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on Environmental Economics |
| By: | Matthieu CLEMENT (GREThA UMR CNRS 5113); André MEUNIE (GREThA UMR CNRS 5113) |
| Abstract: | This article aims at examining the relationship between social inequalities and pollution. On the one hand, it proposes a survey which shows that from a theoretical point of view, a decrease in inequality has an undetermined effect on environment. On the other hand, on the basis of these theoretical considerations, we propose an econometric analysis based on panel data for developing and transition countries during the period 1988-2003. More precisely, we examine the effect of income inequalities on the degree of local pollution (sulphur dioxide emissions and organic water pollution) by integrating Gini index in the formulation of environmental Kuznets curve. Then, two effects may be tested: (i) a direct effect of inequalities on pollution; (ii) an indirect effect by which the degree of inequality influence pollution by his negative impact on political freedoms. |
| Keywords: | pollution; inequality; environmental Kuznets curve; panel data |
| JEL: | C23 Q01 Q53 Q56 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2008-13&r=env |
| By: | Karen Mayor (Economic and Social Research Institute (ESRI)); Richard S. J. Tol (Economic and Social Research Institute (ESRI)) |
| Abstract: | We examine the impacts of the EU-US Open Skies agreement on the environment, in particular looking at the effect of the agreement on emissions from the aviation sector. We use the Hamburg Tourism Model, a model of domestic and international tourist numbers and flows, to estimate these impacts. The Open Aviation Area will result in increased competition between carriers and consequently falls in the cost of transatlantic flights. This will not only have implications for the size and structure of the industry but also for climate policy. The objectives of this paper are (1) to assess what effects the expected increases in passenger numbers will have on CO2 emissions and (2) to test whether this increase in travel will result in a corresponding rise in emissions. Model simulations show that passenger numbers arriving from the US to the EU will increase by between 1% and 14% depending on the magnitude of the price reductions. We find that because of substitution between destinations, the percentage increase in global emissions is much smaller (max. 1%) than the increase in cross-Atlantic traffic. In the current context of greenhouse gas control policies, any increase in emissions will make climate policy objectives more difficult to achieve and will attract more attention to aviation’s contribution to climate change. |
| Keywords: | International tourism; open skies agreement; carbon dioxide emissions; climate policy; externalities |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp240&r=env |
| By: | Karen Mayor (Economic and Social Research Institute (ESRI)); Richard S. J. Tol (Economic and Social Research Institute (ESRI)) |
| Abstract: | We use a model of international and domestic tourist numbers and flows to investigate the effect of various climate policy instruments implemented in Europe on arrivals and emissions for the countries concerned. We find that these schemes do not fulfil their desired effects. The introduction of aviation into the European Trading system results in a fall in the number of tourists travelling into the EU in favour of other destinations. It also causes a significant welfare loss with only a small reduction in emissions. The flight taxes in the Netherlands and the United Kingdom result in different substitution effects across destinations (depending on the zones being taxed) but both policies do have the same consequence of inducing welfare losses and also reducing visitor numbers to the countries. We find that when these policies are combined their effects are additive. Welfare impacts are robust to variations in the underlying assumptions and changes in the scope of the taxes examined have the expected effects. |
| Keywords: | Climate policy, carbon dioxide emissions, international tourism |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp241&r=env |
| By: | Sandra Rousseau; Stef Proost |
| Abstract: | We aim to integrate information, monitoring and enforcement costs into the choice of environmental policy instruments. We use a static partial equilibrium framework to study different combinations of regulatory instruments (taxes, standards…) and enforcement instruments (criminal fine, administrative fine…). The firms’ compliance decisions depend on the instrument combination selected by the government. The model is used to compare the welfare effects of different instrument combinations for the textile industry in Flanders. We find that administrative, implementation, enforcement and monitoring costs are important to decide on the necessity of an environmental policy. Moreover, we show that emission taxes are not necessarily the most cost-effective instrument. This result holds even if we include industry heterogeneity. The decision of whether to pursue an environmental policy or not depends crucially on the formulation of an appropriate monitoring and enforcement policy. |
| Keywords: | K32 Environmental Law, K42 Illegal behaviour and enforcement of law, Q28 Government policy |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces0204&r=env |
| By: | Karen Mayor (Economic and Social Research Institute (ESRI)); Richard S. J. Tol (Economic and Social Research Institute (ESRI)) |
| Abstract: | We use a model of international and domestic tourist numbers and flows to forecast tourist numbers and emissions from international tourism out to 2100. We find that between 2005 and 2100 international tourism grows by a factor of 12. Not only do people take more trips but these also increase in length. We find that the growth in tourism is mainly fuelled by an increase in trips from Asian countries. Emissions follow this growth pattern until 2060 when emissions per passenger-kilometre start to fall due to improvements in fuel efficiency. Forecasted emissions are also presented for the four SRES scenarios and maintain the same growth pattern but the levels of emissions differ substantially. We find that the forecasts are sensitive to the period to which the model is calibrated, the assumed rate of improvement in fuel efficiency and the imposed climate policy scenario. |
| Keywords: | Carbon dioxide emissions, international tourism, long-term forecasting, aviation |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp244&r=env |
| By: | Dritan Osmani; Richard S.J. Tol (Economic and Social Research Institute) |
| Abstract: | Game theory is used to analyze the formation and stability of coalitions for environmental protection. The paper extends further our previous research on farsightedly stable coalitions and preferred farsightedly stable coalitions (Osmani & Tol 2007a). The integrated assessment model FUND provides data for di®erent time horizons as well as the cost-bene¯t function of pollution abatement. This allows for analysis of the evolution in time of farsightedly stable coalitions and their improvement to environment and welfare. Considering multiple farsightedly stable coalitions, the participation in coalitions for environmental protection is signi¯cantly increased, which is a positive result of our game theoretical approach. But the farsighted behavior can not be sustained for a long term which implies that we can not have big coalitions for environmental protection even in "a farsighted world". |
| Keywords: | game theory, integrated assessment modeling, farsighted stability, coalition formation |
| JEL: | C02 C72 H41 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:162&r=env |
| By: | Alex Coad (Max Planck Institute of Economics, Evolutionary Economics Group); Peter de Haan (ETH Zurich, Institute for Environmental Decisions); Julia Sophie Woersdorfer (Max Planck Institute of Economics, Evolutionary Economics Group) |
| Abstract: | This paper focuses on how consumer motivation can be tapped in order to encourage the adoption of cleaner technologies. Consumers are heterogeneous they may be guided by intrinsic motivation or extrinsic motivation. While information provision policies (such as the energy label for cars) may be effective in encouraging certain consumers to adopt green cars, financial incentive schemes (such as subsidies or fines) may be more persuasive for extrinsically-motivated consumers. We develop a dynamic theory of adoption of environmental innovations, in which information-provision policies are followed by financial incentives (first 'carrot', then 'stick' incentives). Analysis of a survey dataset of Swiss households observes considerable heterogeneity in terms of support of information- provision or financial incentive policies, in line with our conjectures. Our results will be of particular interest to policymakers interested in guiding consumers towards cleaner technologies. |
| Keywords: | Environmental policy, Technology adoption, Technology diffusion, Intrinsic motivation, Financial incentives. |
| JEL: | Q53 Q57 O33 |
| Date: | 2008–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-035&r=env |
| By: | Bazhanov, Andrei; Tyukhov, Igor |
| Abstract: | We consider two scenarios of the development of renewable power industry in Russia on an example of the Dasgupta-Heal-Solow-Stiglitz model. We assume that the resource rent is being invested into capital in the form of renewable power technologies according to the standard Hartwick saving rule. We use the modified Hotelling rule that reflects externalities implying, in particular, growing rates of oil extraction. We have shown that the growing extraction, prescribed by the Russian Energy Strategy (RES), implies growth of capital and the corresponding growth of per capita consumption in the short run (about 13 years). However, this growth is not sustainable and follows the decline in per capita consumption in the long run. An alternative hypothetical scenario of sustainable extraction implies always growing per capita consumption with the higher level in the long run in comparison with the RES-scenario. |
| Keywords: | renewable energy; sustainable growth; Russian Energy Strategy |
| JEL: | Q32 O13 Q01 P28 |
| Date: | 2008–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8804&r=env |
| By: | Heike Wetzel (Institute of Economics, Leuphana University of Lüneburg) |
| Abstract: | The objective of this paper is to analyze the impact of regulatory and environmental conditions on technical effciency of European railways. Using a panel data set of 31 railway firms from 22 European countries from 1994 to 2005, a multioutput distance function model, including regulatory and environmental factors, is estimated using stochastic frontier analysis. The results obtained indicate positive and negative effciency effects of different regulatory reforms. Furthermore, estimating models with and without regulatory and environmental factors clearly indicates that the omission of environmental factors, such as network density, substantially changes parameter estimates and, hence, leads to biased estimation results. |
| Keywords: | European railways, technical effciency, stochastic frontier analysis |
| JEL: | L92 L51 L22 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:86&r=env |
| By: | Ben Lockwood; John Whalley |
| Abstract: | We discuss emerging proposals for border tax adjustments (BTAs) to accompany commitments to reduce carbon emissions in the EU, the US and other OECD economies. The rationale offered for such border adjustment is that various entities, such as the EU, if making commitments to reduce emissions which go beyond those undertaken in other regions of the world, impose added costs on domestic producers which create a competitive disadvantage for them. Some form of remedy is viewed as reasonable to maintain the competitiveness of domestic industries when responding to global environmental problems. In this paper, we argue that despite its current carbon manifestation, the issue of border tax adjustments and both their rationale and their effects on trade are not new and, despite the present debate (which seems to overlook older literature), have arisen before. Earlier debate on border tax adjustments occurred at the time of the adoption of the Value Added Tax (VAT) in the EU as a tax harmonization target in the early 1960’s. But academic literature of the time showed that a change between origin and destination basis in the VAT would be neutral and hence the use of a destination based tax in the EU to accompany the VAT offered no trade advantage to Europe. Here we argue that essentially the same arguments also apply for carbon motivated BTAs, and in the current debate there seems to be a misconception between price level effects and relative price effects stemming from a BTA, which needs correcting. We also argue that the impact of border tax adjustments should be viewed as independent of the motivation of the adjustments. |
| JEL: | F13 F18 Q56 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14025&r=env |
| By: | Seema Jayachandran |
| Abstract: | Smoke from massive wildfires blanketed Indonesia in late 1997. This paper examines the impact this air pollution (particulate matter) had on fetal, infant, and child mortality. Exploiting the sharp timing and spatial patterns of the pollution and inferring deaths from "missing children" in the 2000 Indonesian Census, I find that the pollution led to 15,600 missing children in Indonesia (1.2% of the affected birth cohorts). Prenatal exposure to pollution largely drives the result. The effect size is much larger in poorer areas, suggesting that differential effects of pollution contribute to the socioeconomic gradient in health. |
| JEL: | I12 O1 Q52 Q53 Q56 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14011&r=env |
| By: | van der Ploeg, Frederick |
| Abstract: | Many resource-rich countries have poor economic performance and suffer from negative genuine saving rates, especially if they have many rival factions and badly functioning legal systems. We attempt to shed light on these stylized facts by analyzing a power struggle about the control of natural resources where competing factions in society have a private stock of financial assets and a common stock of natural resources. We solve a dynamic common-pool problem and obtain political economy variants of the Hotelling rule for resource depletion and the Hartwick saving rule necessary to sustain constant consumption in an economy with exhaustible natural resources. The rate of increase in the price of natural resources and resource depletion are faster than demanded by the Hotelling rule. As a result, the country substitutes away from resources to capital so that it saves and invests more than a homogenous society. The power struggle boosts output. Nevertheless, fractionalization depresses aggregate consumption and social welfare and leads to negative genuine saving if properly corrected for common-pool externalities. Fractionalization induces, however, positive genuine saving as measured by the World Bank. |
| Keywords: | capital; common pool; Exhaustible natural resources; fractionalization; genuine saving; Hartwick rule; Hotelling resource rents; rapacious rent seeking; sustainable consumption; voracity |
| JEL: | E20 F32 O13 Q01 Q32 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6831&r=env |
| By: | Urs von Arx (CER-ETH, Swiss Federal Institute of Technology (ETH) Zurich, Center of Economic Research); Andreas Ziegler (University of Zurich, Center for Corporate Responsibility and Sustainability) |
| Abstract: | This paper provides new empirical evidence for the effect of corporate social responsibility (CSR) on corporate financial performance. In contrast to former studies, we examine two different regions, namely the USA and Europe. Our econometric analysis shows that environmental and social activities of a firm compared with other firms within the industry are valued by financial markets in both regions. However, the respective positive effects on average monthly stock returns between 2003 and 2006 appear to be more robust in the USA and, in addition, to be nonlinear. Our analysis furthermore points to biased parameter estimations if incorrectly specified econometric models are applied: The seemingly significantly negative effect of environmental and social performance of the industry to which a firm belongs vanishes if the explanation of stock performance is based on the Fama-French threefactor or the Carhart four-factor models instead of the simple Capital Asset Pricing Model. |
| Keywords: | Corporate social responsibility, Environmental performance, Financial performance, Asset pricing models. |
| JEL: | Q56 M14 G12 Q01 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:08-85&r=env |
| By: | David Campbell (University of Durham); Matthias Klaes (Keele University) |
| Abstract: | Ecological questions have proven particularly fruitful to illustrate Luhmann’s theory of society as an integrative perspective cutting across the scientific, economic, legal, and political domains. In this paper, we will discuss the development of carbon trading as a case study of how reflexive system rationality of the kind postulated by Luhmann becomes the defining characteristic of the spectacular failure of such trading as has taken place to date to even approximate any of it own stated goals. Paradoxically, regulatory attempts to provide for a market-based response to anthropogenic global warming have resulted in the emergence of carbon prices that are essentially planned at a level of ambition reminiscent of the twentieth century’s most extensive exercises in centralised command and control, due to structural couplings between the scientific, economic, political and legal systems and an ecology of organisations and institutions spread across them. As government-sponsored carbon trading is perhaps the most characteristic initiative of modern government, its discussion in Luhmann’s terms is significant for any evaluation of the relevance of his work. |
| Keywords: | globalisation, Luhmann, carbon trading, regulatory failure, Coase |
| JEL: | B41 B52 K0 Q5 Z1 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:sti:wpaper:024/2008&r=env |
| By: | Brigid Laffan; Jane O’Mahony |
| Date: | 2007–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:200738&r=env |