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on Resource Economics |
| By: | Ross McKitrick (Department of Economics and Finance, University of Guelph, Guelph ON Canada) |
| Abstract: | The classical Pigovian analysis leads to the “polluter pay” concept, in which firms pay the marginal damages (MD) of their emissions, evaluated where MD equals marginal abatement costs (MACs). But Sandmo (1975) showed that the emission tax rate should be normalized by the marginal social cost of the tax system or it will lead to a suboptimal outcome. This insight implies a distinction between private and social MACs, the implication of which is largely ignored in environmental policy textbooks and in practice. Here I review the underlying theory, provide a simple graphical summary and then offer a formal derivation in general equilibrium. The Pigovian and Sandmo pricing rules can be reconciled by noting that tax distortions drive a wedge between private and social MACs and the Sandmo rule compensates for the difference. I discuss some of the practical implications and surprising paradoxes created by the Sandmo analysis. I then present a detailed discussion of how the Sandmo model can be applied to the development of optimal climate policy. |
| Keywords: | Green taxes; Pigovian rule; Sandmo model; tax interactions; damage thresholds; climate policy |
| JEL: | H21 H23 Q54 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:gue:guelph:2024-03 |
| By: | Daniel Thiel (Université Sorbonne Paris Nord, CEPN - Centre d'Economie de l'Université Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord); Erick Leroux (Université Sorbonne Paris Nord, CEPN - Centre d'Economie de l'Université Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord); Emmanuel Labarbe (UBM - Université Bordeaux Montaigne, D2iA - Dynamiques, Interactions, Interculturalité Asiatiques - ULR - La Rochelle Université - UBM - Université Bordeaux Montaigne, MICA - Médiation, Information, Communication, Art - UBM - Université Bordeaux Montaigne) |
| Abstract: | In order to reduce overtourism and traffic congestion, local authorities may have to divert recreational vehicle traffic to off-site service areas. The problem that will arise is how best to accommodate different types of users with opposing preferences in the same area, some wanting to be as close as possible to the major site to be visited, others seeking peace and quiet. We have represented their specific attitudes using a two-stage decision-making process via a conjunctive model followed by a compensatory model. We then propose to model three strategies, seeking either to optimise customer attractiveness, or profit, or space occupation, in order to define a location, capacity and price for this shared area. Using a realistic data set, the results show that economic performance follows a concave curve as a function of the population mix. Moreover, only the strategy of maximising attractiveness suggests always mixing users in the same area. |
| Keywords: | overtourism recreational vehicles service areas optimisation heterogeneous preferences, overtourism, recreational vehicles, service areas, optimisation, heterogeneous preferences |
| Date: | 2023–11–27 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04811280 |
| By: | Sophia Möller (University of Kassel, Institute of Economics); Andreas Ziegler (University of Kassel, Institute of Economics) |
| Abstract: | While climate change is widely considered as a major challenge for societies, another pressing global environmental problem, i.e. the loss of biodiversity, is often given less attention despite its strong negative consequences for ecosystems and thus for human life. In light of the strong interconnections between biodiversity loss and climate change, this paper compares the pref-erences and stated willingness to pay (WTP) for biodiversity conservation and climate pro-tection. The empirical analysis is based on data from a broadly representative large-scale com-puter-assisted online survey of more than 9, 000 citizens in Germany in 2021. Our data reveal a strong correlation between the perceived importance of the problems of biodiversity loss and climate change as well as between the WTP for biodiversity conservation and climate protection. However, the average WTP for climate protection is slightly higher than for bio-diversity conservation according to our data. Our econometric analysis with bivariate linear and loglinear regression models as well as Tobit and binary probit models suggests that the main explanatory factors, namely environmental attitudes (i.e. environmental awareness and ecological policy identification) as well as economic preferences (i.e. altruism, trust, and pa-tience) in addition to some socio-economic variables (e.g. equivalized income), are very similar for the WTP for biodiversity conservation and climate protection. However, for many individual characteristics (e.g., ecological policy identification, altruism, trust, patience) that are (statistically) significantly correlated with the WTP for both climate protection and biodiversity conservation, the correlations are significantly stronger for the WTP for climate protection. These estimation results, in combination with a higher average perception in our sample that climate change is an important global environmental problem, could be due to the stronger recognition of climate change and protection in the public debate (e.g., in media coverage) compared to biodiversity loss and conservation. |
| Keywords: | Biodiversity conservation, climate protection, willingness to pay, bivariate econometric models. |
| JEL: | Q57 Q54 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:mar:magkse:202502 |