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on Environmental Economics |
| By: | Jean-Jacques MALFAIT (GREThA UMR CNRS 5113); Guillaume PAJOT (Macaulay Institute) |
| Abstract: | The aim of the paper is to analyse the implementation of a climate change mitigation strategy for the forest sector. We suggest a strategy based on an increased storage capacity in wood products. An additional resource is provided by recycling and a reallocation of timber usages. In the first part of the paper, the additionality notion (“Kyoto meaning”) is discussed (environmental and economic aspects). Then a case study is conducted on the “Landes de Gascogne forest”. The project is assessed on the basis of additional carbon storage and on the basis of avoided emissions, as wood can replace CO2 intensive materials (concrete, steel). Results will be useful in view of the discussions dealing with the post 2012 Kyoto period and the possible inclusion of wood products in the carbon stocks. |
| Keywords: | Kyoto Protocol, carbon sequestration, additionality, avoided emissions, life lengths, modelling, wood products, forest sector |
| JEL: | L73 Q23 Q54 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2008-16&r=env |
| By: | Martin Halla (Department of Economics, Johannes Kepler University Linz, Austria); Friedrich Schneider (Department of Economics, Johannes Kepler University Linz, Austria); Alexander Wagner (Institute for Swiss Banking University of Zurich Plattenstrasse 14 CH-8032 Zurich Switzerland) |
| Abstract: | Using modern methods for analyzing multi-level data, we find that, by and large, citizens of OECD countries are more satisfied with the way democracy works in their country if more environmental policies are in place and if environmental quality is higher. We also document that parents care about carbon dioxide emissions more than non-parents and that those with a high willingness to pay for environmental quality deplore intervention through government policies. |
| Keywords: | Collective action problems, environmental economics and policy, satisfaction with democracy |
| JEL: | K32 P16 Q21 Q28 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2008_08&r=env |
| By: | Don Fullerton; Andrew Leicester; Stephen Smith |
| Abstract: | This chapter provides an overview of key economic issues in the use of taxation as an instrument of environmental policy in the UK. It first reviews economic arguments for using taxes and other market mechanisms in environmental policy, discusses the choice of tax base, and considers the value of the revenue from environmental taxes. It is argued that environmental tax revenues do not significantly alter economic constraints on tax policy, and that environmental taxes need to be justified primarily by the cost-effective achievement of environmental goals. The chapter then assesses key areas where environmental taxes appear to have significant potential – including taxes on energy used by industry and households, road transport, aviation, and waste. In some of these areas, efficient environmental tax design needs to make use of a number of taxes in combination – a "multi-part instrument". |
| JEL: | H23 Q28 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14197&r=env |
| By: | Meghan McGuinness; A. Denny Ellerman |
| Abstract: | In the absence of a federal policy to cap carbon emissions many states are moving forward with their own initiatives, which currently range from announcements of commitments to reduce greenhouse gases to a regional multi-state cap-and-trade program slated to begin in 2009. While federal legislation is expected in the next few years, it is unclear how such legislation will define the relationship between a federal cap and trade program and other state regulations. Assuming the introduction of a cap-and-trade program at the federal level, this paper analyzes the economic and environmental impacts of the range of possible interactions between the federal program and state programs. We find that the impacts of interaction depend on relative stringency of the federal and state program and overlap in source coverage. Where state programs are both duplicative of and more demanding than the federal cap, the effect is entirely redistributive of costs and emissions, with in-state sources facing higher marginal abatement costs. Also, differing marginal abatement costs among states create economic inefficiencies that make achievement of the climate goal more costly than it need be. These redistributive effects and the associated economic inefficiency are avoided under either federal preemption of duplicative state programs or a ‘carve out’ of state programs from the federal cap with linkage to the federal allowance market. |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:0804&r=env |
| By: | Jean-Jacques MALFAIT (GREThA UMR CNRS 5113); Guillaume PAJOT (Macaulay Institute) |
| Abstract: | The aim of the paper is to analyse the impact of rotation lengths on carbon storage in the forest, but also on carbon storage in wood products. The software Co2Fix has been used to undertake the simulations. A case study has been conducted on the “Landes de Gascogne” forest. On a long time scale, the analysis shows that carbon storage in wood products is significant. The study also shows that the implementation of long rotations although it allows to increase forests carbon stocks reduces timber production, and is not finally the best strategy. Results will be useful in view of the discussions dealing with the post 2012 Kyoto period and the possible inclusion of wood products in the carbon stocks. |
| Keywords: | Kyoto Protocol, wood products, carbon sequestration, modelling, rotation lengths, forest sector |
| JEL: | L73 Q23 Q54 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2008-19&r=env |
| By: | Markus Groth (Centre for Sustainability Management, Leuphana University of Lüneburg) |
| Abstract: | The mandatory deposit for one-way drinks packaging, embodied in the German Packaging Ordinance of 1991, entered into force in January 2003, after the condition for its implementation was given by the fall of the market share of reusable drinks packaging under 72% in 1997. In this context the author doubts that the German mandatory deposit is an effective instrument to stabilise the market share of ecologically advantageous drinks packaging. Rather it is to be expected that the environmental policy objectives can be accomplished more effectively by a reorientation of the specific environmental policy. Hence it needs to be considered that – even eleven years after the first time decrease of the relevant market share of reusable drinks packaging – an urgent need for action exists in Germany. This practise based analysis therefore deals with packaging-taxes as an alternative environmental policy instrument and points out recommendations against the background of a further amending of the German Packaging Ordinance as well as experiences from the use of packaging taxes in Europe. |
| Keywords: | agri-environmental policy, biodiversity conservation auctions, transaction costs, ecological services, plant biodiversity, experimental economics, EAFRD-Regulation |
| JEL: | C93 D44 D82 H41 L14 Q24 Q28 Q57 R52 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:87&r=env |
| By: | Michael Ahlheim; Ulrike Lehr |
| Abstract: | Environmental valuation studies aim at the assessment of the social benefits or the social costs caused by some change in environmental quality (in the broadest sense). The most popular field of application of environmental valuation studies is project appraisal where the benefits arising from some environmental project (measured in terms of people's willingness to pay for that project) are assessed and confronted with the costs of the project or with the benefits from some alternative project if a choice has to be made between different projects. A closer look at the results of empirical valuation studies shows that in many surveys a negative correlation between the number auf household members and the willingness to pay (WTP) stated by a household for a project can be observed. These results are rather puzzling because in larger households more people are going to benefit from an environmental improvement than in small households. A plausible explanation for these results is that household budgets are tighter for large households than for smaller households with the same household income. Therefore, large households must state a smaller WTP for a project than smaller households with the same income and the same preferences. This might have consequences for the allocation of public funds in all cases where the realization of a specific environmental project depends on the absolute value of the aggregate social benefits it generates. In order to calculate the social benefits typically the WTPs of the different households affected by that project are added up. In this aggregation process the members of larger households have a lower weight and, therefore, their WTP has a smaller impact on the decision if a certain project is realized or not. The reason for this violation of the principle of horizontal equity is that for the computation of the social benefits not individual but household WTPs are aggregated. In this paper we suggest to use household equivalence scales for the evaluation of WTP data in order to reduce this discrimination of the members of large families. We demonstrate the effects of equivalence scales on the results of environmental valuation surveys using an empirical study carried out in Eastern Germany. |
| Keywords: | contingent valuation; Environmental Valuation; Equity |
| JEL: | D61 D63 H43 Q51 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:hoh:hohdip:295&r=env |
| By: | Michael Ahlheim; Benchaphun Ekasingh; Oliver Frör; Jirawan Kitchaicharoen; Andreas Neef; Chapika Sangkapitux; Nopasom Sinphurmsukskul |
| Abstract: | Though contingent valuation is the dominant technique for the valuation of public projects, especially in the environmental sector, the high costs of contingent valuation surveys prevent the use of this method for the assessment of relatively small projects. The reason for this cost problem is that typically only contingent valuation studies which are based on face-to-face interviews are accepted as leading to valid results. Especially in countries with high wages face-to-face surveys are extremely costly considering that for a valid contingent valuation study a minimum of 1,000 completed face-to-face interviews is required. In this paper we try a rehabilitation of mail surveys as low-budget substitutes for costly face-to-face surveys. Based on an empirical contingent valuation study in Northern Thailand we show that the validity of mail surveys can be improved significantly if so-called citizen expert groups are employed for a thorough survey design. |
| Keywords: | contingent valuation; Environmental Valuation; Equity |
| JEL: | D6 H4 L3 Q25 Q51 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:hoh:hohdip:297&r=env |
| By: | Hong, Seung Hyun (Department of Economics, Concordia University, Montreal, Quebec, Canada); Wagner, Martin (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria) |
| Abstract: | Recent years have seen a growing literature on the environmental Kuznets curve (EKC) that resorts in a large part to cointegration techniques. The EKC literature has failed to acknowledge that such regressions involve unit root nonstationary regressors and their integer powers (e.g. GDP and GDP squared), which behave differently from linear cointegrating regressions. Here we provide the necessary tools for EKC analysis by deriving estimation and testing theory for cointegrating equations including stationary regressors, deterministic regressors, unit root nonstationary regressors and their integer powers. We consider fully modified OLS estimation, specification tests based on augmented and auxiliary regressions, as well as a sub-sample KPSS type cointegration test. We present simulation results illustrating the performance of the estimators and tests. In the empirical application for CO2 and SO2 emissions for 19 early industrialized countries over the period 1870-2000 we find evidence for an EKC in roughly half of the countries. |
| Keywords: | Integrated process, Nonlinear transformation, Fully modified estimation, Nonlinear cointegration analysis, Environmental Kuznets curve |
| JEL: | C12 C13 Q20 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:ihs:ihsesp:224&r=env |
| By: | Shannon Pendergast; Judith Clarke; G. Cornelis van Kooten |
| Keywords: | natural resource curse, petroleum resources, unbalanced panels and GMM estimation |
| JEL: | O12 Q32 Q34 O43 O47 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:rep:wpaper:2008-10&r=env |
| By: | Janet Currie; Matthew J. Neidell; Johannes Schmieder |
| Abstract: | We examine the impact of three "criteria" air pollutants on infant health in New Jersey in the 1990s by combining information about mother's residential location from birth certificates with information from air quality monitors. In addition to large sample size, our work offers three important innovations: First, because we know the exact addresses of mothers, we select those mothers closest to air monitors to ensure a more accurate measure of air quality. Second, since we follow mothers over time, we control for unobserved characteristics of mothers using maternal fixed effects. Third, we examine interactions of air pollution with smoking and other predictors of poor infant health outcomes. We find consistently negative effects of exposure to pollution, especially carbon monoxide, both during and after birth. The effects are considerably larger for smokers than for nonsmokers as well as for older mothers. Since automobiles are the main source of carbon monoxide emissions, our results have important implications for regulation of automobile emissions. |
| JEL: | I12 Q53 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14196&r=env |
| By: | GOLLIER Christian |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:ler:wpaper:08.18.262&r=env |
| By: | Robert Lifran; Vanja Westerberg |
| Abstract: | The purpose of this paper is to elicit social preferences for various organizational and managerial changes in the landscape of the agricultural area called “Ancien Marais des Baux”, at the foothill of the Alpilles Mountain, in Provence. We present preliminaries results from a pilot survey conducted in the area in the winter of 2008. In our research, the environmental resource is the landscape, defined in terms of its attributes and levels these attributes would take with and without various management options. We use the Choice Experiment to determine what the preferred landscape is, and under wetland restoration, the most desired features that the wetland should provide. The random parameter logit model is employed to take into account variances in unobserved preference heterogeneity. Consistent with expectations, we observed that respondents who are neither green, have little attachment to wetlands, have poor understanding of wetland services, are WTP less ceteris paribus for all the attributes in question, compared to the respondents that have green behaviour, knows about wetlands or cares about their existence in Marais des Baux. Not surprisingly, the respondents considering the wetland in Marais des Baux, part of their cultural heritage, wants to visit it in the future, and preserve it for future generations, have the greatest WTP for any combination of attributes. We also observed the importance of mosquito control in any support of wetland restoration among respondents. Indeed, restoration on an advanced scale is only accepted in the presence of biological mosquito control. Distinct landscape features, such as tree hedges which still allows for the view of the massif of the Alpilles are valued equally high as the recreational opportunites related to the wetland. Biodiversity is low on the priority list compared to other attributes, but still positively valued. |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:08-12&r=env |
| By: | Nguyen Manh Hung (Département économique, Université Laval, Cité Universitaire, Ste Foy, Québec, Canada G1K 7P4); Nguyen Van Quyen (Département de science économique, Université d'Ottawa, 55 Laurier E, Ottawa, Ontario, Canada, K1N) |
| Abstract: | The paper presents a synthesis of the economics of exhaustible resources and that of endogenous fertility in an overlapping-generations model. Renewable energy is produced by a backstop, while the consumption good is produced from energy – provided by the backstop or from a stock of fossil fuels – and labor. Along the equilibrium path, we show that the stock of fossil fuels might or might not have been completely depleted. Under the first possibility, the forward-looking competitive equilibrium can be computed recursively from the steady state of the economy. This is however no longer possible under the second possibility where the part of the resource stock left in situ serves as the oil bubble. In this case, long run equilibrium indeterminacy arises with a continuum of possible steady states. Also, the dynamic convergence to a steady state is far from being simply monotone, and might exhibit cyclical behavior, such as damped oscillation, limit cycles, etc. |
| Keywords: | Exhaustible Resources, Endogenous Fertility, Overlapping Generations, Complex Dynamics |
| JEL: | J13 O41 Q30 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dpc:wpaper:1608&r=env |
| By: | Frank Convery; Christian De Perthuis; Denny Ellerman |
| Abstract: | The European Union Emissions Trading Scheme (EU ETS) is the largest greenhouse gas market ever established. The European Union is leading the world's first effort to mobilize market forces to tackle climate change. A precise analysis of the EU ETS's performance is essential to its success, as well to that of future trading programs. The research program "The European Carbon Market in Action: Lessons from the First Trading Period," aims to provide such an analysis. It was launched at the end of 2006 by an international team led by Frank Convery, Christian de Perthius and Denny Ellerman. This interim report presents the researchers' findings to date. It was prepared after the research program's second workshop, held in Washington DC in January 2008. The first workshop was held in Paris in April 2007. Two additional workshops will be held in Prague in June 2008 and in Paris in September 2008. The researchers' complete analysis will be published in the beginning of 2009. |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:0802&r=env |
| By: | Elodie Brahic; Jean-Michel Salles |
| Abstract: | Bien que le changement climatique soit un problème global, il n’affecte pas les pays de façon identique et la mise en oeuvre de politiques de limitation des émissions impliquera pour chaque pays des efforts et des conséquences différents. Le problème est celui de la légitimité des dotations initiales. Les pays diffèrent par leur démographie, leur niveau de développement ou leur capacité d’adaptation, et l’objectif de cet article est de savoir si l’allocation initiale des permis d’émission négociables initiée à Kyoto peut et doit être utilisée afin de corriger certaines de ces inégalités. Pour analyser ces enjeux, cet article propose une exploration expérimentale : il va s’agir de tester les préférences éthiques d’agents face à différents systèmes d’allocation initiale des permis d’émission. Le Protocole de Kyoto stipulant que les Parties ont des « responsabilités communes mais différenciées », nous portons un intérêt tout particulier au courant éthique post-welfariste dont l’ambition est d’intégrer la notion de responsabilité dans les problèmes d’allocation d’une ressource. Pour identifier les variables qui doivent être intégrées dans le système d’allocation des permis, nous testons l’axiome de récompense naturelle à travers un test direct et un test indirect. Les variables étudiées sont la population, le PIB par habitant, le coût marginal de réduction des émissions et le niveau initial d’émission. Au final, les sujets considèrent que pour être équitable, le système d’allocation doit tenir compte des différences observées entre les pays sur ces variables, mais le degré et le sens de la compensation peuvent varier selon les situations. |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:08-11&r=env |
| By: | Griffith, Rachel; Nesheim, Lars |
| Abstract: | We use hedonic prices and purchase quantities to consider what can be learned about household willingness to pay for baskets of organic products and how this varies across households. We use rich scanner data on food purchases by a large number of households to compute household specific lower and upper bounds on willingness to pay for various baskets of organic products. These bounds provide information about willingness to pay for organic without imposing restrictive assumptions on preferences. We show that the reasons households are willing to pay vary, with quality being the most important, health concerns coming second, and environmental concerns lagging far behind. We also show how these methods can be used for example by stores to provide robust upper bounds on the revenue implication of introducing a new line of organic products. |
| Keywords: | hedonic prices; organic; willingness to pay |
| JEL: | D12 L81 Q51 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6905&r=env |
| By: | Birur, Dileep; Hertel, Thomas; Tyner, Wally |
| Abstract: | This paper introduces biofuels sectors as energy inputs into the GTAP data base and to the production and consumption structures of the GTAP-Energy model developed by Burniaux and Truong (2002), and further modified by McDougall and Golub (2008). We also incorporate Agro-ecological Zones (AEZs) for each of the land using sectors in line with Lee et al. (2005). The GTAP-E model with biofuels and AEZs offers a useful framework for analyzing the growing importance of biofuels for global changes in crop production, utilization, commodity prices, factor use, trade, land use change etc. We begin by validating the model over the 2001-2006 period. We focus on six main drivers of the biofuel boom: the hike in crude oil prices, replacement of MTBE by ethanol as a gasoline additive in the US, and subsidies for ethanol and biodiesel in the US and EU. Using this historical simulation, we calibrate the key elasticities of energy substitution between biofuels and petroleum products in each region. With these parameter settings in place, the model does a reasonably good job of predicting the share of feedstock in biofuels and related sectors in accordance with the historical evidence between 2001 and 2006 in the three major biofuel producing regions: US, EU, and Brazil. The results from the historical simulation reveal an increased production of feedstock with the replacement of acreage under other agricultural crops. As expected, the trade balance in oil sector improves for all the oil exporting regions, but it deteriorates at the aggregate for the agricultural sectors. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:gta:workpp:2413&r=env |
| By: | Ian Keay (Queen's University) |
| Abstract: | The main objective of this paper is to determine whether specialization in resource intensive production had a positive impact on the performance of the aggregate Canadian economy over the 1970-2005 period. Specialization is simply measured as the proportion of aggregate employment, the aggregate fixed capital stock, and G.N.P. that may be attributed to Canada's energy, fishing, forestry, and mining industries. Direct contributions to intensive, or per capita performance are measured in terms of the resource industries' profitability, productivity, and capital intensity. Indirect contributions to economic performance are measured in terms of spill overs, or linkages to other non-resource intensive industries through raw material price advantages and demand generation. The possibility that resource intensive production may have been crowding out other sectors in the economy through input price inflation or currency appreciation is also investigated. Based on the evidence, I argue that Canada's resource industries were making a substantial positive impact on aggregate economic performance after 1970, but this conclusion depends on the inclusion of the energy industries in resource sector. |
| Keywords: | Resource Dependence, Spill Overs, Crowding Out, Resource Based Growth |
| JEL: | O13 N52 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1176&r=env |
| By: | G. Cornelis van Kooten; Mark Eiswerth |
| Keywords: | marginal willingness to pay; endangered species and extinction; minimum viable population |
| JEL: | Q20 Q24 C61 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:rep:wpaper:2008-09&r=env |
| By: | Ana M. Fernandes; Ariel Pakes |
| Abstract: | We use the World Bank Investment Climate Surveys data to analyze the employment of both labor and capital in Indian manufacturing. We focus on disparities among states in manufacturing employment patterns, and provide reduced form evidence of their relationship to both (i) institutional constraints, and (ii) productivity. |
| JEL: | L11 L5 O4 O53 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14178&r=env |
| By: | Matti Liski; Juan-Pablo Montero |
| Abstract: | We analyze oligopolistic exhaustible-resource depletion when ?rms can trade forward contracts on deliveries, a market structure prevalent in many resource commodity markets. We ?nd that this organization of trade has substantial implications for resource depletion. As ?rms’ interactions become in?nitely frequent, resource stocks become fully contracted and the symmetric oligopolistic equilibrium converges to the perfectly competitive Hotelling (1931) outcome. Asymmetries in stock holdings allow ?rms to partially escape the procompetitive effect of contracting: a large stock provides commitment to leave a fraction of the stock uncontracted. In contrast, a small stock provides commitment to sell early, during the most pro?table part of the equilibrium. |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:0806&r=env |
| By: | Karligash Kenjegalieva (Dept of Economics, Loughborough University); Maximilian J. B. Hall (Dept of Economics, Loughborough University); Richard Simper (Dept of Economics, Loughborough University) |
| Abstract: | Within the banking efficiency analysis literature there is a dearth of studies which have considered how banks have ‘survived’ the Asian financial crisis of the late 1990s. Considering the profound changes that have occurred in the region’s financial systems since then, such an analysis is both timely and warranted. This paper examines the evolution of Hong Kong’s banking industry’s efficiency and its macroeconomic determinants through the prism of two alternative approaches to banking production based on the intermediation and services-producing goals of bank management over the post-crisis period. Within this research strategy we employ Tone’s (2001) Slacks-Based Model (SBM) combining it with recent bootstrapping techniques, namely the non-parametric truncated regression analysis suggested by Simar and Wilson (2007) and Simar and Zelenyuk’s (2007) group-wise heterogeneous sub-sampling approach. We find that there was a significant negative effect on Hong Kong bank efficiency in 2001, which we ascribe to the fallout from the terrorist attacks in America in 9/11 and to the completion of deposit rate deregulation that year. However, post 2001 most banks have reported a steady increase in efficiency leading to a better ‘intermediation’ and ‘production’ of activities than in the base year of 2000, with the SARS epidemic having surprisingly little effect in 2003. It was also interesting to find that the smaller banks were more efficient than the larger banks, but the latter were also able to enjoy economies of scale. This size factor was linked to the exportability of financial services. Other environmental factors found to be significantly impacting on bank efficiency were private consumption and housing rent. |
| Keywords: | Finance and Banking; Productivity; Efficiency. |
| JEL: | C23 C52 G21 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2008-01&r=env |