date: 2017–03
  40. By: Roman Starikov; Agayeva S.B., Abasov S.I., Aliyeva A.E., Starikov R.V., Mamedova M.T., Isayeva E.S., Imanova A.A., Iskenderova A.A., Zarbaliyev R . R., Nasirova F.M., Tagiyev D.B.
    Abstract: Isomerization of light gasoline fractions from gas condensate or straight-run gasoline - conversion of normal paraffins and slightly branched hydrocarbons to highly branched, providing an increase in octane number of fuel fractions Using of transition metals modified mordenite combined with sulfated zirconium dioxide as an effective catalyst Introduction of sulfated zirconia into metal-mordenite reduces the reaction temperature to 160-200° C, i.e. this system is able to operate at the low temperature isomerization conditions. Effective gas condensate isomerization occurs even at 160° C.
    Keywords: Azerbaijan, Energy and environmental policy, Energy and environmental policy
    Date: 2015–07–01
  41. By: Spash, Clive L.; Dobernig, Karin
    Abstract: In this discussion paper we review and contrast alternative theories of consumption in terms of the intellectual basis they provide for understanding sustainable behaviours. A defining aspect of the modern literature in this field is the emphasis on the individual as a volitional agent who engages wilfully in the decision to consume. This is in stark contrast to earlier literature that concentrated on the structural lock-in of individuals to undesirable consumption patterns and the powers of corporations in creating consumer demand for their products and services. We argue that, in order to unravel consumption in its full complexity, and as a matter of utmost importance, understanding must include both the buy-in of individual agents, whose consumption activities contribute to their self-identity, and the structure imposed by the institutions of society, that frame the context of actors' decisions. More than this, any move away from the current unsustainable consumption patterns prevalent in modern societies requires a richer conceptualisation of consumption that involves an awareness and examination of the political economy in which humans live.
    Keywords: sustainable consumption, structure, agency, nudging, social practice theory, technostructure, corporate power, social ecological transformation

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