nep-res New Economics Papers
on Resource Economics
Issue of 2013‒12‒20
six papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Self-protection as a limit to strategic delegation in the context of global pollution problems By Heuson, Clemens
  2. Potential approaches to the management of third-party impacts from groundwater transfers By Skurray, James H.; Pannell, David J.
  3. Clean-development investments : an incentive-compatible CGE modeling framework By Bohringer, Christoph; Rutherford, Thomas F.; Springmannc, Marco
  4. Decarbonising urban transportation By Joseph V. Spadaro; Sérgio H. Faria; Anil Markandya
  5. Global Markets, Global Citizens, and Global Governance in the 21st Century By Nancy Birdsall, Christian Meyer, Alexis Sowa
  6. Economics of supply reliability of irrigation water By Olubode-Awosola, Femi; Paragahawewa, Upananda Herath; Upsdell, Martin; Vattala, Don

  1. By: Heuson, Clemens
    Abstract: This paper analyses the outcome of non-cooperative national efforts in combatting global pollu-tion problems when governments are elected by their citizens. It is well-known that the latter tend to vote governments that are less 'green' than the median voter in order to commit to lower national mitigation efforts, which further increases the inefficiently high amount of global emis-sions. However, the present paper shows that the option of self-protection against environmen-tal damages, which has been invariably neglected in the relevant literature to date, alleviates or even completely offsets such strategic delegation and the related adverse effects. --
    Keywords: strategic delegation,global pollution problems,self-protection,non-cooperative behaviour
    JEL: C72 D72 H41 Q58
    Date: 2013
  2. By: Skurray, James H.; Pannell, David J.
    Abstract: Groundwater extraction can have varied and diffuse effects. Negative external effects may include costs imposed on other groundwater users and on surrounding ecosystems. Environmental damages are commonly not reflected in market transactions. Groundwater transfers have the potential to cause spatial redistribution, concentration, and qualitative transformation of the impacts from pumping. An economically and environmentally sound groundwater transfer scheme would ensure that marginal costs from trades do not exceed marginal benefits, accounting for all third-party impacts, including those of a non-monetary nature as well as delayed effects. This paper proposes a menu of possible management strategies that would help preclude unacceptable impacts by restricting transfers with certain attributes, ideally ensuring that permitted transfers are at least welfare-neutral. Management tools would require that transfers limit or reduce environmental impacts, and provide for the compensation of financial impacts. Three management tools are described. While these tools can limit impacts from a given level of extraction, they cannot substitute for sustainable overall withdrawal limits. Careful implementation of transfer limits and exchange rates, and the strategic use of management area boundaries, may enable a transfer system to restrict negative externalities mainly to monetary costs. Provision for compensation of these costs could be built in to the system.
    Keywords: Water markets, institutions, externalities, wetlands, Australia., Agricultural and Food Policy, Environmental Economics and Policy, Institutional and Behavioral Economics, Land Economics/Use, Political Economy, Public Economics, Resource /Energy Economics and Policy, Q15 Q25 Q28 Q38 Q56 Q57 Q58 R14 R52 H41 H23 H11,
    Date: 2013–11–24
  3. By: Bohringer, Christoph; Rutherford, Thomas F.; Springmannc, Marco
    Abstract: The Clean Development Mechanism established under the Kyoto Protocol allows industrialized Annex I countries to offset part of their domestic emissions by investing in emissions-reduction projects in developing non-Annex I countries. Computable general equilibrium analysis of the Clean Development Mechanism's impacts so far mimics the Clean Development Mechanism as a sector emissions trading scheme, thereby overstating its potential to save climate change mitigation costs. This study develops a novel approach that represents the Clean Development Mechanism more realistically by compensating Clean Development Mechanism implementing sectors for additional abatement cost and by endogenizing Clean Development Mechanism credits as a function of investment. Compared with previous representations, the proposed approach is more consistent in its incentive structure and investment characteristics at the sector level. An empirical application of the new methodology demonstrates that the economy-wide cost savings from the Clean Development Mechanism tend to be lower than suggested by conventional modeling approaches while Clean Development Mechanism implementing sectors do not lose in output.
    Keywords: Climate Change Economics,Climate Change Mitigation and Green House Gases,Energy Production and Transportation,Economic Theory&Research,Environment and Energy Efficiency
    Date: 2013–12–01
  4. By: Joseph V. Spadaro; Sérgio H. Faria; Anil Markandya
    Abstract: The transportation sector is a major contributor to global greenhouse gas emissions, accounting for around one-quarter of current annual emissions. Surface transportation (passenger vehicles, buses, rail, and freight transportation) contributes 75% of total emissions, with the remaining 25% allocated equally between air and water transport. According to the recently released 5th Assessment Report of the IPCC (September 2013), the transportation sector is expected to grow significantly in future years, particularly in rapidly developing countries around the world, and will therefore be one of a few key drivers of increasing global warming. Unless there is a major political effort and consumer willingness to change current energy consumption patterns and travel modes over the next few decades, transport-related emissions are likely to double by 2050 relative to levels observed in 2010. Because of the contribution of transportation to climate change and its impact on urban air quality, a comparative assessment of potential carbon emission reductions and health benefits of reduced particulate matter emissions was undertaken considering several low carbon pathways for development of the urban road transport sector up to 2050. As a result, we conclude that aggressive changes will be needed to scale back future emissions by 20% (or more) compared to present day emissions. These changes will impact vehicle fuel economy (+50%), urban mobility patterns (lower private car demand and greater use of public transportation), choice of alternative fuels (less use of petroleum-based fuels and greater use of biofuels and electrons) and electricity generation mix (greater use of renewables, carbon capture technologies for limiting fossil fuel carbon emissions, and/or nuclear energy). Public acceptance is fundamental to bring about changes in consumer attitudes and behaviour. Given the long lead times required for research, development, demonstration and deployment of new technologies, the time to act is now if we are to limit the global mean surface temperature increase to within 2°C above preindustrial levels.
    Keywords: transportation; biofuels; climate change; low carbon pathways; carbon price; electricity decarbonisation; health impacts; DALY.
    Date: 2013–11
  5. By: Nancy Birdsall, Christian Meyer, Alexis Sowa
    Abstract: The politics, rules, and institutions of cooperation among nations have not kept up with the demands from global citizens for changes in the global political order. Whether norms and policies can make the global politics of managing the global economy more effective, more legitimate, and more responsive to the needs of the bottom half of the world’s population, for whom life remains harsh, remains to be seen. There is some cause for optimism, however: citizens everywhere are becoming more aware of and active in seeking changes in the global norms and rules that could make the global system and the global economy fairer—in processes if not outcomes—and less environmentally harmful.
    Keywords: global economic governance, role of citizens, citizen activism, public opinion, global middle class, international financial institutions, World Bank, IMF, United Nations, income inequality, climate change, global public goods, political legitimacy
    JEL: F02 D31 D63 H87
    Date: 2013–06
  6. By: Olubode-Awosola, Femi; Paragahawewa, Upananda Herath; Upsdell, Martin; Vattala, Don
    Abstract: In this study, we have assessed the economic impact of potential increase in supply reliability of irrigation water in the Hinds Plains Area in the Ashburton district. The Hinds catchment has a number of irrigation schemes namely, Rangitata Diversion Race (provides water for Mayfield Hinds and Valetta Schemes), Barrhill Chertsey, Eiffelton and Lynford Schemes. All these schemes have varying supply reliability which ranges from 40% to 80% approximately. First, we estimated the relationship between water availability and pasture growth using experimental data. We then employed this relationship to estimate the potential incremental pasture growth with assumed increased supply reliability (95%) at farm level. We estimated the farm level benefit of increased pasture production in terms of saved costs in supplementary feed. These farm level estimates were used to assess the catchment level farm income gain. The catchment level income gain was then employed to assess the regional level economic gain (GDP and employment) by the socio-accounting matrix input-output model (SAMI-O) simulation. Income gain at catchment level is estimated to vary from $16 to $17million. This implies an additional gain in regional level income (GDP) of $85 to $91million and additional employment of 137 FTE to 207 FTE. The study indicates the importance of an increase in irrigation efficiency at farm level for the local and regional economy and also discusses the potential environmental impacts of increase irrigation efficiency at catchment level.
    Keywords: water, supply reliability, SAMI-O input-output modeling, irrigation, Agribusiness, Agricultural and Food Policy, Crop Production/Industries, Demand and Price Analysis, Environmental Economics and Policy, Farm Management, Land Economics/Use,
    Date: 2013–08

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