nep-res New Economics Papers
on Resource Economics
Issue of 2010‒12‒04
three papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Do Biofuel Subsidies Reduce Greenhouse Gas Emissions? By R. Quentin Grafton; Tom Kompas; Ngo Van Long
  2. Climate Change, Irrigation and Pests: Examining Heliothis in the Murray Darling Basin By David Adamson
  3. Does Eco-Certification Have Environmental Benefits? Organic Coffee in Costa Rica By Blackman, Allen; Naranjo, Maria A.

  1. By: R. Quentin Grafton; Tom Kompas; Ngo Van Long
    Abstract: Conventional wisdom suggests that subsidising biofuel production will reduce greenhouse gas (GHG) emissions. This paper shows that in many cases, and for a wide range of parameter values, this is not true. Biofuel subsidies can generate supply-side response by fossil fuel producers that accelerates their rate of extraction, even in the case where fossil fuel extraction costs are stock dependent. Thus, policies designed to reduce GHG emissions may, perversely, hasten climate change.
    Date: 2010
  2. By: David Adamson (Risk and Sustainable Management Group, University of Queensland)
    Abstract: Helicoverpa spp. (heliothis) are a major insect pest of cotton, grains and horticulture in the Murray‐ Darling Basin. Climate change is likely to make conditions more favourable for heliothis. This could cause regional comparative advantages in irrigation systems to change as management costs increase and yields decrease. Irrigation in the Murray Darling Basin produces 12 percent of Australia’s total gross value of agricultural production. If producers fail to consider climate change impacts on heliothis they may misallocate resources.Adamson et al. (2007 and 2009) have used a state contingent approach to risk and uncertainty to illustrate how producers could allocate irrigation resources based on climate change impacts on water resources. This is achieved by separating environmental risks and uncertainties into defined states of nature to which the decision makers have a set of defined responses. This approach assumes that the decision makers can achieve optimal allocation of resources as they have perfect knowledge in how they should respond to each state of nature (i.e. producers know how to manage heliothis now). Climate change brings a set of new conditions for which existing state parameters (mean and variance) will alter. Consequently a decision maker will have incomplete information about the state description; and the relationship between state allocable inputs and the associated state dependent output, until they have experienced all possible outcomes. Therefore if producers ignore climate changes to heliothis they may lock in resources that may prove to be unprofitable in the long run. The purpose of this paper is to suggest a framework that could be used for determining climate change impacts of heliothis (i.e. density), illustrate that management costs rise as density increases and how a stochastic function could deal with incomplete knowledge in a state contingent framework.
    Keywords: Murray Darling Basin, Heliothis, Irrigation
    Date: 2010–11
  3. By: Blackman, Allen (Resources for the Future); Naranjo, Maria A.
    Abstract: Eco-certification of coffee, timber and other high-value agricultural commodities is increasingly widespread. In principle, it can improve commodity producers’ environmental performance, even in countries where state regulation is weak. However, evidence needed to evaluate this hypothesis is virtually nonexistent. To help fill this gap, we use detailed farm-level data to analyze the environmental impacts of organic coffee certification in central Costa Rica. We use propensity score matching to control for self-selection bias. We find that organic certification improves coffee growers’ environmental performance. It significantly reduces chemical input use and increases adoption of some environmentally friendly management practices.
    Keywords: certification, coffee, Costa Rica, propensity score matching
    JEL: Q13 Q20 Q56
    Date: 2010–11–22

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