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on Environmental Economics |
| By: | Jayasri Dutta, Colin Rowat |
| Abstract: | We study extinction in a commons problem in which agents have access to capital markets. When the commons grows more quickly than the interest rate, multiple equilibria are found for intermediate commons endowments. In one of these, welfare decreases as the resource becomes more abundant, a `resource curse'. As marginal extraction costs become constant, market access instantly depletes the commons. Without markets - the classic environment - equilibria are unique; extinction dates and welfare increase with the endowment. When the endowment is either very abundant or very scarce, market access improves welfare. As marginal costs of extraction from the commons become constant, market access can reduce welfare if the subjective discount rate exceeds the world interest rate. |
| Keywords: | commons, capital markets, perfect foresight, extinction, resource curse, storage |
| JEL: | C73 D91 O17 Q21 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:04-11r&r=env |
| By: | Alexander F. Wagner; Friedrich Schneider |
| Abstract: | We construct a panel of satisfaction with democracy (SWD) and economic, institutional, and environmental variables for 1990-2001 for fifteen European countries. In this sample, controlling for a number of factors, we find that average SWD is higher where (1) there exists an energy / CO2 tax, where (2) government expenditures on the environment are higher, where (3) certain environmental regulations like packaging rules are in place, and (4) where the government puts in place environmental offices or other official bodies charged with addressing environmental concerns. We also find that, on the environmental quality side, (5) more cars on the roads, (6) less unleaded fuel, and (7) higher pesticide use intensity all decrease SWD. |
| Keywords: | satisfaction with democracy, environment |
| JEL: | K32 P16 Q21 Q28 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1660&r=env |
| By: | Catherine Boeamare (CIRED - Centre International de Recherche sur l'Environnement et le Développement - http://www.centre-cired.fr - [CNRS : UMR8568] - [] - [Ecole des Hautes Etudes en Sciences Sociales][Ecole Nationale du Génie Rural des Eaux et des Forêts][Ecole Nationale des Ponts et Chaussées]); Philippe Quirion (CIRED - Centre International de Recherche sur l'Environnement et le Développement - http://www.centre-cired.fr - [CNRS : UMR8568] - [] - [Ecole des Hautes Etudes en Sciences Sociales][Ecole Nationale du Génie Rural des Eaux et des Forêts][Ecole Nationale des Ponts et Chaussées]) |
| Abstract: | The European Commission (2001a) has recently presented a directive proposal to the European Parliament and Council in order to implement a greenhouse gas emission trading scheme. If this proposal survives the policy process, it will create the most ambitious trading system ever implemented. However the legislative process is an opportunity for various interest groups to amend environmental olicies which, as a result, generally deviate further from what economic literature proposes. A close look at implemented emission trading schemes, stressing their discrepancies with economic literature requests, is thus useful to increase the chances of forthcoming emission trading schemes to go through the political process.<br />We thus review ten emission trading systems, that are either implemented or at an advanced stage of the policy process. We draw attention to major points to be aware of when designing an emission trading system: sectoral and spatial coverage, permits allocation, temporal flexibility, trading organisation, monitoring, enforcement, compliance, and the harmonisation vs. subsidiarity issue.<br />The aim is to evaluate how far experiences in emission trading move away from theory and why. We then provide some lessons and recommendations on how to implement a greenhouse gas emission trading program in Europe. We identify some pros of<br />the Commission proposal (spatial and sectoral coverage, temporal flexibility, trading organisation, compliance rules), some potential drawbacks (allocation rules, monitoring and enforcement) and items on which further guidance is needed (monitoring and allocation rules). Lastly, the European Commission should devote prominent attention to the U.S. NOX Ozone Transport Commission budget program, as the only example of integration between the federal and state levels. |
| Keywords: | Emission trading; climate change policy; policy-making and implementation |
| Date: | 2006–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00009822_v1&r=env |
| By: | Alexandro Caparros (IEG - Department of Economics, Institute of Economics and Geography (IEG), - http://www.ieg.csic.es - [Spanish Council for Scientific Research (CSIC)] - [] - []); Jean-Christophe Pereau (CIRED - Centre International de Recherche sur l'Environnement et le Développement - http://www.centre-cired.fr - [CNRS : UMR8568] - [] - [Ecole des Hautes Etudes en Sciences Sociales][Ecole Nationale du Génie Rural des Eaux et des Forêts][Ecole Nationale des Ponts et Chaussées]); Tarik Tazdait (CIRED - Centre International de Recherche sur l'Environnement et le Développement - http://www.centre-cired.fr - [CNRS : UMR8568] - [] - [Ecole des Hautes Etudes en Sciences Sociales][Ecole Nationale du Génie Rural des Eaux et des Forêts][Ecole Nationale des Ponts et Chaussées]) |
| Abstract: | This article determines the conditions under which theSouthern countries should act together, or separately, while negotiating with the North about climate change policy and about the conditions for future Southern engagement. The paper models the international negotiations with complete and with asymmetric information in a dynamic framework. Results show that, depending on their characteristics, the different players can obtain benefits delaying the moment of the agreement. |
| Keywords: | Bargaining theory; Asymmetric information; Climate change;International cooperation. |
| Date: | 2006–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00009823_v1&r=env |
| By: | Vincent Gitz (CIRED - Centre International de Recherche sur l'Environnement et le Développement - http://www.centre-cired.fr - [CNRS : UMR8568] - [] - [Ecole des Hautes Etudes en Sciences Sociales][Ecole Nationale du Génie Rural des Eaux et des Forêts][Ecole Nationale des Ponts et Chaussées]); Philippe Ciais (LSCE - Laboratoire des sciences du climat et de l'environnement - http://www.lsce.cnrs-gif.fr - [CNRS : UMR1572][CEA] - [] - []) |
| Abstract: | We constructed a model to analyze the interactions between land-use change and atmospheric CO2 during the recent past and for the future. The primary impact of the conversion of forested lands to cultivated lands is to increase atmospheric CO2, via losses of biomass and soil carbon to the atmosphere. This increase is likely to continue in the next decades, but its magnitude can vary according to each land-use scenario. We show that this first-order effect is further amplified by the correlated diminution of terrestrial sinks, because when croplands replace forests, the turnover time of excess carbon in the biosphere decreases, and hence the sink capacity of terrestrial ecosystems decreases. This effect acts to further increase by up to 100 ppm the CO2 level reached by 2100, and it is of<br />the same order of magnitude, although smaller, than climate-carbon feedbacks. Uncertainties on the magnitude of this land-use induced effect are large, because of uncertainties in the sink role of terrestrial ecosystems in the future and because of uncertainties inherent to the modeling of land-use induced carbon emissions. Such an extra rise in atmospheric CO2 is however partially offset by the ocean reservoir and by sinks operating over undisturbed, pristine ecosystems, suggesting that conserving pristine forests with long turnover times might be efficient in mitigating the greenhouse effect |
| Keywords: | land-use change; carbon cycle; future scenarios |
| Date: | 2006–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00009826_v1&r=env |
| By: | Andreas Freytag (University of Jena, Faculty of Economics); Christoph Vietze (University of Jena, Faculty of Economics) |
| Abstract: | We analyse whether biodiversity can improve the economic growth of Least Developed Countries (LDCs) by increasing the receipts of tourism as one of the world biggest and fastest growing industries. The intention of our examination is to present an alternative utilization of biodiversity, rather than hunting or the agricultural use of habitats. Our hypothesis is that tourism may be an important chance for economic growth in developing countries. We assume that biodiversity is an important factor influencing the demand for tourism. In other words: a rich biodiversity provides a comparative advantage for most LDCs. Using by a simple growth-model, we conclude that only sustainable tourism shows a steady economic growth in the long run, which may result in an economic convergence from LDCs to Developed Countries. <BR> The model is supported by an empirical analysis. We assess the determinants of trade in tourism and comparative advantage therein based on cross-country data of incidence and the rate of endangerment of birds, as the probably best explored taxonomic group. Other exogenous variables are GDP per capita, life expectancy (as determinates for safety and infrastructure), coastline, the distance to the equator and the number of UNESCO-World-Heritage sites. The main findings are that LDCs first seem to have a comparative advantage in (sustainable) tourism, that second incidence of birds has a positive impact on inbound tourism receipts per capita, and that third the rate of endangered to total birds is negatively influencing tourism receipts. |
| Keywords: | tourism, economic growth, biodiversity conservation |
| JEL: | F18 Q26 |
| Date: | 2006–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:jen:jenasw:2006-11&r=env |
| By: | Sonja Peterson |
| Abstract: | The European Emissions Trading Scheme for CO2 established in 2005 is the world's largest emissions trading scheme. Since it covers only some sectors of the European economies it can nevertheless not ensure that the Kyoto targets are reached at minimal cost. This paper first analyzes the conditions for cost efficiency in the current separated carbon markets accounting also for the possibilities of purchasing international carbon credits from outside the EU. A computable general equilibrium model is then used to assess the cost efficiency of current EU climate strategies. Finally, based both on the theoretical as well as the quantitative analysis, recommendations are derived for a better allocation of the reduction burden between the sectors participating in emissions trading, those that do not participate and international carbon purchases. |
| Keywords: | emissions trading, allocation, efficiency, separated markets |
| JEL: | H21 D61 Q48 D58 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1271&r=env |
| By: | David Popp |
| Abstract: | While many studies have looked at innovation and adoption of technologies separately, the two processes are linked. Advances (and expected advances) in a single technology should affect both its adoption rate and the adoption of alternative technologies. Moreover, advances made abroad may affect adoption differently than improvements developed domestically. This paper combines plant-level data on U.S. coal-fired electric power plants with patent data pertaining to NOx pollution control techniques to study these links. I show that technological advances, particularly those made abroad, are important for the adoption of newer post-combustion treatment technologies, but have little effect on the adoption of older combustion modification techniques. Moreover, I provide evidence that adaptive R&D by U.S. firms is necessary before foreign innovations are adopted in the U.S. Expectations of future technological advances delay adoption. Nonetheless, as in other studies of environmental technologies, the effect of other explanatory variables is dominated by the effect of environmental regulations, demonstrating that the mere presence of environmental technologies is not enough to encourage its usage. |
| JEL: | L94 O31 O33 Q53 Q55 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12119&r=env |
| By: | Boyd, James (Resources for the Future); Banzhaf, H. Spencer (Resources for the Future) |
| Abstract: | This paper advocates consistently defined units of account to measure the contributions of nature to human welfare. We argue that such units have to date not been defined by environmental accounting advocates and that the term “ecosystem services” is too ad hoc to be of practical use in welfare accounting. We propose a definition, rooted in economic principles, of ecosystem service units. A goal of these units is comparability with the definition of conventional goods and services found in GDP and the other national accounts. We illustrate our definition of ecological units of account with concrete examples. We also argue that these same units of account provide an architecture for environmental performance measurement by governments, conservancies, and environmental markets. |
| Keywords: | Environmental accounting, ecosystem services, index theory, nonmarket valuation |
| JEL: | Q51 Q57 Q58 D6 |
| Date: | 2006–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-06-02&r=env |
| By: | Fischer, Carolyn (Resources for the Future) |
| Abstract: | Some environmental policies focus on emissions intensity rather than total emissions, or they try to mitigate the regulatory impact on the final product market. To analyze the effects of these policies, or to evaluate the distributional effects of any regulation on consumers and producers, output must be incorporated explicitly into an economic model of abatement, separately from the emissions variable. This provides two options. Traditionally, total emissions and output are the independently controlled variables, leaving emissions intensity as endogenously determined. Alternatively, one can make emissions intensity and output the control variables, leaving total emissions as the endogenously determined variable. One is the dual of the other and the problems are equivalent, but the latter method offers more transparency for examining intensity-based policies. This note shows how the intensity-based model fits into the traditional context. |
| Keywords: | emissions intensity, emissions standards, environmental tax, pollution, tradable emissions permits |
| JEL: | Q5 |
| Date: | 2004–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-04-14&r=env |
| By: | Aldy, Joseph E. (Resources for the Future) |
| Abstract: | This paper explores the relationships among economic development, energy consumption, and carbon dioxide (CO2) emissions by focusing on a set of advanced economies, the U.S. states. Energy consumption and emissions grew 50–60 percent on average over the 1960–1999 period. The states’ per capita energy consumption and emissions have grown on average 2 percent annually as income and population growth have outpaced improvements in energy intensity of output and carbon intensity of energy. The energy consumption income elasticity is positive but decreasing in income, although energy production takes an inverted-U shape, reflecting the electricity imports among high income states. The standard CO2 measure, corresponding to energy production, is characterized by an inverted-U environmental Kuznets curve. Adjusting emissions for interstate electricity trade yields an emissions–income relationship that peaks and plateaus. The carbon intensity of energy declines in income for total energy consumption and the industrial, residential, and commercial sectors. |
| Keywords: | Engel curve, environmental Kuznets curve, cubic spline, Kaya identity |
| JEL: | Q43 Q54 Q56 |
| Date: | 2006–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-06-13&r=env |
| By: | Parry, Ian W.H. (Resources for the Future) |
| Abstract: | Energy models suggest that the cost of reducing carbon emissions from the transportation sector is high relative to other sectors, such as electricity generation. However, this paper shows that taxes to reduce passenger vehicle emissions produce large net benefits, rather than costs, when account is taken of: (a) their impact on reducing non-carbon externalities from passenger vehicle use, and (b) interactions with the broader fiscal system. Both of these considerations also strengthen the case for using a tax-based approach to reduce emissions over fuel economy regulation, while fiscal considerations strengthen the case for taxes over (non-auctioned) emissions permits. |
| Keywords: | carbon policies, passenger vehicles, externalities, welfare costs |
| JEL: | Q54 R48 H23 |
| Date: | 2006–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-06-14&r=env |