|
on Environmental Economics |
| By: | ZhongXiang Zhang (Research Program East-West Center) |
| Abstract: | China, from its own perspective cannot afford to, and from an international perspective, is not allowed to continue on the conventional path of encouraging economic growth at the expense of the environment. The country needs to transform its economy to effectively address concern about a range of environmental problems from burning fossil fuels and steeply rising oil import and international pressure to exhibit greater ambition in fighting global climate change. This paper first discusses China’s own efforts towards energy saving and pollutants cutting, the widespread use of renewable energy and participation in clean development mechanism, and puts carbon reductions of China’s unilateral actions into perspective. Given that transition to a low carbon economy cannot take place overnight, the paper then discusses China’s policies on promoting the use of low-carbon energy technologies and nuclear power and efforts to secure stable oil and gas supplies during this transition period. Based on these discussions, the paper provides some recommendations on issues related to energy conservation and pollution control, wind power, nuclear power, clean coal technologies, and overseas oil and gas supplies, and articulates a roadmap for China regarding its climate commitments to 2050. |
| Keywords: | Energy Saving, Renewable Energy, Clean Development Mechanism, Nuclear Power, Power Generation, Oil and Gas, Post-Copenhagen Climate Negotiations, China |
| JEL: | Q42 Q48 Q52 Q54 Q58 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.76&r=env |
| By: | Alexander Vasa |
| Abstract: | The EU Emissions Trading Scheme (EU ETS) is the main instrument to reduce greenhouse gas emissions in Europe. Subject to a country specific limit, installations in the EU ETS can use EU allowances (EUA) and certified emissions reductions (CERs) generated through the Clean Development Mechanism (CDM) to fulfil their emission reduction target. The CDM encourages and finances emission reduction projects in developing countries. The basis for the implementation of a CDM usage limit is the supplementarity criteria, which was established to ensure that developed countries only cover part of their compliance obligations with emissions reductions abroad. The CDM limits are differentiated between EU member states to cater to the different levels of emission reduction ambitions, the progress made when the limits were established and the ability of the Member State to reduce emissions. The binding limits created substantial arbitrage rents, due to the CER-EUA spread in the range of 200 million Euro for the year 2008. This paper discusses different options for the allocation of this rent. The paper finds that making the right to use CERs tradable or the regulator precommitting to buying CERs at the level of the limit reduces the inefficiencies connected to the current regulation. Auctioning these CER usage rights furthermore shifts the rents created through the CER-EUA spread to the state. Both the EU ETS and the CDM are scrutinised by academics, industry and non-governmental institutions according to their efficiency and environmental effectiveness. The debate about wind-fall profits has shown that climate policies need to be designed carefully. In light of improving the EU ETS, the use of CDM and in light of upcoming regional emissions trading schemes in other developed economies, this paper shows how CDM limits can be designed more efficiently. |
| Keywords: | Clean Development Mechanism, Emissions Trading, Climate Policy, Efficiency |
| JEL: | K23 K32 Q48 Q54 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1032&r=env |
| By: | Koichi Futagami (Graduate School of Economics, Osaka University); Yasuhiro Nakamoto (Faculty of Economics, Kyushu Sangyo University) |
| Abstract: | We examine the effects of environmental policies such as a subsidy for reforestation and an export-income tax in a small open economy with a renewable resource. In the small economy, the harvested renewable resources are exported to acquire foreign assets and consumers can invest in the natural resource to preserve it. In the setup, using a phase diagram, we show how the environmental policies affect the natural resource and the domestic economy. |
| Keywords: | Renewable resources; The effects of environmental policies. |
| JEL: | F41 H21 Q28 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1021&r=env |
| By: | Frank Ackerman, Elizabeth A. Stanton, Ramón Bueno |
| Abstract: | This paper describes a new model, Climate and Regional Economics of Development (CRED), which is designed to analyze the economics of climate and development choices. Its principal innovations are the treatment of global equity, calculation of the optimum interregional flows of resources, and use of McKinsey marginal abatement cost curves to project the cost of mitigation. The model shows more equitable scenarios have better climate outcomes; the challenge of climate policy is to persuade high-income countries to accept the need for both international equity and climate protection. |
| Keywords: | climate economics, development, global equity, abatement costs, integrated assessment models |
| JEL: | Q54 Q56 O13 Q52 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:une:wpaper:96&r=env |
| By: | Francesco Bosello (Fondazione Eni Enrico Mattei, University of Milan and Euromediterranean Center for Climate Change (CMCC)); Ramiro Parrado (Fondazione Eni Enrico Mattei and Euromediterranean Center for Climate Change (CMCC)); Renato Rosa (Fondazione Eni Enrico Mattei and Euromediterranean Center for Climate Change (CMCC)) |
| Abstract: | Illegal logging is widely recognized as a major economic problem and one of the causes of environmental degradation. Increasing awareness of its negative effects has fostered a wide range of proposals to combat it by major international conservation groups and political organizations. Following the 2008 US legislation which prohibits the import of illegally harvested wood and wood products, the European Union (EU) is now discussing a legislation proposal which would ban illegal timber from the EU market. In this study we use the ICES computable general equilibrium model to estimate the reallocation of global demand and timber imports following the pending EU legislation. With this exercise our final objective is to assess the economic impacts and measure the potential emission reduction resulting from the introduction of this type of policy. Results show that while the EU ban does not seem particularly effective in reducing illegal logging activities, its main effect will be the removal of illegal logs from the international markets. In addition, the unilateral EU ban on illegal logs increases secondary wood production in illegal logging countries as their exports become relatively more competitive. Through this mechanism, part of the banned, illegal timber will re-enter the international trade flows, but it will be “hidden” as processed wood. This effect is, however, limited. Finally, given the limited effect on overall economic activity, effects on GHG emissions are also limited. Direct carbon emissions from logging activities can decrease from 2.5 to 0.6 million tons per year. |
| Keywords: | Forestry, Illegal Logging, International Trade, Economy and Environment, Computable General Equilibrium Models |
| JEL: | D58 Q23 Q56 R13 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.67&r=env |
| By: | Xavier Pautrel (Université de Nantes, Laboratoire d’Économie et de Management de Nantes (LEMNA), Institut d’Économie et de Management de Nantes - IAE) |
| Abstract: | This note shows that the assumptions about the abatement technology modify the impact of the environmental taxation (both the size and the “direction”) on the long-run growth driven by human capital accumulation à la Lucas (1988), when the source of pollution is private consumption and lifetime is finite. When the human capital’s share in the abatement services production is higher (respectively lower) than in the final output production, a higher environmental tax reduces (resp. increases) the allocation of human capital in production sectors (abatement service and final output) and boostes (resp. decreases) the BGP rate of growth. When abatement services are produced with the final output, the environmental taxation does not influence growth. |
| Keywords: | Growth, Environment, Overlapping Generations, Human capital, Finite Lifetime, Abatement |
| JEL: | Q5 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.70&r=env |
| By: | Ryan, Anthony M.; Spash, Clive L. |
| Abstract: | The Value-Belief-Norm model assumes that egoistic, social-altruistic and biospheric value orientations causally influence how people cognitively structure beliefs regarding adverse environmental consequences. Empirical studies have administered the Awareness of Consequences (AC) scale to differentiate between these three orientations. We report an analysis which challenges previous work in the field. Evidence is presented that indicates the AC scale should be reinterpreted as a measure of beliefs supporting environmental action and beliefs supporting environmental inaction. The beliefs supporting environmental action appear to be differentiable according to beliefs in the positive consequences from environmental protection and the seriousness of environment harm. This has major implications for the Value-Belief-Norm model and its application. |
| Keywords: | Environmental attitudes; awareness of consequences scale; environmental beliefs; value orientations; environmental scales; egoistic; altruistic; biospheric; value-belief-norm model |
| JEL: | D46 A13 D64 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23900&r=env |
| By: | Paul Sarfo-Mensah (Bureau of Integrated Rural Development, College of Agriculture and Natural Resources (CANR), Kwame Nkrumah University of Science and Technology (KNUST)); William Oduro (Wildlife and Range Management, Faculty of Renewable Natural Resources, CANR, KNUST); Fredrick Antoh Fredua (Bureau of Integrated Rural Development, College of Agriculture and Natural Resources (CANR), Kwame Nkrumah University of Science and Technology (KNUST)); Stephen Amisah (Wildlife and Range Management, Faculty of Renewable Natural Resources, CANR, KNUST) |
| Abstract: | Local cosmologies and traditional perceptions of the natural environment, especially forests, have been a major influence in the management of the natural resources and biodiversity amongst rural communities in the transitional zone of Ghana. Sacred groves, which are typical outputs of traditional conservation practices, derive from indigenous religious beliefs and perceptions of forest. Sacred groves are believed to be the abode of local gods, ancestral spirits and other super natural beings. These beliefs and perceptions have in the past strongly supported the conservation of biodiversity. However, changes in local cosmologies threaten the protection of rare species, habitats and ecological processes. Data from the study confirm evidence from several studies in Ghana and elsewhere in West Africa that the tremendous ecological, social, institutional, religious and economic changes in communities that have protected sacred groves threaten the survival of these cultural artefacts. The paper demonstrates that in contemporary natural resources management, the sacred grove model may still be used as a means of restoring and protecting landscapes in indigenous communities. Even in communities where population explosion and economic pressures have reached thresholds that undermine the natural landscape, the model may still be useful to keep pockets of forests within the landscape. |
| Keywords: | Sacred Grove, Cultural Artefact, Communal Resource, Degradation, Sustainability and Biodiversity |
| JEL: | Q5 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.87&r=env |
| By: | Chakravorty, Ujjayant (University of Alberta, Department of Economics); Leach, Andrew (University of Alberta School of Business); Moreaux, Michel (Toulouse School of Economics) |
| Abstract: | In this paper, we show that the potential for endogenous technological change in alternative energy sources may alter the behaviour of resource-owning firms. When technological progress in an alternative energy source can occur through learning-by-doing, resource owners face competing incentives to extract rents from the resource and to prevent expansion of the new technology. We show that in such a context, it is not necessarily the case that scarcity-driven higher traditional energy prices over time will induce alternative energy supply as resources are exhausted. Rather, we show that as we increase the learning potential in the substitute technology, lower equilibrium energy prices prevail and there may be increased resource extraction and greenhouse gas emissions. We show that the effectiveness and the incidence of emissions reduction policies may be altered by increased potential for technological change. Our results suggest that treating finite resource rents as endogenous consequences of both technological progress and policy changes will be important for the accurate assessment of climate change policy. |
| Keywords: | resource extraction; climate change; induced innovation; learning-by-doing |
| JEL: | Q30 Q42 Q54 |
| Date: | 2010–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2010_012&r=env |
| By: | Michael Finus (University of Exeter); Pedro Pintassilgo (University of Algarve) |
| Abstract: | Na and Shin (1998) showed that the veil of uncertainty can be conducive to the success of self-enforcing international environmental agreements. Later papers confirmed this negative conclusion about the role of learning. In the light of intensified research efforts worldwide to reduce uncertainty about the environmental impact of emissions and the cost of reducing them, this conclusion is intriguing. The purpose of this paper is threefold. First, we analyze whether the result carries over to a more general setting without restriction on the number of players and which considers not only no and full learning but also partial learning. Second, we test whether the conclusion also holds if there is uncertainty about abatement costs instead of uncertainty about the benefits from global abatement. Third, we propose a transfer scheme that mitigates the possible negative effect of learning and which may even transform it into a positive effect. |
| Keywords: | Transnational Cooperation, Self-enforcing International Environmental Agreements, Uncertainty, Learning |
| JEL: | C72 D62 D81 H41 Q20 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.79&r=env |
| By: | James Roumasset (University of Hawaii, Department of Economics; University of Hawaii Econonmic Research Organization); Christopher Wada (University of Hawaii Econonmic Research Organization) |
| Abstract: | With the specter of climate change, groundwater scarcity looms as an increasingly critical issue worldwide. Minimizing the adverse effects of scarcity requires optimal as well as sustainable patterns of groundwater management. We review the many sustainable paths for groundwater extraction from a coastal aquifer and show how to find the particular sustainable path that is optimal. In some cases the optimal path converges to the maximum sustainable yield. For sufficiently convex extraction costs, the extraction path converges to an internal steady state above the level of maximum sustainable yield. We describe the challenges facing groundwater managers faced with multiple aquifers, the prospect of using recycled water, and the interdependence with watershed management. The integrated water management thus described results in less water scarcity and higher total welfare gains from groundwater use. The framework also can be applied to climatechange specifications about the frequency, duration, and intensity of precipitation by comparing before and after optimal management. For the case of South Oahu in Hawaii, the prospect of climate change increases the gains of integrated groundwater management. |
| Keywords: | sustainability science, groundwater economics, dynamic optimization |
| JEL: | Q25 Q56 |
| Date: | 2010–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201009&r=env |
| By: | Robert W. Hahn (University of Manchester and University of Oxford); Robert N. Stavins (John F. Kennedy School of Government, Harvard University Resources for the Future National Bureau of Economic Research) |
| Abstract: | We examine an implication of the “Coase Theorem” which has had an important impact both on environmental economics and on public policy in the environmental domain. Under certain conditions, the market equilibrium in a cap-and-trade system will be cost-effective and independent of the initial allocation of tradable rights. That is, the overall cost of achieving a given aggregate emission reduction will be minimized, and the final allocation of permits will be independent of the initial allocation. We call this the independence property. This property is very important because it allows equity and efficiency concerns to be separated in a relatively straightforward manner. In particular, the property means that the government can establish the overall pollution-reduction goal for a cap-and-trade system by setting the cap, and leave it up to the legislature – such as the U.S. Congress – to construct a constituency in support of the program by allocating the allowances to various interests without affecting either the environmental performance of the system or its aggregate social costs. Our primary objective in this paper is to examine the conditions under which the independence property is likely to hold – both in theory and in practice. A number of factors can call the independence property into question theoretically, including market power, transaction costs, non-cost-minimizing behavior, and conditional allowance allocations. We find that, in practice, there is support for the independence property in some, but not all cap-and-trade applications. |
| Keywords: | Cap-and-Trade System, Tradable Permits, Coase Theorem, Allowance Allocation |
| JEL: | Q58 H11 L51 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.80&r=env |
| By: | Gollin, Douglas (Williams College); Zimmermann, Christian (University of Connecticut) |
| Abstract: | We study the impact of global climate change on the prevalence of tropical diseases using a heterogeneous agent dynamic general equilibrium model. In our framework, households can take actions (e.g., purchasing bednets or other goods) that provide partial protection from disease. However, these actions are costly and households face borrowing constraints. Parameterizing the model, we explore the impact of a worldwide temperature increase of 3° C. We find that the impact on disease prevalence and especially output should be modest and can be mitigated by improvements in protection efficacy. |
| Keywords: | DSGE models, climate change, tropical diseases, incomplete markets |
| JEL: | I1 O11 E13 E21 Q54 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5042&r=env |
| By: | Rasmus Heltberg (The World Bank); Radhika Prabhu (The World Bank); Habiba Gitay (The World Bank) |
| Abstract: | The Development Marketplace 2009 focused on adaptation to climate change. This paper identifies lessons from the Marketplace and assesses their implications for adaptation support. Our findings are based on: statistical tabulation of all proposals; in-depth qualitative and quantitative analysis of the 346 semi-finalists; and interviews with finalists and assessors. Proposals were fuelled by deep concerns that ongoing climate change and its impacts undermine development and exacerbate poverty, migration and food insecurity. Proposals addressed both local poverty and climate change challenges, and offered a wide range of approaches to render local development more resilient to current climate variability. Therefore, support to community-based adaptation should: exploit its strong local grounding and synergies with development; help connect local initiatives to higher levels; and use complementary approaches to address policy issues. |
| Keywords: | Community-based Adaptation, Development Marketplace, Adaptation, Climate Change |
| JEL: | O1 Q5 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.84&r=env |
| By: | Shardul Agrawala (OECD Environment Directorate); Maëlis Carraro (OECD Environment Directorate) |
| Abstract: | Much of the current policy debate on adaptation to climate change has focussed on estimation of adaptation costs, ways to raise and to scale-up funding for adaptation, and the design of the international institutional architecture for adaptation financing. There is however little or no emphasis so far on actual delivery mechanisms to channel these resources at the sub-national level, particularly to target the poor who are also often the most vulnerable to the impacts of climate change. It is in this context that microfinance merits a closer look. This paper offers the first empirical assessment of the linkages between microfinance supported activities and adaptation to climate change. Specifically, the lending portfolios of the 22 leading microfinance institutions in two climate vulnerable countries – Bangladesh and Nepal - are analysed to assess the synergies and potential conflicts between microfinance and adaptation. The two countries had also been previously examined as part of an earlier OECD report on the links between macro-level Official Development Assistance and adaptation. This analysis provides a complementary “bottom-up” perspective on financing for adaptation. Insights from this analysis also have implications for OECD countries. This is because microfinance is also being increasingly tapped to reduce the vulnerability of the poor in domestic OECD contexts as well and may therefore have the potential to contribute to adaptation. The paper identifies areas of opportunity where microfinance could be harnessed to play a greater role in fostering adaptation, as well as its limitations in this context. It also explores the linkage between the top-down macro-financing for adaptation through international financial mechanisms and the bottom-up activities that can be implemented through microfinance. |
| Keywords: | Microfinance, Climate Change, Financing, Adaptation, Bangladesh, Nepal |
| JEL: | Q56 Q54 R51 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.82&r=env |
| By: | Caporale, Guglielmo Maria (Brunel University); Rault, Christophe (University of Orléans); Sova, Robert (CREST & University of Paris 1 Panthéon-Sorbonne); Sova, Ana Maria (CREST & University of Paris 1 Panthéon-Sorbonne) |
| Abstract: | The transition process in Central and Eastern Europe was associated with growing environmental awareness. This paper analyses the determinants of Pollution Abatement and Control Expenditure (PACE) at plant level in the case of Romania using survey data and a Multilevel Regression Model (MRM). Our findings suggest that, although Romania has improved its environmental performance, formal and informal regulation are still only partially developed due to the difficulties of economic transition, and heterogeneity across regions remains considerable. |
| Keywords: | pollution abatement and control expenditure, transition economy, Multilevel Regression Model (MRM) |
| JEL: | Q52 C29 C40 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5041&r=env |
| By: | Koichi Futagami (Graduate School of Economics, Osaka University); Yasuhiro Nakamoto (Faculty of Economics, Kyushu Sangyo University) |
| Abstract: | We construct a small open economy model with a renewable resource. Households have an endogenous time preference rate that depends on the level of the renewable resource in the domestic economy. Although households know that the degree of own patience depends on its resource, we assume that households believe that they cannot control the motion of the aggregate renewable resource. This is because they think that their impact is negligible so that there exists an externality in the form of the patience of the households. Based on this framework, we analyze the dynamic character of the steady state and show that the equilibrium path may be indeterminate. We next examine the welfare effects of tax policies. Finally, we investigate socially optimal tax policies. |
| Keywords: | Endogenous time preference rate; Indeterminacy; Renewable resources; Optimal tax policy |
| JEL: | F41 H21 Q28 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1022&r=env |
| By: | Valentina Iafolla (University of Ferrara); Massimiliano Mazzanti (University of Ferrara, University of Bologna and the National Research Council CERIS-CNR DSE Milan); Francesco Nicolli (University of Ferrara) |
| Abstract: | We empirically test delinking of waste dynamics with regard to economic growth and the effectiveness of environmental and specific waste-related policies, by exploiting a newly constructed, integrated waste-economic-policy dataset based on official data for the EU15 for 1995-2007. We find that absolute delinking for waste generation is far from being achieved in the EU despite fairly stringent and longstanding policy commitment that goes back to the mid 1990s, but which however is biased towards waste management and waste disposal rather than waste prevention. Policy as well as country structural factors seem to impact instead on landfill diversion. Nevertheless, country heterogeneity matters: SURE based analyses show that EU average figures often hide high variance. Their results provide food for thought for a future most comprehensive EU waste policy strategy, which is now aimed mainly at landfill diversion, within a framework strongly oriented to allowing countries to decide about the implementation of EU directives. |
| Keywords: | Waste Generation, Landfill Diversion, SUR, EU Waste Policy, Environmental Policy, Delinking |
| JEL: | C23 Q38 Q56 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.77&r=env |
| By: | Sonia Schwartz (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579); Hubert Stahn (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579) |
| Abstract: | Permit markets lead polluting firms to purchase abatement goods from an eco-industry, which is often concentrated. This paper studies the consequences of imperfect competition in an eco-industry on the equilibrium choices of the competitive polluting firms. It then characterizes the second best pollution cap. By comparing this situation to a competitive one, we show that Cournot competition on the abatement good market contributes not only to a non optimal level of emission reduction but also to a higher permit price, which reduces the production level. These distortions increase with market power measured by the margin taken by the non competitive firms and suggest a second best less stringent pollution cap |
| Keywords: | pollution permit market, eco-industry, imperfect competition |
| Date: | 2010–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00501831_v1&r=env |
| By: | Francisco Alpizar (Environment for Development Center, Tropical Agricultural and Higher Education Center); Fredrik Carlsson (Göteborg University); Maria Naranjo (Environment for Development Center, Tropical Agricultural and Higher Education Center) |
| Abstract: | The risk of losses of income and productive means due to adverse weather associated to climate change can significantly differ between farmers sharing a productive landscape. It is important to learn more about how farmers react to different levels of risk, under measurable and unmeasurable uncertainty. Moreover, the costs associated to investments in reduced vulnerability to climatic events are likely to exhibit economies of scope. We explore these issues using a framed field experiment that captures realistically the main characteristics of production, and the likely weather related losses of premium coffee farmers in Tarrazu, Costa Rica. Given that the region recently was severely hit by an extreme, albeit very infrequent, climatic event, we expected to observe, and found high levels of risk aversion, but we do observe farmers making trade-offs under different risk levels. Although hard to disentangle at first sight given the high level of risk aversion, we find that farmers opt more frequently for safe options in a setting characterized by unknown risk. Finally, we find that farmers to a large extent are able to coordinate their decisions in order to achieve a lower cost of adaptation, and that communication among farmers strongly facilitates coordination. |
| Keywords: | Risk Aversion, Ambiguity Aversion, Technology Adoption, Climate change, Field Experiment |
| JEL: | C93 D81 H41 Q16 Q54 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.81&r=env |
| By: | Mireille CHIROLEU-ASSOULINE; Sébastien ROUSSEL |
| Abstract: | According to several studies, agricultural carbon sequestration could be a relatively low cost opportunity to mitigate greenhouse gas (GHG) concentration and a promis-ing means that could be institutionalised. However the potential for additional carbon quantities in agricultural soils is critical and comes from the agricultural .rms behaviour with regards to land heterogeneity. In this paper, our aim is to set incentive mechanisms to enhance carbon sequestration by agricultural .rms. A policymaker has to arrange incentives as agricultural .rms have private information and do not spontaneously switch to the required practices. Moreover, a novelty in our paper is to show that the potential for additional carbon sequestration is similar to an exhaustible resource. As a result, we construct an intertemporal principal-agent model with adverse selection. Our contribution is to specify contracts in order to induce truthful revelation by the .rms regarding their intrinsic characteristics towards carbon sequestration, while analytically characterizing the optimal path to sequester carbon as an exhaustible resource. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:10-07&r=env |
| By: | Roger Fouquet |
| Abstract: | Understandably, focus on a transition to a low carbon economy has overshadowed what happens when the transition has been completed. This paper tries to offer lessons about the very long run aspects of a future economy reliant predominantly on renewable energy sources. The evidence is based on past economies and civilizations and their experiences of economic expansion driven by renewable energy resources. The paper proposes that economies around the world, since antiquity, have managed to survive, and even develop and grow driven by renewable energy sources. Successful long run economic growth depended on sound management of demand, supply and trade of woodfuel. Where governments failed to develop appropriate policies, growth and development was severely constrained. Despite the uncertainty about the future, this paper proposes that researchers start to consider the nature of long run economic growth and appropriate policies within renewable energy systems.<br /> |
| Keywords: | renewable energy; economic growth; low carbon economy; economic history |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2010-09&r=env |
| By: | Girja Sharan |
| Abstract: | A two-phase project is underway to develop greenhouse systems suitable for water scarce, semi-arid region of north-west India (Kutch). The first phase aimed at studying the effectiveness of natural ventilation and earth-tube-heat-exchanger for environmental control, in place of fan-pads commonly used. These measures were able to reduce the need for evaporative cooling significantly and offer scope for further improvement. The second phase, just started, aims at finding cost-effective means of desalinating brackish water for plant use. Arrays of simple basin type solar stills have been used in this region in the past to provide drinking water in villages. The area of stills needed to meet the greenhouse crop requirement works out to approximately half the cropping area. It would be cumbersome to integrate these with greenhouse structure. Besides, these were reported to be difficult to maintain. A new option - solar assisted low temperature thermal desalination - is therefore being pursued. An outline of the work in progress is presented. [W.P. No. 2008-07-02] |
| Keywords: | Greenhouse, water scarce, semi-arid region, Kutch, environmental control, desalinating, brackish water |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2655&r=env |
| By: | Dan Marsh (University of Waikato); Bentry Mkwara (University of Waikato); Riccardo Scarpa (University of Waikato) |
| Abstract: | In environmental valuation studies with stated preference methods, researchers often provide descriptions of status quo conditions which may differ from those perceived by respondents. Ignoring this difference in utility baselines may affect the magnitude of utility changes and hence bias the implied estimates of benefits from the proposed environmental policies. We investigate this issue using data from a choice experiment on a community’s willingness to pay for water quality improvements in streams. More than 60 percent of respondents perceived the description of the quality of water in streams to be better than the one we provided in our scenario. Our results show that respondents who could provide details of their perception of the status quo displayed stronger preferences for water quality improvements - hence a higher marginal willingness to pay - than their counterparts. Respondents who opted for their own status quo description displayed a higher inclination to remain in the status quo, while their counterparts displayed the contrary. We argue this might be linked to the amount of knowledge each group displayed about the status quo: a kind of reluctance to leave what one knows well. |
| Keywords: | choice experiments; fixed status quo; people’s perceived status quo; status quo effect; willingness to pay. |
| JEL: | C51 Q25 Q51 |
| Date: | 2010–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:10/04&r=env |
| By: | Sébastien ROUILLON (GREThA UMR CNRS 5113) |
| Abstract: | We construct an economic mechanism to realize in Nash equilibrium an optimal consumption time path of a natural resource. For exposition convenience, the analysis is conducted within the model initiated by Levhari and Mirman (1980). This framework allows us to explicitly calculate the consumption time paths of the resource, associated with an open-access regime, with a cooperative management and with a (stationary Markovian) Nash equilibrium of the di¤erence game induced by the proposed mechanism. |
| Keywords: | Natural resource; Fish war; Difference game; Mechanism design |
| JEL: | Q20 C73 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2010-15&r=env |
| By: | Karen Pittel; Dirk Rübbelke |
| Abstract: | The paper provides an introduction to energy, respective resource, use within the framework of endogenous growth models. We provide an overview of different modeling approaches as well as intuition with respect to the results obtained. We consider the source problem, i.e. the supply of energy, as well as the sink problem, i.e. pollution generated by the consumption of energy resources. The introduction to the theoretical framework shortly discusses the use of neoclassical versus endogenous growth models and also points to the implications of the different types of endogenous growth approaches. We additionally give an introduction to CGE-models that include energy use and present an example of a numerical solvable model in detail. The paper closes with an outlook on future research.<br /> |
| Keywords: | endogenous growth, energy, resources, pollution, CGE-models |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2010-10&r=env |
| By: | Antoine Leblois (CIRED (Centre International de Recherche sur l’Environnement et le Développement)); Philippe Quirion (CIRED, CNRS, LMD-IPSL (Laboratoire de Météorologie Dynamique – Institut Pierre-Simon Laplace)) |
| Abstract: | In many low-income countries, agriculture is mostly rain-fed and yields highly depend on climatic factors. Furthermore, farmers have little access to traditional crop insurance, which suffers from high information asymmetry and transaction costs. Insurances based on meteorological indices could fill this gap since they do not face such drawbacks. However their implementation has been slow so far. In this article, we first describe the most advanced projects that have taken place in developing countries using these types of crop insurances. We then describe the methodology that has been used to design such projects, in order to choose the meteorological index, the indemnity schedule and the insurance premium. We finally draw an agenda for research in economics on this topic. In particular, more research is needed on implementation issues, on the assessment of benefits, on the way to deal with climate change, on the spatial variability of weather and on the interactions with other hedging methods. |
| Keywords: | Agriculture, Insurance, Climatic Risk |
| JEL: | G21 O12 Q12 Q18 Q54 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.71&r=env |
| By: | Gustavo A. Marrero; Francisco Javier Ramos-Real |
| Abstract: | The Canary Islands offer an example of an isolated electric grid of relative important size within the EU. Due to its peculiarities, the role of renewable energies and their complementarity with fossil fuels offers a solid path to achieving the main energy policy goals of the Islands. The purpose of this paper is to assess the current situation and the energy objectives proposed in the Energy Plan of the Canaries (PECAN 2006) for the electricity industry, taking into account the average cost and the risk associated with the different alternatives for generating electricity by means of the Mean-Variance Portfolio Theory. Our analysis highlights the inefficiency of the current electricity generating mix in terms of cost, risk and lack of diversification. Shifting toward an efficient system would involve optimizing the use of endogenous energy sources and introducing natural gas to generate electricity. This scenario would mean reducing both cost and risk by almost 30% each, as well as atmospheric CO2 emissions. Our results agree with the PECAN philosophy. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2010-17&r=env |
| By: | Brand, Bernhard (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Zingerle, Jonas (Energiewirtschaftliches Institut an der Universitaet zu Koeln) |
| Abstract: | Morocco, Algeria and Tunisia, the three countries of the North African Maghreb region, are showing increased efforts to integrate renewable electricity into their power markets. Like many other countries, they have pronounced renewable energy targets, defining future shares of “green” electricity in their national generation mixes. The individual national targets are relatively varied, reflecting the different availability of renewable resources in each country, but also the different political ambitions for renewable electricity in the Maghreb states. Open questions remain regarding the targets’ economic impact on the power markets. Our article addresses this issue by applying a linear electricity market optimization model to the North African countries. Assuming a competitive, regional electricity market in the Maghreb, the model minimizes dispatch and investment costs and simulates the impact of the renewable energy targets on the conventional generation system until 2025. Special emphasis is put on investment decisions and overall system costs. |
| Keywords: | North Africa; Renewable energy sources; Electricity markets |
| JEL: | L94 Q42 |
| Date: | 2010–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2010_002&r=env |
| By: | Maryla Maliszewska; Elena Jarocinska; Milan Scasny |
| Abstract: | The EU-Russia Partnership and Cooperation Agreement, which entered into force in 1997 foresees the possible establishment of a free trade area (FTA) between the parties. The aim of our study is to evaluate the possible economic, social and environmental impact of such a free trade agreement between the European Union and Russia. The results of the analysis indicate that an EU-Russia FTA will be beneficial to the Russian Federation and the EU27. Some sectors are expected to contract in the medium term, but their importance in total output is small. Over the long run, the majority of sectors in Russia are expected to expand, while only a few sectors in the EU27 are expected to register negligible decreases in output. We estimate that welfare losses from the environmental damages would be very small for Russia (possibly even smaller due to the implementation of greener technologies), and negligible for the EU. Despite some significant negative medium-term social implications in selected sectors in Russia, the overall increase in economic activity and wages, coupled with likely domestic policies aiming at easing the impact of transitional unemployment, are expected to allow for the overall reduction in poverty rates. Overall, the results show that significant welfare gains (2.24% of GDP for Russia) would accrue from the deep FTA scenario involving a significant reduction of NTBs along with additional flanking measures, particularly on competition, IPR protection and corruption, which would help re-branding of Russia as a safe and attractive investment location. Also a number of countries such as Finland, Ireland, Netherlands, Denmark, Estonia, Slovakia, Slovenia and Sweden are expected to see their welfare increase by around 0.5% of GDP. |
| Keywords: | free trade agreement, WTO accession, European Union, Russian Federation, labor market, environment, NTBs, CGE |
| JEL: | F12 F15 F16 F17 F18 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:sec:cnrepo:0093&r=env |