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on Environmental Economics |
| By: | Catherine Norman (Johns Hopkins University); STEPHEN DECANIO (University of California, Santa Barbara); Lin Fan (Johns Hopkins University) |
| Abstract: | This paper considers the success of the Montreal Protocol on Substances that deplete the Ozone Layer in addressing an incompletely understood global environmental hazard under risk and uncertainty, and its implications for and interactions with other global environmental protection regimes, particularly the Kyoto Protocol. We illustrate a method for assessing joint impacts of projects and policies designed to reduce environmental damage in the absence of a coordinated legal and regulatory framework. Further, we note areas for improvements in coordination and efficiency across the treaties. |
| Keywords: | Global environmental protection, emissions trading markets, Montreal Protocol, Kyoto Protocol, abatement costs, ozone, climate, |
| Date: | 2007–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucsbec:12-07&r=env |
| By: | Uwe A. Schneider; Michael Obersteiner; Erwin Schmid; Bruce A. McCarl (Research unit Sustainability and Global Change, Hamburg) |
| Abstract: | This study uses a partial equilibrium model of the US agricultural sector to examine how technical progress and carbon price levels affect land management adaptation. We find that the climate policy range, over which a more extensive agriculture is preferred, decreases as crop yields increase. Second, technical progress with traditional crops offers less mitigation benefits than progress with mitigation options themselves. Third, while agricultural producers benefit from technical progress on energy crops, they fare worse if technical progress improves traditional crops and low carbon prices. |
| Keywords: | Technical Change, Producer Adaptation, Agricultural Sector Model, Carbon Sequestration, Mathematical Programming, Climate Policy Simulation |
| JEL: | Q11 Q55 Q58 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:133&r=env |
| By: | M. Chomitz, Kenneth; Wertz-Kanounnikoff, Sheila |
| Abstract: | Environmental concern in developing countries has risen rapidly over the past decade. At the same time, decentralization and civic participation in environmental policy-making have also burgeoned. This paper uses data from the Brazilian Municipal Environmental Survey 2001 to examine the causal effect of municipio (county) level environmental institutions on perceptions about environmental problems in Brazil. Consistent with models of public choice, the analysis assumes that the existence of an environmental secretary or an environmental council is related to characteristics of the municipio population. To control for endogeneity - the possibility that the presence of environmental institutions merely signals constituents ' tastes rather than influences municipal actions - the authors construct a system of equations that identifies the causal impact of the institutions. Estimation via a trivariate probit model allows for correlation of unobserved determinants of problem perception, presence of an environmental secretary, and presence of an environmental council. The results suggest that the presence of environmental secretaries has a strong, highly significant, positive causal effect on environ mental problem perception. Presence of local environmental councils with civic participation has a significant but weaker impact on environmental problem perception. The authors conclude that local environmental institutions indeed shape local environmental awareness and that participatory institutions can influence local government. |
| Keywords: | Environmental Economics & Policies,Environmental Governance,Population Policies,,Children and Youth |
| Date: | 2008–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4522&r=env |
| By: | Johan Eyckmans and Cathrine Hagem (Statistics Norway) |
| Abstract: | The literature suggests that Russia and Ukraine may become large sellers of greenhouse gas emissions permits under the Kyoto Protocol and might exploit their market power to maximize trading profits. The EU countries taken together will probably be net buyers of permits. For any given global target for emission, participation by developing countries with low-cost abatement options would benefit the net buyers of permits because the market price for carbon permits would go down. We explore how the EU could benefit from a broader participation through specific bilateral agreements with developing countries in the post-Kyoto period. The bilateral agreement involves a minimum permit sales requirement which is compensated by a financial transfer from EU to the developing country. Such bilateral agreement enables the EU to act strategically in the permit market on behalf of its member states, although firms in each member state are assumed to be price takers in the permit market. In a numerical simulation we show that an appropriately designed bilateral agreement between the EU and China can cut EU’s total compliance cost by one third. |
| Keywords: | emissions permits; post-Kyoto climate agreement; strategic permit trading |
| JEL: | D43 Q54 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:530&r=env |
| By: | David E. Clark (Department of Economics, Marquette University; U.S. Department of Hoursing and Urban Development) |
| Abstract: | This paper develops and applies a space-based strategy for overcoming the general problem of getting at the demand for non-market goods. It focuses specifically on evaluating one form of environmental quality, distance from EPA designated environmental hazards, via the single-family housing market in the Puget Sound region of Washington State. A spatial two stage hedonic price analysis is used to: (1) estimate the marginal implicit price of distance from air release sites, hazardous waste generators, hazardous waste handlers, superfund sites, and toxic release sites; and (2) estimate a series of demand functions describing the relationship between the price of distance and the quantity consumed. The analysis, which represents a major step forward in the valuation of environmental quality, reveals that the information needed to identify second-stage demand functions is hidden right in plain site — hanging in the aether of the regional housing market. |
| Keywords: | Environmental Quality, Hedonic Price Analysis |
| JEL: | Q53 R21 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:mrq:wpaper:0702&r=env |
| By: | Hasan, Lubna |
| Abstract: | Deforestation remains one of the most intractable environmental problems of today. Pakistan also faces serious problem of depletion of its forest reserves.The general perception among planners is that over population is the primary culprit behind forest degradation. Moreover, people living close to forestlands, and using it for their needs, show an imprudent behaviour towards these forests and use it in an unsustainable manner. So there is tendency among the policy makers to find ways of keeping people away from this resource, and to strengthen government’s hold over it. This is a rather simplistic conception of the issue since most of the forests in Pakistan are state owned/managed, and responsibility for the protection/conservation of these forests rests with the state, therefore, any inquiry into the causes of forest degradation in Pakistan must analyse the state’s role in it. Putting the entire burden of deforestation on ‘other factors’ shifts attention away from more important causes (namely, failure of government to manage forests), and leads to wrong policy conclusions. This study intends to focus attention on this important factor behind deforestation - the role of state in forest degradation in Pakistan. |
| Keywords: | State Failures; Deforestation |
| JEL: | Q23 Q58 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6513&r=env |
| By: | Rousseau Sandra (K.U.Leuven-Center for Economic Studies) |
| Abstract: | This model explicitly incorporates the dynamic aspects of conservation programs with incomplete compliance and it allows landholders’ behavior to change over time. A distinction is made between initial and continuing compliance. We find that incomplete and instrument-specific enforcement can have a significant impact on the choice between subsidy schemes and reserves for conservation policies. The results suggest that it is useless to design a conservation scheme for landholders, if the regulator is not prepared to explicitly back the program with a monitoring and enforcement policy. In general, the regulator will prefer to use compensation payments, if the cost of using government revenues is sufficiently low, the environmental benefits are equal, and the cost efficiency benefits exceed the (possible) increase in inspection costs. If the use of government funds is too costly, the reserve-type instruments will be socially beneficial. |
| Keywords: | Monitoring and enforcement; Policy instruments; Conservation policy |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:ete:etewps:ete0801&r=env |
| By: | Feng, Hongli; Rubin, Ofir; Babcock, Bruce A. |
| Abstract: | Life cycle analysis (LCA) is the standard approach used to evaluate the greenhouse gas (GHG) benefits of biofuels. However, it is increasingly recognized that LCA results do not account for some impacts—including land use changes—that have important implications on GHGs. Thus, an alternative accounting system that goes beyond LCA is needed. In this paper, we contribute to the literature by laying out the basics of a system-wide accounting (SWA) method that takes into account all potential changes in GHGs resulting from biofuel expansion. We applied both LCA and SWA to assess the GHG impacts of ethanol based on Iowa corn. Growing corn in rotation with soybeans generated 35% less GHG emissions than growing corn after corn. Based on average corn production, ethanol’s GHG benefits were lower in 2007 than in 2006 because of an increase in continuous corn in 2007. When only additional corn was considered, ethanol emitted about 22% less GHGs than gasoline. Results from SWA varied with the choice of baseline and the definition of geographical boundaries. Using 2006 as a baseline and 2007 as a scenario, corn ethanol’s benefits were about 20% of the emissions of gasoline. If we expand geographical limits beyond Iowa, but assume the same emission rates for soybean production and land use changes as those in Iowa, then corn ethanol generated more GHG emissions than gasoline. These results highlight the importance of boundary definition for both LCA and SWA. |
| Keywords: | biofuels, corn ethanol, greenhouse gas, life cycle analysis, system-wide accounting. |
| Date: | 2008–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12871&r=env |
| By: | Hongli Feng (Center for Agricultural and Rural Development (CARD)); Ofir D. Rubin; Bruce A. Babcock (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)) |
| Abstract: | Life cycle analysis (LCA) is the standard approach used to evaluate the greenhouse gas (GHG) benefits of biofuels. However, it is increasingly recognized that LCA results do not account for some impacts—including land use changes—that have important implications on GHGs. Thus, an alternative accounting system that goes beyond LCA is needed. In this paper, we contribute to the literature by laying out the basics of a system-wide accounting (SWA) method that takes into account all potential changes in GHGs resulting from biofuel expansion. We applied both LCA and SWA to assess the GHG impacts of ethanol based on Iowa corn. Growing corn in rotation with soybeans generated 35% less GHG emissions than growing corn after corn. Based on average corn production, ethanol's GHG benefits were lower in 2007 than in 2006 because of an increase in continuous corn in 2007. When only additional corn was considered, ethanol emitted about 22% less GHGs than gasoline. Results from SWA varied with the choice of baseline and the definition of geographical boundaries. Using 2006 as a baseline and 2007 as a scenario, corn ethanol's benefits were about 20% of the emissions of gasoline. If we expand geographical limits beyond Iowa, but assume the same emission rates for soybean production and land use changes as those in Iowa, then corn ethanol generated more GHG emissions than gasoline. These results highlight the importance of boundary definition for both LCA and SWA. |
| Keywords: | biofuels, corn ethanol, greenhouse gas, life cycle analysis, system-wide accounting. |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:08-wp461&r=env |
| By: | André Fontana (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.) |
| Abstract: | Les ressources en combustibles fossiles étant limitées, l’homme cherche aujourd’hui des combustibles et carburants de substitution. Les biocarburants et bicombustibles sont d’actualité, mais l’exploitation agricole en vue de production de ce type de produits risque de se faire aux dépends de l’industrie agroalimentaire ou des forets. A titre d’exemple, la déforestation au XVIIIe siècle a été sauvée par l’imagination humaine. Aujourd’hui, il reste des pistes à explorer pour sauver la biosphère. |
| Keywords: | coke, biocarburants, biocombustibles, agriculture, déchets |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:08-005&r=env |
| By: | Christopher Costello (University of California, Santa Barbara); Robert Deacon (University of California, Santa Barbara) |
| Abstract: | ITQ regulation relies on a decentralized market mechanism and a single price to allocate access to a stock of fish. The resulting allocation will not be fully efficient if the stock being allocated is heterogeneous or if there are potential gains from centralized coordination of harvesting effort. If stocks are heterogeneous in their density, location, or unit value during the season, harvesters governed by an ITQ policy will not be indifferent to when or where they exercise their quotas. Stocks that are relatively dense and/or close to port will be preferred to those less dense or more remote. Because an ITQ policy assigns the same opportunity cost of each unit harvested, individual harvesters have an incentive to compete for higher valued units and such competition may dissipate part of the fishery's potential rent. A similar phenomenon arises when stock densities vary in an unknown way over space or time, so harvesters must engage in costly search. Individual harvesters governed by an ITQ policy have no incentive to share information on stock locations, which can lead to redundant search effort. We demonstrate that both sources of inefficiency can be eliminated either by defining ITQ rights more precisely or by an agreement among harvesters to coordinate their effort. We develop models that illustrate these effects and identify the factors that determine their likely size. Anecdotal evidence on practices adopted by fishery cooperatives is presented to illustrate the practical relevance of the issues we raise. |
| Keywords: | fisheries management, property rights, rent dissipation, |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucsbec:03-07&r=env |
| By: | Robert Deacon (University of California, Santa Barbara); Christopher Costello (University of California, Santa Barbara) |
| Abstract: | An ITQ System that relies on a single price to allocate harvest rights will not be fully efficient unless the stock in question is uniform in terms of its economic value. Variations in the location or density of portions of a stock can give rise to corresponding variations in value, leading harvesters to compete for the best portions of the stock. The size of the waste that can arise from this competition is governed in part by the degree of heterogeneity--greater heterogeneity leads to greater losses. Similar losses can arise from inefficient search in cases where rights are not spatially delineated. We argue that these potential losses can be eliminated either by fully delineating ITQ harvest rights or by coordinating the fishing effort expended by quota holders. Evidence on practices adopted by harvesters operating under ITQ and other forms of regulation indicate that the issues we raise have practical relevance. |
| Keywords: | fisheries management, property rights, rent dissipation, |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucsbec:04-07&r=env |
| By: | Oscar E. Melhado |
| Abstract: | This paper reviews forestry reform in the Congo basin, focusing on Gabon. It argues that the key challenge for the Congo basin countries is to manage their forests in a sustainable manner. It presents the current situation of forestry taxation and forestry reform in Gabon. The paper analyzes optimal taxation in the forestry sector using a static model. The model works from the proposition that tax policy should be used exclusively for revenue purposes and resource preservation should be achieved mainly through legislation and enforcement. It argues that when prices are uncertain the best practice is to tax only profits. |
| Keywords: | Forestry , Gabon , Taxation , Economic models , |
| Date: | 2007–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/253&r=env |
| By: | Paul Lanoie |
| Abstract: | <P>L'image du Québec « vert » a récemment fait l'objet de commentaires contradictoires; certains lui donnent une image d’un exemple environnemental à suivre alors que d'autres qualifient cette même image de mythe. Afin de mieux connaître la situation, nous comparons certains indicateurs environnementaux avec le reste du Canada.<p> Du côté des institutions, nous remarquons que le Québec jouit d’avantages uniques au niveau des énergies renouvelables qui lui donnent le potentiel de devenir une société exemplaire sur le plan environnemental. Cependant, il existe un déficit criant en matière de tarification, particulièrement dans les domaines de l'eau, des déchets, de l'électricité et des transports. |
| Date: | 2008–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirtra:2008dt-01&r=env |
| By: | Baker, Mindy; Hayes, Dermot J.; Babcock, Bruce A. |
| Abstract: | A myriad of policy issues and questions revolve around understanding the bioeconomy. To gain insight, we develop a stochastic and dynamic general equilibrium model and capture the uncertain nature of key variables such as crude oil prices and commodity yields. We also incorporate acreage limitations on key feedstocks such as corn, soybeans, and switchgrass. We make standard assumptions that investors are rational and engage in biofuel production only if returns exceed what they can expect to earn from alternative investments. The Energy Independence and Security Act of 2007 mandates the use of 36 billion gallons of biofuels by 2022, with significant requirements for cellulosic biofuel and biodiesel production. We calculate the level of tax credits required to stimulate this level of production. Subsidies of nearly $2.50 per gallon to biodiesel and $1.86 per gallon to cellulosic biofuel were required, and long-run equilibrium commodity prices were high, with corn at $4.76 per bushel and soybeans at $13.01 per bushel. High commodity prices are due to intense competition for planted acres among the commodities. |
| Keywords: | biodiesel, biofuels, cellulosic, dynamic, ethanol, general equilibrium, Monte Carlo, market. |
| Date: | 2008–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12870&r=env |
| By: | Sebastian Lechner (University of Göttingen); Zulia Gubaydullina (University of Göttingen); Kilian Bizer (University of Göttingen) |
| Abstract: | This paper provides an economic justification for the protection of cultural property rights of indigenous groups. Cultural property either in the form of traditional knowledge or folklore carries the potential to increase wealth by adding to the knowledge base of an economy. But in order to ensure efficient use of cultural assets, the law should provide protection from overexploitation which is likely to occur as cultural assets can be characterized as a common pool resource. In contrast to other intellectual property such as inventions cultural goods are primarily provided by intrinsic motivation. External effects of using them in the production of other goods could crowd out this motivation. If cultural assets are part of the knowledge base of an economy, as argued here, protection of cultural assets should be implemented by either specific regulation by the state or the creation of property rights which can be traded on markets. International law should endeavour to provide a framework with lowest possible transaction costs while securing cultural assets. |
| Keywords: | Intellectual property rights, Cultural property rights, common pool resource, knowledge base |
| JEL: | Z1 O34 H41 |
| Date: | 2008–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:got:vwldps:136&r=env |
| By: | Mindy L. Baker; Dermot J. Hayes (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Bruce A. Babcock (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)) |
| Abstract: | A myriad of policy issues and questions revolve around understanding the bioeconomy. To gain insight, we develop a stochastic and dynamic general equilibrium model and capture the uncertain nature of key variables such as crude oil prices and commodity yields. We also incorporate acreage limitations on key feedstocks such as corn, soybeans, and switchgrass. We make standard assumptions that investors are rational and engage in biofuel production only if returns exceed what they can expect to earn from alternative investments. The Energy Independence and Security Act of 2007 mandates the use of 36 billion gallons of biofuels by 2022, with significant requirements for cellulosic biofuel and biodiesel production. We calculate the level of tax credits required to stimulate this level of production. Subsidies of nearly $2.50 per gallon to biodiesel and $1.86 per gallon to cellulosic biofuel were required, and long-run equilibrium commodity prices were high, with corn at $4.76 per bushel and soybeans at $13.01 per bushel. High commodity prices are due to intense competition for planted acres among the commodities. |
| Keywords: | biodiesel, biofuels, cellulosic, dynamic, ethanol, general equilibrium Monte Carlo, market. |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:08-wp460&r=env |