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on Environmental Economics |
| By: | Arazmuradov, Annageldy |
| Abstract: | The main source of convertible energy—fossil-fuel combustion—generates desirable means for production of national output (GDP) along with an undesirable by-product—carbon dioxide (CO2) emissions. This paper investigates the effect of this supply process for environmental quality. By introducing energy and non-energy production factors, we estimate economic and CO2 efficiency. We build an alternative environmental efficiency indicator with respect to CO2 emissions by applying non-parametric data-envelopment analysis (DEA)—window analysis under variable returns to scale (VRS)—to 15 former Soviet Union (FSU) economies for the period 1992–2008. There is a clear distinction between three FSU economies—Estonia, Latvia, and Lithuania (now EU member states)—and the rest of the sample in that they display better environmental performance. In these three countries, economic efficiency directly influences the environmental performance. Results also show that over time FSU economies improve their CO2 environmental efficiency and comply with the Kyoto Protocol directives. However, this positive gain comes with costs; it seems there is a tradeoff between positive output production (GDP) and controlling for carbon emission. On average, we observe a 15.9-percent drop in producing GDP, while there is a 1.59 -percent rise in positive environmental CO2 efficiency. |
| Keywords: | Eurasia; carbon dioxide emissions; environmental efficiency; DEA window analysis |
| JEL: | Q50 P28 P52 |
| Date: | 2011–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36903&r=env |
| By: | Howes, Stephen (Asian Development Bank Institute); Wyrwoll, Paul (Asian Development Bank Institute) |
| Abstract: | The developing economies of Asia are confronted by serious environmental problems that threaten to undermine future growth, food security, and regional stability. This study considers four major environmental challenges that policymakers across developing Asia will need to address towards 2030: water management, air pollution, deforestation and land degradation, and climate change. We argue that these challenges, each unique in their own way, all exhibit the characteristics of “wicked problems”. As developed in the planning literature, and now applied much more broadly, wicked problems are dynamic, complex, encompass many issues and stakeholders, and evade straightforward, lasting solutions. |
| Keywords: | asia environmental problems; food security; water management; air pollution; deforestation; land degradation; climate change; wicked problems |
| JEL: | O10 O44 O53 Q28 Q53 Q56 Q58 |
| Date: | 2012–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0348&r=env |
| By: | Gabriel Chan (Harvard Kennedy School); Robert Stavins (Harvard Kennedy School); Robert Stowe (Harvard Kennedy School); Richard Sweeney (Harvard Kennedy School) |
| Abstract: | The introduction of the U.S. SO2 allowance-trading program to address the threat of acid rain as part of the Clean Air Act Amendments of 1990 is a landmark event in the history of environmental regulation. The program was a great success by almost all measures. This paper, which draws upon a research workshop and a policy roundtable held at Harvard in May 2011, investigates critically the design, enactment, implementation, performance, and implications of this path-breaking application of economic thinking to environmental regulation. Ironically, cap and trade seems especially well suited to addressing the problem of climate change, in that emitted greenhouse gases are evenly distributed throughout the world’s atmosphere. Recent hostility toward cap and trade in debates about U.S. climate legislation may reflect the broader political environment of the climate debate more than the substantive merits of market-based regulation. |
| Keywords: | Cap-and-Trade, Market-Based Environmental Policy, Acid Rain, Sulfur Dioxide, Clean Air Act Amendments |
| JEL: | Q52 Q55 Q58 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.06&r=env |
| By: | Hansson, Sven Ove (National Institute of Economic Research); Edvardsson Björnberg, Karin (National Institute of Economic Research); Vredin Johansson, Maria (National Institute of Economic Research) |
| Abstract: | We propose a framework for studies of efficiency in environmental poli-cies in the form of an iterative “policy cycle”. The policy cycle’s six ma-jor elements are goal-setting, choice of policy instruments (informa-tion/communication, voluntary agreements, economic instruments and regulation), enforcement, changes in behaviour of public and private agents, effects of policy measures and, finally, evaluation. Through itera-tions of the policy cycle (or parts of it), efficiency in environmental poli-cies can be improved. The policy cycle is applied to climate policies, both mitigation and adaptation and we identify important areas for future research. |
| Keywords: | Policy cycle; environmental efficiency; mitigation; adaptation; goal-setting; voluntary agreements; regulation; behavioural change; evaluation |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nierwp:0125&r=env |
| By: | Broberg, Thomas (National Institute of Economic Research); Forsfält, Tomas (National Institute of Economic Research); Östblom, Göran (National Institute of Economic Research) |
| Abstract: | From the perspective of climate policy, a target for energy efficiency could imply costly overlapping regulation. We estimate, using a computable general equilibrium model of the Swedish economy, the potential economic cost of attaining the national 2020 energy intensity target by means of tax policy instruments. Our analysis shows that the efforts to meet the energy intensity target will also reduce carbon dioxide emissions, but at excessive costs compared to alternative climate policy instruments. Moreover, attainment of the energy intensity target will call for policy instruments additional to those needed for fulfilling the national climate policy target. The results are sensitive to the development of the nuclear energy production as the definition of energy intensity includes conversion losses in electricity production |
| Keywords: | climate policy; energy efficiency; carbon tax; overlapping regulation; general equilibrium; Sweden |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nierwp:0123&r=env |
| By: | Patrick Hamshere (Department of Economics, University of Queensland); Liam Wagner (Department of Economics, University of Queensland) |
| Abstract: | This paper examines the potential impacts of subprime carbon credits on the impending Australian carbon market. Subprime carbon could potentially be created in carbon offset markets that lack adequate regulation, as projects face risks that can overstate emissions abatement. Recent research suggests that subprime carbon credits will likely cause significant price instability in carbon markets, with some authors drawing parallels to the US market for mortgage backed securities during the subprime mortgage crisis (Chan, 2009). To assess the impacts of subprime carbon credits on the impending Australian carbon market, carbon price fundamentals are examined using a marginal abatement cost curve for the year 2020. The 2020 Australian marginal abatement cost curve is derived using a bottom-up model of the Australian electricity sector, as well as findings by the (DCC, 2009) and (McKinsey, 2008). Impacts are evaluated under several scenarios, which consider different trading scheme limits on the use of offsets; different proportions of offset credits that are subprime; and different emissions reduction targets. The results suggest that subprime carbon credits will always result in overall emissions reductions to be overstated, while sometimes increasing price volatility in the carbon market, depending on the steepness of the marginal abatement cost curve, the proportion of offset credits that are subprime, and the trading schemes limits on the use of offsets. We conclude that carbon markets could benefit significantly from a carbon offsets regulator, which would ensure the environmental and financial integrity of offset credits. |
| Keywords: | Carbon Offsets, Marginal Abatement Cost, Carbon Market Regulation, Subprime Carbon |
| JEL: | Q52 Q31 L51 G18 G01 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqeemg:14&r=env |
| By: | Christopher C. Moore |
| Abstract: | As atmospheric carbon dioxide (CO2) concentrations increase, the world’s oceans are absorbing CO2 at a faster rate than at any time in the past 800,000 years. While this reduces the amount of the most prevalent greenhouse gas in the atmosphere it also causes changes in seawater chemistry, collectively known as ocean acidification. One of the known ecological impacts of ocean acidification is a reduced ability of some marine calcifiers to form shells and skeletons. Mollusks and reef building corals are particularly vulnerable. Understanding how these biophysical impacts affect social welfare is a critical step in crafting and evaluating policies that reduce CO2 emissions. There is an extensive body of literature estimating the economic impacts of climate change but very little research has been done on how ocean acidification could affect social welfare. This paper proposes an integrated biogeochemical-economic model to estimate the social welfare impacts of ocean acidification in the US mollusk fishery. To demonstrate the model two pathways for global greenhouse gas emissions are compared: a baseline path and a policy path in which CO2 and other greenhouse gas emissions are reduced. These pathways provide input for integrated earth systems models, generating forecasts of changes to sea water chemistry and mollusk production. A two-stage demand system estimates the utility function parameters needed to calculate compensating variation for avoided increases in the prices of oysters, scallops, clams and mussels. The model estimates annual compensating variation for the mitigation path relative to baseline conditions. |
| Keywords: | ocean acidification, integrated assessment model, demand system estimation |
| JEL: | C33 Q22 Q54 Q57 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201106&r=env |
| By: | Francesco Bosello (Fondazione Eni Enrico Mattei, University of Milan and Euro-Mediterranean Center for Climate Change); Fabio Eboli (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change); Roberta Pierfederici (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change) |
| Abstract: | The present research describes a climate change integrated impact assessment exercise, whose economic evaluation is based on a CGE approach and modeling effort. Input to the CGE model comes from a wide although still partial set of up-to-date bottom-up impact studies. Estimates indicate that a temperature increase of 1.92°C compared to pre-industrial levels in 2050 could lead to global GDP losses of approximately 0.5% compared to a hypothetical scenario where no climate change is assumed to occur. Northern Europe is expected to benefit from the evaluated temperature increase (+0.18%), while Southern and Eastern Europe are expected to suffer from the climate change scenario under analysis (-0.15% and -0.21% respectively). Most vulnerable countries are the less developed regions, such as South Asia, South-East Asia, North Africa and Sub-Saharan Africa. In these regions the most exposed sector is agriculture, and the impact on crop productivity is by far the most important source of damages. It is worth noting that the general equilibrium estimates tend to be lower, in absolute terms, than the bottom-up, partial equilibrium estimates. The difference is to be attributed to the effect of market-driven adaptation. This partly reduces the direct impacts of temperature increases, leading to lower damage estimates. Nonetheless these remain positive and substantive in some regions. Accordingly, market-driven adaptation cannot be the solution to the climate change problem. |
| Keywords: | Environmental Innovation, Industrial Sectors, ETS, Innovation Drivers, CIS Data |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.03&r=env |
| By: | Kirill Borissov; Thierry Brechet; Stephane Lambrecht |
| Abstract: | We assume a population of infinitely-lived households of the economy split into two groups: one with a high discount factor (the patient) and one with a low one (the impatient). The environmental quality is deteriorated by firm's polluting emissions. The governmental policy consists in proposing households to vote for a tax aimed at environmental maintenance. We study the voting equilibrium at steady states. The resulting equilibrium maintenance is the one of the median voter. We show that (i)~an increase in total factor productivity may produce effects described by the Environmental Kuznets Curve, (ii)~an increase in the patience of impatient households may foster environmental quality if the median voter is impatient and maintenance positive, (iii)~a decrease in inequality among the patient households leads to an increase in environmental quality if the median voter is patient and maintenance is positive. We also show that, if the median income is lower than the mean, our model predict lower level of environmental quality than the representative agent model, and that increasing public debt decreases the level of environmental quality. |
| Keywords: | intertemporal choice and growth, discounting, government environmental policy, externalities, environmental taxes; voting equilibrium |
| JEL: | D90 Q58 H23 D72 |
| Date: | 2012–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:eus:wpaper:ec0212&r=env |
| By: | Donatella Baiardi (Department of Economics and Quantitative Methods, University of Pavia) |
| Abstract: | The paper explores the relationship between per capita income and three air pollutants, CO, NMVOCs and SOx, using a novel dataset based on the Italian regions. Given the central role of technological progress in long-term environmental problems, we empirically investigate the influence of innovation on the environmental Kuznets curve (EKC). The estimation results validate the EKC hypothesis for the three air pollutants considered. Furthermore, the influence of innovation on the inverted-U-shaped curve identified by the theoretical literature is empirically confirmed too. |
| Keywords: | Air pollutants, Environmental Kuznets Curve, Italian regions, Technological Progress. |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:pav:wpaper:156&r=env |
| By: | Kirill Borissov; Thierry Brechet; Stephane Lambrecht |
| Abstract: | We assume a population of infinitely-lived households of the economy split into two groups: one with a high discount factor (the patient) and one with a low one (the impatient). The environmental quality is deteriorated by firm's polluting emissions. The governmental policy consists in proposing households to vote for a tax aimed at environmental maintenance. We study the voting equilibrium at steady states. The resulting equilibrium maintenance is the one of the median voter. We show that (i)~an increase in total factor productivity may produce effects described by the Environmental Kuznets Curve, (ii)~an increase in the patience of impatient households may foster environmental quality if the median voter is impatient and maintenance positive, (iii)~a decrease in inequality among the patient households leads to an increase in environmental quality if the median voter is patient and maintenance is positive. We also show that, if the median income is lower than the mean, our model predict lower level of environmental quality than the representative agent model, and that increasing public debt decreases the level of environmental quality. |
| Keywords: | intertemporal choice and growth, discounting, government environmental policy, externalities, environmental taxes; voting equilibrium |
| JEL: | D90 Q58 H23 D72 |
| Date: | 2012–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:eus:ce3swp:0212&r=env |
| By: | Tol, Richard S. J. |
| Abstract: | Trends in the emissions to air of sulphur dioxide, nitrogen oxides, carbon monoxide, volatile organic compounds, and ammonia in Ireland are analysed with a logarithmic mean Divisia index decomposition for the period of 1990-2009. Emissions fell for four of the five pollutants, with ammonia being stationary, despite rapid economic change. A fall in emissions per unit output was the main driver of this trend, except for ammonia where structural economic change was the main driver. Extrapolating these trends continue, Ireland will keep emissions below its National Emission Ceilings, except in the case of nitrogen oxides where the target will likely be met by 2015. |
| Keywords: | decomposition/Ireland |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp422&r=env |
| By: | David Berre (IESEG School of Management (LEM-CNRS) and University Lille 1); Jean-Philippe Boussemart (IESEG School of Management (LEM-CNRS) and University Lille 3); Emmanuel Tillard (UMR SELMET / CIRAD La Réunion) |
| Keywords: | Agriculture, Data Envelopment Analysis, Environmental Studies |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:ies:wpaper:e201202&r=env |
| By: | Keith Burnard; Sankar Bhattacharya |
| Abstract: | Coal is an important source of energy for the world, particularly for power generation. To meet the growth in demand for energy over the past decade, the contribution from coal has exceeded that of any other energy source. Additionally, coal has contributed almost half of total growth in electricity over the past decade. As a result, CO2 emissions from coal-fired power generation have increased markedly and continue to rise. More than 70% of CO2 emissions that arise from power generation are attributed to coal. To play its role in a sustainable energy future, its environmental footprint must be reduced; using coal more efficiently is an important first step. Beyond efficiency improvement, carbon capture and storage (CCS) must be deployed to make deep cuts in CO2 emissions. This report focuses mainly on developments to improve the performance of coal-based power generation technologies, which should be a priority – particularly if carbon capture and storage takes longer to become established than currently projected. A close look is taken of the major ongoing developments in process technology, plant equipment, instrumentation and control. The need for energy and the economics of producing and supplying it to the end-user are central considerations in power plant construction and operation. Economic and regulatory conditions must be made consistent with the ambition to achieve higher efficiencies and lower emissions. In essence, clean coal technologies must be more widely deployed. |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ieaaaa:2011/14-en&r=env |
| By: | OECD |
| Abstract: | Bioenergy with Carbon Capture and Storage (BECCS) is a carbon reduction technology that offers permanent net removal of carbon dioxide (CO2) from the atmosphere. This has been termed 'negative carbon dioxide emissions', and offers a significant advantage over other mitigation alternatives, which only decrease the amount of emissions to the atmosphere. The benefits inherent within this technology are currently receiving increased attention from policy makers. To facilitate the development of appropriate policy incentives, this paper reviews the treatment of 'negative carbon dioxide emissions' under current and planned international carbon accounting frameworks. It finds that, while current frameworks provide limited guidance, proposed and revised guidelines could provide an environmentally sound reporting framework for BECCS. However, the paper also notes that, as they currently stand, new guidelines do not tackle a critical issue that has implications for all biomass energy systems, namely the overall carbon footprint of biomass production and use. It recommends that, to the best extent possible, all carbon impacts of BECCS are fully reflected in carbon reporting and accounting systems under the UNFCCC and Kyoto Protocol. |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ieaaaa:2011/16-en&r=env |
| By: | Thureson, Disa (Department of Business, Economics, Statistics and Informatics); Hope, Chris (Judge Business School, University of Cambridge) |
| Abstract: | Since 1982 hundreds of estimates of the social costs of greenhouse gases (GHG) have been produced. It is known that uncertainty is of crucial importance when analyzing this problem. We explore some of the most important sources of the variation in outcomes uncertainty, focusing on discounting and climate sensitivity, using the PAGE2002 model. The five percent upper tail of the social cost of carbon distribution is demonstrated to contribute 28 percent to the expected cost. We show graphically how the social costs of GHG depend on different parameter values and how the global damage potential for methane and sulfur hexafluoride evolves over time. Also the introduction of unbound probability distributions and prolonged calculation period is examined. <p> We find that the social cost of carbon dioxide (SCCO2) distribution resembles at least one heavy-tailed standard distribution, is sensitive to the probability distribution of climate sensitivity; and that the “global-warming potential” concept is unsuitable for calculation of the social cost of other GHG than carbon dioxide. The analysis supports the Weitzman’s claim (2009) that structural uncertainty about the climate sensitivity may outweigh the effect of discounting. |
| Keywords: | Social cost of greenhouse gases; Heavy tail; Discounting; Sensitivity; Global warming potential |
| JEL: | Q54 |
| Date: | 2012–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2012_003&r=env |
| By: | Adamos Adamou; Sofronis Clerides; Theodoros Zachariadis |
| Abstract: | Vehicle taxation based on CO2 emissions is increasingly being adopted worldwide in order to shift consumer purchases to low-carbon cars, yet little is known about the effectiveness and overall economic impact of these schemes. We focus on feebate schemes, which impose a fee on high-carbon vehicles and give a rebate to purchasers of low-carbon automobiles. We estimate a discrete choice model of demand for automobiles in Germany and simulate the impact of alternative feebate schemes on emissions, consumer welfare, public revenues and firm profits. The analysis shows that a well-designed scheme can lead to emission reductions without reducing overall welfare. |
| Keywords: | CO2 emissions, German automobile market, feebates, carbon taxation |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:01-2012&r=env |
| By: | Carfì, David; Schilirò, Daniele |
| Abstract: | This paper provides a coopetitive model for a global green economy taking into account the environmental sustainability. In particular we propose a differentiable coopetitive game G (in the sense recently introduced by D. Carfì) to represent a basic green economy interaction among a country c and the rest of the world w. Our game G is a linear parametric (Euclidean) perturbation of the classic Cournot duopoly. In the paper we offer the complete study of the proposed model and in particular a deep examination of its possible coopetitive solutions. |
| Keywords: | environmental sustainability; global green economy; coopetitive games; infinite game |
| JEL: | Q42 Q30 C78 C71 Q56 Q20 Q58 C72 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:37018&r=env |
| By: | William Lilley (Saudi Aramco); Luke Reedman (Commonwealth Scientific and Industrial Research Organisation (CSIRO), Energy Transformed Flagship); Liam Wagner (School of Economics, The University of Queensland); Colin Alie (Environment Canada); Anthony Szatow (ToshEnterprises) |
| Abstract: | Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) recently completed a major study investigating the value of distributed energy (DE; collectively demand management, energy efficiency and distributed generation) technologies for reducing greenhouse gas emissions from Australia’s energy sector (CSIRO, 2009). This comprehensive report covered potential economic, environmental, technical, social, policy and regulatory impacts that could result from the wide scale adoption of these technologies. In this paper we highlight the economic findings from the study. Partial Equilibrium modeling of the stationary and transport sectors found that Australia could achieve a present value welfare gain of around $130 billion when operating under a 450 ppm carbon reduction trajectory through to 2050. Modeling also suggests that reduced volatility in the spot market could decrease average prices by up to 12% in 2030 and 65% in 2050 by using local resources to better cater for an evolving supply-demand imbalance. Further modeling suggests that even a small amount of distributed generation located within a distribution network has the potential to significantly alter electricity prices by changing the merit order of dispatch in an electricity spot market. Changes to the dispatch relative to a base case can have both positive and negative effects on network losses. |
| Keywords: | Distributed energy; Economic modeling; Carbon price; Electricity markets |
| JEL: | E17 Q40 Q42 Q47 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqeemg:16&r=env |
| By: | Muehlenbachs, Lucija (Resources for the Future) |
| Abstract: | The environmental remediation required to permanently decommission most industrial projects is an expensive and irreversible investment. Real options literature shows that temporarily closing a project and postponing decommissioning has value when economic conditions are uncertain and future reactivation is possible. However, high decommissioning costs create an incentive to “temporarily” close a project, even when there is no intention to reactivate. This paper estimates a dynamic discrete choice model of closure to evaluate the likelihood of reactivation. The model reveals that the option to temporarily close is being widely used to avoid environmental remediation of oil and gas wells in Canada. |
| Keywords: | environmental remediation, real options, structural estimation |
| JEL: | Q30 Q47 Q58 C63 |
| Date: | 2012–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-12-12&r=env |
| By: | Kelly B. Maguire; Glenn Sheriff |
| Abstract: | Economists have long been interested in measuring distributional impacts of policy interventions. As environmental justice (EJ) emerged as an ethical issue in the 1970s, the academic literature has provided statistical analyses of the incidence and causes of various environmental outcomes as they relate to race, income and other demographic variables. In the context of regulatory impacts, however, there is a lack of consensus regarding what information is relevant for EJ analysis, and how best to present it. This paper helps frame the discussion by suggesting a set of questions fundamental to regulatory EJ analysis, reviewing past approaches to quantifying distributional equity, and discussing the potential for adapting existing tools to the regulatory context. |
| Keywords: | environmental justice, regulatory impact analysis, distributional analysis, equity, inequality indes |
| JEL: | C43 D63 Q52 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201102&r=env |
| By: | Walls, Margaret (Resources for the Future); Riddle, Anne (Resources for the Future) |
| Abstract: | Natural ecosystems provide a variety of benefits to society, known as “ecosystem services.” Fundamental to the provision of ecosystem services in a region is its underlying biodiversity, i.e., the wealth and variety of plants, animals, and microorganisms. Because the benefits from ecosystem services and biodiversity are not valued in market exchanges, private landowners tend to undersupply them. We compare and contrast the different approaches taken to providing ecosystem services on private land in three federal programs—the Endangered Species Act, the Conservation Reserve Program, and Section 404 of the Clean Water Act. The Endangered Species Act (ESA) places restrictions on land uses for private landowners if endangered species, or critical habitats for endangered species, are found on their properties. The Conservation Reserve Program (CRP) compensates farmers for removing valuable property from agricultural production to preserve wildlife habitat, water and soil quality, and other ecosystem values. Section 404 of the Clean Water Act prohibits destruction or damage to wetlands, unless individuals buy credits for equivalent wetlands created by third parties—so-called “wetlands mitigation banks.” These three policies run the gamut from a command-and-control regulatory approach to a “payment for ecosystem services” option. We summarize the economics literature on key findings from these programs. |
| Keywords: | biodiversity, critical habitat, conservation, green infrastructure, payment for ecosystem services, public goods, wetlands mitigation |
| JEL: | Q57 Q15 Q25 Q28 |
| Date: | 2012–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-12-08&r=env |
| By: | Baard, Patrik (National Institute of Economic Research); Carlsen, Henrik (National Institute of Economic Research); Edvardsson Björnberg, Karin (National Institute of Economic Research); Vredin Johansson, Maria (National Institute of Economic Research) |
| Abstract: | Adaptation to climate change often involves long time frames and uncer-tainties over consequences of chosen adaptation measures. In this study, two tools developed for assisting local decision-makers in adaptation planning were tested: socio-economic scenarios and sustainability analy-sis. The objective was to study whether these tools could be of practical relevance to Swedish municipalities and foster local level climate change adaptation. We find that the municipal civil servants who participated in the testing generally considered the tools to be useful and of high rele-vance, but that more time was needed for using the tools than provided during the test process. |
| Keywords: | climate change; adaptation; socio-economic scenarios; goal conflict; cost-benefit analysis |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nierwp:0124&r=env |
| By: | Carmen Camacho (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne); Agustín Pérez-Barahona (INRA - INRA-Economie publique) |
| Abstract: | We build a model to study optimal land use, encompassing land use activities, pollution and climate change. This benchmark set-up allows us to identify the spatial drivers behind the interaction between land use and the environment. Pollution generates local and global damages since it flows across locations following a Gaussian Plume. In constrast to the previous literature on spatial dynamics, we prove that the social optimum problem is well-posed, i.e., the solution exists and is unique. We close the paper with a numerical analysis which illustrates the richness of our model, and its global dynamics. We study the different drivers of spatial heterogeneity. In particular, abatement technology stands out as a fundamental ingredient to achieve steady state solutions, which are compatible with the emergence of spatial patterns. |
| Keywords: | Land use, spatial dynamics, pollution. |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00674020&r=env |
| By: | Lluis Parcerisas; Joan Marull; Joan Pino; Enric Tello; Francesc Coll; Corina Basnou (Universitat de Barcelona) |
| Abstract: | We use a set of landscape metrics to study the long-term environmental transformation of a typical coastal Mediterranean area from 1850 to 2005. Our figures show a dramatic environmental deterioration between 1950 and 2005. The main proximate drivers of this landscape degradation are the effects of urban sprawl on former agricultural areas located in the coastal plains, together with the abandonment and reforestation of hilly slopes intercepted by low-density residential areas, highways, and other linear infrastructures. We carry out a statistical redundancy analysis (RDA) to identify certain ultimate socioeconomic and political drivers of these environmental impacts. The results confirm our interpretive hypothesis that: 1) land cover changes determine changes in landscape properties, both structural and functional; 2) these changes are not at random, but related to geographical endowments and socioeconomic or political drivers. |
| Keywords: | statistical redundancy analysis (rda), ecological connectivity, land-use change, socioeconomic drivers, mediterranean landscapes |
| JEL: | R14 Q56 N54 N53 O18 Q15 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bar:bedcje:2012273&r=env |
| By: | Francesco Bosello (Fondazione Eni Enrico Mattei, University of Milan and Euro-Mediterranean Center for Climate Change); Fabio Eboli (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change); Roberta Pierfederici (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change) |
| Abstract: | The present research describes a climate change integrated impact assessment exercise, whose economic evaluation is based on a CGE approach and modeling effort. Input to the CGE model comes from a wide although still partial set of up-to-date bottom-up impact studies. Estimates indicate that a temperature increase of 1.92°C compared to pre-industrial levels in 2050 could lead to global GDP losses of approximately 0.5% compared to a hypothetical scenario where no climate change is assumed to occur. Northern Europe is expected to benefit from the evaluated temperature increase (+0.18%), while Southern and Eastern Europe are expected to suffer from the climate change scenario under analysis (-0.15% and -0.21% respectively). Most vulnerable countries are the less developed regions, such as South Asia, South-East Asia, North Africa and Sub-Saharan Africa. In these regions the most exposed sector is agriculture, and the impact on crop productivity is by far the most important source of damages. It is worth noting that the general equilibrium estimates tend to be lower, in absolute terms, than the bottom-up, partial equilibrium estimates. The difference is to be attributed to the effect of market-driven adaptation. This partly reduces the direct impacts of temperature increases, leading to lower damage estimates. Nonetheless these remain positive and substantive in some regions. Accordingly, market-driven adaptation cannot be the solution to the climate change problem. |
| Keywords: | Computable General Equilibrium Modeling, Impact Assessment, Climate Change |
| JEL: | C68 Q51 Q54 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.02&r=env |
| By: | Hang Xiong (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I) |
| Abstract: | China's actual fiscal decentralization is one-sided: while public expenditures are largely decentralized, fiscal revenues are recentralized after 1994. One critical consequence of the actual system is the creation of significant fiscal imbalances at sub-national level. This paper investigates empirically effects of fiscal imbalances on environmental performance of Chinese provinces. First, environmental efficiency scores of Chinese provinces are calculated with SFA for the period from 2005 to 2010. Then, these scores are regressed against two fiscal imbalance indicators in a second stage model. Finally, conditional EE scores are calculated. This paper finds that effects of fiscal imbalances on EE are nonlinear and conditional on economic development level. Fiscal imbalances are more detrimental to environment in less developed provinces. These results suggest that the one-sided fiscal decentralization in China may have regressive environmental effects and contribute to regional disparity in terms of sustainable development. |
| Keywords: | Chinese provinces;Decentralization; Environmental efficiency; SFA |
| Date: | 2012–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00672450&r=env |
| By: | William Brock (University of Wisconsin, Department of Economics); Gustav Engstrom (The Beijer Institute of Ecological Economics and University of Stockholm); Anastasios Xepapadeas (Athens University of Economics and Business) |
| Abstract: | We develop a one-dimensional energy balance climate model with heat transportation across locations. We introduce the concept of potential world GDP at time t, and we introduce, through the temperature function, spatial characteristics into the damage function which make damages latitude dependent. We solve the social planner’s problem and characterize the competitive equilibrium. We define optimal taxes on fossil fuels and profit taxes on firms that extract fossil fuels. Our results suggest that if the implementation of international transfers across latitudes is not possible, then optimal taxes are spatially non homogeneous and tend to be lower at the poor latitudes. The degree of spatial differentiation of optimal taxes depend on heat transportation. We also locate sufficient conditions for optimal mitigation policies to have rapid ramp-up initially and then decrease over time. By employing the properties of the spatial model and approximating solutions, we show how to study the impact of thermal transport across latitudes on welfare inequality. |
| Keywords: | Energy Balance Climate Models, Heat Diffusion, Temperature Distribution, Spatial Optimal Taxes |
| JEL: | Q54 Q58 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.05&r=env |
| By: | Hyland, Marie; Jennings, Anne; Tol, Richard S. J. |
| Abstract: | In this paper we use a subsystem input-output decomposition analysis to examine the drivers of greenhouse gas emissions in the Republic of Ireland and in Northern Ireland. We use a bi-regional input-output analysis to look at how greenhouse gases in one region can be emitted as a result of demand in an exporting region. Looking at emissions generated throughout the island of Ireland, we find that emissions driven by demand in Northern Ireland are larger than those it generates, and vice-versa for the Republic of Ireland. We then use the input-output tables to simulate the effect of imposing a ?15/tonne carbon tax in the Republic of Ireland. We find that this causes a decrease in final demand in the Republic of Ireland, and a decrease in output in both the Republic of Ireland and in Northern Ireland; the decrease is greater in the Republic as the domestically produced share of inputs is much larger than the imported share in all sectors. |
| Keywords: | decomposition/Greenhouse gas emissions,Bi-regional input-output analysis,Carbon tax,Northern Ireland/Republic of Ireland/taxes |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp420&r=env |
| By: | OECD |
| Abstract: | The International Energy Agency (IEA) estimates that 100 Carbon Capture and Storage (CCS) projects will be required by 2020 and over 3 000 by 2050 if CCS is to contribute fully to the least-cost technology portfolio for CO2 mitigation. For CCS to reach its emissions reduction potential, the 2009 IEA publication Technology Roadmap: Carbon Capture and Storage recommends that international legal obstacles associated with global CCS deployment be removed by 2012 – including the prohibition on transboundary CO2 transfer under the London Protocol. The London Protocol was amended by contracting parties in 2009 to allow for cross-border transportation of CO2 for sub-seabed storage, but the amendment must be ratified by two-thirds of contracting parties to enter into force. It is unlikely that this will occur in the near term; this working paper therefore outlines options that may be available to contracting parties under international law to address the barrier to deployment presented by Article 6, pending formal entry into force of the 2009 amendment. |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ieaaaa:2011/15-en&r=env |
| By: | Ubilava, David; Helmers, C Gustav |
| Abstract: | This study examines the benets of nonlinear time series modelling to improve forecast accuracy of the El Nino Southern Oscillation (ENSO) phenomenon. The paper adopts a smooth transition autoregressive (STAR) modelling framework to assess the potentially regime-dependent dynamics of sea surface temperature anomaly. The results reveal STAR-type nonlinearities in ENSO dynamics, resulting in superior out-of-sample forecast performance of STAR over the linear autoregressive models. The advantage of nonlinear models is especially apparent in the short- and intermediate-term forecasts. These results are of interest to researchers and policy makers in the elds of climate dynamics, agricultural production, and environmental management. |
| Keywords: | El Nino Southern Oscillation; Out-of-Sample Forecasting; Smooth Transition Autoregression |
| JEL: | C53 C22 Q54 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36890&r=env |
| By: | Mary-Françoise Renard (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Hang Xiong (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I) |
| Abstract: | This paper studies whether Chinese provinces set strategically their environmental stringency when faced with interprovincial competition for mobile capital. Using Chinese provincial data and spatial panel econometric models, we find that Chinese provinces do engage in this kind of strategic interaction, particularly among those with similar industrial structure. Furthermore, we haven't found evidence of asymmetric responsiveness suggested by the race to the bottom theory. Finally, the one-sided fiscal decentralization is likely to strengthen the strategic behavior. These empirical results call for a skeptical attitude towards China's decentralization of environment policy implementation as well as its fiscal arrangements. |
| Keywords: | China;strategic interaction;pollution;spatial panel |
| Date: | 2012–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00672449&r=env |
| By: | Brennan, Timothy J. (Resources for the Future); Palmer, Karen (Resources for the Future) |
| Abstract: | Twenty states in the United States have adopted energy efficiency resource standards (EERS) that specify absolute or per¬centage reductions in energy use relative to business as usual. We examine how an EERS compares to policies oriented to meeting objectives, such as reducing greenhouse gas emissions, cor¬recting for consumer error in energy efficiency investment, or reducing peak de¬mand absent real-time prices. If reducing energy use is a policy goal, one could use energy taxes or cap-and-trade systems rather than an EERS. An EERS can be optimal under special conditions, but to achieve optimal goals following energy efficiency investments, the marginal external harm must fall with greater energy use. This could happen if inframarginal energy has greater negative externalities, particularly regarding emissions, than energy employed at the margin. |
| Keywords: | energy efficiency resource standards, energy efficiency, electricity, conservation |
| JEL: | L94 Q48 D02 |
| Date: | 2012–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-12-10&r=env |
| By: | Amigues, Jean-Pierre (Toulouse School of Economics (INRA, IDEI and LERNA)); Moreaux, Michel (Toulouse School of Economics (IDEI and LERNA)) |
| Abstract: | Pollution accumulation may result in more or less severe losses of natural self-cleaning capacities. We study a polluting resource management problem submitted to a potential shift from a high to a low pollution self-regeneration regime be crossed some critical pollution stock threshold. We rst describe the optimal resource exploitation policy absent the threshold. When at the threshold, the society has two options: either stabilizing the pollution level to avoid the loss of natural self-cleaning capacity or deliberately cross the threshold and switch to the low regeneration regime. We show under fairly general assumptions that there exists a unique critical pollution stock level such that thresholds located below this level will induce a switch from the high to the low regeneration regime while thresholds located above it will imply maintaining the high regime forever. We characterize the optimal policies in these two scenarios and show that triggering the low regeneration regime requires an upward jump of the resource consumption rate at the optimal switching time. |
| JEL: | Q15 Q17 |
| Date: | 2012–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:25511&r=env |
| By: | Felix Creutzig (Department of Economics of Climate Change, TU Berlin) |
| Abstract: | A major obstacle for the transformation to a low-carbon economy is the risk of a carbon lock-in: fossil fuel-based ('dirty') technologies dominate the market although their carbon-free ('clean') alternatives are dynamically more efficient. We study the interaction of learning-by-doing spillovers and the substitution elasticity between the clean and the dirty sector in an intertemporal general equilibrium model. We find that the substitution possibilities between the two sectors have an ambivalent effect: although a high substitution elasticity requires less aggressive mitigation policies than a low one, it creates a greater lock-in in the absence of regulation. The optimal policy response consists of a permanent carbon tax as well as a learning subsidy for clean technologies. A single policy instrument can also avoid high welfare losses, but a more stringent mitigation target can only be achieved at painful costs. We demonstrate that the policy implication of [Acemoglu et al. 2012] is limited in scope. Our numerical results also highlight that infrastructure provision is crucial to facilitate the low-carbon transformation. |
| Keywords: | urban form, mode choice, optimal public transit, fuel price |
| JEL: | R41 R42 R52 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecc:wpaper:4&r=env |
| By: | Robert D. Cairns; Vincent Martinet |
| Abstract: | A central issue in the study of sustainable development is the interplay of growth and sacrifice in a dynamic economy. This paper investigates the relationship among current consumption, growth, and sustained consumption in two canonical, stylized economies and in a more general context. It is found that the maximin value measures what is sustainable and provides the limit to growth. Maximin value is interpreted as an environmental-economic carrying capacity and current consumption or utility as an environmental-economic footprint. The time derivative of maximin value is interpreted as net investment in sustainability improvement. It is called durable savings to distinguish it from genuine savings, usually computed with discounted utilitarian prices. |
| Keywords: | sustained development, growth, maximin, sustainability indicator |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2012-2&r=env |
| By: | Ibrahim Ahamada (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Djamel Kirat (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | This paper addresses the economic impact of the European Union Emission Trading Scheme (EU ETS) for carbon on wholesale electricity prices in France and Germany during the Kyoto commitment period (2008-2012). Specifically, we use first identify a structural break occurred on the carbon spot price series on October 2008, which is mainly resulting from the financial and economic crisis. Then, we model the prices of day-ahead electricity contracts. We look at the volatilities around their fundamentals and simultaneously evaluate the correlation between electricity prices in both countries. We find that the price of carbon does not matter for electricity prices in either countries before October 2008. After October 2008, electricity producers in both countries were constrained to include the carbon price in their cost functions. During that period, French electricity producers were more constrained than their German counterparts. Comparing the results with those reported in Kirat and Ahamada (2011) reveals improvements in the response of electricity generation sector to carbon constraints. The impact of carbon constraint increased significantly by 300% and 150% in France and Germany, respectively, between the pilot phase and the second phase of the EU ETS. This is a consequence of the possibility of "banking" for subsequent periods and the reduction of allowance caps introduced in the second phase. We also find evidence of a trade off between gas and coal in electricity generation in Germany. Furthermore, the conditional correlation of electricity prices in both countries is highly significant and greater than during the pilot phase of the EU ETS. |
| Keywords: | Carbon emission trading, multivariate GARCH models, structural breaks, energy prices. |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00673918&r=env |
| By: | Andrew Manale; Cynthia Morgan; Glenn Sheriff; David Simpson |
| Abstract: | Considerable interest has been expressed recently in prospects for water quality trading markets between nutrient sources in the Chesapeake Bay Watershed. Allowing such flexibility in response to the terms of recently announced total maximum daily load (TMDL) restrictions might considerably decrease costs of compliance with the TMDLs. Before an effective and efficient market for offsets can be established, however, certain preconditions must be met. In particular, there must be means by which nutrients can be measured, allowances can be assigned, and limits on nutrient discharges enforced. In this paper we consider some factors that may affect the realization of these preconditions. A recurrent theme is that there are tradeoffs in policy design. A regime that imposes tight restrictions on those who are eligible to trade may also limit the cost savings that might be realized from trading. On the other hand, a regime that maximizes market participation might fail fully to achieve the environmental goals of an offset or trading policy. We conclude with some recommendations for steps that might be taken to initiate limited markets in nutrient and sediment discharges. These markets might then be expanded as experience is gained and methods developed to assure improved market performance. |
| Keywords: | water quality trading, offsets, transaction costs, adverse selection, leakage, additionality, monitoring, Chesapeake Bay, nutrients |
| JEL: | Q15 Q53 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201105&r=env |
| By: | Harrison Fell; Ian A. MacKenzie; William A. Pizer |
| Abstract: | Quantity-based regulation with banking allows regulated firms to shift obligations across time in response to periods of unexpectedly high or low marginal costs. Despite its wide prevalence in existing and proposed emission trading programs, banking has received limited attention in past welfare analyses of policy choice under uncertainty. We address this gap with a model of banking behavior that captures two key constraints: uncertainty about the future from the firm’s perspective and a limit on negative bank values (e.g., borrowing). We show conditions where banking provisions reduce price volatility and lower expected costs compared to quantity policies without banking. For plausible parameter values related to U.S. climate change policy, we find that bankable quantities produce behavior quite similar to price policies for about two decades and, during this period, improve welfare by about a $1 billion per year over fixed quantities. |
| JEL: | Q52 Q54 Q58 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17878&r=env |
| By: | Jaraite, Jurate (CERE, Centre for Environmental and Resource Economics); Kažukauskas, Andrius (CERE, Centre for Environmental and Resource Economics) |
| Abstract: | To the best of our knowledge, this study is one of the first to empirically analyse the trading behaviour of all ETS firms during the first phase of the EU’s Emissions Trading System. We use a unique dataset which allows investigating the importance of permit trading transaction costs, such as information costs and search costs. This paper shows that transaction costs can play an important role in the initial years of the programme. These costs are significant in explaining why a number of ETS firms did not sell their unused allowances on the market. This study also supports the concerns that transaction costs might be excessive for smaller participants. |
| Keywords: | emission trading; Europe; firm level data; transaction costs |
| JEL: | Q52 |
| Date: | 2012–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2012_009&r=env |
| By: | Sébastien Foudi |
| Abstract: | This paper analyzes the interactions between soil biota and agricultural practices in the exploitation of soil ecosystem services. A theoretical bioeconomic model stylized this set of interactions and combined a production function approach with optimal<br /> control theory. In the model, a farmer decides his optimal use of external input and land use given that (i) land uses modify soil biota composition, (ii) the external input reduces soil biota population. The results show how the combination of ecological interactions, farmer\\\'s expectations on the evolution of the stock of soil biota and the technology of production determines the optimal decisions. The interpretation of the results helps to understand why and under which circumstances a sustainable or a non-sustainable use of soil ecosystem services may be optimal for farmers. A particular emphasis given to the role of property rights and time preferences in the use of soil biota services reveals the ambiguity of their role on the conservation of soil ecosystem services generated by soil biota. |
| Keywords: | Ecosystem services, land uses, agriculture, heterogeneous environment, time preferences. |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2012-02&r=env |
| By: | Nikolai Hoberg (Sustainability Economics Group, Leuphana University of Lüneburg, Germany); Stefan Baumgärtner (Sustainability Economics Group, Leuphana University of Lüneburg, Germany) |
| Abstract: | Two important policy goals in intergenerational problems are Pareto-efficiency and sustainability, i.e. intergenerational equity. We demonstrate that the pursuit of these goals is subject to an intergenerational equity-efficiency trade-off. Our analysis highlights two salient characteristics of sustainability problems and policy: (i) temporal irreversibility, i.e. the inability to revise one’s past actions; and (ii) unawareness of future consequences of present actions in human-environment systems (“unknown unknowns”). If initially unknown sustainability problems become apparent and policy is enacted after irreversible actions were taken, policy-making faces a fundamental trade-off between Pareto-efficiency and sustainability. |
| Keywords: | climate change, closed ignorance, intergenerational equity-efficiency tradeoff, irreversibility, Pareto-efficiency, sustainability, unawareness |
| JEL: | D3 H23 Q01 Q38 Q56 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:198&r=env |
| By: | Kishan Khoday (UNDP); Leisa Perch (International Policy Centre for Inclusive Growth) |
| Abstract: | The world is experiencing a historic convergence of increasing demand for natural resources from emerging economies, prices at record levels across various commodity groups, a downward trend in resource supply, serious trends of ecological instability, and the rise of inequality between those who develop and profit from such resources and the communities that host them. As the world convenes in 2012 for the Rio+20 Earth Summit and marks 50 years since the passage of the UN Declaration on Permanent Sovereignty over Natural Resources, natural resources are once again changing the geopolitical landscape of countries around the world. Three and a half billion people?half of the global population?live in 56 resource-rich and resource-dependent developing countries, representing less than one third of the 193 members of the UN. (?) |
| Keywords: | Securing Greater Social Accountability in Natural Resource Management |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:opager:140&r=env |
| By: | Stephen C. Newbold |
| Abstract: | Government agencies routinely use the “value of a statistical life” (VSL) in benefit-cost analyses of proposed environmental and safety regulations. Here I review an alternative approach for valuing health risks using a “life-cycle consumption framework.” This framework is based on an explicit individual-level lifetime utility function over health and income at all ages, and so could be used to examine any pattern of health risk changes over a person’s lifespan. I discuss several potential advantages of this framework, both positive and normative. From a positive perspective, this framework can support a functional benefit transfer approach that is more flexible and potentially more accurate than the standard point-value benefit transfer approach based on the VSL, and it can be used to evaluate mortality and morbidity effects simultaneously in an internally consistent model. From a normative perspective, it provides a natural foundation for a social welfare function and therefore could facilitate a unified evaluation of efficiency and equity, as a supplement to traditional benefit-cost analysis. |
| Keywords: | VSL, life-cycle model, benefit-cost analysis, social welfare analysis, QALY, health-wealth tradeoff |
| JEL: | I18 J17 Q51 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201103&r=env |
| By: | Eva Schmid (Potsdam Institute for Climate Impact Research); Brigitte Knopf (Potsdam Institute for Climate Impact Research); Nico Bauer (Potsdam Institute for Climate Impact Research) |
| Abstract: | This paper presents a detailed documentation of the hybrid energy-economy model REMIND-D. REMIND-D is a Ramsey-type growth model for Germany that integrates a detailed bottom-up energy system module, coupled by a hard link. The model provides a quantitative framework for analyzing long-term domestic CO2 emission reduction scenarios. Due to its hybrid nature, REMIND-D facilitates an integrated analysis of the interplay between technological mitigation options in the different sectors of the energy system as well as overall macroeconomic dynamics. REMIND-D is an intertemporal optimization model, featuring optimal annual mitigation effort and technology deployment as a model output. In order to provide transparency on model assumptions, this paper gives an overview of the model structure, the input data used to calibrate REMIND-D to the Federal Republic of Germany, as well as the techno-economic parameters of the technologies considered in the energy system module. |
| Keywords: | Hybrid Model, Germany, Energy System, Domestic Mitigation |
| JEL: | O41 O52 Q43 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.09&r=env |
| By: | Ross McKitrick (Department of Economics,University of Guelph) |
| Abstract: | The debate over whether urbanization and related socioeconomic developments affect large-scale surface climate trends is stalemated with incommensurable arguments. Each side can appeal to supporting statistical evidence based on data sets that do not overlap, yielding inferences that merely conflict with but do not refute one another. I argue that such debates can only be resolved in an encompassing framework, in which both types of results can be demonstrated on the same data set, in such a way that apparent support for one conclusion occurs as a restricted case of a more general specification that supports the other, and where the restrictions can be tested. The issues under debate make such data sets challenging to construct, but I give two illustrative examples. First, insignificant differences in warming trends in urban temperature data between windy and calm conditions are shown in a restricted model whose general form shows temperature data to be strongly affected by local population growth. Second, an apparent equivalence between trends in a data set stratified by a static measure of urbanization is shown to be a restricted finding in a model whose general form indicates significant influence of local socioeconomic development on temperatures. |
| Keywords: | Urbanization; Socioeconomic growth patterns; climate data; spatial correlation |
| JEL: | Q24 Q54 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:gue:guelph:2012-02.&r=env |
| By: | Guy Meunier (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, INRA - UR 1303 ALISS); Jean-Pierre Ponssard (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Philippe Quirion (CIRED - Centre international de recherches en environnement et en développement - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR8568 - AgroParisTech - ENPC) |
| Abstract: | Countries which currently are, or are in the process of, implementing a national or regional cap and trade CO2 scheme are following alternatives routes in a number of ways: coverage, cap/target, allocation of allowances, measures to manage price volatility, offsets, measures to address competitiveness and leakage. This last issue more specifically concerns "sensitive sectors", i.e. internationally traded carbon intensive sectors (aluminium, cement, steel, refined petroleum...). Three main approaches have been proposed: output based allocation (Aus- tralia, California, New Zealand), capacity based allocation (EU) and auctioning with border adjustment. This paper investigates what the best policy should be in this setting. The analysis suggests that, if a border adjustment is not available, a combination of output and capacity based allocation is socially optimal. Demand uncertainty and international competition play a key role in the analysis since the interaction between these two factors makes the difference. A calibration of the model is used to evaluate the EU scheme for the cement sector in the third phase of the EU-ETS (2013-2020). It is shown that (i) an output based scheme would perform better than the proposed scheme, that (ii) if output-based allocation is chosen, allocation should be much less generous than the current EU benchmark, and that (iii) full auctioning with border adjustment would perform even better. |
| Date: | 2012–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00672907&r=env |
| By: | Manoj Roy; Ferdous Jahan; David Hulme |
| Abstract: | Abstract Poor urban people in Bangladesh are already experiencing numerous climate-related problems because of their multiple forms of vulnerability and multiple sources of deprivation. Their problems differ greatly, both within and across settlements and cities, and so do the practices by which they are trying to tackle them. Various factors – physical, tenure-related, socio-political and institutional – contribute to this great variety of problems and practices. In this paper, we focus on Khulna City to identify the challenges facing Khulna’s poor people, understand the practices they are developing, and examine the role that institutions are playing in supporting/constraining these practices. Khulna is third largest city of Bangladesh, located in the southwest region, where the consequences of climate change are expected to be particularly severe. In order to capture the main features of Khulna’s diverse low-income settlements, we examined two of the most common forms of settlement – a public (Rupsha Ghat) and a private (Bagmara) settlement. A quantitative mini-survey was followed by detailed qualitative interviews and participatory exercises. In many ways Khulna’s poor are responding well to their problems, such as through adjusting their livelihoods and reducing risks through individual and collective actions, and built environment changes and adaptation. People have more opportunities for advancement in public than private settlements, in terms of both developing more effective practices and having comparatively fewer constraints. However, several factors are constraining what they can achieve, such as geography and settings, lack of socio-political platform, ineffective support from public institutions, aid and NGO dependency, and limits to their own agency and structures. The paper concludes by arguing that improving the formal and informal processes of urban governance is central to strengthening the capacity of people in low-income settlements to cope with both existing problems and the intensified problems created by climate change. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:16312&r=env |
| By: | L. Lambertini; A. Tampieri |
| Abstract: | We investigate the feasibility of horizontal mergers in a homogeneous triopoly where firms compete in quantities and production is polluting the environment. We show that the degree of alignment between private and social incentives increases in the intensity of pollution. |
| JEL: | L13 L41 Q51 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp813&r=env |
| By: | Palmer, Karen (Resources for the Future); Grausz, Samuel (Resources for the Future); Beasley, Blair (Resources for the Future); Brennan, Tim (Resources for the Future) |
| Abstract: | Energy efficiency resource standards (EERS) refer to policies that require utilities and other covered entities to achieve quantitative goals for reducing energy use by a certain year. EERS policies generally apply to electricity and natural gas sales and electricity peak demand, though they also cover other energy sources in Europe. Our study aggregates information about the requirements of existing EERS policies for electricity sales in the United States. We convert quantitative goals into comparable terms to compare the nominal stringency of EERS programs across states. EERS programs also differ in their nonquantitative requirements, including flexibility measures, measurement and verification programs, and penalties and positive incentives. We compare the U.S. policies to similar policies in the European Union and discuss important policy issues, including exogenous changes in fuel prices and issues with utility management of energy efficiency programs. |
| Keywords: | energy efficiency, electricity, energy efficiency resource standards, state regulation |
| JEL: | L94 L95 L51 |
| Date: | 2012–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-12-11&r=env |
| By: | Ambec, Stefan; Dinar, Ariel; McKinney, Daene |
| Abstract: | By signing a fixed water sharing agreement (FWSA), countries voluntarily commit to release a fixed amount of river water in exchange for an agreed compensation. We examine the vulnerability of such commitments to reduced water ows. Among all FWSAs that are acceptable to riparian countries, we find out the one which is sustainable to the most severe drought scenarios. The so-called upstream incremental FWSA assigns to each country its marginal contribution to its followers in the river. Its mirror image, the downstream incremental FWSA, is not sustainable to reduced ow at the source. We apply our analysis to the Aral Sea basin agreement. |
| Keywords: | international river treaty, water, stability, core, compliance, Aral sea. |
| JEL: | D74 Q25 Q28 Q54 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:25458&r=env |
| By: | Tol, Richard S. J.; Walsh, Sharon |
| Abstract: | We examine the determinants of holiday destination choice for tourists from 182 countries over a fifteen year time period. Our sample is much larger than that used by previous studies. The results are similar. Tourists prefer to stay relatively close to their home country. They like countries that have a long coast and lots of heritage. Tourists dislike poverty, and tourists from richer countries have a greater aversion to poverty. Tourists prefer politically unstable countries (all else being equal). Tourists like countries with high precipitation. Tourists like it hot, but not too hot. Tourists from warmer origins have stronger climate preferences. |
| Keywords: | poverty |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp423&r=env |
| By: | Nadia Ameli (Fondazione Eni Enrico Mattei, Italy, and Energy and Resources Group, University of California, Berkeley, USA); Daniel M. Kammen (Energy and Resources Group, University of California, Berkeley, USA) |
| Abstract: | With a focus on alternative methods for accelerating clean energy policy adoption, this study introduces an innovative financing scheme for renewable and energy efficiency deployment. Financing barriers represent a notable obstacle for energy improvements and this is particularly the case for low-income households. Limited access to credit, due to socio-economic status and the lack of guarantees, are key issues related to financing barriers. Implementing a policy such as PACE – Property Assessed Clean Energy – allows for the provision of up-front funds for residential property owners to install electric and thermal solar systems and make energy-efficiency improvements to their buildings. This paper will inform the design of better policies tailored to the creation of the appropriate conditions for such investments to occur, especially when the lack of access to capital tends to stall them. |
| Keywords: | Financing Barriers, Energy Efficiency, Solar PV, Energy Investments |
| JEL: | Q42 Q55 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.10&r=env |
| By: | Stuart McDonald (School of Economics, The University of Queensland); Joanna Poyago-Theotoky |
| Abstract: | This paper performs a comparison of two well known approaches for modelling R&D spillovers associated with investment in E-R&D, namely dAspremont-Jacquemin and Kamien-Muller-Zang. We show that there is little qualitative difference between the models in terms of total surplus delivered when selecting the optimal tax regime when there is precommitment under cooperative regimes in which firms coordinate expenditures to maximize joint profits. However, under non-cooperative regimes there is marked difference, with the model of Kamien- Muller-Zang leading to higher taxation rates when firms share information. Furthermore, we argue that the Kamien-Muller-Zang model is of questionable validity when modelling R&D on emissions reducing technology due to counter intuitive results showing a positive relationhip between R&D spillovers and emissions taxes. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:455&r=env |
| By: | David Berre (IESEG School of Management (LEM-CNRS)); Stéphane Blancard (AGROSUP Dijon, UMR 1041 CESAER); Jean-Philippe Boussemart (Université Lille 3 et IESEG School of Management (LEM-CNRS)); Emmanuel Tillard (UMR SELMET / CIRAD La Réunion) |
| Abstract: | Grâce aux avancées méthodologiques sur la prise en compte des outputs indésirables dans la modélisation des technologies de production, cet article permet d’évaluer l’éco-efficience de 51 exploitations laitières de La Réunion selon le point de vue de trois acteurs : l’éleveur, la coopérative et la société. Si l’analyse retient le scenario désirée par la société comme celui conforme à la plus forte diminution des quantités globales d’outputs indésirables, on constate néanmoins qu’en termes d’indicateurs environnementaux (excèdent azote/litre de lait et gaz a effet de serre émis/litre de lait), le scénario de la coopérative qui vise à maximiser la production laitière aboutit aux mêmes ordres de grandeur. Cependant, l’augmentation des couts suggérée par ce dernier scenario pourrait être un frein a sa mise en œuvre, compte tenu des charges déjà très élevées auxquelles font face les producteurs réunionnais. La vision de l’éleveur souhaitant améliorer sa productivité globale a dotations factorielles constantes apparaît alors comme satisfaisante en permettant une progression assez significative de la production à niveau de gaz à effet de serre (GES) et d’excédents azotés (EA) inchangé. |
| Keywords: | Agriculture, outputs indésirables, fonction distance, Data Envelopment Analysis, gaz à effet de serre, azote |
| JEL: | D57 Q12 Q16 Q51 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:ies:wpaper:e201109&r=env |
| By: | Valentina Bosetti (Fondazione Eni Enrico Mattei and CMCC); Michela Catenacci (Fondazione Eni Enrico Mattei); Giulia Fiorese (Fondazione Eni Enrico Mattei and Dipartimento di Elettronica e Informazione, Politecnico di Milano); Elena Verdolini (Fondazione Eni Enrico Mattei and CMCC) |
| Abstract: | In this paper we present and discuss the results of an expert elicitation survey on solar technologies. Sixteen leading European experts from the academic world, the private sector and international institutions took part in this expert elicitation survey on Photovoltaic (PV) and Concentrated Solar Power (CSP) technologies. The survey collected probabilistic information on (1) how Research, Development and Demonstration (RD&D) investments will impact the future costs of solar technologies and (2) the potential for solar technology deployment both in OECD and non-OECD countries. Understanding the technological progress and the potential of solar PV and CPS technologies is crucial to draft appropriate energy policies. The results presented in this paper are thus relevant for the policy making process and can be used as better input data in integrated assessment and energy models. |
| Keywords: | Expert Elicitation, Research, Development and Demonstration, Solar Technologies |
| JEL: | Q42 Q55 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.01&r=env |
| By: | Srinivasan, Raghavendra Guru |
| Abstract: | ABSTRACT People become obese for various reason including loss of self control over consumption. Practice of yoga reinforces basic ability of self control over food consumption. In this regard, the paper analyses the health economic cost of weight loss treatments. It is observed that the health economic cost of treatment could be reduced for the savings in food consumption achieved. The paper also seeks to extend the same benefit to yoga practice as the practice reduces food consumption and slows down metabolism. Recognising yoga as clean practice and evaluating yoga service for reducing/optimizing food consumption may promote healthy practices and may lead to completeness in conserving all forms of energy consumption, i.e mechanical energy and food energy. Further research is required to measure the benefits of yoga for creation of appropriate incentive structure. |
| Keywords: | Carbon incentive; yoga ; |
| JEL: | P36 I1 |
| Date: | 2012–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36885&r=env |
| By: | Di Cosmo, Valeri; Hyland, Marie |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp424&r=env |
| By: | GROFF Jocelyn; NGUYEN Thi Thuc Uyen |
| Abstract: | Cette analyse identifie les principaux facteurs qui incitent les entreprises à s'engager dans l'innovation environnementale. Elle contribue à la littérature empirique sur l'innovation environnementale à plusieurs niveaux. Premièrement, cet article présente pour la première fois, une analyse comparative intersectorielle des motivations à l'éco-innovation. Deuxièmement, au lieu de considérer l'éco-innovation comme une mesure agrégée d'innovation, cette étude s'attache à la différencier selon le type d'innovation en termes de produit, de procédé et de technologie. Troisièmement, cet article prend en compte la nature de l'éco-innovation au cours du processus d’innovation, en distinguant l'innovation environnementale à l'étape de la production et celle à l'étape des produits destinés aux consommateurs finaux. L'objectif est donc double. Il s'agit dans un premier temps, d'identifier les déterminants de la probabilité d'introduction de différents types d'éco-innovations dans une optique intersectorielle, quelle que soit la finalité de ces innovations. Puis, dans un second temps, d'étudier les déterminants des éco-innovations en fonction de leurs objectifs. Un modèle logistique a été réalisé à partir des données issues l'enquête communautaire sur l'innovation du Luxembourg. Cette analyse a permis de mettre en évidence l’importance de prendre en considération les spécificités inter et intra-sectorielles lorsqu’il s’agit de traiter la question des motivations à l’éco-innovation au niveau des entreprises. Les principales distinctions qui se révèlent, démontrent que les entreprises du secteur de l’industrie manufacturière sont plus sensibles aux pressions réglementaires que celles du secteur des services. D'autre part, les services semblent bénéficier rapidement d’outputs en terme d'éco-innovation, grâce à la mise en place d’un système de management environnemental, mais également grâce à des activités de R&D et cela, quel que soit le type ou la nature de l’innovation. |
| Keywords: | eco-innovation; Services; Industrie manufacturière; Réglementation; Système de management environnemental; Demande; R&D |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2012-11&r=env |