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on Environmental Economics |
| By: | Gautam Sethi (Bard College, Bard Center for Environmental Policy); Christopher Costello (UC Santa Barbara, Donald Bren School of Environmental Science & Management); Anthony Fisher (University of California, Berkeley and Giannini Foundation); Michael Hanemann (Univerisity of California, Berkeley and Giannini Foundation); Larry Karp (University of California, Berkeley and Giannini Foundation) |
| Date: | 2004–10–13 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:agrebk:1021&r=env |
| By: | Meredith Fowlie (University of California, Berkeley); Jeffrey Perloff (University of California, Berkeley, and Giannini Foundation) |
| Abstract: | According to the Coase theorem, if property rights to pollute are clearly established and emissions markets nearly eliminate transaction costs, the market equilibrium will be independent of how the permits are initially allocated across firms. Using panel data from Southern California's RECLAIM program, we find that initial allocations are a statistically significant determinant of firm-level emissions. This relationship between allocation and emissions is stronger among firms with relatively high transaction costs. Thus, care must be exercised in the initial allocation of permits to ensure efficiency. |
| Keywords: | emissions trading, transaction costs, |
| Date: | 2004–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:agrebk:1047&r=env |
| By: | Maximilian Auffhammer (University of California, Berkeley); Richard Carson (University of California, San Diego); Teresa Garin-Munoz (UNCED - Madrid) |
| Keywords: | carbon dioxide emissions, climate change, |
| Date: | 2004–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:agrebk:1050&r=env |
| By: | Jennifer Alix-Garcia (University of California, Berkeley); Alain de Janvry (University of California, Berkeley); Elisabeth Sadoulet (University of California, Berkeley) |
| Abstract: | Explaining land use change in Mexico requires understanding the behavior of the local institutions involved. We develop two theories to explain deforestation in communities with and without forestry projects, where the former involves a process of side payments to non-members of the community and the latter of partial cooperation among community members. Data collected in 2002 combined with satellite imagery are used to test these theories. For the forestry villages, we establish a positive relationship between the distribution of profits as dividends instead of public goods and forest loss. For communities not engaged in forestry projects, deforestation is largely related to the ability of the community to induce the formation of a coalition of members that cooperates in not encroaching. This happens more easily in smaller communities with experienced leaders. A disturbing result of the analysis is that deforestation is higher when a community engages in forestry projects, even after properly accounting for self-selection into this activity. This suggests that forestry projects as they now exist in Mexico are not sustainable and contribute to the deforestation problem. |
| Keywords: | deforestation, common property, partial cooperation, |
| Date: | 2003–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:agrebk:1060&r=env |
| By: | Francesco Sindico (Universitat Jaume I) |
| Abstract: | USA, Canada and Argentina have challenged before the World Trade Organisation the European Communities’ (EC) denial of Genetically Modified (GM) product imports, which took place from 1998 to 2004 . Against this background, the goal of this paper is twofold. Firstly, we will determine which WTO provisions would have been violated by the EC. Secondly, we will highlight the dispute’s most important legal issues in order to see to what extent the dispute might influence the ongoing trade and environment debate. The paper concludes that the role of the precautionary principle in the application of the EC legislation is one of the dispute’s main issues. Furthermore, the Panel findings on the legal nature of the precautionary principle, and on its relevance for the interpretation of WTO provisions, will finally determine the influence of the GMO dispute on the trade and environment debate. |
| Keywords: | GMO, WTO, Trade, Environment |
| JEL: | Q00 F10 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.11&r=env |
| By: | Parashar Kulkarni (CUTS Centre for International Trade, Economics & Environment) |
| Abstract: | This paper tries to understand whether importers in the North are able to push exporters in the South towards sustainable production, with the help of a case study of the Indian leather industry. After providing a short description of the global leather footwear industry, the first section provides insights into the competitive advantages of different countries, characteristics of developing country exporters and the difference between large and small European buyers of Indian leather footwear. The subsequent section provides an insight into the different chains of influence that exist in trying to make international trade more sustainable with the help of a broad understanding of the means, their effectiveness, their constraints and a few examples of such chains of influence. Section four studies whether ecolabels are in a position to be suitable indicators of sustainability. Further it delves into understanding the perspectives of consumers, producers and regulators on whether ecolabels are useful in promoting sustainable exports. The explanation of how ecolabels conflict with brand dynamics is quite interesting. The policy measures provide clear options for targeting sustainable production. Suggestions include use of eco-elasticity indicator, toolbox approach to environment policy, introducing comprehensive sustainability labels, maintaining a level of mandatory legislations as well as a constructive effort to increase transparency in supply chains. The annexure include the research methodology adopted for the paper, the reason for choosing Europe as destination for the research, a brief overview about types of ecolabels and a small description of integrated product policies. |
| Keywords: | Ecolabels, Export promotion, Leather footwear, Market access |
| JEL: | F18 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.15&r=env |
| By: | Paulo Augusto Nunes (University Ca' Foscari of Venice); Qiang Wu (Bologna Center, SAIS and Johns Hopkins University) |
| Abstract: | For the past two decades, China has experienced strong, continuous economic growth. At the same time, the number of motor vehicles in China has rapidly increased. As a direct result of such a phenomenon, China has been registering significant increases in air pollution. In spite of recent advances in air pollution control, it remains a serious problem for China’s major cities, and constitutes an important issue in the agenda of its policy makers. The object of this paper is to explore the use of cost-benefit analysis (CBA) to evaluate and rank alternative policy scenarios regarding the control of air pollution emitted by motor vehicles. The empirical analysis carried out relates specifically to the Chinese context, over a twenty year period, from 2001 to 2020, and focuses on emission changes of the following three principal pollutants: CO, HC and NOx. |
| Keywords: | Vehicle, Pollution, CO, HC, NOx, Scenario, Standard, Cost, Benefit, China |
| JEL: | O33 O53 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.2&r=env |
| By: | Carlo Carraro (University of Venice, Fondazione Eni Enrico Mattei, CEPR and CEPS); Barbara Buchner (Fondazione Eni Enrico Mattei) |
| Abstract: | No international regime on climate change is going to be fully effective in controlling GHG emissions without the involvement of countries such as China, India, the United States, Australia, and possibly other developing countries. This highlights an unambiguous weakness of the Kyoto Protocol, where the aforementioned countries either have no binding emission targets or have decided not to comply with their targets. Therefore, when discussing possible post-Kyoto scenarios, it is crucial to prioritise participation incentives for all countries, especially those without explicit or with insufficient abatement targets. This paper offers a bottom-up game-theoretic perspective on participation incentives. Rather than focusing on issue linkage, transfers or burden sharing as tools to enhance the incentives to participate in a climate agreement, this paper aims at exploring whether a different policy approach could lead more countries to adopt effective climate control policies. This policy approach is explicitly bottom-up, namely it gives each country the freedom to sign agreements and deals, bilaterally or multilaterally, with other countries, without being constrained by any global protocol or convention. This study provides a game-theoretic assessment of this policy approach and then evaluates empirically the possible endogenous emergence of single or multiple climate coalitions. Welfare and technological consequences of different multiple bloc climate regimes will be assessed and their overall environmental effectiveness will be discussed. |
| Keywords: | Agreements, Climate, Incentives, Negotiations, Policy |
| JEL: | C72 H23 Q25 Q28 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.21&r=env |
| By: | Fausto Cavallaro (University of Molise); University of Molise |
| Abstract: | The planning and appraisal of sustainable energy projects involve rather complex tasks. This is due to the fact that the decision making process is the closing link in the process of analysing and handling different types of information: environmental, technical economic and social. Such information can play a strategic role in steering the decision maker towards one choice instead of another. Some of these variables (technical and economic) can be handled fairly easily by numerical models whilst others, particularly ones relating to environmental impacts, may only be adjudicated qualitatively (subjective or not). In many cases therefore, traditional evaluation methods such as cost-benefit analysis and the main economic and financial indicators (NPV, ROI, IRR etc.) are unable to deal with all the components involved in an environmentally valid energy project. Multi-criteria methods provide a flexible tool that is able to handle and bring together a wide range of variables appraised in different ways and thus offer valid assistance to the decision maker in mapping out the problem. This paper sets out the application of a multi-criteria method (PROMETHEE developed by J.P. Brans et al. 1986) to a real life case that is in tune with the objectives of sustainable development. |
| Keywords: | Renewable energy, Multicriteria, Sustainable devolopment |
| JEL: | Q42 Q48 C63 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.22&r=env |
| By: | Wietze LISE (Vrije Universiteit) |
| Abstract: | There is a multi-dimensional need for studying the energy situation in Turkey and to ob-tain insight into the development of CO2 emissions. On the one hand, recent projections of the OECD show that Turkey has a yearly GDP growth potential of over 7%. On the other hand, recent projections of UNDP and World Bank indicate that the level of CO2 emission is going to rise six-fold by 2025 with respect to the level of emissions in 1990. It is a great challenge to both meet the growth target and keep the CO2 under control. Thereupon, this paper tries to unfold factors that explain CO2 emissions by undertaking a complete decomposition analysis for Turkey over the period 1980–2003. The analysis shows, as is common to relatively fast growing economies, that the biggest contributor to the rise in CO2 emissions is the expansion of the economy (scale effect). The carbon intensity and the change in composition of the economy, which nearly move in tandem, also contribute to the rise in CO2 emissions, albeit at a slower rate. The energy intensity of the economy, which is decreasing, is responsible for a modest reduction in CO2 emissions. Hence, in congruence with the scale effect, we do not find a decoupling of carbon emissions and economic growth in Turkey over the period 1980–2003. |
| Keywords: | Decomposition analysis, Turkey, Energy, CO2 emissions, Economic growth |
| JEL: | Q4 Q54 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.24&r=env |
| By: | Riccardo Scarpa (University of York); Susanne Menzel (University of Goettingen and University of York) |
| Abstract: | We report on a discrete-choice CV study conducted in Germany to value the WTP for biodiversity protection in less developed countries. To systematically investigate survey realism and subjective threat assessment from the loss of biodiversity described in the scenario the study includes questions to uncover the constructs of Protection Motivation Theory, which is introduced to the CV literature. The patterns of responses to such questions are analysed using an Expectation-Maximization algorithm to derive class membership probabilities. These are found to match the predictions of Protection Motivation Theory and systematically improve the logistic analysis of the WTP responses. |
| Keywords: | Biodiversity valuation, Protection motivation theory, Latent class analysis, Expectation-Maximization algorithm, Contingent valuation |
| JEL: | Q2 D6 C42 C25 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.26&r=env |
| By: | Paul Sarfo-Mensah (Kwame Nkrumah University of Science and Technology) |
| Abstract: | This paper presents an empirical analysis of the linkage between external timber trade in Ghana and the increased incidence of illegal chainsaw operations which do not only threaten the country’s forests and other natural resources but also the erosion of the basis for sustainable agriculture which is the main-stay of the country’s economy. It uses ethnographic data from case studies of a recent research in selected forest reserves fringe communities in High Forest Zone of the country to explain the frustrations of local people with government policies that favour export to the neglect of local demand for timber and wood products. Although government pronouncements suggest that it is gaining an upper hand in the battle against illegal logging operations, evidence on the ground suggests that the greater part of the lumber on the local markets is supplied through illegal means predominated by itinerant chainsaw operators and their urban financiers . The paper concludes that the country’s forest and tree resources face massive degradation and overexploitation if the government does not take a bold decision on illegal logging, especially the activities of chainsaw operators. An option, though unpalatable and politically sensitive, may be the mainstreaming of chainsaw operations through the re-introduction of limited permits to registered local groups of timber traders and their chainsaw operators to supply the domestic market. This should be under a system which enjoins such groups to be collectively responsible for the activities of their members. And, the government should also strengthen the Forestry Services Division (FSD) to design and operationalize an enhanced monitoring and surveillance system of logging activities. |
| Keywords: | Economic recovery program (ERP), Timber exportation, Illegal chainsaw operation, Timber traders, High forest zone, Forestry services division (FSD) |
| JEL: | O O5 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.29&r=env |
| By: | Andrea Bigano (Fondazione Eni Enrico Mattei); Alessandra Goria (Fondazione Eni Enrico Mattei); Jacqueline Hamilton (Hamburg University and Centre for Marine and Atmospheric Science); Richard S.J. Tol (Hamburg University, Vrije Universiteit and Engineering and Public Policy, Carnegie Mellon University) |
| Abstract: | Tourism is an industry of primary importance for the world economy. For some countries, tourism is the first source of income and foreign currency, and many local economies heavily depend on tourism. Tourists are sensitive to climate and to climate change, which will affect the relative attractiveness of destinations and hence the motive for international tourists to leave their country of origin. Yet, until recently, the attention devoted by the tourism literature to climate change and by the climate change literature to tourism has been quite limited. This paper is divided in two parts. The first part reviews the literature on the relationship between climate change and tourism. We find that the existing studies have but started unveiling the complexities of this relationship, by means of very heterogeneous approaches and scarcely comparable studies. A comprehensive, coherent quantitative message cannot yet be drawn from the literature. The broad qualitative message is clear, however: climate change will affect tourism, and the consequences for the economy might be wide and pervasive. The second part analyses empirically the relationship between climate characteristics, weather extremes and domestic and international tourism demand across Europe, with a focus on Italy. This study draws on the results on the Italian tourist sector of the WISE project, a multi-sector research project that investigates the impacts of extreme weather events on the socio-economic systems of some European countries by means of both quantitative and qualitative analyses. In general, temperature is the strongest indicator of domestic tourism. The relationship between tourism and temperature is generally positive in the same-month all across Europe, except in winter sports regions. The climate impact depends as well on destination type: for example coastal resorts respond more favourably to summer temperature increases than inland resorts. Moreover, it is not just temperature that counts, but also the expectations about future temperature levels; not just the presence of weather extremes, but also the expectations about their future occurrence. Qualitative results, based on individual surveys, show that during an unusually hot summer day trips are more climate-responsive than short breaks, that short breaks are more climate-responsive than main holidays, and that most people tend not to change plans for their main vacation: those that do change either stay at home or in their own country. On the basis of our literature survey and of our empirical study’s results, the paper concludes by indicating the most urgent gaps to be filled in the knowledge about the relationship between climate change and tourism and by pointing at the most promising directions for further research. |
| Keywords: | Tourism, Climate change, Extreme weather events |
| JEL: | L83 Q25 C23 C42 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.30&r=env |
| By: | Maria Angeles Garcia-Valiñas (University of Oviedo) |
| Abstract: | By means of a two-jurisdictional model, this paper analyses the optimal division of environmental policymaking functions among the different government levels, identifying the most appropriate level of decentralization in each case. The paper focuses on water resources policies, with an application to Spanish regions during the 1996-2001 period. The estimation of an environmental quality-consumption transformation function allows the implementation of a simulation to find the most efficient policies in the context of water resources. |
| Keywords: | Fiscal federalism, Environmental policies, Water resources |
| JEL: | H77 Q25 Q28 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.31&r=env |
| By: | Joseph Huber (Martin-Luther-University) |
| Abstract: | This paper is based on empirical research on a taxonomy of technological environmental innovations. It draws on a databank with over 500 examples of new technologies (materials, products, processes and practices) which come with benign environmental effects. The approaches applied to interpreting the datasets are innovation life cycle analysis, and product chain analysis. Main results include the following: 1. Innovations merely aimed at eco-efficienc y do in most cases not represent significant contributions to improving the properties of the industrial metabolism. This can better be achieved by technologies that fulfill the criteria of eco-consistency (metabolic consistency), also called eco-effectiveness. 2. Ecological pressure of a technology is basically determined by its conceptual make-up and design. Most promising thus are technologies in earlier rather than later stages of their life cycle (i.e. during R&D and customisation in growing numbers), because it is during the stages before reaching the inflection point and maturity in a learning curve where technological environmental innovations can best contribute to improving ecological consistency of the industrial metabolism while at the same time delivering their maximum increase in efficiency as well.3. Moreover, environmental action needs to focus on early steps in the vertical manufacturing chain rather than on those in the end. Most of the ecological pressure of a technology is no rmally not caused end-of-chain in use or consumption, but in the more basic steps of the manufacturing chain (with the exception of products the use of which consumes energy, e.g. vehicles, appliances). There are conclusions to be drawn for refocusing attention from downstream to upstream in life cycles and product chains, and for a shift of emphasis in environmental policy from regulation to innovation. Ambitious environmental standards, though, continue to be an important regulative precondition of ecologically benign technological innovation. |
| Keywords: | Technological innovation, Environmental innovation, Life cycle analysis, Sustainability strategies, Environmental policy |
| JEL: | O33 Q00 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.33&r=env |
| By: | Richard S.J. Tol (Hamburg University); Andrea Bigano (Fondazione Eni Enrico Mattei and Catholic University of Leuven); Jacqueline M. Hamilton (Hamburg University and Centre for Marine and Atmospheric Science) |
| Abstract: | The holiday destination choice is analysed for tourists from 45 countries, representing all continents and all climates. Tourists are deterred by distance, political instability and poverty, and attracted to coasts. Tourists prefer countries with a sunny yet mild climate, shun climes that are too hot or too cold. A country’s tourists’ aversion for poverty and distance can be predicted by that country’s average per capita income. The preferred holiday climate is the same for all tourists, independent of the home climate. However, tourists from hotter climates have more pronounced preferences. |
| Keywords: | Climate change, Impacts, Adaptation, Acclimatisation, Domestic tourism, International tourism |
| JEL: | L83 Q25 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.4&r=env |
| By: | Aart de Zeeuw (Tilburg University) |
| Abstract: | In terms of the number of signatories, one observes both large and small international environmental agreements. The theoretical literature, based on game theory, discusses different concepts and mechanisms for the stability of coalitions and has reached the conclusion that, under farsightedness, both large and small stable coalitions can occur. In the context of a repeated game, this implies that large stable coalitions can also be sustained over time by a simple trigger mechanism, for large enough discount factors. However, if changes in time implement changes in state, this conclusion does not hold anymore: only small stable coalitions can be sustained. |
| Keywords: | IEA’s, Coalitional stability, Dynamics |
| JEL: | Q2 C70 F42 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.41&r=env |
| By: | Anna Alberini (University of Maryland); Valentina Zanatta (DICAS, Politecnico di Torino and Fondazione Eni Enrico Mattei); Paolo Rosato (DIC, Università di Trieste and Fondazione Eni Enrico Mattei) |
| Abstract: | This paper reports the results of a Travel Cost Method (TCM) study about the recreational use of the Lagoon of Venice for sports fishing. In April-July 2002, we conducted a mail survey of anglers with valid licenses fishing on the Lagoon of Venice to gather data on their fishing trips, behaviors and expenditures over the previous year. We also asked questions about trips that would be undertaken under hypothetical changes in the price of a trip and/or in the catch rate. Actual and hypothetical trips are combined to estimate single-site TCM demand function for trips. We propose several models to test whether it is acceptable to pool hypothetical and actual trip data, focusing on the respondent heterogeneity in the contingent behavior questions. Our models suggest actual and contingent behavior are driven by the same demand function, and can be pooled for estimation purposes. We use this estimated demand function, and its shift when the catch rate is improved, to compute angler surplus at the current catch rate and the change in surplus accruing from a 50% improvement in the catch rate. For the average angler in our sample, the former is about €1,700 a year, while the latter is about €2,800. |
| Keywords: | Sports fishing value, Travel cost method, Environmental improvement |
| JEL: | Q26 Q51 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.44&r=env |
| By: | Michael Finus (University of Hagen); Bianca Rundshagen (University of Hagen) |
| Abstract: | We analyze the formation of self-enforcing international environmental agreements under the assumption that countries announce their participation either simultaneously or sequentially. It is shown that a sequential formation process opens up possibilities for strategic behavior of countries that may lead to inferior outcomes in terms of global abatement and welfare. We then analyze whether and under which conditions a regulator like an international organization, even without enforcement power, can improve upon globally suboptimal outcomes through coordination and moderation, given that recommendations must be Pareto-improving to all parties. |
| Keywords: | International environmental agreements, Timing of participation decision, Coalition theory, Role of international regulator |
| JEL: | C72 D70 H41 Q50 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.45&r=env |
| By: | Lorenzo Pellegrini (Vrije Universiteit); Reyer Gerlagh (Vrije Universiteit) |
| Abstract: | In 2004, ten new states entered the European Union. Relative to the pre-2004 member states, these accession states have lower environmental standards, and some worry that it will be too demanding for these new EU members to fully comply with European environmental provisions. In this paper, we assess one rationale for such harmonization. Specifically, we analyze the determinants of environmental policies’ stringency, and show that differences in corruption levels are more important as explanatory factor when compared to income differentials. Since high levels of corruption characterize some countries in the enlarged EU, we argue that this is a good reason for an upward harmonization of environmental policies at the EU level. |
| Keywords: | Corruption, European union, Environmental policy |
| JEL: | C31 K00 Q53 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.46&r=env |
| By: | Hubert Kempf (Université Paris-1 Panthéon Sorbonne); Stéphane Rossignol (Université de Versailles, and EUREQua Université Paris-1 Panthéon-Sorbonne) |
| Abstract: | In this paper we investigate the relationship between inequality and the environment in a growing economy from a political economy perspective. We consider an endogenous growth economy, where growth generates pollution and a deterioration of the environment. Public expenditures may either be devoted to supporting growth or abating pollution. The decision over the public programs is done in a direct democracy, with simple majority rule. We prove that the median voter is decisive and show that inequality is harmful for the environment: the poorer the median voter relative to the average individual, the less she will tax and devote resources to the environment, preferring to support growth. |
| Keywords: | Inequality, Environment, Pollution abatement policy, Growth, Political economy |
| JEL: | D31 O11 Q50 Q58 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.5&r=env |
| By: | Carlo Carraro (University of Venice); Johan Eyckmans (Europese Hogeschool Brussel and Katholieke Universiteit Leuven, Centrum voor Economische Studiën); Michael Finus (University of Hagen) |
| Abstract: | The literature on international environmental agreements has recognized the role transfers play in encouraging participation in international environmental agreements (IEAs), but the few results achieved so far are overly specific and do not exploit the full potential of transfers for successful treaty-making. Therefore, in this paper, we develop a framework that enables us to study the role of transfers in a more systematic way. We propose a design for transfers using both internal and external financial resources and making “welfare optimal agreements” self-enforcing. To illustrate the relevance of our transfer scheme for actual treaty-making, we use a well-known integrated assessment model of climate change to show how appropriate transfers may be able to induce almost all countries into signing a self-enforcing climate treaty. |
| Keywords: | Self-enforcing international environmental agreements, Climate policy, Transfers |
| JEL: | C72 H23 Q25 Q28 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.50&r=env |
| By: | Alireza Naghavi (PSE, Ecole Normale Supèrieure) |
| Abstract: | The Doha declaration on trade and environment proposed to clarify the relationship between multilateral environmental agreement (MEA) trade obligations and WTO rules by only guaranteeing economic integration upon ratification of certain MEAs. In other words, it pushed to authorize the use of trade measures against non-compliance, denying a non-signatory of its WTO rights to exercise countervailing tariffs. This paper demonstrates that the Doha proposal can be effective when environmental policy and its trade obligations are endogenous. Under plausible circumstances, ratification by a non-signatory to the MEA along with free trade as a reward is the unique equilibrium outcome. Delocation to pollution havens does not occur, as optimal tariffs are positive if standards are not adopted. Tariffs however only work as a credible threat and do not emerge in equilibrium. Results are consistent with broad empirical evidence that opposes the pollution haven hypothesis and suggests capital movements to be non-pollution related. |
| Keywords: | Environmental policy, WTO, Location of firms, Green tariffs, Multilateral environmental agreements, Doha declaration |
| JEL: | F13 F18 F23 H23 Q56 R38 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.52&r=env |
| By: | Paulo A.L.D. Nunes (University of Venice, Fondazione Eni Enrico Mattei and Free University); Margaretha Breil (Fondazione Eni Enrico Mattei); Gretel Gambarelli (University of Venice, Fondazione Eni Enrico Mattei) |
| Abstract: | The paper focuses on the economic assessment of damages caused by high water in the city of Venice. In particular, we focus our attention on a valuation exercise that addresses the estimation of monetary, short period, on-site damages due to high water events on the different business activities located in Venice. On-site damages include both mitigation costs, which refer to all types of financial expenditure undergone to avert physical and material damages caused by flooding, and remediation costs, i.e. costs to be sustained for maintenance and substitution of affected building elements. Hence, the present study can be considered as a pioneering attempt to analytically quantify, from an economic point of view, on-site damages from high water. An integrated dose-response modelling and an expert-based valuation approach have been selected as the most suitable economic valuation methodology to shed light on the on-site damages. The main focus of the work is to assess dose-response relationships, which are able to describe the physical effects of high water on the different on-site damage categories, including inner and front doors maintenance, cleaning of pavements and maintenance of the walls. Bearing in mind such an economic valuation framework, we proceed with the estimation of on-site damages not only for the present high water situation (business as usual) but also extend the valuation exercise to three additional high water scenarios: (1) a climate change scenario; (2) a high water protection scenario; and, (3) a combined climate change and protection scenario. Estimation results show that the welfare loss due to on-site, short-term damages supported by the business activities ranges from 3.41 to 4.73 million Euro per year, respectively for the business as usual and climate change scenarios. Finally, we can conclude that the introduction of a public policy protection mechanism that defends the city of Venice from any flooding above 110 cm above the Punta della Salute Tidal Datum, such as the MOSE, will reduce the on-site damages supported by the business activities up to 2.87 million Euro per year. |
| Keywords: | High water damages, Venice, Economic valuation |
| JEL: | C29 Q25 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.53&r=env |
| By: | Gernot Klepper (Kiel Institute for World Economics); Sonja Peterson (Kiel Institute for World Economics) |
| Abstract: | The objective of this paper is to assess the likely allocation effects of the current cli-mate protection strategy as it is laid out in the National Allocation Plans (NAPs) for the European Emissions Trading Scheme (ETS). The multi-regional, multi-sectoral CGE-model DART is used to simulate the effects of the current policies in the year 2012 when the Kyoto targets need to be met. Different scenarios are simulated in order to highlight the effects of the grandfathering of permits to energy-intensive installations, the use of the project-based mechanisms (CDM and JI), and the restriction imposed by the supplementarity criterion. |
| Keywords: | Kyoto targets, EU, EU emissions trading scheme, National allocation plans, CDM and JI, Computable general equilibrium model, DART |
| JEL: | D58 F18 Q48 Q54 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.55&r=env |
| By: | Bernard Sinclair-Desgagné (HEC Montréal); Maia David (UMR INRA-INAPG Économie publique) |
| Abstract: | This paper re-examines environmental regulation, under the assumption that pollution abatement technologies and services are provided by an imperfectly competitive environment industry. It is shown that each regulatory instrument (emission taxes and quotas; design standards; and voluntary agreements) has a specific impact on the price-elasticity of the polluters’ demand for abatement services, hence on the market power of the eco-industry and the resulting cost of abatement. This implies that the optimal pollution tax will be higher than the marginal social cost of pollution, while a voluntary approach to pollution abatement may fail unless the eco-industry itself is willing to participate. |
| Keywords: | Pollution regulation, End-of-pipe pollution abatement, Environment industry |
| JEL: | H23 L13 Q58 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.56&r=env |
| By: | Bernard Sinclair-Desgagné (HEC Montréal); Alain-Désiré Nimubona (Institute of Applied Economics, HEC Montréal) |
| Abstract: | Pollution abatement goods and services are now largely being delivered by a specialized “eco-industry.” This note reconsiders Pigouvian taxes in this context. We find that the optimal emission tax will depart from the marginal social cost of pollution according to the polluters’ and the environment firms’ relative market power. |
| Keywords: | Pigouvian taxes, Environment industry |
| JEL: | H23 L13 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.57&r=env |
| By: | Valentina Bosetti (Fondazione Eni Enrico Mattei); Carlo Carraro (Università di Venezia and Fondazione Eni Enrico Mattei); Marzio Galeotti (Università di Milano and Fondazione Eni Enrico Mattei) |
| Abstract: | In recent years, a large number of papers have explored different attempts to endogenise technical change in climate models. The obvious reason is that technical change is widely considered the main route to achieving a significant reduction in global GHG emissions. This recent literature has emphasized that four factors – two inputs and two outputs – should play a major role when modelling technical change in climate models. The two inputs are R&D investments and Learning by Doing, the two outputs are energy-saving and fuel switching. Indeed, R&D investments and Learning by Doing are the main drivers of a climate-friendly technical change that eventually affect both energy intensity and fuel-mix. In this paper, we present and discuss an extension of the FEEM-RICE model in which these four factors are explicitly accounted for. In our new specification of endogenous technical change, an index of technical progress depends on both Learning by Researching and Learning by Doing. This index enters the equations defining energy intensity (i.e. the amount of carbon energy required to produce one unit of output) and carbon intensity (i.e. the level of carbonization of primarily used fuels). This new specification is embodied in the RICE 99 integrated assessment climate model and then used to generate a business as usual scenario and to analyze the relationship between climate policy and technical change. Sensitivity analysis is performed on different key parameters of the energy module in order to obtain crucial insights into the relative importance of the main channels through which technological changes affects the impact of human activities on climate. In addition, the effectiveness of different possible ways of combining Learning by Researching and Learning by Doing is also investigated. |
| Keywords: | Climate Policy, Environmental Modelling, Integrated Assessment, Technical Change |
| JEL: | H0 H2 H3 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.6&r=env |
| By: | David Calef (Fondazione Eni Enrico Mattei); Robert Goble (George Perkins Marsh Institute, Clark University) |
| Abstract: | All advanced industrialized societies face the problem of air pollution produced by motor vehicles. In spite of striking improvements in internal combustion engine technology, air pollution in most urban areas is still measured at levels determined to be harmful to human health. Throughout the 1990s and beyond, California and France both chose to improve air quality by means of technological innovation, adopting legislation that promoted clean vehicles, prominently among them, electric vehicles (EVs). In California, policymakers chose a technology-forcing approach, setting ambitious goals (e.g., zero emission vehicles), establishing strict deadlines and issuing penalties for non-compliance. The policy process in California called for substantial participation from the public, the media, the academic community and the interest groups affected by the regulation. The automobile and oil industries bitterly contested the regulation, in public and in the courts. In contrast, in France the policy process was non-adversarial, with minimal public participation and negligible debate in academic circles. We argue that California's stringent regulation spurred the development of innovative hybrid and fuel cell vehicles more effectively than the French approach. However, in spite of the differences, both California and France have been unable to put a substantial number of EVs on the road. Our comparison offers some broad lessons about how policy developments within a culture influence both the development of technology and the impact of humans on the environment. |
| Keywords: | Environmental policy, Electric vehicles, Air pollution, Technology policy, Sustainable transport |
| JEL: | O33 O57 Q53 K32 L5 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.7&r=env |
| By: | Lorenzo Pellegrini (Vrije Universiteit); Reyer Gerlagh (Institute for Environmental Studies (IVM-FALW), Vrije Universiteit) |
| Abstract: | Both theoretical and empirical studies have shown that democracy and corruption have substantial influence on environmental policy. In this paper, we empirically analyse whether both democracy and corruption are equally important determinants. When these variables are jointly included as explanatory variables, we find that corruption stands out as an important determinant of environmental policies, while democracy has a very limited impact. Further on, we discuss our results in the context of the Environmental Kuznets Curve literature. We argue that institutional disarray that plagues developing countries will make it problematic for them to have increasing environmental policy stringency combined with increasing incomes. Finally, and more optimistically, when we consider our results in the context of institutions and growth, we conclude that there is a possibility of reaching a double dividend. Reductions in corruption would induce both higher growth rates and stricter environmental policies. Thus, institutional improvement is an extremely valuable step in achieving sustainable development. |
| Keywords: | Corruption, Democracy, Development, Environmental policy, Institutions |
| JEL: | H40 D73 Q56 Q58 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.8&r=env |
| By: | Angelo Antoci (DEIR, University of Sassari) |
| Abstract: | We analyse growth dynamics in an economy where the well-being of economic agents depends on three goods: leisure, a free access environmental good and a private good which can be produced by each agent through his own labour input. The private good can be consumed as a substitute for the environmental resource. The production process of the private good by each agent generates negative externalities on the other agents, by depleting the free access natural resource; but it also produces positive externalities by increasing the productivity of labour via a learning-by-doing mechanism of accumulation of knowledge [which is a pure public good]. In this context, we show that attracting steady states may exist which are Pareto-dominated by others where aggregate private consumption and labour productivity are lower. However, negative externalities can also be an engine of desirable growth: the deterioration of the environmental good can play the role of a coordination device leading economic agents to a wider exploitation of positive externalities. |
| Keywords: | Self-protection choices, Consumption patterns, Negative externalities, Undesirable economic growth, Adaptive dynamics |
| JEL: | D62 O11 O13 O40 Q20 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.9&r=env |
| By: | Haryo Aswicahyono (Department of Economics, Centre for Strategic and International Studies) |
| Abstract: | This paper provides an assessment on policy and structural changes in the Indonesian woodbased industries. The author shows that the tremendous growth of production and exports has been made possible through heavy subsidies, resulting in inefficiencies in harvesting and production. Subsidies created an incentive to delay the use of cost- and wood-saving technology. Constant market share analysis revealed that competitiveness of forest product exports declined during the period 1993-2003, and could only be partially compensated by an increased shift towards pulp and paper exports. Indonesia is losing competitiveness in slow growing industries like wood products, especially plywood. Further restructuring of the forest product industry in favor of pulp and paper industry with proper environmental management is the right policy direction, but there are also concerns that the huge demand for wood by the industry is already exceeding sustainable harvest levels. |
| Keywords: | Indonesia, forestry, competitiveness, trade. |
| Date: | 2004–02 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:51&r=env |
| By: | Ada Ferrer-i-Carbonell (Amsterdam Institute for Advanced Labour Studies & Faculty of Economics and Econometrics (SCHOLAR), University of Amsterdam, The Netherlands); John M. Gowdy (Department of Economics, Rensselaer Polytechnic Institute, Troy NY 12180-3590, USA) |
| Abstract: | The focus of this paper is on the relationship between an individual's environmental attitudes (or awareness) and well-being. We use an ordered probit model to examine the relationship between individual measures of subjective well-being and environmental attitudes regarding ozone pollution and species extinction. Using data from the British Household Panel Survey we find a negative correlation between well-being and concern about ozone pollution and a positive correlation between well-being and concern about species extinction. These relationships hold when explanatory variables are included indicating whether or not the person lives in a polluted environment and whether or not the person engages in outdoor leisure activities. These relationships also hold when we control for individual psychological traits. Our results are an important step in clarifying some of the subtleties of the relationship between environmental quality and well-being. This research area is important in addressing the related issues of sustainability and environmental policy design. |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:rpi:rpiwpe:0503&r=env |
| By: | Rahul Shastri (National Akademi of Development); Prabha Panth (Osmania University); Aubrey Moss (Osmania University) |
| Abstract: | This study finds that the consumption of minerals and oil reserves of India has grown several times faster than the GNP. This has reduced the estimated reserves of several Non-renewable Resources (NRRs), whose estimated life spans in India vary from 9 to 47 years. It uses the Liontief Input Output tables to decompose the gross demand for NRRs, and finds that private consumption expenditure is responsible for nearly half of their demand, followed by investment (28%), and exports (12%). However, the NRR intensity per rupee of expenditure is twice as high in investments and exports when compared to private consumption. Imports meet about half of the demand for NRRs in the Indian Economy. Direct imports of NRRs which were about 28% of total imports in 1989-90, satisfied about 35% of the total demand for NRRs in the Indian Economy. Other imports had an NRR content which met about 11% of the total NRR demand. In general, the NRR intensity of non-NRR imports is much higher than the NRR intensity of exports, indicating that India's foreign trade conserves Non-renewable resources on the whole. Looking at the different industrial sectors, it is found that the demand for NRRs is highly skewed, with about half of the total demand for NRRs being accounted for by three sectors, and 86% of the NRR demand being due to only nine sectors. Any strategy aiming to conserve non-renewable resources should concentrate on these sectors. Consumption expenditure in about 20 sectors of consumption was more NRR intensive (per rupee spent at 1989- 90 prices) than others. Likewise, exports in about 11 sectors were more NRR intensive than the average. An economic strategy to conserve non- renewable resources would do well to attempt to reallocate expenditures and exports away from these sectors to other sectors that are less NRR intensive. |
| Keywords: | non-renewable resources, conservation, Liontief Input Output Tables, exponential reserve index, Indian economic growth, life span, Liontief Inverse, limits to growth |
| JEL: | P Q Z C6 D5 D9 |
| Date: | 2005–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpot:0504008&r=env |
| By: | Angus, A.J (Institute of Water and Environment, Cranfield University at Silsoe, Bedford, MK45 4DT, UK); Ian Hodge (Department of Land Economy, University of Cambridge, Cambridge, CB3 9EP, UK) |
| Abstract: | This study uses a linear programming approach to compare the potential effectiveness of uniform rules (under the Integrated Pollution Prevention and Control Directive) and a landscape-scale based policy for reducing ammonia (NH3) emissions and their related impacts from a case study poultry installation. The model incorporates a variety of potential NH3 abatement techniques. It also incorporates the first application of a spatial model of the diffusion of environmental impacts from NH3 emissions. This models N deposition at a nearby nature reserve. The model finds that the uniform rules proposed under the Integrated Pollution Prevention and Control Directive are likely to be ineffective in certain contexts and that a landscape-scale approach is more suitable for reducing N deposition from livestock production units in environmentally sensitive locations. However, the adjustments required are associated with large reductions in net margin. This reflects the limited range of cost-effective NH3 abatement techniques available. An alternative cost-effective abatement technique could be to maintain a spatial buffer between poultry production and sensitive receptors. |
| Keywords: | Ammonia, Integrated Pollution Prevention and Control, Broiler installations |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:lnd:wpaper:012005&r=env |
| By: | Ekin Birol (Homerton College and Department of Land Economy, University of Cambridge, Cambridge, UK); Melinda Smeale (International Food Policy Research Institute, Washington DC, USA and International Plant Genetic Resources Institute, Rome, Italy) |
| Abstract: | Crop genetic resources are natural assets that are necessary for future crop improvement. In isolated, marginal production environments where markets function imperfectly, farm families depend on them directly for food. In recognition of their importance, international agreements such as the Convention on Biological Diversity and the International Treaty on Plant Genetic Resources for Food and Agriculture encourage national governments to support their sustainable use and management, on farms and in gene bank collections. Hungary is a signatory to these international agreements. The aim of this study is to contribute research-based information to support the design of efficient and equitable conservation programmes for socially valuable crop landraces still found on small farms in Hungary. Landrace cultivation and richness is predicted with a Poisson hurdle model applied to data from a statistical survey of 323 households in three pilot conservation sites. Poorer, larger farm families with older decision-makers, who are more isolated from market infrastructure, are more likely to grow landraces and maintain greater landrace richness. Those managing smaller farms with lower quality soils and less irrigation have higher predicted probabilities of growing landraces. Findings suggest that the development of market infrastructure may contribute to abandonment of landraces, although specialised markets for high-quality products merit further investigation. Where economic development opportunities remain limited, supporting the continued management of crop genetic resources on farms could have positive equity implications and address other social goals, although the full cost and benefit implications of relevant policy instruments would need to be assessed in the context of Hungary’s national agri-environmental programme. |
| Keywords: | crop genetic resources, landraces, farm household model, Poisson Hurdle model, sustainable use and management, |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:lnd:wpaper:022005&r=env |