nep-res New Economics Papers
on Resource Economics
Issue of 2012‒10‒20
six papers chosen by
Maximo Rossi
Universidad de la Republica

  1. An analysis of physical and monetary losses of environmental health and natural resources in India By Mani, Muthukumara; Markandya, Anil; Sagar, Aarsi; Strukova, Elena
  2. The Value to the Environmental Movement of the New Literature on the Economics of Happiness By Oswald, Andrew J.
  3. Water Conservation in Irrigated Agriculture: Trends and Challenges in the Face of Emerging Demands By Schaible, Glenn D.; Aillery, Marcel P.
  4. Economics of Biofuels: An Overview of Policies, Impacts and Prospects By Moschini, GianCarlo; Cui, Jingbo; Lapan, Harvey
  5. Green Paradox and Directed Technical Change: The Effects of Subsidies to Clean R&D By Daubanes, Julien; Grimaud, André; Rougé, Luc
  6. How African Agriculture Can Adapt to Climate Change? A Counterfactual Analysis from Ethiopia By Salvatore Di Falco; Marcella Veronesi

  1. By: Mani, Muthukumara; Markandya, Anil; Sagar, Aarsi; Strukova, Elena
    Abstract: This study provides estimates of social and financial costs of environmental damage in India from three pollution damage categories: (i) urban air pollution; (ii) inadequate water supply, poor sanitation, and hygiene; and (iii) indoor air pollution. It also provides estimates based on three natural resource damage categories: (i) agricultural damage from soil salinity, water logging, and soil erosion; (ii) rangeland degradation; and (iii) deforestation. The estimates are based on a combination of Indian data from secondary sources and on the transfer of unit costs of pollution from a range of national and international studies. The study estimates the total cost of environmental degradation in India at about 3.75 trillion rupees (US$80 billion) annually, equivalent to 5.7 percent of gross domestic product in 2009, which is the reference year for most of the damage estimates. Of this total, outdoor air pollution accounts for 1.1 trillion rupees, followed by the cost of indoor air pollution at 0.9 trillion rupees, croplands degradation cost at 0.7 trillion rupees, inadequate water supply and sanitation cost at around at 0.5 trillion rupees, pasture degradation cost at 0.4 trillion rupees, and forest degradation cost at 0.1 trillion rupees.
    Keywords: Health Monitoring&Evaluation,Environmental Economics&Policies,Population Policies,Brown Issues and Health,Climate Change Mitigation and Green House Gases
    Date: 2012–10–01
  2. By: Oswald, Andrew J. (University of Warwick and CAGE UK and IZA Germany)
    Abstract: Many environmentalists have not yet discovered and understood the value to them of a new research literature. That literature is the economics of happiness. It offers a potentially important tool for future policy debate. In particular, this literature offers a defensible way to calculate the costs and benefits of the true happiness value of ‘green’ variables – and to weigh those against the happiness value to people of extra income and consumption. Some of the latest research findings turn out to accord well with environmentalists’ intuitions : green variables seem to have large direct effects on human well-being; society would arguably be better to concentrate more on environmental aims and less on monetary or materialistic ones; greater consumption of things in Western society cannot be expected to make us much happier
    Date: 2012
  3. By: Schaible, Glenn D.; Aillery, Marcel P.
    Abstract: This report relies on fi ndings from several national surveys and current literature to assess water resource use and conservation measures within the U.S. irrigated crop sector. U.S. agriculture accounts for 80-90 percent of the Nation’s consumptive water use (water lost to the environment by evaporation, crop transpiration, or incorporation into products. Expanding water demands to support population and economic growth, environmental flows (water within wetlands, rivers, and groundwater systems needed to maintain natural ecosystems), and energy-sector growth, combined with Native American water-right claims and supply/demand shifts expected with climate change, will present new challenges for agricultural water use and conservation, particularly for the 17 Western States that account for nearly three-quarters of U.S. irrigated agriculture. Despite technological innovations, at least half of U.S. irrigated cropland acreage is still irrigated with less effi-cient, traditional irrigation application systems. Sustainability of irrigated agriculture will depend partly on whether producers adopt more effi cient irrigation production systems that integrate improved onfarm water management practices with effi-cient irrigation application systems.
    Keywords: agricultural water conservation, irrigated agriculture, irrigation effi ciency, water supply and demand, irrigation technologies, water management practices, water conservation policy, Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2012–09–27
  4. By: Moschini, GianCarlo; Cui, Jingbo; Lapan, Harvey
    Abstract: This paper provides an overview of the economics of biofuels. It starts by describing the remarkable growth of the biofuel industry over the last decade, with emphasis on developments in the United States, Brazil and the European Union, and it identifies the driving role played by some critical policies. After a brief discussion of the motivations that are commonly argued in favor of biofuels and biofuel policies, the paper presents an assessment of the impacts of biofuels from the economics perspective. In particular, the paper explains the basic analytics of biofuel mandates, reviews several existing studies that have estimated the economic impacts of biofuels, presents some insights from a specific model, and outlines an appraisal of biofuel policies and the environmental impacts of biofuels. The paper concludes with an examination of several open issues and the future prospects of biofuels.
    Keywords: biodiesel; Biofuel policies; ethanol; Greenhouse gas emissions; mandates.
    JEL: F1 H2 Q2
    Date: 2012–05–24
  5. By: Daubanes, Julien; Grimaud, André; Rougé, Luc
    Abstract: The "green paradox" literature points out that environmental policies which are anticipated to become gradually more stringent over time may induce a more rapid extraction of fossil fuels, thus having a detrimental effect to the environment. The manifestation of such phenomena has been extensively studied in the case of taxes directly applied to the extraction of a polluting non-renewable resource and of subsidies applied to its non-polluting substitutes. This paper examines the effects of subsidies to "clean" R&D activities, aimed to improve the productivity of non-polluting substitutes. We borrow standard assumptions from the directed-technical-change literature to take a full account of the private incentives to perform R&D and of the patterns of complementarity/substitutability between dirty resource and clean non-resource sectors. We show that a gradual increase in relative subsidies to clean R&D activities does not have the adverse green paradox effect, which contradicts an earlier made conjecture. Instead, the presence of several R&D sectors implies arbitrages which give rise to other quite paradoxical results. However substitutable or complementary sectors are, and whatever the induced technological bias is, clean-R&D-support policies always enhance the long-run productivity of the resource and thus result in a less rapid extraction.
    Keywords: Non-renewable resources; Directed technical change; Environmental policy; Green paradox; R&D subsidies
    JEL: O32 O41 Q32
    Date: 2012–08
  6. By: Salvatore Di Falco (London School of Economics and Political Science); Marcella Veronesi (Department of Economics (University of Verona))
    Abstract: We analyse and compare the impact of different adaptation strategies on crop net revenues in the Nile Basin of Ethiopia. We implement a counterfactual analysis, and estimate a multinomial endogenous switching regression model of climate change adaptation and crop net revenues. We combine data from 1,000 farm households with spatial climate data at the farm household level in Ethiopia. We find that adaptation to climate change based upon a combination of strategies -opposed to strategies adopted in isolation- increases farm net revenues. In particular, the combinations of changing crops with water or soil conservation strategies deliver the highest pay off.
    Keywords: adaptation, climate change, endogenous switching, Ethiopia, net revenues
    JEL: Q54 Q56
    Date: 2012–03

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