|
on Energy Economics |
| By: | Christian Gross |
| Abstract: | The rapidly growing literature on the relationship between energy consumption and economic growth has not univocally identified the ‘real’ causal relationship yet. We argue that bivariate models, which analyze the causality at the level of the total economy, are not appropriate – especially in cases where both variables do not cover the same scope of economic activity. After discussing appropriate pairs of variables, we investigate Granger causality between energy consumption and GDP in the U.S. for the period from 1970 to 2007 for three sectors - industry, commercial sector, transport as well as for the total economy. The choice of additional variables is based on major findings from the Environmental Kuznets curve literature and its critical reflections. Using the recently developed ARDL bounds testing approach by Pesaran and Shin (1999) and Pesaran et al. (2001), we find evidence for long-run Granger causality for the commercial sector, in case energy is the dependent variable, as well as bi-directional long-run Granger causality for the transport sector. We conclude that controlling for trade as well as increasing energy productivity significantly improves the fit of several extensions of the bivariate model. |
| Keywords: | energy, growth, multivariate ARDL, cointegration, granger causality Length 30 pages |
| JEL: | C3 Q4 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2011-04&r=ene |
| By: | Ibrahim Abada; Vincent Briat; Olivier Massol |
| Abstract: | Most of the recent numerical market equilibrium models of natural gas markets use imperfect competition assumptions. These models are typically embedded with an oversimplified representation of the demand side, usually a single-variable affine function, that does not capture any dynamic adjustment to past prices. To remedy this, we report an effort to construct an enhanced functional specification using the system dynamics-based model of Moxnes (1987, 1990). Thanks to a vintage representation of capital stock, this putty-clay model captures the effect of both past and current energy prices on fuel consumption. Using a re-calibrated version of this model, we first confirm the pertinence of this modeling framework to represent interfuel substitutions at different fuel prices in the industrial sector. Building on these findings, a dynamic functional specification of the demand function for natural gas is then proposed and calibrated. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2011-13&r=ene |
| By: | Manuel Frondel; Nolan Ritter; Colin Vance |
| Abstract: | Rebound effects measure the behaviorally induced offset in the reduction of energy consumption following efficiency improvements. Using both panel estimation and quantile-regression methods on household travel diary data collected in Germany between 1997 and 2009, this study investigates the heterogeneity of the rebound effect in private transport. With the average rebound effect being in the range of 57% to 62%, our results are in line with a recent German study by FRONDEL, PETERS, and VANCE (2008), but are substantially larger than those obtained from other studies. Furthermore, our quantile-regression results indicate that the magnitude of estimated fuel price elasticities – from which rebound effects can be derived – depends inversely on the household’s driving intensity: Households with low vehicle mileage exhibit fuel price elasticities, and hence rebound effects, that are significantly larger than those for households with high vehicle mileage. |
| Keywords: | Automobile travel; rebound effect; panel models; quantile regression |
| JEL: | D13 Q41 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0227&r=ene |
| By: | Murray, Anthony G.; Mills, Bradford F. |
| Abstract: | The Energy Star label program to promote the diffusion of energy efficient home appliances is arguably the most significant government effort to reduce U.S. residential energy consumption. Program effectiveness requires that consumers are aware of the labeling scheme and also change their purchase decisions based on label information. This paper examines the factors associated with consumer awareness of the Energy Star label of recently purchased âwhiteâ major appliances and the factors associated with the choice of Energy Star labeled appliances. The paper finds that household characteristics have a much stronger association with consumers awareness of labels than with the choice of Energy Star appliances. Renting the home, Hispanic ethnicity, being poor or near poor, and living in regions with lower ACEEE scores do, however,decrease the propensity for households to purchase Energy Star appliances. Eliminating these gaps in Energy Star appliance adoption would result in house electricity cost savings of $164 million per year and associated carbon emission reductions of about 1.1 million metric tons per year. |
| Keywords: | Energy Star, Household Energy Efficiency, Technology Adoption, Consumer/Household Economics, Resource /Energy Economics and Policy, O33, Q40, Q48, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103328&r=ene |
| By: | Curtiss, Jarmila; Jelinek, Ladislav |
| Abstract: | Increasing worldwide energy demand and diminishing supplies of fossil fuels have necessitated the development and increasing use of new sustainable energy sources, as well as more parsimonious energy use. In the context of agriculture, research has focused predominantly on the production of bio-energy, while only a limited number of studies have investigated the energy use and possible energy saving in conventional agricultural production. In response to this lack in empirical research this study aims (i) to measure the farm-level energy and cost efficiency of conventional agricultural (wheat) production, (ii) to identify the potential for energy saving in conventional agriculture and quantify its shadow cost, (iii) to identify production technologies and managerial practices that reduce total energy use. We adjusted the method by Coelli, Lauwers, Van Huylenbroeck (2007) introducing analogy between cost and nutrient minimization to measure energy use reduction potential and its costs. The analysis was carried out on survey data for 95 farms for production year 2007/08. Energy coefficients for individual non-renewable inputs were derived from the PLANETE methodology (Méthode Pour L'Analyse EnergéTique de l'Exploitation) developed by SOLAGRO. We applied data envelopment analysis to estimate energy and cost optima and efficiencies, and truncated regression to identify statistically significant determinants of energy efficiency. We found significant differences in energy consumption per unit of wheat production among Czech farms - best producers consume 46% less energy per unit of production than average producers, however, from that ca. 30% is due to variation in production conditions. Marked share of energy inefficiency (over 50% of potential energy savings) originates in technical efficiency, which offers simultaneous cost savings. Producing wheat in energy optimum would increase costs by 9% when compared to cost optimum. The largest potential of energy savings was found in fuel, and fertilizers and other chemicals. Regression analysis implies that use of more fuel-efficient machinery or machinery with other energy-saving technical parameters (e.g., higher utility weight) and optimizing material transport could increase energy efficiency, while some commonly applied technological practices (such as conventional soil preparation) have a negative energy efficiency effects. |
| Keywords: | Energy efficiency, cost efficiency, shadow cost of energy saving, agriculture, Czech farm, wheat production, Agribusiness, Crop Production/Industries, Production Economics, Productivity Analysis, D24, |
| Date: | 2011–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103410&r=ene |
| By: | Maguire, Karen |
| Abstract: | This paper focuses on the role of electricity markets and renewable energy regulation in wind development across the United States. My findings, using a random effects Tobit model with a 25-state sample, from 1994-2008, indicate that the implementation of state Renewables Portfolio Standards (RPS), Green Power Purchase programs (GPP), and the Federal Production Tax Credit (PTC) positively influenced a stateâs added wind capacity. The influence of GPP programs continued to increase in the years after implementation, while for RPS it diminished. Also, other programs such as State Loan and Grant programs directed at increasing renewable energy development have not had a significant impact on wind capacity. The role of market factors is less significant, although there is some evidence that increases in natural gas prices had a positive influence. |
| Keywords: | Wind Energy, Energy Policy, Renewable Energy Development, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103599&r=ene |
| By: | Thure Traber; Claudia Kemfert |
| Abstract: | Under perfect competition on the output market, first best technology subsidies in the presence of learning by doing are justified by knowledge spill overs that are not accounted for by individual companies. First best output subsidies are thus depending directly on the learning effects and are, if applicable, positive. Considering electricity markets, a setting of imperfect competition is more appropriate. We show that the second best output subsidy for learning by doing in renewable energies takes the market distortion due to imperfect competition into account and is of ambiguous sign. Based on simulations with a European electricity market model, we find that second best renewable energy subsidies are positive and only insignificantly impacted by market power. By contrast, the welfare gains from an optimal subsidy are considerably higher compared to a hypothetical situation of perfect competition. |
| Keywords: | energy policy, renewable energy, learning by doing, imperfect competition, emission trading |
| JEL: | L13 L94 O33 Q42 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1126&r=ene |
| By: | Davis, Clay D.; Gotham, Douglas J.; Preckel, Paul V. |
| Keywords: | Wind Energy, System Costs, Alternative Energy, Electricity Generation, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q4, Q42, Q54, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103770&r=ene |
| By: | Peter Grösche; Carsten Schröder |
| Abstract: | With its commitment to double the share of renewable fuels in electricity generation to at least 30% by 2020, the German government has embarked on a potentially costly policy course whose public support remains an open empirical question. Building on household survey data, in this paper we trace peoples‘ willingness-to-pay (WTP) for various fuel mixes in electricity generation, and capture preference heterogeneity among respondents using random parameter techniques. Based on our estimates, we trace out the locus that links the premia charged for specifi c electricity mixes with the fraction of people supporting the policy. Albeit people‘s WTP for a certain fuel mix in electricity generation is positively correlated to the renewable fuel share, our results imply that the current surcharge eff ectively exhausts the fi nancial scope for subsidizing renewable fuels. |
| Keywords: | Green electricity; willingness-to-pay; preference heterogeneity; policy evaluation |
| JEL: | C23 H23 Q48 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0233&r=ene |
| By: | Pham, Matthew |
| Abstract: | Poster prepared for presentation at the Agricultural & Applied Economics Associationâs 2011 AAEA & NAREA Joint Annual Meeting, Pittsburgh, Pennsylvania, July 24-26, 2011 |
| Keywords: | Willingness-to-pay, Perennial Grass, Contingent Valuation, Economic Feasibility, Credit Stacking, Minnesota, Row Crops, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2011–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103604&r=ene |
| By: | Key, Nigel; Sneeringer, Stacy |
| Abstract: | Biogas recovery systems that use methane from manure to generate electricity have not been widely adopted in U.S. mainly because the costs of constructing and maintaining these systems have exceeded the value of the benefits provided. Climate change mitigation and renewable energy policies could increase profits for the operators of such systems thereby making digester adoption more widespread. For the U.S. Dairy sector, we examine digester adoption rates, emissions reductions, net returns, electricity generation, and program costs under different policy scenarios. We find that 3% or fewer dairies would need to adopt digesters to meet the policy goals of reducing 25% of greenhouse gas emissions from dairy manure or generating one million megawatt hours of electricity per year. A carbon pricing program provides the highest net social benefits for almost all policy goals considered. |
| Keywords: | anaerobic digester, methane, dairy, renewable electricity, subsidy, carbon offsets, climate change, Environmental Economics and Policy, Livestock Production/Industries, Q5, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103440&r=ene |
| By: | Beckman, Jayson; Borchers, Allison; Stenberg, Peter |
| Keywords: | Agribusiness, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103454&r=ene |
| By: | Parkins, John R.; Haluza-DeLay, Randolph |
| Abstract: | A new urgency is emerging around nuclear power development and this urgency is accentuated by the post-tsunami events at the Fukushima Daiichi nuclear power plant in Japan. This urgency extends beyond these dramatic events in Japan, however, to many other regions of the world and situations where nuclear power development is receiving renewed attention as an alternative to carbon-based energy sources. As a contribution to the growing public debate about nuclear power development, this paper offers a set of insights into the social and ethicalaspects of nuclear power development by drawing from published literature in the humanities and social sciences. We offer insights into public risk perception of nuclear power at individual and national levels, the siting of nuclear waste repositories, the changing policy context for nuclear power development, social movements, and the challenges of risk management at the institutional level. We also pay special attention to the ethical aspects of nuclear power withattention to principles such as means and ends, use value and intrinsic value, private goods and public goods, harm, and equity considerations. Finally, we provide recommendations for institutional design and performance in nuclear power design and management. |
| Keywords: | nuclear power, risk perception, social context, megaprojects, energy production, applied ethics, social values, social movements, complexity, hazards, disaster response, Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty, Q40, Z00, |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ualbsp:103237&r=ene |
| By: | Sherzod N. Tashpulatov |
| Abstract: | Price fluctuations that partially comove with demand are a specific feature inherent to liberalized electricity markets. The regulatory authority in Great Britain, however, believed that sometimes electricity prices were significantly higher than what was expected and, therefore, introduced price-cap regulation and divestment series. In this study, I analyze how the introduced institutional changes and regulatory reforms affected the dynamics of daily electricity prices in the England and Wales wholesale electricity market during 1990-2001. The research finds that the introduction of price-cap regulation did achieve the goal of lowering the price level at the cost of higher price volatility. Later, the first series of divestments is found to be successful in lowering price volatility, which however happens at the cost of a higher price level. Finally, the study also documents that the second series of divestment was more successful in lowering both the price level and volatility. |
| Keywords: | electricity prices, seasonality, Fourier transform, conditional volatility, regulation. |
| JEL: | C22 C51 L50 L94 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp439&r=ene |
| By: | Singh, Aaron; Karali, Berna; Ramirez, Octavio A. |
| Abstract: | We analyze time-varying volatility in crude oil, heating oil, and natural gas futures markets by incorporating changes in important macroeconomic variables and major political and weather-related events in conditional variance equations. We allow each market to respond to positive news different than to negative news by using the exponential GARCH model developed by Nelson (1991). It is shown that a leverage effect exists in each market with a larger response to negative news. Further, volatility in these markets is found to change in response to several major events such as the Asian financial crisis in 1997 and hurricane Katrina in 2005, as well as in response to changes in macroeconomic variables such as consumer price and industrial production indices. In addition, downward changes in these macro variables are found to have larger impact than upward changes do. Finally, volatility spillover from heating oil to natural gas futures markets is found. |
| Keywords: | Asymmetric shocks, energy markets, oil, spillover effects, volatility, Marketing, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103593&r=ene |
| By: | Wixson, Sarah E.; Katchova, Ani L. |
| Abstract: | Recent increases in the price of crude oil have led to a rise in the prominence of corn-based ethanol as an alternative source of energy. As a result linkages have been established between commodity and energy prices. The aim of this study is to determine if soybeans, corn, wheat, oil, and ethanol adjust their prices asymmetrically depending on whether their actual price is over- or under-predicted with respect to one another. This studyâs goal of determining if asymmetric price relationships exist is accomplished by using monthly time series price data incorporated into a distributed lag error correction model distinguishing between positive and negative price difference and positive and negative values of the error correction term. The primary results of this study found that asymmetric price changes do occur in the commodity and energy markets. Interestingly, in all the asymmetric price adjustments that were found, with only one exception in the soybean-corn relationship, prices will adjust downward when the actual price of one variable is above its equilibrium price as determined by the price of another study variable and consequently would be expected to exhibit a downward adjustment in price in the following month. |
| Keywords: | asymmetric price adjustment, grain prices, crude oil prices, ethanol prices, error correction model, Agribusiness, Agricultural Finance, Demand and Price Analysis, Marketing, Resource /Energy Economics and Policy, Q11, Q13, Q42, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103735&r=ene |
| By: | Lin, C.-Y. Cynthia; Zhang, Wei |
| Abstract: | This paper estimates a dynamic model of the world market for nine nonrenewable resources over the period 1970-2004, and tests whether the countries supplying a nonrenewable resource behaved as price-takers or oligopolists. The model generates estimates of the shadow price of the nine minerals with minimal functional form assumptions. The results show that the countries supplying hard coal, lead, and oil behaved as oligopolists during the study period, while the world market for other nonrenewable resources could be characterized as perfectly competitive. The shadow prices do not increase monotonically, which is evidence for stock effects in extraction costs. The shadow prices of most minerals peaked between 1970 and 1980. |
| Keywords: | nonrenewable resources, market power, shadow price, empirical dynamic model, Resource /Energy Economics and Policy, Q31, L13, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103397&r=ene |
| By: | Manfred Wiebelt; Karl Pauw; John Mary Matovu; Evarist Twimukye; Todd Benson |
| Abstract: | With the recent discovery of crude oil reserves along the Albertine Rift, Uganda is set to establish itself as an oil producer in the coming decade. Total oil reserves are believed to be 2 billion barrels, with recoverable reserves estimated at 0.8-1.2 billion barrels. At peak production, likely to be reached by 2017, oil output will range from 120,000-210,000 barrels per day, with a production period spanning up to 30 years. Depending on the exact production levels, the extraction period, the future oil price, and revenue sharing agreements with oil producers, the Ugandan government is set to earn revenue equal to 10-15 percent of GDP at peak production. The discovery of crude oil therefore has the potential to provide significant stimulus to the Ugandan economy and address its development objectives. However, this is subject to careful management of oil revenues to avoid the potential pitfall of a sudden influx of foreign exchange. Dominating the concerns is the potential appreciation in the real exchange rate and subsequent loss of competitiveness in the non-resource tradable goods sectors such as agriculture or manufacturing (‘Dutch Disease’). These sectors are often major employers in developing countries and the engines of growth. Several mitigation measures can be employed by government to counter Dutch Disease, including measures that directly counter the real exchange rate appreciation or measures that offer direct support to traditional export sectors in the form of subsidies. With the aid of a recursive-dynamic computable general equilibrium model this study evaluates the economic implications of the future oil boom in Uganda. We also consider various options open to the Ugandan government for saving, spending, or investing forecasted oil revenues with aim of promoting economic development and reducing poverty, but also countering possible Dutch Disease effects. We find that generally urban sectors and households will be better able to capture rents generated by the oil revenues leading to growing rural-urban and regional inequality. Yet, despite these potential risks, Uganda’s oil economy presents an unparalleled opportunity for the agricultural sector and for poverty reduction in particular. On the one hand, domestic demand for food, such as cereals, root crops, pulses and matooke (cooking banana), but especially higher valued products, such as horticulture and livestock products, will increase as incomes rise. Moreover, higher urban income and urban consumer preferences will lead to increasing demand for processed foods and foods with greater domestic value-added, such as meat, fish, etc. Provided Uganda’s tradable food sectors can remain competitive, this provides an opportunity for both farming and the food processing manufacturing sector. On the other hand, there is the immediate danger to lose market shares in agricultural export markets, which might be extremely hard to regain after the oil boom. As shown in this paper, the outcomes for agriculture, rural-urban income differentials and poverty reduction depend very much on whether government revenues for public investment in the agricultural sector will increase and help alleviate chronic under-investment in public goods that is constraining agricultural growth in Uganda |
| Keywords: | Uganda, crude oil, Dutch Disease, agricultural competitiveness, general equilibrium modeling |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1696&r=ene |
| By: | Elobeid, Amani; Carriquiry, Miguel; Fabiosa, Jacinto F. |
| Abstract: | We use a spatially disaggregated model of Brazilian agriculture to assess the implications of global biofuel expansion on Brazilian land usage at the regional level. This Brazilian model is part of the FAPRI agricultural modeling system, a multimarket, multi-commodity international agricultural model, used to quantify the emergence of biofuels and to analyze the impact of biofuel expansion and policies on both Brazilian and world agriculture. We evaluate two scenarios in which we introduce a 25% exogenous increase in the global demand for ethanol and one scenario in which we increase global ethanol demand by 50%. We then analyze the impact of these increases in terms of land-use change and commodity price changes particularly in Brazil. In the first scenario, we assume that the enforcement of the land-use reserve in Brazil remains at historically observed levels, and that abundant additional land can be readily incorporated into production. The second scenario involves implementing the same exogenous biofuel demand shock but with a different responsiveness in area expansion to price signals in Brazil, reflecting varying plausible assumptions on land availability for agricultural expansion. The third scenario, which is similar to the first scenario but with a larger increase in global ethanol demand, is run to check whether increasing volume of ethanol requires the incorporation of additional quantities of land per unit of ethanol. We find that, within Brazil, the expansion occurs mostly in the Southeast region. Additionally, total sugarcane area expansion in Brazil is higher than the increase in overall area used for agriculture. This implies that part of the sugarcane expansion displaced other crops and pasture that is not replaced, which suggests some intensification in land use. The lower land expansion elasticities in the second scenario result in a smaller expansion of area used for agricultural activities. A higher proportion of the expansion in sugarcane area occurs at the expense of pasture area, which implied land intensification of beef production. This explains the small change in commodity prices observed between the first and second scenarios. These results suggest that reducing the overall responsiveness of Brazilian agriculture may limit the land-use changes brought about by biofuel expansion, which would in turn reduce its environmental impacts in terms of land expansion. Additionally, the impacts on food prices are limited because of the ability of local producers to increase the intensity of land use in both crop (by double cropping and raising yields) and livestock production (by increasing the number of heads of cattle per hectare of pasture or stocking rate) releases area that can be used for crops. In scenario three, we find that larger ethanol volumes did not require more land per unit of ethanol. Doubling the demand for ethanol does not change the results, which indicates that the limit for intensification is beyond the 50% expansion assumed in Scenario 3. In this range, the same amount of land is incorporated into production per additional unit of ethanol. |
| Keywords: | Biofuels, Brazil, land use, Land Economics/Use, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103798&r=ene |
| By: | Qiu, Cheng; Colson, Greg; Wetzstein, Michael |
| Abstract: | In this study, a Structural Vector Autoregression model (SVAR) is employed to decompose how supply/demand structural shocks affect food and fuel prices within fuel and corn markets. Results indicate that the relative importance of each structural shock in explaining the variation of corn prices is different. Our findings support the hypothesis that corn prices increase as a response to those positive demand shocks in the short run, while in the long run, global competitive agricultural commodities markets as well as positive supply shocks respond to commodity price shocks, restoring prices to its long-run trends. In conclusion, fundamental market forces of demand and supply as well as real economic aggregated demand shocks were the main contributors of the 2007-2008 food price spike. |
| Keywords: | Food, fuel, Food Consumption/Nutrition/Food Safety, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103689&r=ene |
| By: | Nunez, Hector M.; Onal, Hayri; Khanna, Madhu; Chen, Xiaoguang; Huang, Haixiao |
| Keywords: | Environmental Economics and Policy, Marketing, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:104019&r=ene |
| By: | Yu, Tun-Hsiang âEdwardâ; Larson, James A.; Gao, Yuan; English, Burton C. |
| Abstract: | It is generally believed that preprocessing procedure can reduce the transportation and storage costs of biomass feedstock for biofuel production by condensing the feedstockâs size. However, the capital costs of preprocessing facilities could be significant in the feedstock logistics system. Applying a GIS and mixed-integer mathematical programming model, this study evaluates the economic values of a preprocessing technology, stretchâwrap baling, in the biomass feedstock supply chain for a potential commercial-scale switchgrass biorefinery in East Tennessee. Preliminary results suggest that the stretch-wrap baling equipment outperforms the conventional hay harvest methods in terms of total delivered costs. Although the densification process involves additional capital and operation costs, the total delivered costs of switchgrass for a 25- million-gallon per year biorefinery in the preprocessing system is 12% â 21% lower than various logistic methods using conventional hay equipments. |
| Keywords: | Biomass feedstock, cellulosic biofuel, logistic costs, preprocessing technology, Crop Production/Industries, Resource /Energy Economics and Policy, Q16, D24, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103993&r=ene |
| By: | Egbendewe-Mondzozo, Aklesso; Swinton, Swinton M.; Izaurralde, R. Cesar; Manowitz, David H.; Zhang, Xuesong |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, Production Economics, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103435&r=ene |
| By: | Di Corato, Luca; Mandal, Maitreyi; Lagerkvist, Carl Johan |
| Keywords: | Crop Production/Industries, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103701&r=ene |
| By: | Birur, Dileep K.; Beach, Robert H. |
| Abstract: | As the biofuels are emerging as promising alternative transportation fuels across the world, they also offer huge potential for international trade in biofuels. A number of trade barriers such as import tariffs and domestic support have limited the scope for trade in biofuels. The purpose of this study is to analyze the implications of U.S. biofuel mandates, subsidies and import tariffs on global trade and welfare. We utilize the GTAP-BIO model, which was developed as a customized version of the Global Trade Analysis Project (GTAP) model capable of analyzing domestic and trade policy issues associated with biofuels (Birur, 2010). We supplement this model with updated and detailed sectoral level information on feedstock crops, different types of first and second generation biofuels and their byproducts. This highly refined data base facilitates the model for simulating changes in cropping patterns at individual crop level, land use changes, commodity prices, etc. We analyze the following policy scenarios in this study: (a) implementation of volume requirements consistent with the U.S RFS2 volumes for the year 2022 relative to a starting point of the base year 2004, (b) reduction in the ethanol specific import tariff from 54 ¢/gallon to 45 ¢/gallon, so that there will be âparityâ between the U.S. and exporting countryâs ethanol price, (c) Complete removal of the U.S. ethanol blendersâ credit and import tariff on ethanol, (d) combined implementation of (a) and (c) policy scenarios. This paper offers insights regarding the prospective policy options that can affect potential trade in biofuels amongst the major producing countries, such as the extent to which a removal of U.S. import tariff on ethanol affects pasture and forest land conversion in Brazil. |
| Keywords: | Biofuels, Computable General Equilibrium, land use change, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103996&r=ene |
| By: | Sesmero, Juan P. |
| Abstract: | Off-farm demand for crop residues is expected to grow as bioenergy policies become effective. Demand for residues will provide farmers with an additional source of revenue but it may also trigger losses in soil organic carbon and increases in fertilizer application. This study develops a dynamic economic model of stover harvest that permits conceptualization and quantification of these potential tradeoffs. We parameterize our model based on publicly available studies of soil biophysical relationships in the Corn Belt. Under these parameter values and 2010 corn and fertilizer prices harvesting stover is not economically convenient at prices below $53 per dry ton of stover. Results suggest that the rate of stover harvest may be quite sensitive and negatively linked to corn prices, which means that policies favoring the use of stover for biomass may be overridden by further increases in corn price. The negative link between stover harvest and corn prices, while somewhat counterintuitive, is driven by the fact that removal of stover reduces future grain yield (through reductions in soil organic carbon). Results also seem to indicate that, under plausible parameter values, profit maximizing farmers would increase stover supply in response to increases in stover price. However increases in supply are, according to our simulations, associated with (potentially significant) reductions in soil organic carbon (and hence carbon emissions as these are positively linked) and increases in nitrogen application (and potential runoffs). This result suggests that concerns about adverse environmental implications of harvesting stover may be justified, and more precise quantification of environmental tradeoffs should be pursued by future research. |
| Keywords: | stover supply, biomass, soil productivity, soil organic carbon, nitrogen, Environmental Economics and Policy, Farm Management, Land Economics/Use, Resource /Energy Economics and Policy, C61, Q12, Q24, Q42, Q53, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103765&r=ene |
| By: | Wang, Weiwei; Park, Seong C.; McCarl, Bruce A.; Amosson, Steve |
| Abstract: | The sustainable water use especially for irrigated agriculture in the Texas Panhandle Region is a major concern. A semi-arid climate and average low rainfalls results in little surface water being available year-round. The Ogallala Aquifer is the primary source of irrigation water in this region. The intensive irrigated agricultural production and growing livestock industry have led to substantial decline of water tables. Furthermore, climate change and growing bioenergy feedstock productions exacerbates the water shortage and quality problems. Given the critical dependence of the regional economy on Ogallala Aquifer, underground water use is an intergenerational issue that must be evaluated in terms of the sustainability of agricultural activities in the long run. This paper develops a dynamic multi-county land allocation optimization model which integrates three sectors: agriculture, climate and hydrology. The sustainable water use and associated irrigated agricultural economic consequences under climate change are analyzed. This model also serves as a policy tool in evaluating economic impacts of alternative bioenergy expansion policies and water saving technologies in Ogallala Aquifer Region. The simulation results show that availability of extractable water has a direct impact on optimal land allocation. Deficit irrigation for major crops is an effective short-run strategy for water sustainability. In the longer run, dryland and pastureland farming will dominate. Climate change has heterogeneous impacts on agricultural production over counties and sub-counties because of the non-uniform hydrological characteristics. |
| Keywords: | Groundwater, Land Use Change, Climate Change, Bioenergy feedstock, Dynamic Optimization Model, Deficit Irrigation, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, Q24, Q25, Q54, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103642&r=ene |
| By: | Taheripour, Farzad; Hertel, Thomas W.; Liu, Jing |
| Abstract: | In recent years there has been a flurry of activity aimed at evaluating the land use consequences of biofuels programs and the associated carbon releases. In this paper we argue that these studies have tended to underestimate the ensuing land use change, because they have ignored the role of irrigation, and associated constraints on cropland expansion. In this paper, we develop a new general equilibrium model which distinguishes irrigated and rainfed cropping industries at a global scale. Using the new model we evaluate the implications of land use change due to US ethanol programs, in the context of short run constraints on the expansion of irrigated cropland. Since irrigated area tends to offer a higher yield than its rainfed counterpart, this provides an upper bound on the change in cropland following biofuel expansion. We find that the biofuel-induced expansion in global cropland cover is about 16 percent larger when the irrigation constraint is imposed. This translates into a 21 percent increase in land use emissions due to US ethanol production. This estimate represents an upper bound, since irrigated area can be expanded over the medium run in many places around the world. |
| Keywords: | Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103843&r=ene |
| By: | Taheripour, Farzad; Tyner, Wallace E. |
| Abstract: | The economic and land use consequences of US biofuel programs and their contributions to GHG emissions have been the focal point of many debates and research studies in recent years. However, most of these studies focused on the land use emissions due to the first generation of biofuels such as corn ethanol, sugarcane ethanol, and biodiesel (e.g. [1, 2] [3, 4]). A quick literature review indicates that only a few attempts have been made to estimate these emissions for the second generation of biofuels which convert cellulosic materials into liquid fuels. Gurgel et al. [5] have used a highly aggregated computational model (CGE) to evaluate land use consequences of producing biofuels from biomass feedstock. This model does not distinguish between the first and second generation of biofuels, aggregates all agricultural products in one sector thereby over simplifying the competition for land among its alternative uses, and relies on an old data set which represents the world economy in 1999. These authors predict that producing energy from biomass requires a considerable amount of land, about 0.5 hectares per 1000 gallons of ethanol. More recently, the United States Environmental Protection Agency (EPA) has released its emissions assessments for alternative biofuels including ethanol produced from corn stover and a dedicated crop (switchgrass) [6]. To provide these assessments EPA has mainly relied on the FASOM and FARPRI partial equilibrium models to evaluate domestic and international land use impacts of the US cellulosic biofuel targets. The simulation results obtained from these models show that producing ethanol from corn stover has insignificant land use impacts. However, producing ethanol from switchgrass will cause major land use changes in the US and other countries across the world. The EPA results show that producing 7.9 billion gallons of ethanol from switchgrass will increase global cropland areas by about 3 million hectares of which 1.7 million hectares will occur in the US. In addition, according to the EPA estimates, producing ethanol from switchgrass will curb acreages of US soybeans, wheat, hay, and other crops by 3.36 million hectares as well. On the other hand several research studies have concluded that dedicated energy crops can be grown on marginal lands (including idled cropland and cropland pasture) and that considerable amounts of these lands are available across the world to use without imposing a major impact on cropland and no consequences for food security [7-9],. These papers simply assume that these marginal lands have no opportunity costs. The economic and land use impacts of producing biofuels from dedicated crops could be more complicated than corn ethanol. Production of dedicated crops for significant volumes of biofuels could alter relative prices of crops and their profitability leading farmers to produce them on their existing active croplands or convert their idled or marginal croplands to produce these crops. This could cause major implications for livestock producers who use marginal lands (such as cropland pasture) in their production process. This will alter demand for feedstocks leading to major changes in markets of agricultural commodities, animal feed items such as DDGS (a by-product corn ethanol) and oilseed meals (co-products of biodiesel), and livestock products. The impacts of producing cellulosic biofuels from dedicated energy crops go beyond agricultural sectors and affect many economic activities at local, regional, national, and global scales. This paper discusses these impacts and explains interactions among the first and second generations of biofuels and their joint implications for other economic activities and markets. Then it provides a preliminary analysis of the economic and land use changes induced by cellulosic feedstocks for biofuel production. It develops an economy-wide computational general equilibrium (CGE) model based on the modeling framework developed at the Center for Global Trade Analysis (GTAP) to assess the economic and land use consequences of producing biofuels from cellulosic materials including corn stover and a dedicated energy crop. In particular, it extends the model developed in Tyner et al. [4]. The paper extends this model and its database in several directions. The new model works based on the latest version of GTAP databases (version 7). Following Taheripour et al. [10] the first generation of biofuels are introduced into the database. Then new industries and commodities are introduced into the database to support production and consumption of an advanced cellulosic biofuel (named Bio-Gasoline). In particular, a new crop industry is introduced to produce a dedicated energy crop (miscanthus) and a new industry is defined to supply agricultural residues (corn stover). The production technologies and cost structures of new industries are taken from the literature. The land use and land cover component of the data base is also updated according to the work done by Avetisyan et al. [11]. To introduce cellulosic biofuels we assumed several regions including US, some EU members, Brazil, and China produce tiny volumes of cellulosic biofuels from miscanthus in the base year in order to be able to shock the model for larger volumes of production. Then the GTAP modeling framework is revised to handle production, consumption, and trade of new industries and commodities at a global scale. To accomplish this task all production, supply, and demand functions included in the model are revised and necessary changes are made in market clearing conditions as well. In addition, the land use module of the model is altered to handle competition for land (including marginal lands) among the new dedicated crop and traditional land use industries such as forestry, livestock, and crops. Econometric analyses on land cover changes are used to update the economic parameters of the land use module as well. Furthermore the model is augment with a procedure which links productivity of marginal lands with their rent. This component will play an essential role in assessing the economic impacts of advanced biofuels. The CGE model is used to assess the economic and land use impacts of alternative biofuel scenarios including in the US Renewable Fuel Standard Program (RFS2). The numerical results obtained from these simulations show that producing bio-gasoline from corn stover has no significant land use impacts and generates economic gains. On the other hand, the numerical results indicate that the economic land use impacts of producing bio-gasoline from miscanthus vary across alternative assumptions. For example, producing bio-gasoline from miscanthus increases global cropland areas by about 0.2 hectares per 1000 gallons of ethanol equivalent in the presence of yield improvement on cropland pasture. This experiment indicates that about 40% of this land requirement will occur in the US, and forest has a small share (about 4%) in this land conversion. This figure is significantly higher than the additional land requirement of corn ethanol (about 0.13hectares per 1000 gallon ethanol). The results obtained from this experiment shows that production and consumption of each gallon of Bio-Gasoline (converted to ethanol equivalent) produced from miscanthus generates 891 grams CO2 emissions. This figure is 7% percent less than the corresponding figure for corn ethanol. In this case the livestock industry will not suffer from bio-gasoline production. However, when farmers do not improve yield on cropland pasture more land with higher share from forest is needed. Finally, based on the numerical results the paper offers a set of policies to support production of the second generation of biofuels which reduce welfare costs of the RFS policies. References 1. Searchinger, T., et al., Use of U.S. croplands for biofuels increases greenhouse gases through emissions from land use change. Science, 2008. 319(5867): p. 1238-1240. 2. Taheripour, F., T. Hertel, and W.E. Tyner, Biofuels and Their By-Products: Global Economic and Environmental Implications. Biomass and Bioenergy, 2010. 34: p. 278-89. 3. Hertel, T., W. Tyner, and D. Birur, The Global Impacts of Multinational Biofuels Mandates. Energy Journal, 2010. 31(1): p. 75-100. 4. Tyner, W., et al., Land Use Changes and Consequent CO2 Emissions due to US Corn Ethanol Production: A Comprehensive Analysis, A Report to Argonne National Laboratory. 2010, Department of Agricultural Economics, Purdue University. 5. Gurgel, A., J.M. Reilly, and S. Paltsev, Potential Land Use Implications of a Global Biofuels Industry. Journal of Agricultural and Food Industrial Organization, 2007. 5: p. Article 9. 6. Environmental Protection Agency, Renewable Fuel Standard Program (RFS2) Regulatory Impact Analysis. 2010: Washington, D.C. 7. Tyner, W.E., F. Taheripour, and Y. Han., Preliminary Analysis of Land Use Impacts of Cellulosic Biofuels, Argonne National Laboratory and the California Energy Commission, Editor. 2009. 8. Campbell, J.E., et al., The Global Potential of Bioenergy on Abandoned Agricultural Lands. Environmental Science and Technology, 2008. 42(15): p. 5791-5794. 9. Cai, X., X. Zhand, and D. Wang, Land Availability for Biofuel Production. Environmental Science and Technology, 2011. 45(1): p. 334-39. 10. Taheripour, F., et al., Introducing Liquid Biofuels into the GTAP Database, in GTAP Research Memorandum No 11, GTAP, Editor. 2007, Purdue University: West Lafayette, IN. 11. Avetisyan, M., U. Baldos, and T. Hertel, Development of the GTAP Version 7 land Use Data Base, in GTAP Research Memorandum No. 19. 2010, Purdue University: West Lafayette. |
| Keywords: | biofuels, cellullosic feedstocks, land use change, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103559&r=ene |
| By: | Crago, Christine Lasco; Khanna, Madhu |
| Abstract: | The ethanol tariff is one of the instruments used by the government to encourage domestic ethanol production. Existing literature analyzing the market and welfare effects of the US ethanol tariff has concluded that removing the tariff would increase social surplus and reduce greenhouse gas (GHG) emissions, due to the replacement of corn ethanol with lower cost and lower GHG intensive sugarcane ethanol. This paper re-examines these findings in the presence of a domestic cellulosic ethanol industry. The current RFS mandate requires 21 billion gallons of advanced biofuel, a portion of which could be met by any non-starch based biofuel that reduces emissions by at least 50% compared to an energy equivalent amount of gasoline. Sugarcane ethanol has been classified as an advanced biofuel, and competes for market share with domestic advanced biofuels such as cellulosic ethanol. In addition, it also competes with corn ethanol for market share in the non-advanced biofuel market. The dual market for sugarcane ethanol raises the question of which domestic biofuel market the tariff protects. Our results show that the effect of removing the tariff on social welfare and GHG emissions is ambiguous and depends on which biofuel market the tariff is protecting. If the tariff protects the corn ethanol market, its removal increases welfare and GHG emissions. However, if the tariff protects the cellulosic ethanol market, removing the tariff could increase emissions. Whether the tariff protects either the corn ethanol or cellulosic ethanol market, or both depends on the relative costs and supply elasticities of the three types of biofuel. In general, the removal of the tariff leads to an increase in social surplus, although in some cases, such as when the excess supply elasticity of sugarcane ethanol is not very elastic, net welfare could decrease when the tariff is removed. Removal of the tariff also reduces the share of domestically produced fuel, and this effect is greater when the tariff is protecting both the cellulosic and corn ethanol markets, i.e. the removal of the tariff causes a reduction in the production of both biofuels. |
| Keywords: | biofuel, ethanol tariff, fuel externalities, Agricultural and Food Policy, Resource /Energy Economics and Policy, Q17, Q18, Q42, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103784&r=ene |
| By: | Yoo, Do-il; Skog, Kenneth E.; Ince, Peter J.; Kramp, Andrew D. |
| Abstract: | This paper analyzes impacts of the U.S. biofuel energy policies on the carbon sequestration by forest products, which is expressed as Harvested Wood Products (HWP) Contribution under the United Nations Framework Convention on Climate Change. Estimation for HWP Contribution is based on tracking carbon stock stored in wood and paper products in use and in solid-waste disposal sites (SWDS) from domestic consumption, harvests, imports, and exports. For this analysis, we hypothesize four alternative scenarios using the existing and pending U.S. energy policies by requirements for the share of biofuel to total energy consumption, and solve partial equilibrium for the U.S. timber market by 2030 for each scenario. The U.S. Forest Products Module (USFPM), created by USDA Forest Service Lab, operating within the Global Forest Products Model (GFPM) is utilized for projecting productions, supplies, and trade quantities for the U.S. timber market equilibrium. Based on those timber market components, we estimate scenario-specific HWP Contributions under the Production, the Stock Change, and the Atmospheric Approach suggested by Intergovernmental Panel on Climate Change (IPCC) Guidelines for National Greenhouse Gas Inventories using WOODCARB II created by VTT Technical Research Centre of Finland and modified by USDA Forest Service Lab. Lastly, we compare estimated results across alternative scenarios. Results show that HWP Contributions for the baseline scenario in 2009 for all approaches are estimated higher than estimates reported by U.S. Environmental Protection Agency in 2011, (e.g., 22.64 Tg C/ year vs 14.80 Tg C/ year under the Production Approach), which is due to the economic recovery, especially in housing construction, assumed in USFPM/GFPM. Projected HWP Contribution estimates show that the Stock Change Approach, which used to provide the highest estimates before 2009, estimate HWP Contribution lowest after 2009 due to the declining annual net imports. Though fuel wood consumption is projected to be expanded as an alternative scenario requires higher wood fuel share to total energy consumption, the overall impacts on the expansion in other timber products are very modest across scenarios in USFPM/GFPM. Those negligible impacts lead to small differences of HWP Contribution estimates under all approaches across alternative scenarios. This is explained by the points that increasing logging residues are more crucial for expansion in fuel wood projections rather than the expansion of forest sector itself, and that the current HWP Contribution does not include carbon held in fuel wood products by its definition. |
| Keywords: | Forest Products, Carbon Sequestration, Biofuel Policies, HWP Contribution, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103961&r=ene |
| By: | Bento, Antonio M.; Klotz, Richard; Landry, Joel R. |
| Abstract: | This paper applies the insights of the carbon leakage literature to study the emissions consequences of biofuel policies. We develop a simple analytic framework to decompose the intended emissions impacts of biofuel policy from four sources of carbon leakage: domestic fuel markets, domestic land markets, world land markets and world crude oil markets. A numerical simulation model illustrates the magnitude of each source of leakage for combinations of two current US biofuel policies: the Volumetric Ethanol Excise Tax Credit (VEETC) and the Renewable Fuel Standard (RFS). In the presence of both land and fuel market leakage, current US biofuel policies are unlikely to reduce greenhouse gases. Four of the five policy scenarios we consider lead to increases in greenhouse gas emissions. That is, total leakage was greater than 100%. The single scenario that generates emissions savings, the removal of the VEETC in conjunction with a binding RFS, only does so because negative leakage in the domestic fuel market offset the remaining positive sources of leakage. |
| Keywords: | Multi-market, carbon leakage, biofuels, greenhouse gases, Agricultural and Food Policy, Land Economics/Use, Resource /Energy Economics and Policy, Q42, Q54, Q58, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:104008&r=ene |
| By: | Kabata, Tshepelayi |
| Abstract: | This study aims at assessing the environmental performance the U.S. agriculture with respect to GHG emissions across states. To reach this objective, this paper utilizes alternative non-parametric approaches: a graph measure of technical efficiency under strong disposability and weak disposability and a modified output oriented Malmquist index. The graph measure of technical efficiency accounting for undesirable outputs reveals that regulations of agriculture GHG emission would be effective in all states but Delaware, as they would be binding and impose a âcostâ in terms of reduction of desirable output. Results show also that on average regulations would improve technical efficient for about 3.5%. States operating on the frontier shift from one to seven when the regulation is accounted for. But the opportunity cost of binding to this regulation amounts to 3.7% reduction of agricultural output. The approach Malmquist index and its components reveal that on average the efficiency change has been invariant to the treatment of the undesirable output as input. The average productivity growth is 2.2 percent when GHG emissions are treated as input whereas it is 2 percent when they are complementally ignored. In both cases, the productivity growth is driven by technological change. |
| Keywords: | Productivity, Technical Efficiency, environmental performance, Production Economics, Productivity Analysis, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103427&r=ene |
| By: | Burnett, J. Wesley; Bergstrom, John C. |
| Abstract: | One of the major shortcommings of past environmental Kuznets curve (EKC) studies is that the spatiotemporal aspects within the data have largely been ignored. By ignoring the spatial aspect of pollution emissions past estimates of the EKC implicitly assume that a regionâs emissions are unaffected by events in neighboring regions (i.e., assume there are no transboundary pollution emissions between neighbors). By ignoring the spatial aspects within the data several past estimates of the EKC could have generated biased or inconsistent regression results. By ignoring the temporal aspect within the data several past estimates of the EKC could have generated spurious regression results or misspecified t and F statistics. To address this potential misspecification we estimate the relationship between state-level carbon dioxide emissions and income (GDP) accounting for both the spatiotemporal components within the data. Specifically, we estimate a dynamic spatiotemporal panel model using a newly proposed robust, spatial fixed effects model. This new estimation scheme is appropriate for panels with large N and T. Consistent with the EKC hypothesis we find the inverted-U shaped relationship between CO2 emissions and income. Further, we find adequate evidence that the underlying economic processes driving carbon dioxide emissions and state-level GDP are temporally and spatially dependent. These findings offer policy implications for both interstate energy trade and pollution emission regulations. These implications are particularly important for the formulation of national policies related to the 2009 Copenhagen Treaty in which the U.S. has committed to significantly reduce greenhouse gas emissions over the next twenty years. |
| Keywords: | Pollution Economics, Environmental Kuznets Curve, Spatial Econometrics, Dynamic Panel Data, Carbon Dioxide Emissions, Global Climate Change, Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, C33, C51, Q43, Q50, Q53, Q58, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103580&r=ene |
| By: | Habermacher, Florian |
| Abstract: | A fundamental question of high practical relevance for climate policy design is whether price controls such as CO2 taxes, or quantity restrictions such as emission quotas should be preferred. I show that as the reach of climate policies is limited in terms of either suboptimally low reduction targets or the policy's extent over only parts of the world, the likelihood of price measures to be more advantageous in terms of minimizing uncertainty related welfare losses increases. The increase of the relative advantage of the price mechanisms over quantity measures may be more than proportional to the regional limitedness of the policy, suggesting that even for relatively important climate coalitions the identified factor implies a clear advantage for price measures. This analysis of the prices vs. quantities question is closer to so far on a high political level seriously discussed climate policies, not to speak of already implemented local or regional climate policies, than previous theoretical literature addressing the issue, which typically relied on the assumption of first bests (i.e. global) policies. Illustrating the main thought of the analysis, I explain why in the example of policies with an extent corresponding to the current Kyoto mechanism, the simple theoretical weighting of the price vs. the quantity approach seems to favor price mechanisms independently of the exact form of the global abatement cost and benefit curves. |
| Keywords: | prices versus quantities, greenhouse gas tax, emission quotas, tradable permits, uncertainty, emission abatement costs, climate change costs, emission abatement benefits, regional climate policy, unilateral climate policy. |
| JEL: | Q54 Q52 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2011:18&r=ene |
| By: | Lee, Jun; Gomez, Miguel L. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103813&r=ene |
| By: | Zhao, Xiaobing |
| Abstract: | We study how carbon dioxide (CO2) emission cuts affect income for 23 OECD countries over the 1980-2004 period. The importance of this question is manifested in the disagreements at the 2009 United Nations Climate Change Conference in Copenhagen and the 2010 State of the Union Address by United States President Barack Obama. We start by deriving an income-CO2 relationship based on a structural production function, which is a natural way to model the relationship among income, energy consumption, and CO2 emissions. We then use a similar empirical methodology as Tucker (1995) to estimate the income-CO2 relationship. Such an approach not only allows us to focus on the long-run relationship but also enables us to project the relationship between income and CO2 emissions for future years. Our findings suggest that the economic cost of CO2 emission cuts is significant. To reduce emissions 50% below 1990 levels by 2050, the economic cost per year for developed countries is about 0.3% reduction in GDP per capita which represents a 15% slowdown in economic growth. |
| Keywords: | Carbon Dioxide Emissions, Income, Global Warming, Production Function, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103412&r=ene |
| By: | Zhao, Xiaobing |
| Abstract: | We follow Schmalensee, Stoker, and Judson (1998) to forecast CO2 emissions based on the environmental Kuznets curve (EKC). Our findings suggest that the EKC will not lead to significant decreases in CO2 emissions even by 2050 for countries with the highest incomes. Therefore, mandatory emissions cuts are required to limit climate change. In the same spirit of Horowitz (2009) and Ng and Zhao (2010), we then use a reduced-form approach to estimate the economic costs of mandatory emission cuts. Based on our parameter estimates, we find that a 25% mandatory deduction in CO2 emissions from 1990 will lead to a 5.63% decrease in the combined GDP of the 19 OECD countries, and a 40% deduction will result in a 12.92% loss in income (holding other relevant variables constant)! Our estimates are substantially higher than those in Paltsev, Reillya, Jacobya, and Morris (2009) and Dellink, Briner and Clapp (2010), and suggest that the economic cost to limit climate change as envisioned in the Copenhagen Accord may be substantial and more research should be done before mandatory emission cuts are implemented. |
| Keywords: | Environmental Kuznets Curve, Carbon Dioxide Emissions, Economic Cost, Climate Change, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103413&r=ene |
| By: | Popp, Michael; Nalley, Lanier |
| Keywords: | net greenhouse gas emissions, life cycle analysis, carbon offset, carbon tax, Environmental Economics and Policy, Farm Management, |
| Date: | 2011–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103686&r=ene |
| By: | Jota Ishikawa; Kazuharu Kiyono; Morihiro Yomogida |
| Abstract: | We develop a two-country (North and South), two-good, general equilibrium model of international trade in goods and explore the effects of domestic and international emission trading under free trade in goods. Whereas domestic emission trading in North may result in carbon leakage by expanding South's production of the emission-intensive good, international emission trading may induce North to expand the production of the emission-intensive good by importing emission permits. Emission trading may deteriorate global environment. North's (South's) emission trading may not benefit South (North). International emission trading improves global efficiency but may not benefit both countries. |
| Keywords: | global warming, emission quota, emission trading, carbon leakage, Kyoto Protocol |
| JEL: | F18 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd10-180&r=ene |
| By: | Cho, Seong-Hoon; Kim, Hee Ho; Roberts, Roland K.; Kim, SeungGyu; Lee, Daegoon |
| Abstract: | This research analyzed the effects of forestland conversion from private to public ownership on greenhouse gas emissions by quantifying the relationship between forestland ownership conversion and deforestation, and then examining the effects of the change in deforestation on greenhouse gas emissions in South Korea. Ex ante simulations forecast greenhouse gas emissions resulting from deforestation rates under the current level of national forestland and three scenarios of increased percentages of national forestland. The findings suggest that increasing the percentage of national forestland would mitigate the increase in the deforestation rate, which in turn would moderate the increase in greenhouse gas emissions. |
| Keywords: | greenhouse gas emissions, Forestland Ownership, Environmental Economics and Policy, Q15, Q23, Q24, Q54, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103714&r=ene |
| By: | Kragt, Marit E; Pannell, David J; Robertson, Michael |
| Abstract: | The Australian government has identified soil carbon sequestration on agricultural lands as a potential strategy to offset greenhouse gas emissions. Within the public debate, it has been claimed that provision of positive incentives for farmers to change their land management will result in substantial carbon sequestration in agricultural soils at a low carbon price. There is, however, little information about the costs or benefits of carbon sequestration in agricultural soils to test these claims. The objective of this study is to assess the costs of alternative land-use and land-management practises that will increase soil carbon sequestration. The analysis integrates biophysical modelling of carbon sequestration with whole-farm economic modelling, to evaluate the cost-effectiveness of alternative carbon storage practices. Results indicate that, for a case study model of a crop-livestock farm in the Western Australian wheatbelt, the opportunity costs of sequestering high levels of soil carbon are considerable. Low carbon prices would generate very modest increases in soil carbon sequestration. We discuss the implications of our findings for policy development. |
| Keywords: | Soil carbon, Climate Change Mitigation, Carbon sequestration, Agriculture, Crop Rotations, MIDAS modelling, Environmental Economics and Policy, Farm Management, |
| Date: | 2011–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103708&r=ene |
| By: | Attavanich, Witsanu; McCarl, Bruce A. |
| Abstract: | Many studies have done econometric estimates of how climate alters crop yields and or land rents in an effort to gain information on potential effects of climate change. However, an important related factor, the atmospheric carbon dioxide (CO2) concentration, and in fact a driver of climate change is ignored. This means the prior econometric estimates are biased as they infer what will happen under climate change from observations in the recent past, but without consideration of CO2 effects. Furthermore although CO2 has been varying, it has proceeded at a very linear pace and cannot be disentangled from technological progress using historical crop yield data. This paper is designed to overcome this issue and estimate the consequences that CO2 has and will have in conjunction with climate change. The paper also partitions yield growth into temporal CO2 and climate change affected components and begins to address an issue of how climate change and its drivers will affect rates of technological progress. Moreover, we also factor in a number of conditions regarding to extreme events. This allows us 1) to estimate the consequences of such factors on yields; 2) to project given forecasts of climate change induced shifts in those factors what the implications are for yield distributions; and 3) carry this into welfare and technological change analyses. First, we use a stochastic production function approach of the type suggested by Just and Pope (1978, 1979) estimated with a three-step feasible generalized least squares approach to estimate the effect of climate change and CO2 fertilization on crop yields. The observational data of crop yields and planted acreage are collected from the USDA-National Agricultural Statistics Service. State-level climate data used in this study are obtained from the National Oceanic and Atmospheric Administration. The free-air CO2 enrichment (FACE) experimental data are obtained from the USDA Agricultural Research Service and SOYFACE, University of Illinois. Next, to investigate the implication of future climate change on crop yield and its variability, we employ our estimated coefficients together with future climate change projected by standard GCMs used in the IPCC (2007) with the IPCC SRES scenario A1B. Finally, to explore the market outcomes and welfare implications of economic units given climate-induced shifts in yields across US regions, we plug in our projected percentage changes of mean crop yields into the agricultural sector model (ASM), a price endogenous, spatial equilibrium mathematical programming of the agricultural sector in the US. Our initial results find that yields of C-3 crops, soybeans, cotton, and wheat, positively respond to the elevated CO2, while yields of C-4 crops, corn and sorghum do not. However, we find that C-4 crops indirectly benefit from elevated CO2 in times and places of drought stress. We find the effect of crop technological progress to mean yields is non-linear with inverted-U shape in all crops, except cotton. Our study also reveals that ignoring the atmospheric CO2 in econometric model of crop yield studies is likely to overestimate the pure effect of climate change on crop yields as CO2 enhances those yields. For climate change impact, the average climate conditions and their variability appear to contribute in a statistically significant way to both average crop yields and their variability. Moreover, generally we find that the effect of CO2 fertilization generally outweighs the effect of climate change on mean crop yields in many regions. In terms of market outcomes and welfare distribution, we find the yield growth under the combined climate change and CO2 effect tends to decrease price in 2050. Planted acreage of all crops in North Plains, except wheat winter, is projected to increase, while it tends to decrease in South Plains, Lake States, Delta States, Southeast, and Mountains for almost all crops. Overall consumersâ surplus is projected to increase, while producersâ surplus is heterogeneously affected across US regions, but in total decreases by about $ 4.72 billion. Overall the total US welfare is increased about $ 2.27 billion compared to the base scenario. There are several clear implications of above findings. For example, 1) returns to agricultural research should be reevaluated in the light of climate change influences as for example aggressive CO2 mitigation will decrease returns; 2) models using econometric methods to predict future crop yields should be aware that ignoring CO2 fertilization may overestimate the real effect of climate change on crop yields; and 3) welfare losses for producers under climate change are likely with consumers gaining. |
| Keywords: | Carbon Dioxide Fertilization, Crop Yield, Yield Variability, Climate Change, Crop Production Technology, Welfare Distribution, Market Outcomes, Stochastic Production Function, the Agricultural Sector Model, Feasible Generalized Least Squares, Crop Production/Industries, Land Economics/Use, Production Economics, Research and Development/Tech Change/Emerging Technologies, C61, C13, Q16, Q54, D69, D24, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103324&r=ene |
| By: | Kim, Man-Keun; Pang, Arwin |
| Keywords: | Cattle Export, Gravity Model, Greenhouse Gas Emission, Trade Competitiveness, International Relations/Trade, Livestock Production/Industries, F18, Q17, Q54, |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103705&r=ene |
| By: | Daigneault, Adam; Greenhalgh, Suzie; Samarasinghe, Oshadhi; Sinclair, Robyn |
| Abstract: | This paper uses an economic catchment model to assess changes in land use,enterprise distribution,greenhouse gas emissions and nutrient loading levels from a series of policies that introduce carbon prices or nutrient reduction caps on land-based production in the Hurunui Catchment in Canterbury,New Zealand. At $20/tCO2e,net revenue for the catchment is reduced by 7% from baseline levels while GHGs are reduced by 3%. At $40/ tCO2e,net revenue is reduced by 15% while GHGs are reduced by 21%. Nitrogen and phosphorous loading levels within the catchment were also reduced when landowners face a carbon price,thus providing other benefits to the environment. Additional scenarios in this paper assess the impacts from developing a large-scale irrigation project within the catchment. Results show that while adding irrigation can improve farm output and revenue,it also results in dramatically higher GHG emissions and nutrient loads. Placing a carbon price on land-based activities diminishes some of these pollutants,but not at the same rate as when the policy what enacted on the baseline irrigation levels. Finally,we investigate the impacts of imposing a nutrient loading cap on farm activities instead of a carbon price and find that if landowners had greater access to irrigation but were constrained to hold the nutrient loads at baseline levels,revenue could increase by 6% over the baseline while GHG emissions could be reduced by 5%. Our findings suggest that while there is a potentially a strong trade-off between water quantity and water quality in the Hurunui Catchment,imposing the right policy levers could reduce some of the environmental impacts from an increase in land-use intensity without placing a large economic or regulatory burden on its landowners. |
| Keywords: | Agriculture and Forestry Modeling, Land Use, Climate Policy, Greenhouse Gas Emissions, Water Quantity, Water Quality, Agricultural and Food Policy, Environmental Economics and Policy, Q23, Q24, Q25, Q54, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103855&r=ene |
| By: | Golub, Alla; Henderson, Benjamin; Hertel, Thomas |
| Abstract: | Recent research on livestockâs role in climate change has raised awareness about contribution that livestock climate policies can make to global mitigation efforts, and has increased the likelihood that mitigation policies will eventually be imposed on the sector. This study investigates effects of GHG mitigation policies on livestock sectors emissions and production by regional sector under a range of global mitigation polices that are broadly aligned with the different responsibilities of developed and developing countries under the UNFCCC. The study also examines emission leakage effects, impacts on food security in developing countries, and the implications of large informal livestock sectors in regions such as Sub Saharan Africa. |
| Keywords: | Environmental Economics and Policy, Food Security and Poverty, C68, Q15, Q54, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103425&r=ene |
| By: | Kragt, Marit Ellen; Pannell, David J.; Robertson, Michael J. |
| Abstract: | Earlier versions of this working paper have been/will be presented at the 2011 Conference of the Australian Agricultural and Resource Economics Society (AARES), and at the 2011 Annual Meeting of the Applied and Agricultural Economics Association (AAEA). |
| Keywords: | APSIM, Carbon sequestration, Climate change mitigation, Farm management, GHG emissions, MIDAS, Soil carbon, Western Australia, Environmental Economics and Policy, Farm Management, Q12, Q19, Q52, Q54, |
| Date: | 2011–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uwauwp:104150&r=ene |
| By: | Cai, Ruohong; Bergstrom, John C.; Mullen, Jeffrey D.; Wetzstein, Michael E. |
| Abstract: | In this paper, a dynamic optimization model was developed to simulate how farm-level realized price and profitability respond to yield change which was induced by climate change. Producers' acreage response was included in the dynamic model considering crop rotation effect. In the crop rotation model, a modified Bellman equation was used to dynamically optimize the net present value of farm profit for a five-year interval. This simulation process was repeated through the year 2050. Then yield, price, and acreage response were compiled to generate realized profit. Results generally indicated that reduction in crop yields due to climate change results in reduced farm profitability for most of the states studied. Predicted climate change is more likely to pose a problem for agricultural production and profitability in the southern U.S. states as compared to the northern U.S. states. Our results also suggest that acreage response alone is not sufficient to ameliorate the potential negative effects of global climate change on agricultural production and profitability. The results of this research are expected to provide a foundation for future related research to aid producers' crop rotation decisions in an unstable price environment. |
| Keywords: | Dynamic simulation model, Acreage response, Crop rotation, Expected price, Realized price, Agricultural Finance, Crop Production/Industries, Environmental Economics and Policy, Farm Management, Land Economics/Use, Production Economics, Productivity Analysis, Risk and Uncertainty, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103420&r=ene |
| By: | Attavanich, Witsanu; McCarl, Bruce A.; Fuller, Stephen W.; Vedenov, Dmitry V.; Ahmedov, Zafarbek |
| Keywords: | Crop Production/Industries, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103998&r=ene |
| By: | Mu, Jianhong E.; McCarl, Bruce A; Wu, Ximing; Gan, Li |
| Abstract: | This paper examines the effect that climate has on Avian Influenza outbreak probability. The statistical analysis shows across a broad region the probability of an outbreak declines by 0.22% when the temperature rises 1 Celsius degree and increases by 0.34% when precipitation increases by 1millimeter. These results indicate that the realized climate change of the last 20 years not only has been a factor behind recent HPAI outbreaks, but that climate change is likely to play an even greater role in the future. The statistical results indicate that overall, the risk of an AI outbreak has been increased by 51% under past climate change and 3-4% under future climate change. An economic evaluation shows the increased probability of outbreaks has caused damages of about $107 million in China and $29 million in the United States due to past climate change. In the year of 2011-2030, for countries with a high proportion of chicken production, economic loss could reach $105-$146 million in China and $12-$18 million in the United Sates. |
| Keywords: | Climate change, Avian Influenza outbreaks, GDP loss, Environmental Economics and Policy, Research Methods/ Statistical Methods, |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103637&r=ene |
| By: | Cai, Ruohong; Bergstrom, John C.; Mullen, Jeffrey D.; Wetzstein, Michael E.; Shurley, W. Don |
| Abstract: | The objective of this study is to compare the effects of climate change on crop yields across different regions. A Principal Component Regression (PCR) model is developed to estimate the historical relationships between weather and crop yields for corn, soybeans, cotton, and peanuts for several northern and southern U.S. states. Climate change projection data from three climate models are applied to the estimated PCR model to forecast crop yield response. Instead of directly using weather variables as predictor variables, the PCR model uses weather indices transformed from original weather variables by the Principal Component Analysis (PCA) approach. A climate change impact index (CCII) is developed to compare climate change effects across different regions. The key contribution of our study is in identifying a different climate change effects in crop yields in different U.S. states. Specifically, our results indicate that future warmer weather will have a negative impact for southern U.S. counties, while it has insignificant impact for northern U.S. counties in the next four decades. |
| Keywords: | Principal component regression, Crop yield response, Climate change., Crop Production/Industries, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ugeofs:103947&r=ene |
| By: | Kibonge, Aziza |
| Keywords: | Environmental Economics and Policy, Productivity Analysis, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:104001&r=ene |
| By: | Ortiz-Bobea, Ariel |
| Abstract: | Economists are relying on agronomic concepts to construct weather or climate independent variables and improve the reliability and efficiency of econometric models of climate change impact on U.S. agriculture. The use of cumulative heat measures in agronomy (growing degree-days), has recently served as a basis for the introduction of plurimonthly calendar heat variables in these models. However, season-long weather conditions seem at odds with conventional agronomic wisdom that emphasizes crucial differences in crop stage sensitivity to environmental stress. In this paper I show that weather variables matched to key corn development stages provide an enhanced and more stable fit than their calendar counterparts. More importantly, the proposed season-disaggregated framework yields very different implications for adaptation than its calendar counterparts as it indicates that most of the projected yield damages are accounted during the flowering period, a relatively short period in the crop cycle. This should open the door to more advanced yield models that account for additional possibilities of adaptation and thus provide a more nuanced outlook on the potential impacts of climate change on crop yields. |
| Keywords: | agriculture, climate change, corn, degree-days, phenology, proxy, yield, Production Economics, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, Q54, C23, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103656&r=ene |
| By: | Feng, Siyi J.; McCarl, Bruce A.; Havlik, Petr |
| Keywords: | Environmental Economics and Policy, Land Economics/Use, Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy, |
| Date: | 2011–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103518&r=ene |
| By: | Tokovenko, Oleksiy; Koo, Won W. |
| Abstract: | This study analyses potential adverse effects of unilateral increase in GHG emission standards. The single good two regions partial equilibrium model of international trade is used to derive and interpret the conditions under which such an increase will lead to a reduction in a total level of GHG emission. We found that improvement in the global GHG emission level will be observed if the response of the home country abatement level is more elastic than that of the foreign country by the factor of the ratio of initial foreign to domestic marginal emission intensities. It is also shown that in the large industry case, the appropriate factor is adjusted by the measure of the relative market influence of two industries. The study concludes that a unilateral reduction in GHG emissions will unlikely lead to the reduction in the total GHG emissions level and may worsen the environmental situation in other regions. An appropriate multilateral agreement that involves producers from the major emitting countries is required to achieve the goal. |
| Keywords: | Emission Regulation, Carbon Leakage, International Trade, Environmental Economics and Policy, International Relations/Trade, |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103847&r=ene |
| By: | Hansen, Jim; Tuan, Francis; Somwaru, Agapi |
| Abstract: | This study analyzes the potential impact of climate change on China's corn, wheat, and rice, domestic agricultural markets, and the international markets out to the year 2050. The study provides a brief background and reviews research literature of climate change effects on China's crop yields. The paper presents the potential impact of climate change on China's yields and attempts to quantify the domestic and global market impacts. The analysis has four scenarios, which assumes two future levels of greenhouse gas emissions with the effects of CO2 fertilization and no CO2 fertilization. A 27-country commodity partial equilibrium simulation mathematical programming model (PEATSim) is used for this analysis. Results indicate under CO2 fertilization, which increases yields, China's grain imports may decrease leading to a decrease in international prices. Under no CO2 fertilization, yields decrease, China's grain imports may increase leading to increased international prices. |
| Keywords: | China, trade, climate change, GHG, CO2 fertilization, rice, wheat, corn, dynamic partial equilibrium simulation mathematical model., Environmental Economics and Policy, International Relations/Trade, |
| Date: | 2011–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103768&r=ene |
| By: | Wang, Weiwei; McCarl, Bruce A. |
| Abstract: | Currently, different dimensions of mitigation strategies have been investigated in policy analysis. However, ambitious mitigation action aiming at reducing future climate change will not prevent much climate change before mid-century. Short-term and medium-term temperature as well as associated damages cannot be avoided completely. Increasingly there appears to be recognition of the need to simultaneously implement adaptation and mitigation. However, the optimal combination between adaptation and mitigation that can best address climate change over time is still an open question. Literature base is rather small, yet very diverse and inconsistent in conclusions. In this paper, we do an exploration of the temporal optimal investment mix between adaptation and mitigation and their relative contributions to climate change damage reduction. By proposing a conceptual framework that integrates both strategies and developing a more complete integrated assessment model, the temporal investment allocation between adaptation and mitigation is identified. Results suggest that adaptation is an effective climate change damages reduction strategy and a complement to mitigation. Adaptation investment tackles the short run reduction of damages in the first 250 years while mitigation dominates from thereon. |
| Keywords: | Climate Change Damages, Adaptation, Mitigation, Temporal Investment, Integrated Assessment Model, Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty, Q54, Q58, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103408&r=ene |
| By: | Buchholz, Wolfgang; Schymura, Michael |
| Abstract: | The evaluation of long-term effects of climate change in cost-benefit analysis has a long tradition in environmental economics. Since the publication of the Stern Review in 2006 the debate about the 'appropriate' discounting of future welfare and utility levels was revived and the most renowned scholars of the profession participated in this debate. But it seems that some contributions dealing with the Stern Review and the Review itself mixed up normative and positive issues to defend the own position. Furthermore, as we argue in this contribution, it also seems that the debate misses the heart of the problem. The aim of this work is to bring together economic and philosophical reasoning about justice and intergenerational equity in the context of climate change. So we adopt the normative view in order to present the most important ethical issues that, particularly in the context of climate policy, are most relevant for the choice of intertemporal welfare criteria. Subsequently we explore whether ethical considerations may also be helpful to determine the parameter values (or at least to delimit their range) which, after the choice of some type of intertemporal social welfare function, are needed to specify the concrete criterion that is employed to make decisions on climate policy. -- |
| Keywords: | Intertemporal ethics,Distribution,Discounting,Climate Change |
| JEL: | Q53 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11031&r=ene |