nep-env New Economics Papers
on Environmental Economics
Issue of 2017‒04‒16
forty-one papers chosen by
Francisco S. Ramos
Universidade Federal de Pernambuco

  1. Prices versus quantities: The impact of fracking on the choice of climate policy instruments in the presence of OPEC By Nachtigall, Daniel
  2. Is China’s Target of a 40-45% Reduction in Carbon Dioxide Emissions Plausible? By Bosupeng, Mpho
  3. Analysis of Environmental Policy in Kazakhstan By Lyazzat Nugumanova
  4. Land Use and Freshwater Ecosystems in France By Basak Bayramoglu; Raja CHAKIR; Anna LUNGARSKA
  5. Export Tariffs Combined with Public Investments as a Forest Conservation Policy Instrument By Gregor Schwerhoff; Johanna Wehkamp
  6. A CGE Analysis of the MacroeconomicEffects of Carbon Dioxide Emission ReductionontheAlgerian Economy By touitou mohammed
  7. The carbon buyers’ club: international emissions trading beyond Paris By Georg Zachmann
  8. 국제사회의 재생에너지 사업 자금 조달 현황과 시사점 (Catalyzing Investment for Renewable Energy in Developing Countries: Experiences and Future Tasks) By Moon , Jin-Young; Song , Jihei; Lee , Seojin
  9. Is the CO2 Emissions Reduction from Scale Change, Structural Change or Technology Change? Evidence from Non-metallic Sector of 11 Major Economies in 1995-2009 By Jin-Wei Wang; Hua Liao; Bao-Jun Tang; Ruo-Yu Ke; Yi-Ming Wei
  10. Economic growth and development with low-carbon energy By Sam Fankhauser; Frank Jotzo
  11. Optimal Growth with Resource Exhaustibility and Pollution Externality By Wei Jin; Alan Woodland
  12. Sensitivity of Modeling Results to Technological and Regional Details: The Case of Italy’s Carbon Mitigation Policy By Gabriele Standardi; Yiyong Cai; Sonia Yeh
  13. Optimal tax policy under heterogeneous environmental preferences By Marcelo Arbex; Christian Trudeau
  15. Climate Change Adaptation and Financial Protection: Synthesis of Key Findings from Colombia and Senegal By Gisela Campillo; Michael Mullan; Lola Vallejo
  16. A multi-period power generation planning model incorporating the non-carbon external costs: A case study of China By Hao Chen; Bao-Jun Tang; Hua Liao; Yi-Ming Wei
  17. Faraway, so close : coupled climate and economic dynamics in an agent-based integrated assessment model By Francesco Lamperti; Giovanni Dosi; Mauro Napoletano; Andrea Roventini; Sandro Sapio
  18. Air emissions perspective on energy efficiency: An empirical analysis of China's coastal areas By Quande Qin; Xin Li; Li Li; Wei Zhen; Yi-Ming Wei
  19. The Economy-wide Effects of Global Climate Policy on the Russian Economy By Anton Orlov
  20. Sensitivity of Modeling Results to Technological and Regional Details: The Case of Italy’s Carbon Mitigation Policy By Gabriele Standardi; Yiyong Cai; Sonia Yeh
  21. Identification of the information gap in residential energy efficiency: How information asymmetry can be mitigated to induce energy efficiency renovations By Collins, Matthew; Curtis, John
  22. Climate change adaptation in agriculture: A general equilibrium analysis of land re-allocation in Nepal By Sudarshan Chalise; Dr Athula Naranpanawa
  23. Farmers’ adaptive measures to climate change induced natural shocks through past climate experiences in the Mekong River Delta, Vietnam By Ngo, Quang Thanh
  24. Operational and environmental performance in China¡¯s thermal power industry: Taking an effectiveness measure as complement to an efficiency measure By Ke Wang; Jieming Zhang; Yi-Ming Wei
  25. Personality and Economic Choices By Christopher Boyce; Mikolaj Czajkowski; Nick Hanley
  26. Economy-wide Effects of Climate Change in Ethiopia By Amsalu Woldie Yalew
  27. Creative Destruction vs Destructive Destruction ? : A Schumpeterian Approach for Adaptation and Mitigation By Can Askan Mavi
  28. A model for strategic planning of sustainable urban transport in Scandinavia: a case study of Uppsala By Pyddoke , Roger; Norheim, Bård; Betanzo , Mari Fossheim
  29. Smog in our brains: Gender differences in the impact of exposure to air pollution on cognitive performance in China: By Chen, Xi; Zhang, Xiaobo; Zhang, Xin
  30. Urban Distribution Centres and Competition among Logistics Providers: a Hotelling Approach By Daniele Crotti; Elena Maggi
  31. Optimal Clean Energy R&D Investments Under Uncertainty By Giacomo Marangoni; Gauthier De Maere; Valentina Bosetti
  32. La convergence entre gain économique et gain écologique en économie circulaire. L'expérimentation d'une innovation environnementale dans le maraîchage nantais By Nicolas Antheaume; Jean-Claude Boldrini
  33. Happiness in the Air: How Does a Dirty Sky Affect Mental Health and Subjective Well-being? By Zhang, Xin; Zhang, Xiaobo; Chen, Xi
  34. Agricultural R&D investments, biofuel policy and food security – a CGE analysis By Zuzana Smeets Kristkova; Edward Smeets; Hans van Meijl
  35. How large and uncertain are costs of 2030 emission reduction target for the European countries? Sensitivity analysis in a global CGE model By Magdalena Zachlod-Jelec; Jakub Boratyński
  36. Policy strategies for a transition to a bioeconomy in Europe: the case of Italy and Germany By Imbert, Enrica; Ladu, Luana; Morone, Piergiuseppe; Quitzow, Rainer
  37. Gone with the Wind: International Migration By Amelia Aburn; Dennis Wesselbaum
  38. Emissions de Dioxyde de Carbone et Croissance Economique au Maroc : Une Analyse de la Courbe Environnementale de Kuznets By Rim Berahab
  39. La taxe carbone dans une économie keynésienne By Nicolas Piluso; Edwin Le Héron
  40. Strategic and stable pollution with finite set of economic agents and a finite set of consumption commodities: a Pareto comparison By Benyamin Shitovitz; Avishay Aiche
  41. On the Role of Skill, Quality, and Environmental Factors on Customer Behavior of the Beauty Industry By KONISHI Yoko

  1. By: Nachtigall, Daniel
    Abstract: This paper analyzes the impact of declining extraction costs of shale oil producers on the choice of the policy instrument of a climate coalition in the presence of a monopolistic oil supplier such as OPEC. Shale oil producers' extraction costs represent an upper bound for the oil price OPEC can charge. Declining extraction costs ultimately limit OPEC's price setting behavior and thus impacts the optimal climate policy of the climate coalition. A pure cap-and-trade system is weakly welfare-inferior relative to a carbon tax for the climate coalition. While high extraction costs allow OPEC to appropriate the whole climate rent in case of quantity regulation, declining extraction costs imply OPEC to capture only a part of the climate rent. A carbon tax always generates positive revenue and thus is welfare-superior in general. However, low extraction costs prevent OPEC from exerting its market power, leading the climate coalition to implement the Pigouvian tax in the first place. Both market-based instruments are equivalent in this case. Complementing a quota with a base tax cannot outperform a pure carbon tax.
    Keywords: fossil fuel taxation,prices versus quantities,international redistribution,global warming
    JEL: H23 Q31 Q54 Q58
    Date: 2017
  2. By: Bosupeng, Mpho
    Abstract: In the early days of industrialisation, economists believed that the ramifications of economic growth will far outweigh the potential damage to the environment. Today the concern is the rising magnitude of emissions. Many economies are under immense pressure to reduce carbon dioxide emissions. Carbon taxation and absorption technologies seem to be the main mechanisms controlling emissions in different nations. China proposed her target of reducing carbon dioxide emissions by 40-45% by 2025. The purpose of this study is to determine if China’s ambition of reducing its carbon dioxide emissions is feasible. This investigation also examines the potential effects of China's emissions on the economic growth of other countries. The study demonstrates that China’s target may not only reduce her output, but may also adversely affect the economic growth of others. This article further reveals that unemployment in China is likely to soar during the reduction in emissions and energy consumption. Additionally, this paper evaluates the effects of green taxation on carbon dioxide emissions. In conclusion, there is a possibility that China may reach her emissions target by 2025. However, the country faces a dilemma between economic growth and environmental preservation. It is recommended that China should explore techniques which will reduce emissions but not impinge negatively on economic growth.
    Keywords: carbon dioxide emissions; economic growth; green taxation; energy consumption.
    JEL: Q53 Q55
    Date: 2016
  3. By: Lyazzat Nugumanova
    Abstract: Kazakhstan has one of the highest CO2 emissions per GDP in the world. Kazakhstan has taken a leadership role in the Central Asian region in terms of climate change policies and greener economy. Kazakhstan has ratified Kyoto Protocol in 2009. Kazakhstan has committed to reduce emissions by 15% below 1992 GHG levels by year 2020. In 2013 by decree of President of Kazakhstan a concept of Green Growth was adopted. Environmental regulations in Kazakhstan inherited from the planned economy need to be modified to correspond to current economic situation and climate change goals. Carbon tax and emissions trading are two of the main instruments to curb GHG emissions. There is an ongoing debate regarding which policy instrument is the most optimal towards reduction of emissions. The main difference between the two instruments are levels of uncertainty with regards to the carbon price and thus emissions reductions. Carbon tax provides more carbon price certainty, while emissions trading carbon prices are more volatile. Carbon tax mechanism is more easily to implement and operate, than ETS. Kazakhstan has opted and implemented emissions trading scheme in January 2013.. The ETS covers 55% of total CO2 emissions in Kazakhstan, and includes energy, mining and chemical industry. The average price of allowances was KZT 406 (US$2). Carbon tax in Kazakhstan would provide stability of carbon price, moreover carbon tax is easier to implement and monitor. The objective of this paper is using computable general equilibrium (CGE) model evaluate macroeconomic and environmental impacts of different carbon tax levels in Kazakhstan. Standard multiregion, multisector static CGE model, GTAP is used to simulate the impact of different carbon tax levels in Kazakhstan. GTAP is a standard CGE model based on assumptions of perfect competition and constant returns to scale. GTAP data base with latest version 9 is used in this study. The base year of the data base is 2010. The data base for the purpose of this study is aggregated to 11 sectors, out of which six are energy sectors, and six regions. Six regions are Kazakhstan, Russia, Belarus, China, EU and Rest of the World. Three sets of scenarios are simulated where carbon tax is priced at US$5, US$10 and US$20 per tCO2. Carbon tax is implemented in the CGE model as ad valorem equivalents. Carbon tax is implemented for all energy sectors and chemicals and heavy manufacturing sectors. Initial findings show macroeconomic effects of carbon tax in Kazakhstan. Preliminary findings allow to identify sectors which would benefit or loss from the implementation of carbon tax in Kazakhstan. It is expected that in all scenarios CO2 emissions will reduce, though magnitude of CO2 emissions reductions is expected to differ.
    Keywords: Kazakhstan, Energy and environmental policy, General equilibrium modeling
    Date: 2016–07–04
  4. By: Basak Bayramoglu; Raja CHAKIR; Anna LUNGARSKA
    Abstract: Freshwater ecosystems have experienced over the last three decades larger declines in biodiversity than terrestrial and marine ecosystems. This is due to alterations of habitat, water pollution problems, overexploitation of water resources, exotic invasions, water extraction and flow regulation (Mantyka-Prigel et al., 2014). These human-induced pressures are mainly driven by land use changes. The increased urbanization and development cause the alteration of habitat in rivers. The agricultural sector is at the origin of diffuse pollution problems due to discharges of nitrogen, phosphorus and pesticides in soil and water. Some rivers in France are highly degraded because of these various land uses and their changes. This degradation is represented by a decline in the quality and quantity of water, and by changes in the distribution and structure of aquatic biota for some rivers in France (Oberdorff et al., 2002). This has led us to ask what land uses are at the origin of the spatial heterogeneity of the "health" of water bodies in France, and which public policies are best in improving it. The previous work on France has studied exclusively the effects of land uses on the chemical status of water quality. In this work, we close the gap in the literature by analyzing how alternative land uses affect freshwater ecosystems in France. In line with Hascic and Wu (2006), we estimate the effects of alternative land uses on a selected indicator of the ecological status of surface water, namely a fish-based index. As the effect of land uses on fish-based index is conditional to the location of water body and to its pedoclimatic conditions, it is important to take into account the spatial heterogeneity of the fish-based index in the econometric strategy. To this end, unlike the previous literature, we estimate a spatial econometric model to explain the FBI score registered for various monitoring points observed between 2001 and 2013 in France. We discuss the implications of the results for the design of agricultural and land use policies that improve the health of freshwater ecosystems. We first expect that different land uses (agriculture, forest, grassland, urban and other) and biophysical variables have a significant effect on the spatial distribution of the fish-based index. We also expect that the shares of forest and grassland areas in a specific hydrographic sector have a positive impact on the score of the fish-based index, while the shares of agricultural and urban areas have a negative impact. Furthermore, we expect that climatic variables significantly affect the evolution of the fish-based index over time. The findings of this study could be useful for policy makers to adapt land use policies for sustainable freshwater ecosystems.
    Keywords: This is a national-scale, hydrographic sector-level analysis for France, Agricultural issues, Energy and environmental policy
    Date: 2016–07–04
  5. By: Gregor Schwerhoff (Mercator Research Institute on Global Commons and Climate Change (MCC)); Johanna Wehkamp (Mercator Research Institute on Global Commons and Climate Change (MCC) and Technical University of Berlin)
    Abstract: The forest conservation policy instrument REDD+ (Reducing Emissions from Deforestation and Forest Degradation) is designed to compensate governments of tropical countries for their efforts to conserve forests. Food insecure countries that are specialized in agriculture and have weak institutions, are likely to face difficulties to enforce forest conservation. This article explores how far export tariffs on agricultural goods combined with public investments, could be used as a forest conservation policy mix in such contexts. We first show empirically that structural constraints to forest conservation policies are particularly pronounced in one third of countries where REDD+ programs are planned to be rolled out. We then develop a two sector competing land use model with a domestic food producing and an exporting agricultural sector. We show that it is possible to combine export tariffs with public investments such that deforestation decreases, while agricultural production levels and food prices remain constant.
    Keywords: Deforestation, REDD+, Export Tariffs, Public Investments, Two Sector Competing Land Use Model
    JEL: O24 Q17 Q23 Q24 Q56
    Date: 2017–04
  6. By: touitou mohammed
    Abstract: This study analyzes the macroeconomic effects of limiting carbon emissions using computable general equilibrium (CGE) model in the Algerian economy. Doing so, we developed an environmental computable general equilibrium model and investigate carbon tax policy responses in the economy applying exogenously different degrees of carbon tax into the model. Three simulations were carried out using anAlgerian Social Accounting Matrix. A static environmental computable general equilibrium (CGE) model of the Algerian economy is constructed for this study . The model consists of tenindustries, one representative household, three factor production, and rest of the world. The CGE technique is an approach that models the complex interdependent relationships among decentralized actors or agents in an economy by considering the actual outcome to represent a ‘general equilibrium’. Briefly, the technique expresses that the ‘equilibrium’ of an economy is reached when expenditures by consumers exactly exhaust their disposable income, the aggregate value of exports exactly equals import demand, and the cost of pollution is just equal at the marginal social value of damage that it causes. The carbon tax policy illustrates that a 1.52% reduction of carbon emission reduces the nominal GDP by 1.26% and exports by 3.04%; a 2.67% reduction of carbon emission reduces the nominal GDP by 1.92% and exports by 4.86%and a 3.72% reduction of carbon emission reduces the nominal GDP by 3.79% and exports by 6.90%. Imposition of successively higher carbon tax results in increased government revenue from baseline by 23.68%, 50.18% and 76.38% respectively. However, fixed capital investment increased in scenario 1a (1st) by 0.23% but decreased in scenarios 1b (2nd) and 1c (3rd) by 0.35% and 2.03% respectively from the baseline. According to our findings policy-makes should consider initial (1st) carbon tax policy. This policy results in achieving reasonably good environmental impacts without losing the investment, fixed capital investment, investment share of nominal GDP and government revenue.
    Keywords: ALGERIA, Energy and environmental policy, General equilibrium modeling
    Date: 2016–07–04
  7. By: Georg Zachmann
    Abstract: The issue Mitigating greenhouse gas emissions is more difficult in some countries than in others. International emissions trading can help to reduce the overall cost of mitigation and ensure that companies in different countries face the same carbon price. Lower costs and tackling competitiveness concerns can enable higher levels of climate ambition. The Paris Agreement explicitly provides for international emissions trading, but the rules governing trading still need to be determined. In the absence of strict rules, international emissions trading might become a loophole leading to reduced climate ambition. And because of its consensus requirements, the United Nations process is unlikely to lead to comprehensive rules. To fill this gap, the European Union should engage with other nations to determine a set of rules that can serve as a gold standard for emissions trading anywhere in the world. Policy challenge The effort to define rules for international emissions trading faces the strong desire of nation states to develop their own climate policies, which collides with the need for tradable units in one country to be equivalent to tradable units in another country. To overcome this dilemma we propose a club of carbon-buying countries that would regulate only imported mitigation outcomes. We propose that private parties would be able, if permitted by the participating governments, to transfer any type of privately tradable emissions reduction unit across borders. But they would also be liable if the foreign units do not represent sufficient mitigation in the selling county. To bridge the period before final settlement, private parties would be able to borrow domestic compliance units, based on collateralising a certain amount of foreign units.
    Date: 2017–04
  8. By: Moon , Jin-Young (Korea Institute for International Economic Policy); Song , Jihei (Korea Institute for International Economic Policy); Lee , Seojin (Korea Institute for International Economic Policy)
    Abstract: Korean Abstract: 2015년 9월 개최된 유엔 지속가능정상회의는 재생에너지 활용 확대를 주요 목표로 설정하였으며, 국제사회는 2020년 신기후체제 출범을 앞두고 온실가스 감축목표 이행을 위한 재생에너지 보급을 확대할 것으로 예상된다. 특히 개도국은 경제발전을 가속화하는 동시에 온실가스를 감축하기 위해 재생에너지의 활용을 크게 확대할 예정이다. 재생에너지에 대한 지속적이고 활발한 투자와 재원확보를 위해서는 민간의 참여가 필수적이며 우리나라는 민간기업과 개발금융기관, 국제기구, 공공기관 등과의 다양한 파트너십을 적극적으로 모색하여 효과적인 개도국 재생에너지 사업 추진전략을 수립할 필요가 있다. 본 연구는 우리나라 중점협력국에서의 재생에너지 사업을 확대하기 위한 재원조달 지원방안에 초점을 둔다. 우리나라의 다수 중점협력국이 재생에너지 개발에 적합한 환경조건을 가지고 있음에 주목하고 개도국의 재생에너지 사업에 민간의 참여를 확대하기 위해 제공된 국제 지원 사례를 유형별로 검토한 후, 우리나라의 추진사례를 비교 분석하였다. 분석 결과를 토대로 향후 중점협력국을 대상으로 우리나라의 재생에너지 투자 확대 및 재원조달 지원방안을 제안하였다. 지난 5년간 세계 재생에너지 투자는 점차 선진국에서 개도국으로 이동하고 있다. 이는 에너지 투자의 주요 동인이 되는 현지 에너지 수요와 제도적 기반환경이 중국과 인도, 남아공, 브라질을 중심으로 하는 개도국에서 보다 우호적으로 조성되고 있기 때문이다. 이들 국가는 한편 지난 5년 동안 재생에너지 원자재 R&D 및 정부의 제도적 지원을 통해 재생에너지 시장을 크게 확대했다는 공통점을 갖는다. IRENA의 태양에너지 및 풍력, 지열에너지 잠재력 평가에 따르면 캄보디아와 방글라데시, 파라과이를 제외한 우리나라의 중점협력국 대부분이 두 개 이상의 재생에너지원에 상당한 잠재력을 가진다. 그러나 우리나라 중점협력국 다수는 높은 개발 잠재력에도 불구하고 제도, 시장 성숙도, 인식도 등의 기반환경 부재로 인해 충분한 개발을 이루지 못하고 있다. 베트남, 인도네시아 등의 중점협력국은 현재 법규제, 시장, 인식도 등의 기반환경을 개선하는 과정에 있으며, 따라서 장기적인 시각에서 볼 때 이들 국가에 대해 재생에너지의 활용과 개발 및 투자가 크게 확대될 것으로 예상된다. (후략). English Abstract: At the United Nations Sustainable Development Summit 2015, the Member States unanimously adopted seventeen Sustainable Development Goals. Among them, SDG 7 calls for substantial increase of renewable energy use. In addition, under the UN Framework Convention for Climate Change, individual countries - developed and developing alike – will work to further encourage and disseminate the use of renewable energy in order to meet their commitment on greenhouse gas reduction. Especially for developing countries, renewable energy development will become a key for sustainable growth for they now face a dual challenge of pursuing economic development while reducing greenhouse gas emission. Since participation from various stakeholder is imperative for sustained yet sizable investment, Korea must seek a proactive strategy in pursuing renewable energy projects in developing countries. In doing so, collaborating with various partners, especially the private sector, is extremely important. This study focuses on mobilizing private sector resource for renewable energy projects in Korea’s priority partner countries. While a number of Korea’s priority partners possess considerable potential in renewable energy development, the lack of institutions, market and awareness have hindered development. The study highlights the fact that renewable energy investment is shifting towards the global South and that the main cause of such transition is the favorable regulatory and institutional environment along with significant demand. In several emerging economies with the highest amount of renewable investment - namely, China, India, South Africa and Brazil - such transition was coupled with governments’ support for technology R&D and subsidies. On the other hand, Vietnam and Indonesia are in the process of actively developing a more conducive environment. That is, laws and regulations, market readiness and awareness regarding renewable energy are being developed. Therefore, we expect rapid progress in relevant investment, development and deployment in these countries in terms of renewable energy in the near future. (The rest omitted).
    Keywords: Economic Cooperation; Energy Industry; Renewable Energy; ODA; International Cooperation; Sustainable Development
    Date: 2015–12–30
  9. By: Jin-Wei Wang; Hua Liao; Bao-Jun Tang; Ruo-Yu Ke; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology)
    Abstract: The contribution of non-metallic sector to global CO2 emissions is increasing. However, there are very few studies on non-metallic sector CO2 emissions from international comparative perspective. This paper proposes an integrated model employing LMDI (Logarithmic Mean Divisia Index) decomposition technique and TOPSIS (the Technique for Order Preference by Similarity to Ideal Solution) method to contribute to the existing literature by filling the gap that the drivers of aggregate and national level non-metallic sector CO2 emissions and its impacts on CO2 emissions reduction have not been estimated by relevant models. First, we analyze drivers of non-metallic sector CO2 emissions in BRIC countries and G7 countries using LMDI decomposition method. Second, we evaluate the low-carbon development of non-metallic sector in the 11 major economies from a comprehensive viewpoint of main drivers using TOPSIS assessment model. Finally, based on the results of the model, this paper presents some implications for the non-metallic sector CO2 emissions reduction and low-carbon development.
    Keywords: CO2 emissions; Non-metallic sector; Cement; Logarithmic mean divisia index decomposition; WIOD database
    JEL: Q54 Q40
    Date: 2017–03–01
  10. By: Sam Fankhauser; Frank Jotzo
    Abstract: Energy is needed for economic growth, and access to cheap, reliable energy is an essential development objective. However, in the future access to fossil fuel-based energy will need to be constrained because of climate change. This paper reviews the implications of a transition to low-carbon energy for economic growth and development in current low-income countries. Historically, most incremental energy demand has been met through fossil fuels but in the future that energy will have to be low-carbon and ultimately zero-carbon. Decarbonisation thus needs to happen in all countries – albeit at varying speeds, depending on national circumstances. The authors set out findings on trajectories for energy intensity and emissions intensity of economic growth, explore pathways to accelerate decarbonisation, review the theoretical and empirical literature on economic costs and co-benefits of energy decarbonisation, and assess analytical approaches. Evidence from the literature, the authors find, suggests that it makes sense for developing countries to start decarbonising their energy systems early, and they discuss 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.
    Date: 2017–03
  11. By: Wei Jin (School of Economics, UNSW Business School, UNSW); Alan Woodland (School of Economics, UNSW Business School, UNSW)
    Abstract: This paper investigates a problem of optimal growth with resource exhaustibility and pollution externality, based on a unified framework that explicitly considers augmentable man-made capital, exhaustible resource reserves, and accumulative environmental pollutants as three stock variables for optimal control analysis. Characterizations of the social optimum show that for any given man-made capital and resource reserves, resource extraction flows generated in optimal growth with both resource exhaustibility and pollution externality are smaller than those with only resource exhaustibility, and taking account of pollution externality resulting from resource extraction reduces the growth rate of consumption if man-made capital and natural resources are complements in final goods production. Existence, uniqueness and comparative statics of the steady state are analyzed. Conditions for transitional dynamics stability of optimal growth with resource exhaustibility and pollution externality are established. Expositions are made on whether allocations in a market equilibrium are consistent with the social optimum outcomes.
    Keywords: Sustainability; Economic Growth; Exhaustible Resources; Pollution Externality; Environmental Damage; Optimal Control Problems.
    JEL: Q54 H23 Q43 Q32 O13 O44 C61
    Date: 2017–03
  12. By: Gabriele Standardi (FEEM and CMCC); Yiyong Cai (CSIRO and CAMA, Australian National University); Sonia Yeh (Chalmers University of Technology)
    Abstract: Model differences in technological and geographical scales are common, but their contributions to uncertainties have not been systematically quantified in the climate policy literature. This paper carries out a systematic assessment on the sensitivity of Computable General Equilibrium models to technological and geographical scales in evaluating the economic impacts of carbon mitigation policies. Taking Italy as an example, we find that the estimation for carbon price and the economic cost of a de-carbonization pathway by means of a model with technological and regional details can be lower than a model without such details by up to 40%. Additionally, the effect of representing regional details appears to be far more important than the effect of representing the details of electricity technology in both the estimated carbon prices and the estimated economic impacts. Our results for Italy highlight the importance of modeling uncertainties of these two key assumptions, which should be appropriately acknowledged when applying CGE models for policy impact assessment. Our conclusions can be generalized to different countries and policy scenarios not in terms of absolute numbers but in terms of economic explanations. In particular, intra-national trade and the sub-national sectoral/technological specialization are important variables for understanding the economic dynamics behind these outcomes.
    Keywords: Computable General Equilibrium, Carbon Mitigation Policy, Sensitivity, Technology, Sub-national regions
    JEL: C68 Q5 Q55
    Date: 2017–04
  13. By: Marcelo Arbex (Department of Economics, University of Windsor); Christian Trudeau (Department of Economics, University of Windsor)
    Abstract: Abstract We model a federation of two heterogeneous jurisdictions where agents value consumption vs. nature differently. Consumption obtained through pollution-inducing production also generates a negative externality on neighbors. We show that even with a decentralized policy we can obtain first-best efficiency by choosing a combination of pollution taxes in both regions and lump-sum transfers. Moreover, we show that optimal pollution taxes are determined only by the externality parameters, independent of agents' preferences for consumption and nature.
    Keywords: Externalities, environmental preferences, optimal taxation.
    JEL: D62 H23 Q53 Q58
    Date: 2017–04
  14. By: Leszek Kasek; Jakub Boratyński; Leszek Kąsek
    Abstract: Oil prices on global markets have plunged from US$115 per barrel in mid-June of 2014 to US$48 at end-January 2015, and around US$30 in January 2016. Oil prices that remain low over the long-term would give a positive boost to the global economy, but the effects will vary across countries. While net oil (fossil fuel) importers are expected to win (Europe, Japan, China, India), net oil exporters (OPEC countries, EFTA, Russia, Canada) are set to lose. However, in the EU, with carbon emission constraints in place, the possible benefits for oil users will be restricted because of climate regulations. This paper quantifies the economic effects of lower fossil fuel prices in the 2020 time horizon, modeled as a supply shock, and emphasizes their interaction with EU climate policy. The impact assessment of the oil price shock was conducted using a multi-county, multi-sector computable general equilibrium (CGE) model, PLACE, maintained by the Center for Climate Policy Analysis (CCPA) in Warsaw. The effects of a permanent 60 percent oil price shock are assessed against a baseline scenario through 2020 based on the IEA 2012 World Energy Outlook assuming a high oil price scenario of US$118 in 2015 and US$128 in 2020 (both in 2010 constant prices) and correlated price changes of coal (by 50 percent), and natural gas (by 30 percent). Model simulations show that, first, oil exporters will suffer substantial double-digit welfare losses through 2020 due to significant deterioration in their terms of trade. Second, the EU, as a large oil importer, will benefit significantly from lower oil prices, with the New Member States being relatively better off, as a consequence of their relatively high energy intensity. Third, if the assumed permanent oil price shock occurs at half the level of the headline 60 percent scenario (proxying for US dollar appreciation or reflecting a rebound in oil prices from their early 2015 levels through 2020), welfare effects will be smaller and less than proportional for most countries. Finally, in the EU, the existing emissions cap constrain the use of cheaper fossil fuels and limits the welfare increase by about 0.5 percentage points.
    Keywords: EU countries and key global regions, Energy and environmental policy, General equilibrium modeling
    Date: 2016–07–04
  15. By: Gisela Campillo; Michael Mullan; Lola Vallejo
    Abstract: Developing countries are disproportionately affected by the rising trend of losses from climate-related extreme events. These losses are projected to continue to increase in future, driven by climate change and the accumulation of people and assets in high-risk areas. Effective climate change policies are needed to reduce the accumulation of risk, combined with instruments and tools to help retain, share or transfer financial losses if an extreme event occurs. These tools and instruments, collectively known as financial protection, can help people cope with the impacts of climate-related disasters, reduce costs of recovery and reconstruction, and encourage risk reduction. Linking financial protection and climate adaptation in development planning and policy has the potential to increase the resilience of affected communities. This paper uses case studies of Colombia and Senegal to examine how countries are using financial protection as part of their approaches to managing climate risks. The paper identifies emerging
    Keywords: adaptation, climate change, insurance, risk management
    JEL: F35 G22 H84 O19 Q54
    Date: 2017–04–07
  16. By: Hao Chen; Bao-Jun Tang; Hua Liao; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology)
    Abstract: The negative externalities apart from carbon emissions are often neglected in most power generation planning models, which will affect the human health, biodiversity, crop yield and land use greatly. To achieve a sustainable development of China's power industry, this paper develops a deterministic linear programming model with consideration of the non-carbon externalities. This model has been applied for the case study of China for the period from 2015 to 2030, through which some interesting results have been drawn. Firstly, most of the new capacity additions are from the non-fossil fuel power plants in this planning horizon, which account for 84% of the total new capacity additions. Secondly, the power generation priority would better be given to the non-fossil fuel power plants in this horizon under the cost-effectiveness criteria. Thirdly, the minimum total cost of China's power planning is 34.48 trillion yuan, which equals to 2% of China's GDP during the planning horizon. Finally, neglecting of non-carbon externalities does have a significant influence on the power planning results, which will lead to a higher power generation share of technology with bigger negative externalities.
    Keywords: Power planning; Investing strategy; Operating strategy; Externalities; Linear programming
    JEL: Q54 Q40
    Date: 2016–10–02
  17. By: Francesco Lamperti (Université Panthéon-Sorbonne - Paris 1 (UP1)); Giovanni Dosi (Laboratory of Economics and Management); Mauro Napoletano (Observatoire français des conjonctures économiques); Andrea Roventini (Laboratory of Economics and Management); Sandro Sapio (Universita degli studi di Napoli "Parthenope" [Napoli])
    Abstract: In this paperwe 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 lead 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 much larger than those estimated through standard IAMs. 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 model; Integrated assessment; Macroeconomic dynamics; Climate damages
    JEL: C63 Q40 Q50 Q54
    Date: 2017–04
  18. By: Quande Qin; Xin Li; Li Li; Wei Zhen; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology)
    Abstract: Improving energy efficiency has been recognized as the most effective way to reduce the greenhouse effect and achieve sustainable development. From the perspective of air emissions, this paper adopts data envelopment analysis approach to evaluate the energy efficiency in China's coastal areas over the period of 2000-2012. Carbon dioxide, sulfur dioxide and nitrogen oxide are treated as undesirable outputs of energy consumptions. The proposed global Epsilon-based measure is used to estimate the static energy efficiency with an annual cross-section of data. The weights of the three undesirable outputs are determined according to their treatment costs. A global Malmquist-Luenberger productivity index based on directional distance function is employed to dynamically evaluate the energy efficiency. The results indicate the following in China's coastal areas: 1) the level of economic development is positively related to energy efficiency scores; 2) energy efficiency scores decrease when considering undesirable outputs except Beijing and Hainan; 3) the Circum-Bohai Sea Economic Region greatly improved energy efficiency and has great potential of air emission; 4) the annual growth rate of Malmquist-Luenberger productivity index change is overestimated; 5) energy efficiency improvement is mainly driven by technological improvement, and scale efficiency and management level are the main obstacles.
    Keywords: Energy efficiency; Data envelopment analysis; China's Coastal areas; Air emissions
    JEL: Q54 Q40
    Date: 2017–01–01
  19. By: Anton Orlov
    Abstract: COP21 meeting in Paris ended up with a global climate (non-binding) agreement, which proposes a very ambiguous, if not unrealistic, target of 2 °C. Among other countries, Russia proposed a reduction in GHG emissions. Russia’s pledge submitted to the UN is a 25-30% reduction in GHG emissions by 2030 compared to 1990 (Carbon Brief , 2015). At present, Russia is one of the largest producers of GHG emissions: Russia’s share in total GHG emissions accounted approximately for 5% in 2012 (WRI , 2012). Recently, a few publications address economy-wide effects from climate and energy policy in Russia (e.g., Heyndrickx et al., 2012). Yet their analyses are based on single-country models, which are unable to depict the response of other economies. Moreover, those studies do not show how the Russian economy could be affected, when other countries implement stricter climate policies. This study aims to fill this knowledge gap. From an economic point of view, what matter is overall welfare costs arising from climate policy. Therefore, many CGE studies typically focus on welfare effects from climate policy. But competitiveness, sectoral effects, and income distribution effects are also vital to policy-makers. It also should be noted that, according to results from CGE models, welfare costs of climate policy are typically moderate. In this study, we focus on competiveness and sectoral effects from climate policy. Therefore, the main objective of this paper is to quantify the sectoral effects resulting from a stricter climate policy in Russia and the rest of the word (RoW). Our analysis is based on a dynamic multi-region multi-sector CGE model, GRACE (Aaheim and Rive , 2009). We modify the core version of the model by disaggregating the electricity generation sector into seven sub-sectors: coal-fired, oil-fired, gas-fired, nuclear, hydro, bioenergy, and renewables. The model is calibrated around Version 9 of the GTAP database. We consider the following countries/regions: Russia, FSU, EU, Asia, and RoW. Two main experiments are carried out: In the first experiment, we implement climate policy in all regions excluding Russia, and in the second experiment, climate policies are implemented in all regions and Russia. The core simulations are supplemented by several sensitivity analyses to investigate the robustness of results with respect to key parameters. The rest of the paper is organized as follows. Section 2 provides an informal description of the model. Section 3 presents the results and discussion. Section 4 concludes. a stricter Russia's climate policy encourages of development of less energy-intensive sector. A removal of subsidies on domestic energy consumption results in energy efficiency improvement and a reduction in GHG emissions.
    Keywords: Russia, General equilibrium modeling, Developing countries
    Date: 2016–07–04
  20. By: Gabriele Standardi; Yiyong Cai; Sonia Yeh
    Abstract: This paper carries out a systematic assessment on the sensitivity of Computable General Equilibrium models to technological and geographical scales in evaluating the economic impacts of carbon mitigation policies. We start with a basic version of a global CGE model and database, which considers Italy as one single economic unit and has one technology in the electricity sector. We then disaggregate the electricity sector into a bundle of various generation technologies, and split Italy into 20 sub-national regions to create more spatially disaggregated versions of the model. The comparison across different model specifications enables us to quantify the importance of technological and regional disaggregation in response to a given policy by carefully laying out the causal inferences that drive the differences of results, and quantitatively assessing the impacts on the results within the realm of the climate policies that we examined in this study. Taking Italy as an example, we find that the estimation for carbon price and economic cost of a de-carbonization pathway by a model with technological and regional details can be lower than a model without such details by up to 40%. Additionally, the effect of representing regional details appears to be several times more important than the effect of representing the details of electricity technology in both the estimated carbon prices and the estimated impacts on electricity production. Our results for Italy highlight the importance of modeling uncertainties of these two key assumptions, which should be appropriately acknowledged when applying CGE models for policy impact assessment. Our conclusions can be generalized to different countries and policy scenarios not in terms of magnitudes of results but in terms of economic explanation. In particular, intra-national trade and the sub-national sectoral/technological specialization are important variables to understand the economic dynamics behind these outcomes.
    Keywords: Italy, General equilibrium modeling, Energy and environmental policy
    Date: 2016–07–04
  21. By: Collins, Matthew; Curtis, John
    Abstract: Improving the energy efficiency of residential dwellings is seen by policy-makers as an important contributor to the mitigation of climate change, a topic of ever increasing interest. Many countries have put in place policies aimed at stimulating the adoption of energy efficiency retrofit measures in private households. These policies generally focus on reducing costs to home owners, which in turn increases the net benefit of retrofitting, making a retrofit more attractive. We examine the drivers of retrofitting from an information point of view, looking mainly at how expected gross benefits can be increased as a means of inducing retrofitting activities. Using survey data, we examine how perceived effects of retrofitting impact on the likelihood that a home owner possesses an expressed interest in engaging in certain retrofit measures. We find the existence of information asymmetries in many cases between those who have and have not engaged in retrofit measures, while asymmetries are present in almost all instances between those who possess an expressed interest in retrofitting and those who do not. The most effective information that can be used to bridge this asymmetry and could lead to a greater interest in retrofitting among home owners are centred around energy costs and comfort. Perceived impacts of retrofitting on occupant health, property value and mould growth are not found to be significant drivers of interest in retrofitting.
    Date: 2017–04
  22. By: Sudarshan Chalise; Dr Athula Naranpanawa
    Abstract: Despite the growing body of literature on the economic impact of climate change, quantification of climate-change adaptation practices is limited. Therefore, this paper investigates the feasibility of crop land re-allocation as an adaptation strategy to minimise the economy-wide costs of climate change on agriculture in Nepal by developing a multi-household Computable General Equilibrium (CGE) model. Nepal makes an interesting case study as it is one of the most vulnerable agricultural economies within South Asia. Top-down CGE models are often used in economy-wide investigations because they enable researchers to evaluate the overall impact of climate change, including income distribution and employment. Operating at the micro-level, individual farmers and households in developing countries make most of the land-use decisions to adapt to the threats of climate change. Therefore, this paper attempts to map these decisions by using a simple model designed specifically for the Nepalese economy that modifies the ORANI-G generic CGE model (Dixon et al, 1982). Specifically, the model modifies the widely assumed “fixed land supply for a given industry” by allowing farmers to supply land to crops that are less affected by climate change subject to any agronomic constraints. Using Constant Elasticity of Transformation (CET) functions to model the allocation of land allows one to recognise the ease of switching from one crop to another based on their agronomic constraints. For the paper, a nested set of CETs with different transformation elasticities is developed and tested. The sensitivity of the CET values is analysed and a framework of beneficial practices in land re-allocation is recommended. The results suggest that, in the long run, farmers in Nepal tend to allocate land to crops that are comparatively less impacted by climate change, such as paddy, thereby minimizing the economy-wide impacts of climate change. Furthermore, re-allocating land from crops that are highly impacted by climate change to those that are not tends to reduce the income disparity among different household groups by significantly moderating the income losses of rural marginal farmers. Therefore, it is suggested that policy makers in Nepal should prioritise schemes such as providing climate-smart paddy varieties (i.e., those that are resistant to heat, drought and floods) to farmers, subsidising fertilizers, improving agronomic practices, and educating farmers to switch from crops that are highly impacted by climate change to those that are not, such as paddy.
    Keywords: Nepal, General equilibrium modeling, Forecasting and projection methods
    Date: 2016–07–04
  23. By: Ngo, Quang Thanh
    Abstract: This study examined farmers’ adaptive measures to climate change induced natural shocks through past climate experiences in the Mekong River Delta (Vietnam) from a data set of 330 farmers. Seemingly unrelated regression model was used to identify the determinants of farmers’ adaptive measures. Results showed that male household head, education of the household head, marital status of the household head, production assets, firm size, availability of credit, access to market, temperature and rainfall had significant impacts on choices of adaptation. Results also indicated that past climate experiences was the most important determinant of adaptive measures. Policy messages enhanced access to credit, to markets, and created awareness on climate change. Other policy options could also be suggested, including: strengthening education level of farmers, facilitating cheap technologies, spurring irrigation investment through public - private partner, and supporting the land reform such as farmers’ cooperation in large-scale production.
    Keywords: Climate change induced natural shocks, adaptative measures, past climate experiences, Mekong River Delta
    JEL: C31 Q12 Q54
    Date: 2016–04–16
  24. By: Ke Wang; Jieming Zhang; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology)
    Abstract: The trend toward a more fiercely competitive and strictly environmentally regulated electricity market in several countries, including China has led to efforts by both industry and government to develop advanced performance evaluation models that adapt to new evaluation requirements. Traditional operational and environmental efficiency measures do not fully consider the influence of market competition and environmental regulations and, thus, are not sufficient for the thermal power industry to evaluate its operational performance with respect to specific marketing goals (operational effectiveness) and its environmental performance with respect to specific emissions reduction targets (environmental effectiveness). As a complement to an operational efficiency measure, an operational effectiveness measure not only reflects the capacity of an electricity production system to increase its electricity generation through the improvement of operational efficiency, but it also reflects the system¡¯s capability to adjust its electricity generation activities to match electricity demand. In addition, as a complement to an environmental efficiency measure, an environmental effectiveness measure not only reflects the capacity of an electricity production system to decrease its pollutant emissions through the improvement of environmental efficiency, but it also reflects the system¡¯s capability to adjust its emissions abatement activities to fulfill environmental regulations. Furthermore, an environmental effectiveness measure helps the government regulator to verify the rationality of its emissions reduction targets assigned to the thermal power industry. Several newly developed effectiveness measurements based on data envelopment analysis (DEA) were utilized in this study to evaluate the operational and environmental performance of the thermal power industry in China during 2006-2013. Both efficiency and effectiveness were evaluated from the three perspectives of operational, environmental, and joint adjustments to each electricity production system. The operational and environmental performance changes over time were also captured through an effectiveness measure based on the global Malmquist productivity index. Our empirical results indicated that the performance of China¡¯s thermal power industry experienced significant progress during the study period and that policies regarding the development and regulation of the thermal power industry yielded the expected effects. However, the emissions reduction targets assigned to China¡¯s thermal power industry are loose and conservative.
    Keywords: Efficiency; Environmental effectiveness; Joint performance; Operational effectiveness
    JEL: Q54 Q40
    Date: 2017–01–03
  25. By: Christopher Boyce (University of Stirling, Stirling Management School, Economics Divisio); Mikolaj Czajkowski (University of Warsaw, Department of Economics); Nick Hanley (School of Geography and Sustainable Development, University of St. Andrews)
    Abstract: In this paper, we undertake the first examination of the effects of personality on individual economic choices over public environmental goods, using a stated preference approach. Based on three data sets from three separate choice modelling studies, we examine the effects of personality on preferences for the status quo, for changes in environmental quality, and over the costs of investing in environmental improvement. Using a hybrid choice framework, we show that incorporating personality research into economic models can provide valuable behavioural insights, enriching explanations of why the demand for environmental goods varies across people.
    Keywords: personality, preference heterogeneity, hybrid choice models, stated preferences, choice models
    JEL: C35 D03 D12 D61 Q25 Q51
    Date: 2017–03
  26. By: Amsalu Woldie Yalew
    Abstract: We assessed the economy-wide impacts of climate change on Ethiopian economy. We coupled global gridded crop model results with CGE model. The results of two crop simulation models were fed into CGE model as shocks to total factor productivity in grain and livestock producing agricultural activities in Ethiopia. We found that the macroeconomic, sectoral, and households’ welfare effects are non-negligible. Small urban residents will relatively burnt the welfare burden compared to rural households (which produce and consume majority of their produce) and households in big urban area (which may have higher access to imported food, and the share of food expenditure is low). Impacts on overall GDP may reach up to 7%. Exports will decline. The import composition moves from non-agricultural to agricultural commodities. Agricultural activities GDP is hit hard by climate change compared to industrial and service activities. Within agricultural activities, grain and livestock activities on which the shock was introduced are those highly affected. There are also impacts on agricultural activities even if climate change impacts were not imposed directly. This calls for proactive adaptation in agriculture in the country. We pursued Structural approach which is an interdisciplinary approach, to assess the economy-wide impacts of climate change. First, the crop yield projections simulated by two Global Gridded Crop Models (GGCMs) were used to obtain the changes in yields overtime. Then, these yields changes, were imposed as shocks to total factor productivity parameters of agricultural activities in the static CGE model. The CGE results were analyzed at macroeconomic (GDP, Exports, Imports, Government Savings), Sectoral (Agricultural, Industrial and Services output), and households (Rural and Urban) level. The preliminary results show that the macroeconomic, sectoral output, and households’ welfare effects of climate change in Ethiopia are non-negligible. The impacts on GDP may reach up to 7%. The impacts on households’ welfare varies between -2& to -11% depending on the model and location of households. Imports of non-agricultural goods declines will that of agriculture may increase. As expected agriculture will bear the highest burden.
    Keywords: Ethiopia, Developing countries, General equilibrium modeling
    Date: 2016–07–04
  27. By: Can Askan Mavi (PSE - Paris School of Economics)
    Abstract: This article aims to show how a market exposed to catastrophic events finds the equilibrium level of adaptation and mitigation policies through R&D policy, with respect to different levels of Poisson probability of catastrophe. We study the effect of pollution tax on long-run growth rate and the implications of catastrophe probability on this effect. Our results suggest that economy increases its R&D level with a higher catastrophe probability only if penalty rate due to an abrupt event is sufficiently high. We also show that pollution tax could increase the long-run growth. Besides, the catastrophe probability increases the amplitude of this positive effect if penalty rate is high enough. The market makes adaptation much more than mitigation with a higher catastrophe probability if total productivity of R&D is higher than cleanliness of innovations for intermediate goods. Lastly, we show that pollution growth could be higher with less polluting inputs, which we call a Jevons type paradox.
    Keywords: Adaptation, Occurence Hazard, Endogenous Technological Change,Abrupt damage,Mitigation
    Date: 2017–02–03
  28. By: Pyddoke , Roger (VTI); Norheim, Bård (Urbanet Analyse); Betanzo , Mari Fossheim (Urbanet Analyse)
    Abstract: Growing populations and car traffic in cities pose challenges to city planners in the form of increased congestion on roads and demand for parking, crowding in public transport and more car traffic and may also affect safety and comfort in infrastructure for cycling. Current Scandinavian transport planning models do not handle these factors and solutions currently appear distant as good data is largely lacking. This paper reports tests with the HUT-model using simplified representations of these dimensions, intended for use in strategic transport planning with focus on cities applied to the city of Uppsala. The model also estimates costs for investment and operation of infrastructure, public transport and social costs for environmental effects and public funds. The tests suggest that these dimensions may have significant effects on transport demand and hence on transport planning. The results indicate that higher parking fees and more central location of new housing may be effective in reducing car traffic and increasing the mode shares of walking, cycling and public transport in Uppsala. Even stronger effects are reported for a package of instruments. Consequently, public costs for these policies are estimated to be about 25 percent lower than for the reference scenario. In contrast increases in supply, lower charges, or concentration of the capacity to bus trunk lines with increased speeds have smaller effects on mode shares. Increased supply and lower charges are costly to the public purse, whereas the trunk line policy has somewhat lower costs. The central conclusion is that results appear to be plausible and the model useful to planners.
    Keywords: Demand model; Transport; Policy instrument; Cost; Sustainable; Urban; Land use; Parking; Public transport fare; Frequency; Trunk bus; Cycling
    JEL: R14 R41 R48 R52
    Date: 2017–04–10
  29. By: Chen, Xi; Zhang, Xiaobo; Zhang, Xin
    Abstract: While there is a large body of literature on the negative health effects of air pollution, there is much less written about its effects on cognitive performance for the whole population. This paper studies the effects of contemporaneous and cumulative exposure to air pollution on cognitive performance based on a nationally representative survey in China. By merging a longitudinal sample at the individual level with local air-quality data according to the exact dates and counties of interviews, we find that contemporaneous and cumulative exposure to air pollution impedes both verbal and math scores of survey subjects. Interestingly, the negative effect is stronger for men than for women. Specifically, the gender difference is more salient among the old and less educated in both verbal and math tests.
    Keywords: CHINA; EAST ASIA; ASIA, gender; pollution; air pollution, cognitive performance; gender difference; human capital, I24 Education and Inequality; Q53 Air Pollution, Water Pollution, Noise, Hazardous Waste, Solid Waste, Recycling; Q51 Valuation of Environmental Effects; J16 Economics of Gender, Non-labor Discrimination,
    Date: 2017
  30. By: Daniele Crotti (University of Genoa); Elena Maggi (University of Insubria)
    Abstract: In recent years several European municipalities have paired market-based measures with urban distribution centres (UDC) in order to reduce CO2 emissions and make more sustainable urban freight ‡ows. However, UDCs may add reloading costs and extra delivery times which have relevant impact on both urban supply chains and the competition among traditional and UDC-based logistics service providers in terms of service quality and freight rates. By using a duopolistic Hotelling framework, we show that market-based measures and subsidies might be substitutes to enhance the demand for UDC-based providers but public funding can be reduced by improving the quality of UDC services. These results can enlarge the scope for investments in UDC value-adding services in order to decrease private crowding-out effects in the long run.
    Keywords: Urban Distribution Centre, City logistics, Sustainable Urban Transport Policy, Hotelling Spatial Competition Model, Market-Based Measures, Public Subsidy
    JEL: D43 H23 L13 Q58 R41 R48
    Date: 2017–04
  31. By: Giacomo Marangoni (FEEM, CMCC and Politecnico di Milano); Gauthier De Maere (FEEM); Valentina Bosetti (FEEM, CMCC and Bocconi University)
    Abstract: The availability of technology plays a major role in the feasibility and costs of climate policy. Nonetheless, technological change is highly uncertain and capital intensive, requiring risky efforts in research and development of clean energy technologies. In this paper, we introduce a two-track method that makes it possible to maintain the rich set of information produced by climate-economy models while introducing the dimension of uncertainty in innovation ef- forts, without succumbing to computation complexity. In particular, we solve the problem of an optimal R&D portfolio by employing Approximate Dynamic Programming, through multiple runs of an integrated assessment model (IAM) for the purpose of computing the value function, and expert elicitation data to quantify the relevant uncertainties. We exemplify the methodology with the problem of evaluating optimal near-term innovation investment portfolios in four key clean energy technologies (solar, biofuels, bioelectricity and personal electric vehicle batteries), taking into account the uncertainty surrounding the effectiveness of innovation to improve the performance of these technologies. We employ an IAM (WITCH) which has a fairly rich description of the energy technologies and experts’ beliefs on future costs for the above-mentioned technologies. Focusing on Europe and its short-term climate policy commitments, we find that batteries in personal transportation dominate the optimal public R&D portfolio. The resulting ranking across technologies is robust to changes in risk-aversion, R&D budget limitation and assump- tions on crowding out of other investments. These results suggest an important upscaling of R&D efforts compared to the recent past.
    Keywords: Energy, Innovation, Technological Change, Uncertainty, Climate Policy
    JEL: O30 O33 Q40 Q41 Q50 Q55
    Date: 2017–04
  32. By: Nicolas Antheaume (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - UN - Université de Nantes); Jean-Claude Boldrini (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - UN - Université de Nantes)
    Abstract: The simultaneity of economic and environmental benefits is a topic which has been extensively debated for more than two decades. This question is being put back on the front stage with new experiments of transition towards a circular economy, quite often through the use of “Service-Product Systems”. The services provided as a complement to products emphasize the use value of products rather than their trade value. Services, as a substitute to products, tend to dematerialize the economy and decouple economic growth from resource consumption. Although Service-Product Systems aim at combining economic and environmental performance – environmental benefits are often small. We study an experiment which aims at recycling plastic films for market garden producers, in order to return them to their original use. We discuss the issue of the convergence of economic and environmental benefits. The results show that such a convergence is feasible but that it could be hindered by socio-cultural, legal and organizational obstacles when the project will be implemented on a full scale.
    Abstract: La question de la simultanéité des gains économiques et environnementaux fait l’objet de nombreux débats depuis plus de deux décennies. Cette question est réactivée avec les expérimentations de transition vers l’économie circulaire, souvent associée à la notion de « Système Produit – Service ». Les services apportés en complément des produits privilégient la valeur d’usage des biens par rapport à leur valeur d’échange. Les services, en se substituant aux biens, tendent à dématérialiser l’économie et à découpler la croissance économique de la consommation de ressources. Bien que les Systèmes Produit – Service visent souvent une performance économique et environnementale leurs gains environnementaux restent fréquemment modestes. L’étude d’une expérimentation cherchant à recycler à l’identique des films plastiques maraîchers exposera les enjeux de la convergence des gains. Les résultats montrent que cette convergence est possible mais qu’elle pourrait buter sur des obstacles socio-culturels, juridiques ou organisationnels dans la phase de réalisation du projet.
    Keywords: circular economy,eco-efficiency,environmental performance,Product-service systems,Economic performance,économie circulaire,éco-efficience,système produit – service,analyse de cycle de vie,performance environnementale,performance économique,convergence des gains
    Date: 2017–02–07
  33. By: Zhang, Xin; Zhang, Xiaobo; Chen, Xi
    Abstract: Previous studies evaluating the welfare cost of air pollution have not paid much attention to its potential effect on mental health and subjective well-being (SWB). This paper attempts to fill the gap by investigating the impact of air pollution on several key dimensions, including mental health status, depressive symptoms, moment-to-moment happiness, and evaluative happiness. We match a nationwide longitudinal survey in China with local air quality and rich weather conditions according to the exact time and place of survey. By making use of variations in exposure to air pollution for the same individuals over time, we show that air pollution reduces hedonic happiness and increases the rate of depressive symptoms, while life satisfaction has little to do with the immediate air quality. Our results shed light on air pollution as an important contributor to the Easterlin paradox that economic growth may not bring more happiness.
    Keywords: mental health,depression,hedonic happiness,life satisfaction,air pollution,Easterlin paradox
    JEL: I31 Q53 Q51
    Date: 2017
  34. By: Zuzana Smeets Kristkova; Edward Smeets; Hans van Meijl
    Abstract: There are major concerns about the impact of the large scale use of crops for energy generation on land use and food security. The objective of this study is to evaluate the possibilities and limitationsof avoiding these undesirable effects by increasing the productivity of crop and livestock production through investments in R&D in agriculture. An extended version of the Modular Applied GeNeral Equilibrium Tool (MAGNET) is used to model the R&D investments in agriculture to compensate the effects of 15 EJ to 100 EJ biomass supply from woody and grassy energy crop plantations. The costsof agricultural R&D necessary to avoid the expansion of land are estimated at 6 to 64 billion US$ for 15 to 100 EJ, respectively. Food security effects are less costly to compensate, i.e. the food securityimproves if the land use change effects of bioenergy are compensated. The costs of R&D investments are 0.4 to 0.6 $ per GJ biomass from plantations. The required R&D investments are higher inindustrialized countries compared to developing regions, because of the longer time lag between R&D investments and productivity increases in industrialized regions. The impact of agricultural R&Dinvestments in agriculture to avoid land use change in 2030 results in additional positive effects in 2040 and 2050, i.e. agricultural land use decreases and food security improves compared to no bioenergy plantation scenario, because of the time lag effect of R&D investments. We conclude that investments in agriculture R&D are a potentially effective and low-cost strategy to avoid undesirableland use change and food security effects of large scale use of biomass from energy crop plantations, but early planning and timing of bioenergy policies with investments in R&D in agriculture is essential. see paper see paper
    Keywords: The Netherlands, Agriculture, Agricultural issues
    Date: 2016–07–04
  35. By: Magdalena Zachlod-Jelec; Jakub Boratyński
    Abstract: CGE models are popular tools for assessing the impact of economic (climate and energy, specifically) policy on the economy, yet the simulation results are sensitive to parameters assumed by the modeler. However, econometric evidence on those parameters available in the literature is often scarce or ambiguous, as well as there is difficulty in finding results tailored to a specific CGE model (with its specific sectoral and regional disaggregation, nesting structure production functions etc). In practice this makes a choice of parameter values more or less arbitrary, and in fact in many cases the modelers simply follow the perhaps equally arbitrary choices made by other authors. Although such an approach does not imply that simulation results are meaningless, it calls for at least a clear communication of uncertainties to the reader. In the paper we present mean results of simulation of the 2030 emission reduction target for the EU countries together with standard deviations of mean results. We also discuss sources of parameters uncertainty. In order to investigate model parameters uncertainty we conduct systematic sensitivity analysis based on Stroud's (1957) Gaussian quadratures in a static global CGE model. By “systematic” we mean that alternative values of parameters are picked in a systematic way, i.e. they are determined by means of some specific method in order to explore the whole domain of plausible values. Our preliminary findings can be summarized as follows. First, uncertainty of model simulation results driven by the uncertainty in assumed elasticities is quite remarkable with double-digit variation coefficients in many cases. Second, the uncertainty is larger with respect to non-energy parameters than to energy parameters. Finally, there is a clear pattern with mostly the New Member States experiencing relatively high cost of emissions reduction in terms of GDP and consumption loss. In the extreme case of strictly rigid energy mixes (no substitution at an industry level), these costs roughly double.
    Keywords: European Union countries, General equilibrium modeling, Energy and environmental policy
    Date: 2016–07–04
  36. By: Imbert, Enrica; Ladu, Luana; Morone, Piergiuseppe; Quitzow, Rainer
    Abstract: Grand societal challenges call for a transition from a society based on finite fossil resources towards a bio-based economy, based on renewable resources. Such a transition should involve not only the energy sector, but also the manufacturing sector. As acknowledged in the European Bioeconomy Strategy, the promotion of a bioeconomy is dependent on policy efforts across a wide spectrum of policy spheres. In the literature on sustainability transitions, this insight is captured in the increasing interest in the concept of policy mixes or policy strategies for promoting transitions to more sustainable modes of production and consumption. In this paper, we present a comparative analysis of bioeconomy strategies in Germany and Italy with a focus on the bioplastics sector. The paper adds to the existing literature on policy mixes by extending the concept of a policy strategy and applying it for the purpose of the comparative analysis. Moreover, the analysis is linked to the discussion on multi-level systems of governance in the European Union. A key finding is that linkages between the two policy strategies via policy making within the European Union have helped in reinforcing the nascent transition to a bio-based economy in Europe.
    Keywords: policy mixes; policy strategies; bioeconomy; bioplastics
    JEL: O38 Q57
    Date: 2017
  37. By: Amelia Aburn (Victoria University of Wellington, New Zealand); Dennis Wesselbaum (Department of Economics, University of Otago, New Zealand)
    Abstract: This paper adds to the literature on the determinants of international migration. First, we offer a joint analysis of the driving forces of migration capturing year-to-year variations and long-run effects. Second, we analyze the dynamic response of migration to shocks to its determinants. We start by presenting a theoretical model that allows us to model migration as an augmented gravity equation. We then construct a rich panel data set with 16 destination and 198 origin countries between 1980 and 2014. Most importantly, we find that climate change is a more important driver than income and political freedom together. Our results imply that a large time dimension is key to understand the effects of climate change. We then estimate a panel vectorautoregressive model showing that the dynamic response of migration is very different across shocks to different driving forces. Our findings carry implications for national and international immigration policies.
    Keywords: Climate Change, Determinants, Dynamic Effects, International Migration
    JEL: F22 O15 Q54
    Date: 2017–04
  38. By: Rim Berahab
    Abstract: Despite the sustained growth in the bilateral trade observed at the beginning of the Century, Moroccan – Brazilian economic relations are still going through what could be called the ‘shallow’ phase of relations between two middle-income countries.
    Date: 2017–03
  39. By: Nicolas Piluso (CERTOP - Centre d'Etude et de Recherche Travail Organisation Pouvoir - UT2 - Université Toulouse 2 - UPS - Université Paul Sabatier - Toulouse 3 - CNRS - Centre National de la Recherche Scientifique); Edwin Le Héron (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - Université Montesquieu - Bordeaux 4 - CNRS - Centre National de la Recherche Scientifique)
    Abstract: L'objet de cet article est d'analyser les effets conjoncturels d'une politique climatique de taxation des émissions polluantes ainsi que son impact sur l'efficacité des politiques de relance dans le cadre d'analyse d'une économie keynésienne. Les contributions empiriques et théoriques actuelles estiment qu'une taxation a le plus souvent un impact récessif. Par ailleurs, ces travaux montrent que l'efficacité des politiques publiques est entravée par l'exercice de la politique climatique et/ou l'existence d'une contrainte environnementale. Nous montrons ici à l'inverse que la politique climatique de taxation peut exercer, sous certaines conditions, un effet favorable sur la conjoncture et renforcer l'efficacité économique des politiques de relance budgétaire.
    Keywords: Taxe carbone, politique de relance, économie keynésienne.
    Date: 2017–02–03
  40. By: Benyamin Shitovitz (University of Haifa, Department of Economics); Avishay Aiche (Faculty of Industrial Engineering and Management, Technion)
    Keywords: Game theory, Pollution, Core, Pareto Domination
    JEL: C71 C72
  41. By: KONISHI Yoko
    Abstract: What do hair salons and hairdressers provide for their customers? One answer is services and creation of customer satisfaction. Customer satisfaction could depend on factors such as location, price, the skill of the hairdressers, and the overall experience at the hair salon. It is difficult to observe customer satisfaction directly for hair salon owners and researchers, because satisfaction is subjective. However, if the customers like the hair salon or hairdressers and are satisfied with their services, customers would return at a higher frequency and become big spenders. This suggests that we can measure customer satisfaction by investigating what causes them to return. In this study, we apply count process and double hurdle analysis to specify a model of customers' return and purchase behavior. We collected daily records from a hair salon in Japan between 2003 to 2010 (2,046 working days). The hair salon has about 15,000 customers and the daily records contain payments and the hairdresser's names for each customer visit. Using the information, we introduced customer behavioral variables, the hairdresser's skill and how crowded the salon is in addition to demographic variables into our model.
    Date: 2017–03

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