|
on Environmental Economics |
| By: | Popp, Michael; Nalley, Lanier |
| Keywords: | net greenhouse gas emissions, life cycle analysis, carbon offset, carbon tax, Environmental Economics and Policy, Farm Management, |
| Date: | 2011–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103686&r=env |
| By: | Burnett, J. Wesley; Bergstrom, John C. |
| Abstract: | One of the major shortcommings of past environmental Kuznets curve (EKC) studies is that the spatiotemporal aspects within the data have largely been ignored. By ignoring the spatial aspect of pollution emissions past estimates of the EKC implicitly assume that a regionâs emissions are unaffected by events in neighboring regions (i.e., assume there are no transboundary pollution emissions between neighbors). By ignoring the spatial aspects within the data several past estimates of the EKC could have generated biased or inconsistent regression results. By ignoring the temporal aspect within the data several past estimates of the EKC could have generated spurious regression results or misspecified t and F statistics. To address this potential misspecification we estimate the relationship between state-level carbon dioxide emissions and income (GDP) accounting for both the spatiotemporal components within the data. Specifically, we estimate a dynamic spatiotemporal panel model using a newly proposed robust, spatial fixed effects model. This new estimation scheme is appropriate for panels with large N and T. Consistent with the EKC hypothesis we find the inverted-U shaped relationship between CO2 emissions and income. Further, we find adequate evidence that the underlying economic processes driving carbon dioxide emissions and state-level GDP are temporally and spatially dependent. These findings offer policy implications for both interstate energy trade and pollution emission regulations. These implications are particularly important for the formulation of national policies related to the 2009 Copenhagen Treaty in which the U.S. has committed to significantly reduce greenhouse gas emissions over the next twenty years. |
| Keywords: | Pollution Economics, Environmental Kuznets Curve, Spatial Econometrics, Dynamic Panel Data, Carbon Dioxide Emissions, Global Climate Change, Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, C33, C51, Q43, Q50, Q53, Q58, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103580&r=env |
| By: | Zhao, Xiaobing |
| Abstract: | We follow Schmalensee, Stoker, and Judson (1998) to forecast CO2 emissions based on the environmental Kuznets curve (EKC). Our findings suggest that the EKC will not lead to significant decreases in CO2 emissions even by 2050 for countries with the highest incomes. Therefore, mandatory emissions cuts are required to limit climate change. In the same spirit of Horowitz (2009) and Ng and Zhao (2010), we then use a reduced-form approach to estimate the economic costs of mandatory emission cuts. Based on our parameter estimates, we find that a 25% mandatory deduction in CO2 emissions from 1990 will lead to a 5.63% decrease in the combined GDP of the 19 OECD countries, and a 40% deduction will result in a 12.92% loss in income (holding other relevant variables constant)! Our estimates are substantially higher than those in Paltsev, Reillya, Jacobya, and Morris (2009) and Dellink, Briner and Clapp (2010), and suggest that the economic cost to limit climate change as envisioned in the Copenhagen Accord may be substantial and more research should be done before mandatory emission cuts are implemented. |
| Keywords: | Environmental Kuznets Curve, Carbon Dioxide Emissions, Economic Cost, Climate Change, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103413&r=env |
| By: | Key, Nigel; Sneeringer, Stacy |
| Abstract: | Biogas recovery systems that use methane from manure to generate electricity have not been widely adopted in U.S. mainly because the costs of constructing and maintaining these systems have exceeded the value of the benefits provided. Climate change mitigation and renewable energy policies could increase profits for the operators of such systems thereby making digester adoption more widespread. For the U.S. Dairy sector, we examine digester adoption rates, emissions reductions, net returns, electricity generation, and program costs under different policy scenarios. We find that 3% or fewer dairies would need to adopt digesters to meet the policy goals of reducing 25% of greenhouse gas emissions from dairy manure or generating one million megawatt hours of electricity per year. A carbon pricing program provides the highest net social benefits for almost all policy goals considered. |
| Keywords: | anaerobic digester, methane, dairy, renewable electricity, subsidy, carbon offsets, climate change, Environmental Economics and Policy, Livestock Production/Industries, Q5, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103440&r=env |
| By: | Zhao, Xiaobing |
| Abstract: | We study how carbon dioxide (CO2) emission cuts affect income for 23 OECD countries over the 1980-2004 period. The importance of this question is manifested in the disagreements at the 2009 United Nations Climate Change Conference in Copenhagen and the 2010 State of the Union Address by United States President Barack Obama. We start by deriving an income-CO2 relationship based on a structural production function, which is a natural way to model the relationship among income, energy consumption, and CO2 emissions. We then use a similar empirical methodology as Tucker (1995) to estimate the income-CO2 relationship. Such an approach not only allows us to focus on the long-run relationship but also enables us to project the relationship between income and CO2 emissions for future years. Our findings suggest that the economic cost of CO2 emission cuts is significant. To reduce emissions 50% below 1990 levels by 2050, the economic cost per year for developed countries is about 0.3% reduction in GDP per capita which represents a 15% slowdown in economic growth. |
| Keywords: | Carbon Dioxide Emissions, Income, Global Warming, Production Function, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103412&r=env |
| By: | Kibonge, Aziza |
| Keywords: | Environmental Economics and Policy, Productivity Analysis, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:104001&r=env |
| By: | Delgado, Michael S.; Khanna, Neha |
| Keywords: | Altruism, Voluntary Pollution Abatement, Regulation, Environmental Economics and Policy, Q52, Q58, K32, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103886&r=env |
| By: | Kragt, Marit Ellen; Pannell, David J.; Robertson, Michael J. |
| Abstract: | Earlier versions of this working paper have been/will be presented at the 2011 Conference of the Australian Agricultural and Resource Economics Society (AARES), and at the 2011 Annual Meeting of the Applied and Agricultural Economics Association (AAEA). |
| Keywords: | APSIM, Carbon sequestration, Climate change mitigation, Farm management, GHG emissions, MIDAS, Soil carbon, Western Australia, Environmental Economics and Policy, Farm Management, Q12, Q19, Q52, Q54, |
| Date: | 2011–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uwauwp:104150&r=env |
| By: | Kragt, Marit E; Pannell, David J; Robertson, Michael |
| Abstract: | The Australian government has identified soil carbon sequestration on agricultural lands as a potential strategy to offset greenhouse gas emissions. Within the public debate, it has been claimed that provision of positive incentives for farmers to change their land management will result in substantial carbon sequestration in agricultural soils at a low carbon price. There is, however, little information about the costs or benefits of carbon sequestration in agricultural soils to test these claims. The objective of this study is to assess the costs of alternative land-use and land-management practises that will increase soil carbon sequestration. The analysis integrates biophysical modelling of carbon sequestration with whole-farm economic modelling, to evaluate the cost-effectiveness of alternative carbon storage practices. Results indicate that, for a case study model of a crop-livestock farm in the Western Australian wheatbelt, the opportunity costs of sequestering high levels of soil carbon are considerable. Low carbon prices would generate very modest increases in soil carbon sequestration. We discuss the implications of our findings for policy development. |
| Keywords: | Soil carbon, Climate Change Mitigation, Carbon sequestration, Agriculture, Crop Rotations, MIDAS modelling, Environmental Economics and Policy, Farm Management, |
| Date: | 2011–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103708&r=env |
| By: | Reeling, Carson J.; Gramig, Benjamin M. |
| Abstract: | The nitrogen cascade concept indicates that agriculture serves as a significant link between emissions of the potent greenhouse gas (GHG) nitrous oxide and losses of nitrate-N to surface waters. Conservation practices have the potential to exploit this link, as their implementation is found to reduce fluxes of GHGs and nonpoint source (NPS) water pollution. Several studies have recognized this link and have documented the potential to improve environmental quality through the use of programs which retire land, the cost of which can be offset by the sale of carbon credits. However, the ability to use land for both agricultural production and environmental conservation is important. As such, this study provides a novel analytical framework that is used to examine the potential for implementing agricultural conservation practices to reduce NPS water pollutants and fluxes of GHGs in a working-lands setting. The extent to which carbon pricing can affect practice implementation costs and the optimal distribution of these practices throughout the watershed is also explored. Results from this study indicate that carbon offsets can sharply reduce conservation practice implementation costs and therefore have the potential to reduce greater amounts of NPS pollution for a given cost of implementation. This conclusion has significant implications for policymaking, particularly with regard to using market mechanisms to improve water quality in watersheds where markets have historically been unsuccessful. However, this study found that the optimal allocation of practices was heavily reliant on fertilizer management, which is difficult to enforce in practice. |
| Keywords: | greenhouse gases, nonpoint source pollution, agricultural conservation practices, DAYCENT, SWAT, genetic algorithm, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103577&r=env |
| By: | Daigneault, Adam; Greenhalgh, Suzie; Samarasinghe, Oshadhi; Sinclair, Robyn |
| Abstract: | This paper uses an economic catchment model to assess changes in land use,enterprise distribution,greenhouse gas emissions and nutrient loading levels from a series of policies that introduce carbon prices or nutrient reduction caps on land-based production in the Hurunui Catchment in Canterbury,New Zealand. At $20/tCO2e,net revenue for the catchment is reduced by 7% from baseline levels while GHGs are reduced by 3%. At $40/ tCO2e,net revenue is reduced by 15% while GHGs are reduced by 21%. Nitrogen and phosphorous loading levels within the catchment were also reduced when landowners face a carbon price,thus providing other benefits to the environment. Additional scenarios in this paper assess the impacts from developing a large-scale irrigation project within the catchment. Results show that while adding irrigation can improve farm output and revenue,it also results in dramatically higher GHG emissions and nutrient loads. Placing a carbon price on land-based activities diminishes some of these pollutants,but not at the same rate as when the policy what enacted on the baseline irrigation levels. Finally,we investigate the impacts of imposing a nutrient loading cap on farm activities instead of a carbon price and find that if landowners had greater access to irrigation but were constrained to hold the nutrient loads at baseline levels,revenue could increase by 6% over the baseline while GHG emissions could be reduced by 5%. Our findings suggest that while there is a potentially a strong trade-off between water quantity and water quality in the Hurunui Catchment,imposing the right policy levers could reduce some of the environmental impacts from an increase in land-use intensity without placing a large economic or regulatory burden on its landowners. |
| Keywords: | Agriculture and Forestry Modeling, Land Use, Climate Policy, Greenhouse Gas Emissions, Water Quantity, Water Quality, Agricultural and Food Policy, Environmental Economics and Policy, Q23, Q24, Q25, Q54, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103855&r=env |
| By: | Moore, Rebecca; Williams, Tiffany; Rodriguez, Eduardo |
| Keywords: | Non-market valuation, ecosystem services, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103717&r=env |
| By: | Attavanich, Witsanu; McCarl, Bruce A.; Fuller, Stephen W.; Vedenov, Dmitry V.; Ahmedov, Zafarbek |
| Keywords: | Crop Production/Industries, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103998&r=env |
| By: | Hansen, Jim; Tuan, Francis; Somwaru, Agapi |
| Abstract: | This study analyzes the potential impact of climate change on China's corn, wheat, and rice, domestic agricultural markets, and the international markets out to the year 2050. The study provides a brief background and reviews research literature of climate change effects on China's crop yields. The paper presents the potential impact of climate change on China's yields and attempts to quantify the domestic and global market impacts. The analysis has four scenarios, which assumes two future levels of greenhouse gas emissions with the effects of CO2 fertilization and no CO2 fertilization. A 27-country commodity partial equilibrium simulation mathematical programming model (PEATSim) is used for this analysis. Results indicate under CO2 fertilization, which increases yields, China's grain imports may decrease leading to a decrease in international prices. Under no CO2 fertilization, yields decrease, China's grain imports may increase leading to increased international prices. |
| Keywords: | China, trade, climate change, GHG, CO2 fertilization, rice, wheat, corn, dynamic partial equilibrium simulation mathematical model., Environmental Economics and Policy, International Relations/Trade, |
| Date: | 2011–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103768&r=env |
| By: | Feng, Siyi J.; McCarl, Bruce A.; Havlik, Petr |
| Keywords: | Environmental Economics and Policy, Land Economics/Use, Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy, |
| Date: | 2011–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103518&r=env |
| By: | de Gorter, Harry; Drabik, Dusan; Just, David R. |
| Abstract: | This paper analyzes carbon leakage due to reduced emissions from deforestation (RED). We find that leakage with RED is good because the policy induces afforestation that contributes to a further carbon sequestration. By ignoring the domestic component of carbon leakage, the literature can either overestimate or underestimate leakage, depending on the magnitudes of the numerator and the denominator of the leakage formulas. Unlike the literature, we include the land and agricultural markets in the analysis of carbon leakage with forestation policies. In this model, carbon leakage depends on: (1) supply and demand elasticities of timber production and consumption, respectively in the country introducing a RED policy (Home country) and in the rest of the world; (2) Home countryâs production and consumption share in the world timber production and consumption, respectively; (3) prices of land and crop products in the Home country and the rest of the world; (4) initial allocation of land between forestry and agriculture; (5) share of total forest area set aside under RED; and (6) relative carbon sequestration potential of the forest planted on an afforested land and of the forest withdrawn from timber harvest. These potentials depend heavily on the forest species as well as on timing of the policy, and on the discount rate and time path of increasing carbon prices. |
| Keywords: | carbon leakage, forestry, reduced emissions from deforestation, afforestation, Agricultural and Food Policy, Environmental Economics and Policy, Land Economics/Use, Q23, Q24, Q54, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103797&r=env |
| By: | Smith, David; Current, Dean; Taff, Steve |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103955&r=env |
| By: | Kim, Hyun Seok; Koo, Won W. |
| Abstract: | The policies that regulate greenhouse gas emissions would provide a significant burden to emission industries as well as final consumers, which can lead to a strong influence on international trade flows of commodities. This study examines the impact of regulating greenhouse gas emissions on livestock trade flows using a commodity specific gravity model approach. This study finds that regulating greenhouse gas emissions has a negative effect on livestock trade flows from countries restricting greenhouse gas emissions to unrestricting countries, from restricting to restricting countries, and from unrestricting to restricting countries. |
| Keywords: | gravity model, livestock, regulating greenhouse gas emission, trade, Environmental Economics and Policy, Livestock Production/Industries, |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea10:61861&r=env |
| By: | Howard, Peter H. |
| Abstract: | Policymakers must make conservation decisions under uncertainty over the social benefits of future vegetative, due to the uncertain effects of climate change on suitable habitat ranges. If policymakers fail to account for future information gains when designing land-use policies, expected social welfare is not maximized. To examine this situation, I consider three land-use policy instruments: urban growth boundaries (UGB), location-independent development fees (LIF), and location-dependent development fees (LDF). I analyze them in a spatial-dynamic model of a municipality in which climate change is modeled as a land-use externality with two future states corresponding to ecosystems thriving or degenerating. Using this model, I derive the privately and socially optimal land allocations under open-loop and closed-loop control. By comparing the privately and socially optimal land allocations within each control problem, I identify the optimal trajectory of each instrument over time. The main result is that welfare-maximizing UGB and LIF depend on the informational assumption, while LDF are robust to the type of control problem when there are no cumulative externalities from development. This work implies that conservation programs should amend current methods for ranking conservation choices to account for future vegetative movement and return lands to the private domain if conservation fails. |
| Keywords: | Uncertainty, Irreversibility, Spatial-temporal modeling, Value of information, Policy design, Climate change, Agricultural preservation, Environmental conservation, Environmental Economics and Policy, Land Economics/Use, Political Economy, Risk and Uncertainty, |
| Date: | 2011–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103639&r=env |
| By: | Huang, Haixiao; Khanna, Madhu; Yang, Xi |
| Abstract: | We analyze the effect of an emergence of biofuel industry on the Conservation Reserve Program. The government expenditure on Conservation Reserve Program needs to increase dramatically to keep the current scale of CRP program when the biofuel industry is considered. We propose that the development of bioenergy crops on expiring CRP land is a potential way to reconcile the conflict between a sharp increase in government CRP budget and its environmental protection goal. CRP program can also be combined with the Biomass Crop Assistance Program (BCAP) to achieve the goal of environmental protection and low carbon society at the same time. |
| Keywords: | Conservation Reserve Program (CRP), Soil Rental Rate, Bioenergy Crops, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103829&r=env |
| By: | Wang, Weiwei; Park, Seong C.; McCarl, Bruce A.; Amosson, Steve |
| Abstract: | The sustainable water use especially for irrigated agriculture in the Texas Panhandle Region is a major concern. A semi-arid climate and average low rainfalls results in little surface water being available year-round. The Ogallala Aquifer is the primary source of irrigation water in this region. The intensive irrigated agricultural production and growing livestock industry have led to substantial decline of water tables. Furthermore, climate change and growing bioenergy feedstock productions exacerbates the water shortage and quality problems. Given the critical dependence of the regional economy on Ogallala Aquifer, underground water use is an intergenerational issue that must be evaluated in terms of the sustainability of agricultural activities in the long run. This paper develops a dynamic multi-county land allocation optimization model which integrates three sectors: agriculture, climate and hydrology. The sustainable water use and associated irrigated agricultural economic consequences under climate change are analyzed. This model also serves as a policy tool in evaluating economic impacts of alternative bioenergy expansion policies and water saving technologies in Ogallala Aquifer Region. The simulation results show that availability of extractable water has a direct impact on optimal land allocation. Deficit irrigation for major crops is an effective short-run strategy for water sustainability. In the longer run, dryland and pastureland farming will dominate. Climate change has heterogeneous impacts on agricultural production over counties and sub-counties because of the non-uniform hydrological characteristics. |
| Keywords: | Groundwater, Land Use Change, Climate Change, Bioenergy feedstock, Dynamic Optimization Model, Deficit Irrigation, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, Q24, Q25, Q54, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103642&r=env |
| By: | Tokovenko, Oleksiy; Koo, Won W. |
| Abstract: | This study analyses potential adverse effects of unilateral increase in GHG emission standards. The single good two regions partial equilibrium model of international trade is used to derive and interpret the conditions under which such an increase will lead to a reduction in a total level of GHG emission. We found that improvement in the global GHG emission level will be observed if the response of the home country abatement level is more elastic than that of the foreign country by the factor of the ratio of initial foreign to domestic marginal emission intensities. It is also shown that in the large industry case, the appropriate factor is adjusted by the measure of the relative market influence of two industries. The study concludes that a unilateral reduction in GHG emissions will unlikely lead to the reduction in the total GHG emissions level and may worsen the environmental situation in other regions. An appropriate multilateral agreement that involves producers from the major emitting countries is required to achieve the goal. |
| Keywords: | Emission Regulation, Carbon Leakage, International Trade, Environmental Economics and Policy, International Relations/Trade, |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103847&r=env |
| By: | Wang, Weiwei; McCarl, Bruce A. |
| Abstract: | Currently, different dimensions of mitigation strategies have been investigated in policy analysis. However, ambitious mitigation action aiming at reducing future climate change will not prevent much climate change before mid-century. Short-term and medium-term temperature as well as associated damages cannot be avoided completely. Increasingly there appears to be recognition of the need to simultaneously implement adaptation and mitigation. However, the optimal combination between adaptation and mitigation that can best address climate change over time is still an open question. Literature base is rather small, yet very diverse and inconsistent in conclusions. In this paper, we do an exploration of the temporal optimal investment mix between adaptation and mitigation and their relative contributions to climate change damage reduction. By proposing a conceptual framework that integrates both strategies and developing a more complete integrated assessment model, the temporal investment allocation between adaptation and mitigation is identified. Results suggest that adaptation is an effective climate change damages reduction strategy and a complement to mitigation. Adaptation investment tackles the short run reduction of damages in the first 250 years while mitigation dominates from thereon. |
| Keywords: | Climate Change Damages, Adaptation, Mitigation, Temporal Investment, Integrated Assessment Model, Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty, Q54, Q58, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103408&r=env |
| By: | Sesmero, Juan P. |
| Abstract: | Off-farm demand for crop residues is expected to grow as bioenergy policies become effective. Demand for residues will provide farmers with an additional source of revenue but it may also trigger losses in soil organic carbon and increases in fertilizer application. This study develops a dynamic economic model of stover harvest that permits conceptualization and quantification of these potential tradeoffs. We parameterize our model based on publicly available studies of soil biophysical relationships in the Corn Belt. Under these parameter values and 2010 corn and fertilizer prices harvesting stover is not economically convenient at prices below $53 per dry ton of stover. Results suggest that the rate of stover harvest may be quite sensitive and negatively linked to corn prices, which means that policies favoring the use of stover for biomass may be overridden by further increases in corn price. The negative link between stover harvest and corn prices, while somewhat counterintuitive, is driven by the fact that removal of stover reduces future grain yield (through reductions in soil organic carbon). Results also seem to indicate that, under plausible parameter values, profit maximizing farmers would increase stover supply in response to increases in stover price. However increases in supply are, according to our simulations, associated with (potentially significant) reductions in soil organic carbon (and hence carbon emissions as these are positively linked) and increases in nitrogen application (and potential runoffs). This result suggests that concerns about adverse environmental implications of harvesting stover may be justified, and more precise quantification of environmental tradeoffs should be pursued by future research. |
| Keywords: | stover supply, biomass, soil productivity, soil organic carbon, nitrogen, Environmental Economics and Policy, Farm Management, Land Economics/Use, Resource /Energy Economics and Policy, C61, Q12, Q24, Q42, Q53, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103765&r=env |
| By: | Nunez, Hector M.; Onal, Hayri; Khanna, Madhu; Chen, Xiaoguang; Huang, Haixiao |
| Keywords: | Environmental Economics and Policy, Marketing, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:104019&r=env |
| By: | Irfanoglu, Zeynep Burcu; Sesmero, Juan P. |
| Abstract: | This study explores the conditions under which a trade sanction can be an effective enforcement mechanism used by the US against China in global greenhouse (GHG) mitigation in agriculture and forestry. The problem has the structure of prisonerâs dilemma and hence both the US and China have incentive to free-ride in GHG emissions abatement. It is found that if the US joined the rest of the world (ROW) in emissions abatement in agriculture and forestry, the US could also convince China to comply with abatement using trade sanctions. In this study, trade sanctions are considered as a deterrent to free-riding. For threats of trade sanctions to become a viable enforcement mechanism tariff rates have to achieve two conditions defined in this study: credibility and effectiveness. In a scenario where China is the only region refusing to implement an emissions tax on its GHG from agricultural and forestry sectors it is shown that there may be a window in which trade sanctions constitute a viable enforcement mechanism for the environmental agreement. This window is depicted by tariff rates below 9% (these rates achieve credibility) and above an increasing lower bound (denoting rates achieving effectiveness). The lower bound intersects 9% at a carbon tax of $80/TCE implying that; 1) at carbon taxes above $80/TCE trade sanctions are no longer a viable enforcement mechanism for the environmental agreement, and 2) the viability of trade sanctions as an enforcement mechanism may be limited to a certain level of targeted abatement. |
| Keywords: | Trade Sanctions, Greenhouse Gas Mitigation, Multilateral Environment Agreements, Computable General Equilibrium Model, Environmental Economics and Policy, International Relations/Trade, Land Economics/Use, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103869&r=env |
| By: | Cho, Seong-Hoon; Kim, Hee Ho; Roberts, Roland K.; Kim, SeungGyu; Lee, Daegoon |
| Abstract: | This research analyzed the effects of forestland conversion from private to public ownership on greenhouse gas emissions by quantifying the relationship between forestland ownership conversion and deforestation, and then examining the effects of the change in deforestation on greenhouse gas emissions in South Korea. Ex ante simulations forecast greenhouse gas emissions resulting from deforestation rates under the current level of national forestland and three scenarios of increased percentages of national forestland. The findings suggest that increasing the percentage of national forestland would mitigate the increase in the deforestation rate, which in turn would moderate the increase in greenhouse gas emissions. |
| Keywords: | greenhouse gas emissions, Forestland Ownership, Environmental Economics and Policy, Q15, Q23, Q24, Q54, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103714&r=env |
| By: | Horan, Richard D.; Shortle, James S. |
| Abstract: | Increasingly, environmental problems are recognized to involve linkages across multiple environmental variables (e.g., pollution and a fishery). Prior work on managing these complex, linked systems generally focuses on efficiency rather than implementation. However, implementation is important and will generally involve involve changing human behaviors within the multiple economic sectors that impact upon the multiple environmental variables. Tradable permit markets are generally seen as a coordinating mechanism, within a particular regulated sector, that enhances efficiency by incentivizing agents to respond to behavioral choices of others within the sector. However, prior work stops short of coordinating behaviors across multiple sectors for cases where society benefits from regulation in both sectors and one sector harms the other. We analyze a multi-sector permit market involving both the externality-generating sector and the affected sector. This multi-sector market provides a mechanism for agents in one sector to respond to environmental behaviors made within the other sector. Moreover, unlike traditional permit markets in which the regulated externality sector incurs only costs, we show that the multi-sector market generates efficiency gains that may be redistributed using appropriate allocations of initial endowments. Accordingly, the multi-sector market may generate gains that benefit both sectors, resulting in a win-win outcome for both sectors. We use a simple example of a polluted fishery to illustrate the approach. |
| Keywords: | Permit trading, fisheries, pollution, Shapley values, bioeconomics, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103591&r=env |
| By: | Jota Ishikawa; Kazuharu Kiyono; Morihiro Yomogida |
| Abstract: | We develop a two-country (North and South), two-good, general equilibrium model of international trade in goods and explore the effects of domestic and international emission trading under free trade in goods. Whereas domestic emission trading in North may result in carbon leakage by expanding South's production of the emission-intensive good, international emission trading may induce North to expand the production of the emission-intensive good by importing emission permits. Emission trading may deteriorate global environment. North's (South's) emission trading may not benefit South (North). International emission trading improves global efficiency but may not benefit both countries. |
| Keywords: | global warming, emission quota, emission trading, carbon leakage, Kyoto Protocol |
| JEL: | F18 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd10-180&r=env |
| By: | Kyophilavong, Phouphet; Takamatsu, Shinya |
| Abstract: | The climate change is global problems. It is predicted to have more severe impact on developing country which most of population are poor. The main impact of climate change on poverty is changing crop productivity and commodity prices. However, there are few studies on the relationship between climate change and poverty. Therefore, this study will use Laos which has a high share of agriculture sector on GDP and high poverty rates as a case study to assess the impact the climate change on national wide-economy and climate change using CGE model. The preliminary result shows that climate change has serious impact of Lao economy in term of declining GDP. On the other hand, the micro-simulation indicates that the impact on poverty was negligible. This is because the households in Laos are autarky and not affected by the changes of prices and wages due to climate change. |
| Keywords: | Environmental Economics and Policy, Food Security and Poverty, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103999&r=env |
| By: | Key, Nigel; Sneeringer, Stacy |
| Abstract: | Climate change could affect the costs and returns of livestock production by altering the thermal environment of animals thereby affecting animal health, reproduction, and the efficiency by which livestock convert feed into retained products (especially meat and milk). In the United States, concentrated livestock operations are located in a variety of climatic regions, suggesting that the industry could adapt to future changes in temperature and weather patterns resulting from global warming. However, this adaption could be costly. We use nationally representative data on dairy producers coupled with finely-scaled climate data to empirically examine how producersâ costs, returns, and production systems vary across U.S. regions as a function of the local climate. |
| Keywords: | climate change, dairy, temperature humidity index, economics, Agricultural and Food Policy, Environmental Economics and Policy, Livestock Production/Industries, Production Economics, Q5, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103461&r=env |
| By: | Lee, Jun; Gomez, Miguel L. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103813&r=env |
| By: | Yoo, Do-il; Skog, Kenneth E.; Ince, Peter J.; Kramp, Andrew D. |
| Abstract: | This paper analyzes impacts of the U.S. biofuel energy policies on the carbon sequestration by forest products, which is expressed as Harvested Wood Products (HWP) Contribution under the United Nations Framework Convention on Climate Change. Estimation for HWP Contribution is based on tracking carbon stock stored in wood and paper products in use and in solid-waste disposal sites (SWDS) from domestic consumption, harvests, imports, and exports. For this analysis, we hypothesize four alternative scenarios using the existing and pending U.S. energy policies by requirements for the share of biofuel to total energy consumption, and solve partial equilibrium for the U.S. timber market by 2030 for each scenario. The U.S. Forest Products Module (USFPM), created by USDA Forest Service Lab, operating within the Global Forest Products Model (GFPM) is utilized for projecting productions, supplies, and trade quantities for the U.S. timber market equilibrium. Based on those timber market components, we estimate scenario-specific HWP Contributions under the Production, the Stock Change, and the Atmospheric Approach suggested by Intergovernmental Panel on Climate Change (IPCC) Guidelines for National Greenhouse Gas Inventories using WOODCARB II created by VTT Technical Research Centre of Finland and modified by USDA Forest Service Lab. Lastly, we compare estimated results across alternative scenarios. Results show that HWP Contributions for the baseline scenario in 2009 for all approaches are estimated higher than estimates reported by U.S. Environmental Protection Agency in 2011, (e.g., 22.64 Tg C/ year vs 14.80 Tg C/ year under the Production Approach), which is due to the economic recovery, especially in housing construction, assumed in USFPM/GFPM. Projected HWP Contribution estimates show that the Stock Change Approach, which used to provide the highest estimates before 2009, estimate HWP Contribution lowest after 2009 due to the declining annual net imports. Though fuel wood consumption is projected to be expanded as an alternative scenario requires higher wood fuel share to total energy consumption, the overall impacts on the expansion in other timber products are very modest across scenarios in USFPM/GFPM. Those negligible impacts lead to small differences of HWP Contribution estimates under all approaches across alternative scenarios. This is explained by the points that increasing logging residues are more crucial for expansion in fuel wood projections rather than the expansion of forest sector itself, and that the current HWP Contribution does not include carbon held in fuel wood products by its definition. |
| Keywords: | Forest Products, Carbon Sequestration, Biofuel Policies, HWP Contribution, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103961&r=env |
| By: | Towe, Charles |
| Keywords: | Dependent competing risks, Land conversion, Real options, Hazard models, Preservation easements, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103725&r=env |
| By: | Golub, Alla; Henderson, Benjamin; Hertel, Thomas |
| Abstract: | Recent research on livestockâs role in climate change has raised awareness about contribution that livestock climate policies can make to global mitigation efforts, and has increased the likelihood that mitigation policies will eventually be imposed on the sector. This study investigates effects of GHG mitigation policies on livestock sectors emissions and production by regional sector under a range of global mitigation polices that are broadly aligned with the different responsibilities of developed and developing countries under the UNFCCC. The study also examines emission leakage effects, impacts on food security in developing countries, and the implications of large informal livestock sectors in regions such as Sub Saharan Africa. |
| Keywords: | Environmental Economics and Policy, Food Security and Poverty, C68, Q15, Q54, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103425&r=env |
| By: | Kabata, Tshepelayi |
| Abstract: | This study aims at assessing the environmental performance the U.S. agriculture with respect to GHG emissions across states. To reach this objective, this paper utilizes alternative non-parametric approaches: a graph measure of technical efficiency under strong disposability and weak disposability and a modified output oriented Malmquist index. The graph measure of technical efficiency accounting for undesirable outputs reveals that regulations of agriculture GHG emission would be effective in all states but Delaware, as they would be binding and impose a âcostâ in terms of reduction of desirable output. Results show also that on average regulations would improve technical efficient for about 3.5%. States operating on the frontier shift from one to seven when the regulation is accounted for. But the opportunity cost of binding to this regulation amounts to 3.7% reduction of agricultural output. The approach Malmquist index and its components reveal that on average the efficiency change has been invariant to the treatment of the undesirable output as input. The average productivity growth is 2.2 percent when GHG emissions are treated as input whereas it is 2 percent when they are complementally ignored. In both cases, the productivity growth is driven by technological change. |
| Keywords: | Productivity, Technical Efficiency, environmental performance, Production Economics, Productivity Analysis, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103427&r=env |
| By: | McGuire, William |
| Abstract: | I study the determinants of ISO 14001 certification in a sample of manufacturing firms in China as well as the effect of ISO 14001 certification on firm environmental performance. Results indicate that ISO 14001 plays an important role in signaling the firm's environmental technology to environmentally conscious customers. ISO 14001 also appears to improve firm environmental performance, even after controlling for endogeneity between performance and certification. |
| Keywords: | China, ISO 14001, Environmental Management Systems, Signaling, Environmental Economics and Policy, International Development, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103659&r=env |
| By: | Rodriguez, Hector German; Popp, Jennie; Gbur, Edward; Chaubey, Indrajeet |
| Abstract: | The economy of northwest Arkansas, including the Lincoln Lake watershed (a sub-watershed of the Illinois River), relies greatly upon livestock and poultry production. The supply of production by-products is increasingly under scrutiny as one of the potential sources of water pollution in the region. In light of the recent economic crisis, methodologies that help producers to evaluate the environmental and economic impacts of several practices before implementing them may be a cost-effective means of increasing BMP adoption. This study uses stochastic dominance techniques to evaluate, environmentally and economically, ten best management practices (BMPs) combinations to lessen water pollution in the Lincoln Lake watershed. All BMP combinations analyzed were effective in reducing total phosphorous (TP) losses. However, six combinations also decreased net returns (NR) when compared to a baseline. This suggests that including BMPs in the bermudagrass production systems may lead to increased NR risk. Without additional incentives, producers will not likely implement these BMP combinations regardless of their TP reduction benefits. Although, as expected, rankings of BMP combinations in terms of TP or NR differed from each other, four scenarios established that environmental and economic goals are not necessarily conflicting; they may be complementary. Additionally, this analysis revealed that producersâ risk preferences did not matter when selecting among the top-four BMP combinations but it could be a factor for other less preferred scenarios. |
| Keywords: | nonpoint pollution, watershed, best management practices, risk analysis, stochastic dominance, Environmental Economics and Policy, Risk and Uncertainty, Q25, Q53, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103344&r=env |
| By: | Mu, Jianhong E.; McCarl, Bruce A; Wu, Ximing; Gan, Li |
| Abstract: | This paper examines the effect that climate has on Avian Influenza outbreak probability. The statistical analysis shows across a broad region the probability of an outbreak declines by 0.22% when the temperature rises 1 Celsius degree and increases by 0.34% when precipitation increases by 1millimeter. These results indicate that the realized climate change of the last 20 years not only has been a factor behind recent HPAI outbreaks, but that climate change is likely to play an even greater role in the future. The statistical results indicate that overall, the risk of an AI outbreak has been increased by 51% under past climate change and 3-4% under future climate change. An economic evaluation shows the increased probability of outbreaks has caused damages of about $107 million in China and $29 million in the United States due to past climate change. In the year of 2011-2030, for countries with a high proportion of chicken production, economic loss could reach $105-$146 million in China and $12-$18 million in the United Sates. |
| Keywords: | Climate change, Avian Influenza outbreaks, GDP loss, Environmental Economics and Policy, Research Methods/ Statistical Methods, |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103637&r=env |
| By: | Hertel, Thomas; Lobell, David; Verma, Monika |
| Abstract: | This paper seeks to understand the main sources of uncertainty in assessing the impacts of climate change on agricultural output, international trade, and poverty. We incorporate biophysical uncertainty by sampling from a distribution of productivity shocks reflecting the impacts of climate on agricultural yields in 2030. These shocks, in turn, affect the global economy. The response of economic agents to climate change is the second source of uncertainty in our estimates. We find that, even though it is difficult to predict where in the world agricultural crops will be favorably affected by climate change, we find that the responses of output and exports can be far more robust. This is due to the fact that supply and demand decisions depend on relative prices, and relative prices depend on productivity changes relative to other crops in a given region, or relative to similar crops in other parts of the world. We also find that uncertainty in poverty impacts of climate change appears to be almost entirely driven by biophysical uncertainty. Further reducing this uncertainty will require improving climate models and the crop models used to interpret the impacts of likely future climate on crop productivity. |
| Keywords: | Climate Change Uncertainty, Crop Production/Industries, Environmental Economics and Policy, International Relations/Trade, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103691&r=env |
| By: | Roumasset, James; Wada, Christopher |
| Abstract: | Optimal recycling of minerals can be thought of as an integral part of the theory of the mine. In this paper, we consider the role that wastewater recycling plays in the optimal extraction of groundwater, a renewable resource. We develop a two-sector dynamic optimization model to solve for the optimal trajectories of groundwater extraction and water recycling. For the case of spatially increasing recycling costs, recycled water serves as a supplemental resource in transition to the steady state. For constant unit recycling cost, recycled wastewater is eventually used as a sector-specific backstop for agricultural users, while desalination supplements household groundwater in the steady state. In both cases, recycling water increases welfare by shifting demand away from the aquifer, thus delaying implementation of costly desalination. The model provides guidance on when and how much to develop resource alternatives. |
| Keywords: | Renewable resources, dynamic optimization, groundwater allocation, wastewater reuse, recycling, reclamation, water quality, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q25, Q28, C6, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103753&r=env |
| By: | Suter, Jordan F.; Spraggon, John; Poe, Gregory L. |
| Abstract: | Water quality trading schemes in the United States can predominantly be character- ized by low trading volumes. In this paper we utilize laboratory economics experiments to explore the extent to which the technology through which pollution abatement is achieved influences market outcomes. Mirroring the majority of water quality trading markets, the sessions utilize small trading groups composed of six participants. To understand the extent to which abatement technology influences trading behavior, the experimental treatments vary the degree of heterogeneity in initial abatement costs and the potential for long-lived investments in cost-reducing abatement technology. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:104023&r=env |
| By: | Mezzatesta, Mariano; Newburn, David A.; Woodward, Richard T. |
| Abstract: | Federal agricultural conservation programs, which have invested billions of dollars, are designed to provide incentives for farmers to voluntarily adopt production practices or change land uses to provide environmental benefits. The effectiveness of these programs depend in part on their additionality: whether payments to farmers encourage practice adoption and land use changes that would not have occurred without the program. Using data from a 2010 survey of farmers in southwest Ohio, we estimate the percentage of additional farm acreage of a conservation practice that was adopted as a result of having received funding from major federal conservation programs. We use covariate and propensity score matching techniques to estimate the average treatment effect on the treated (ATT), measured as the change in acreage in a conservation practice as a percentage of farm acreage. Estimates of additionality improve the understanding of how incentives in conservation programs affect farmer behavior and assist in designing programs that cost-effectively enhance environmental benefits. Analyzing the effect of payments on conservation effort is also crucial to developing successful emerging markets, such as payment for ecosystem services, carbon sequestration, and water quality markets, which are being developed in response to growing environmental concerns. |
| Keywords: | Conservation programs, matching estimators, additionality, average treatment effects, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103592&r=env |
| By: | Hendricks, Nathan P.; Sumner, Daniel A. |
| Keywords: | Crop Production/Industries, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103876&r=env |
| By: | Parvez, Rezwanul; Janssen, Larry; Stover, Ronald; Reitsma, Kurt D.; Smart, Alexander |
| Abstract: | In this poster, we report selected socio-economic findings from analysis of the Bad River Water Quality project (BRWQ) implemented in western South Dakota from 1990 through 2004. An overview of various BRWQ project phases are presented, along with analysis of cost of conservation practices applied and local landowners current assessment of the practices implemented from 1990 â 2004. |
| Keywords: | rangeland conservation, cost-sharing, conservation practices, conservation assessment, conservation programs, resource economics, Bad River Water Quality project, Environmental Economics and Policy, Land Economics/Use, Q20, |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103718&r=env |
| By: | Liu, Zheng; Schieffer, Jack; Hu, Wuyang; Pagoulatos, Angelos |
| Abstract: | A growing share of water pollution in the U.S. can be attributed to nonpoint sources (USEPA 2002). Some of this trend can be attributed to declining point source (PS) emissions as a result of regulation under the Clean Water Act (CWA). However, fertilizer-intensive practices used to improve agricultural productivity over recent decades have also increased nitrate loads and resulted in water quality impairments. Nonpoint source (NPS) pollution from agricultural practices is generally exempt from federal regulation. However, some voluntary programs allow point sources subject to the CWAâs effluent limitations to meet their standards by purchasing offset credits reflecting reductions in NPS discharges to the same waters (USEPA 2004). Such water quality trading (WQT) programs have been implemented in a number of states to reduce pollution abatement costs (Breetz et al 2004). In this setting, NPS supply pollution abatement when they implement best management practices (BMP) that reduce nutrient loads, and the cost of BMPs form a supply curve for credits. WQT programs are supported by the EPA as an important means for efficiently pursuing water quality goals (USEPA 2003a). Among the BMPs available for water quality management, riparian buffer strips have proven effective in mitigating the movement of nutrients and other pollutants into surface waters (Qiu et al 2006). Estimates of riparian buffer costs would be valuable for developing policy related to WQT and other conservation programs. This paper estimates the annual costs of buffer strips in six counties in the Lower Kentucky River Basin, as part of a project evaluating the feasibility of WQT programs in that area. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103633&r=env |
| By: | Habermacher, Florian |
| Abstract: | A fundamental question of high practical relevance for climate policy design is whether price controls such as CO2 taxes, or quantity restrictions such as emission quotas should be preferred. I show that as the reach of climate policies is limited in terms of either suboptimally low reduction targets or the policy's extent over only parts of the world, the likelihood of price measures to be more advantageous in terms of minimizing uncertainty related welfare losses increases. The increase of the relative advantage of the price mechanisms over quantity measures may be more than proportional to the regional limitedness of the policy, suggesting that even for relatively important climate coalitions the identified factor implies a clear advantage for price measures. This analysis of the prices vs. quantities question is closer to so far on a high political level seriously discussed climate policies, not to speak of already implemented local or regional climate policies, than previous theoretical literature addressing the issue, which typically relied on the assumption of first bests (i.e. global) policies. Illustrating the main thought of the analysis, I explain why in the example of policies with an extent corresponding to the current Kyoto mechanism, the simple theoretical weighting of the price vs. the quantity approach seems to favor price mechanisms independently of the exact form of the global abatement cost and benefit curves. |
| Keywords: | prices versus quantities, greenhouse gas tax, emission quotas, tradable permits, uncertainty, emission abatement costs, climate change costs, emission abatement benefits, regional climate policy, unilateral climate policy. |
| JEL: | Q54 Q52 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2011:18&r=env |
| By: | Jayasinghe, Sampath; Miller, David |
| Keywords: | Environmental Economics and Policy, |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103796&r=env |
| By: | Buchholz, Wolfgang; Schymura, Michael |
| Abstract: | The evaluation of long-term effects of climate change in cost-benefit analysis has a long tradition in environmental economics. Since the publication of the Stern Review in 2006 the debate about the 'appropriate' discounting of future welfare and utility levels was revived and the most renowned scholars of the profession participated in this debate. But it seems that some contributions dealing with the Stern Review and the Review itself mixed up normative and positive issues to defend the own position. Furthermore, as we argue in this contribution, it also seems that the debate misses the heart of the problem. The aim of this work is to bring together economic and philosophical reasoning about justice and intergenerational equity in the context of climate change. So we adopt the normative view in order to present the most important ethical issues that, particularly in the context of climate policy, are most relevant for the choice of intertemporal welfare criteria. Subsequently we explore whether ethical considerations may also be helpful to determine the parameter values (or at least to delimit their range) which, after the choice of some type of intertemporal social welfare function, are needed to specify the concrete criterion that is employed to make decisions on climate policy. -- |
| Keywords: | Intertemporal ethics,Distribution,Discounting,Climate Change |
| JEL: | Q53 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11031&r=env |
| By: | Cai, Ruohong; Bergstrom, John C.; Mullen, Jeffrey D.; Wetzstein, Michael E. |
| Abstract: | In this paper, a dynamic optimization model was developed to simulate how farm-level realized price and profitability respond to yield change which was induced by climate change. Producers' acreage response was included in the dynamic model considering crop rotation effect. In the crop rotation model, a modified Bellman equation was used to dynamically optimize the net present value of farm profit for a five-year interval. This simulation process was repeated through the year 2050. Then yield, price, and acreage response were compiled to generate realized profit. Results generally indicated that reduction in crop yields due to climate change results in reduced farm profitability for most of the states studied. Predicted climate change is more likely to pose a problem for agricultural production and profitability in the southern U.S. states as compared to the northern U.S. states. Our results also suggest that acreage response alone is not sufficient to ameliorate the potential negative effects of global climate change on agricultural production and profitability. The results of this research are expected to provide a foundation for future related research to aid producers' crop rotation decisions in an unstable price environment. |
| Keywords: | Dynamic simulation model, Acreage response, Crop rotation, Expected price, Realized price, Agricultural Finance, Crop Production/Industries, Environmental Economics and Policy, Farm Management, Land Economics/Use, Production Economics, Productivity Analysis, Risk and Uncertainty, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103420&r=env |
| By: | Bento, Antonio M.; Klotz, Richard; Landry, Joel R. |
| Abstract: | This paper applies the insights of the carbon leakage literature to study the emissions consequences of biofuel policies. We develop a simple analytic framework to decompose the intended emissions impacts of biofuel policy from four sources of carbon leakage: domestic fuel markets, domestic land markets, world land markets and world crude oil markets. A numerical simulation model illustrates the magnitude of each source of leakage for combinations of two current US biofuel policies: the Volumetric Ethanol Excise Tax Credit (VEETC) and the Renewable Fuel Standard (RFS). In the presence of both land and fuel market leakage, current US biofuel policies are unlikely to reduce greenhouse gases. Four of the five policy scenarios we consider lead to increases in greenhouse gas emissions. That is, total leakage was greater than 100%. The single scenario that generates emissions savings, the removal of the VEETC in conjunction with a binding RFS, only does so because negative leakage in the domestic fuel market offset the remaining positive sources of leakage. |
| Keywords: | Multi-market, carbon leakage, biofuels, greenhouse gases, Agricultural and Food Policy, Land Economics/Use, Resource /Energy Economics and Policy, Q42, Q54, Q58, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:104008&r=env |
| By: | Russell, Noel; Sauer, Johannes |
| Abstract: | This paper investigates participation by farmers in the UK Environmental Stewardship Schemes and how decisions to join the scheme are related to land productivity levels on the one hand and ecological conservation on the other. In particular the paper will explore the extent to which the self selection of farmers onto the scheme influences likely scheme performance. The first part of the paper analyses a theoretical model for the provision of ecological services where an uninformed government agency offers to contracts to well-informed farmers. The results of this analysis indicate the extent to which self selection by farmers can impair the efficiency of PES schemes and point to specific strategies that might be used by a government agency to mitigate these effects. These results are used to motivate the empirical analysis of a sample of participants in the UKâs Environmental Stewardship Schemes (ESS). We use a comprehensive dataset for more than 10,000 ESS agreements over different years to estimate different regression models. The results of this preliminary analysis can inform policy makers on a more adequate design of conservation schemes with respect to positive and/or negative effects of self-selection. |
| Keywords: | Payment for Environmental Services, Self-Selection in PES Schemes, UK Environmental Stewardship Schemes, Beneficial Selection., Environmental Economics and Policy, Farm Management, Land Economics/Use, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103697&r=env |
| By: | Londono, Catalina; Ando, Amy W. |
| Abstract: | Stormwater runoff causes environmental problems such as flooding, soil erosion and water pollution. Conventional stormwater management has focused primarily on flood reduction, while a new generation of decentralized stormwater solutions yields ancillary benefits in the form of improved surface water quality and increased groundwater recharge. Previous research has estimated values for flood reduction from stormwater management, but no estimates exist for the willingness to pay for some of the other benefits of alternative approaches to stormwater control. This paper uses a choice-experiment survey of households in Champaign-Urbana, Illinois to estimate the values of multiple attributes of stormwater management outcomes, and to identify householdsâ willingness to pay for different attributes of stormwater management controls. Results show that people are willing to pay not only for reduction of flooding frequency, especially basement flooding, but also for improved environmental quality. Furthermore, an individualâs values depend on the status quo condition that they experience. |
| Keywords: | Nonmarket valuation, state-dependent preferences, stormwater, aquatic habitat, choice experiment, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103415&r=env |
| By: | Ortiz-Bobea, Ariel |
| Abstract: | Economists are relying on agronomic concepts to construct weather or climate independent variables and improve the reliability and efficiency of econometric models of climate change impact on U.S. agriculture. The use of cumulative heat measures in agronomy (growing degree-days), has recently served as a basis for the introduction of plurimonthly calendar heat variables in these models. However, season-long weather conditions seem at odds with conventional agronomic wisdom that emphasizes crucial differences in crop stage sensitivity to environmental stress. In this paper I show that weather variables matched to key corn development stages provide an enhanced and more stable fit than their calendar counterparts. More importantly, the proposed season-disaggregated framework yields very different implications for adaptation than its calendar counterparts as it indicates that most of the projected yield damages are accounted during the flowering period, a relatively short period in the crop cycle. This should open the door to more advanced yield models that account for additional possibilities of adaptation and thus provide a more nuanced outlook on the potential impacts of climate change on crop yields. |
| Keywords: | agriculture, climate change, corn, degree-days, phenology, proxy, yield, Production Economics, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, Q54, C23, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103656&r=env |
| By: | Taheripour, Farzad; Tyner, Wallace E. |
| Abstract: | The economic and land use consequences of US biofuel programs and their contributions to GHG emissions have been the focal point of many debates and research studies in recent years. However, most of these studies focused on the land use emissions due to the first generation of biofuels such as corn ethanol, sugarcane ethanol, and biodiesel (e.g. [1, 2] [3, 4]). A quick literature review indicates that only a few attempts have been made to estimate these emissions for the second generation of biofuels which convert cellulosic materials into liquid fuels. Gurgel et al. [5] have used a highly aggregated computational model (CGE) to evaluate land use consequences of producing biofuels from biomass feedstock. This model does not distinguish between the first and second generation of biofuels, aggregates all agricultural products in one sector thereby over simplifying the competition for land among its alternative uses, and relies on an old data set which represents the world economy in 1999. These authors predict that producing energy from biomass requires a considerable amount of land, about 0.5 hectares per 1000 gallons of ethanol. More recently, the United States Environmental Protection Agency (EPA) has released its emissions assessments for alternative biofuels including ethanol produced from corn stover and a dedicated crop (switchgrass) [6]. To provide these assessments EPA has mainly relied on the FASOM and FARPRI partial equilibrium models to evaluate domestic and international land use impacts of the US cellulosic biofuel targets. The simulation results obtained from these models show that producing ethanol from corn stover has insignificant land use impacts. However, producing ethanol from switchgrass will cause major land use changes in the US and other countries across the world. The EPA results show that producing 7.9 billion gallons of ethanol from switchgrass will increase global cropland areas by about 3 million hectares of which 1.7 million hectares will occur in the US. In addition, according to the EPA estimates, producing ethanol from switchgrass will curb acreages of US soybeans, wheat, hay, and other crops by 3.36 million hectares as well. On the other hand several research studies have concluded that dedicated energy crops can be grown on marginal lands (including idled cropland and cropland pasture) and that considerable amounts of these lands are available across the world to use without imposing a major impact on cropland and no consequences for food security [7-9],. These papers simply assume that these marginal lands have no opportunity costs. The economic and land use impacts of producing biofuels from dedicated crops could be more complicated than corn ethanol. Production of dedicated crops for significant volumes of biofuels could alter relative prices of crops and their profitability leading farmers to produce them on their existing active croplands or convert their idled or marginal croplands to produce these crops. This could cause major implications for livestock producers who use marginal lands (such as cropland pasture) in their production process. This will alter demand for feedstocks leading to major changes in markets of agricultural commodities, animal feed items such as DDGS (a by-product corn ethanol) and oilseed meals (co-products of biodiesel), and livestock products. The impacts of producing cellulosic biofuels from dedicated energy crops go beyond agricultural sectors and affect many economic activities at local, regional, national, and global scales. This paper discusses these impacts and explains interactions among the first and second generations of biofuels and their joint implications for other economic activities and markets. Then it provides a preliminary analysis of the economic and land use changes induced by cellulosic feedstocks for biofuel production. It develops an economy-wide computational general equilibrium (CGE) model based on the modeling framework developed at the Center for Global Trade Analysis (GTAP) to assess the economic and land use consequences of producing biofuels from cellulosic materials including corn stover and a dedicated energy crop. In particular, it extends the model developed in Tyner et al. [4]. The paper extends this model and its database in several directions. The new model works based on the latest version of GTAP databases (version 7). Following Taheripour et al. [10] the first generation of biofuels are introduced into the database. Then new industries and commodities are introduced into the database to support production and consumption of an advanced cellulosic biofuel (named Bio-Gasoline). In particular, a new crop industry is introduced to produce a dedicated energy crop (miscanthus) and a new industry is defined to supply agricultural residues (corn stover). The production technologies and cost structures of new industries are taken from the literature. The land use and land cover component of the data base is also updated according to the work done by Avetisyan et al. [11]. To introduce cellulosic biofuels we assumed several regions including US, some EU members, Brazil, and China produce tiny volumes of cellulosic biofuels from miscanthus in the base year in order to be able to shock the model for larger volumes of production. Then the GTAP modeling framework is revised to handle production, consumption, and trade of new industries and commodities at a global scale. To accomplish this task all production, supply, and demand functions included in the model are revised and necessary changes are made in market clearing conditions as well. In addition, the land use module of the model is altered to handle competition for land (including marginal lands) among the new dedicated crop and traditional land use industries such as forestry, livestock, and crops. Econometric analyses on land cover changes are used to update the economic parameters of the land use module as well. Furthermore the model is augment with a procedure which links productivity of marginal lands with their rent. This component will play an essential role in assessing the economic impacts of advanced biofuels. The CGE model is used to assess the economic and land use impacts of alternative biofuel scenarios including in the US Renewable Fuel Standard Program (RFS2). The numerical results obtained from these simulations show that producing bio-gasoline from corn stover has no significant land use impacts and generates economic gains. On the other hand, the numerical results indicate that the economic land use impacts of producing bio-gasoline from miscanthus vary across alternative assumptions. For example, producing bio-gasoline from miscanthus increases global cropland areas by about 0.2 hectares per 1000 gallons of ethanol equivalent in the presence of yield improvement on cropland pasture. This experiment indicates that about 40% of this land requirement will occur in the US, and forest has a small share (about 4%) in this land conversion. This figure is significantly higher than the additional land requirement of corn ethanol (about 0.13hectares per 1000 gallon ethanol). The results obtained from this experiment shows that production and consumption of each gallon of Bio-Gasoline (converted to ethanol equivalent) produced from miscanthus generates 891 grams CO2 emissions. This figure is 7% percent less than the corresponding figure for corn ethanol. In this case the livestock industry will not suffer from bio-gasoline production. However, when farmers do not improve yield on cropland pasture more land with higher share from forest is needed. Finally, based on the numerical results the paper offers a set of policies to support production of the second generation of biofuels which reduce welfare costs of the RFS policies. References 1. Searchinger, T., et al., Use of U.S. croplands for biofuels increases greenhouse gases through emissions from land use change. Science, 2008. 319(5867): p. 1238-1240. 2. Taheripour, F., T. Hertel, and W.E. Tyner, Biofuels and Their By-Products: Global Economic and Environmental Implications. Biomass and Bioenergy, 2010. 34: p. 278-89. 3. Hertel, T., W. Tyner, and D. Birur, The Global Impacts of Multinational Biofuels Mandates. Energy Journal, 2010. 31(1): p. 75-100. 4. Tyner, W., et al., Land Use Changes and Consequent CO2 Emissions due to US Corn Ethanol Production: A Comprehensive Analysis, A Report to Argonne National Laboratory. 2010, Department of Agricultural Economics, Purdue University. 5. Gurgel, A., J.M. Reilly, and S. Paltsev, Potential Land Use Implications of a Global Biofuels Industry. Journal of Agricultural and Food Industrial Organization, 2007. 5: p. Article 9. 6. Environmental Protection Agency, Renewable Fuel Standard Program (RFS2) Regulatory Impact Analysis. 2010: Washington, D.C. 7. Tyner, W.E., F. Taheripour, and Y. Han., Preliminary Analysis of Land Use Impacts of Cellulosic Biofuels, Argonne National Laboratory and the California Energy Commission, Editor. 2009. 8. Campbell, J.E., et al., The Global Potential of Bioenergy on Abandoned Agricultural Lands. Environmental Science and Technology, 2008. 42(15): p. 5791-5794. 9. Cai, X., X. Zhand, and D. Wang, Land Availability for Biofuel Production. Environmental Science and Technology, 2011. 45(1): p. 334-39. 10. Taheripour, F., et al., Introducing Liquid Biofuels into the GTAP Database, in GTAP Research Memorandum No 11, GTAP, Editor. 2007, Purdue University: West Lafayette, IN. 11. Avetisyan, M., U. Baldos, and T. Hertel, Development of the GTAP Version 7 land Use Data Base, in GTAP Research Memorandum No. 19. 2010, Purdue University: West Lafayette. |
| Keywords: | biofuels, cellullosic feedstocks, land use change, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103559&r=env |
| By: | Kim, C.S.; Lewandrowski, Jan; Sands, Ronald D.; Johansson, Robert |
| Abstract: | In this paper we examine the issue of permanence in the context of sequestering carbon through afforestation. We develop a dynamic nested optimal control model of carbon sequestration associated with the decision to afforest a tract of land given there are uncertainties associated with fire and insect/disease hazards. Conceptually, these potential hazards are similar in that their occurrence at any time t is uncertain and landowners can take specific actions â although generally different actions - in any time period t to reduce the probability of sustaining losses related to them. The hazards differ, however, in that fire represents a large loss in carbon at a moment in time, while insect/disease infestations are more likely to be reflected in a period of significant slowing of the rate of carbon accumulation than was anticipated followed by a sustained period of slowly decreasing carbon losses. The nature of these losses will influence the design of incentives under GHG mitigation frameworks that require carbon losses to be replaced as well as the strategies farmers adopt to deal with the uncertainties associated with these events occurring. |
| Keywords: | carbon sequestration, uncertainty, optimal control, hazard function, forestry, permanence, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103565&r=env |
| By: | Nalley, Lanier; Popp, Michael; Niederman, Zara; Thompson, Jada |
| Keywords: | Life Cycle Analysis, Greenhouse Gas, sweet corn, biotech, Environmental Economics and Policy, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2011–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103680&r=env |
| By: | Liu, Zhuo; Messer, Kent D.; Korch, Mary A.; Bounds, Thomas |
| Abstract: | This study presents a thorough discussion of the efficiency and effectiveness improvement from optimization models (Binary Linear Programming and Goal Programming), as applied to the Department of Defenseâs Readiness and Environmental Protection Initiative. The OM models can yield 21% and 19.1% higher benefit scores respectively, spending $13,013,473 and $31,463,473 less total acquisition costs. To achieve the same level of conservation benefits for the current rank based approach, the REPI would spend additional $20.1 million and approximate 50% of the budget. A counterpart of OM- the cost-effective analysis is observed to be inefficient when the problem becomes complex. In a real world of political environment of the conservation programs, we suggest a hybrid method of current rank based approach and the OM as well as the GP to address incompatible goals of interests groups. |
| Keywords: | Environmental Economics and Policy, C6, Q24, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103997&r=env |
| By: | Gian Italo Bischi (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo"); Davide Radi (Department of Mathematics, Statistics, Computing and Applications "Lorenzo Mascheroni", Università di Bergamo) |
| Abstract: | This work moves from a recent paper by Antoci, Dei and Galeotti [1] where a dynamic model is proposed to describe an innovative method to improve environmental quality based on the exchange of financial activities, promoted by a Public Administration, between firms and tourists in a given region. We extend their analysis in two directions: we first perform a global analysis of the basins of attraction to check the stability extents of the coexisting stable attractors of the model, and we show that some undesirable and sub-optimal stable equilibria always exist, whose basins may be quite intermingled with those of the optimal equilibrium; then we introduce a structural change of the model by assuming that the Public Administration, besides its action as an intermediary between visitors and polluting firms, also performs a direct action for the pollution control. We show how the cost of this direct action of the Public Administration can be balanced by proper taxes and we prove that undesired equilibria can be ruled out by a suitable balance of financial instruments and direct actions of Public Administration for environmental remediation. |
| Keywords: | Environmental economics, evolutionary dynamics, replicator equations, multistability, basins of attraction. |
| JEL: | D6 H41 N4 Q2 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:11_05&r=env |
| By: | Attavanich, Witsanu; McCarl, Bruce A. |
| Abstract: | Many studies have done econometric estimates of how climate alters crop yields and or land rents in an effort to gain information on potential effects of climate change. However, an important related factor, the atmospheric carbon dioxide (CO2) concentration, and in fact a driver of climate change is ignored. This means the prior econometric estimates are biased as they infer what will happen under climate change from observations in the recent past, but without consideration of CO2 effects. Furthermore although CO2 has been varying, it has proceeded at a very linear pace and cannot be disentangled from technological progress using historical crop yield data. This paper is designed to overcome this issue and estimate the consequences that CO2 has and will have in conjunction with climate change. The paper also partitions yield growth into temporal CO2 and climate change affected components and begins to address an issue of how climate change and its drivers will affect rates of technological progress. Moreover, we also factor in a number of conditions regarding to extreme events. This allows us 1) to estimate the consequences of such factors on yields; 2) to project given forecasts of climate change induced shifts in those factors what the implications are for yield distributions; and 3) carry this into welfare and technological change analyses. First, we use a stochastic production function approach of the type suggested by Just and Pope (1978, 1979) estimated with a three-step feasible generalized least squares approach to estimate the effect of climate change and CO2 fertilization on crop yields. The observational data of crop yields and planted acreage are collected from the USDA-National Agricultural Statistics Service. State-level climate data used in this study are obtained from the National Oceanic and Atmospheric Administration. The free-air CO2 enrichment (FACE) experimental data are obtained from the USDA Agricultural Research Service and SOYFACE, University of Illinois. Next, to investigate the implication of future climate change on crop yield and its variability, we employ our estimated coefficients together with future climate change projected by standard GCMs used in the IPCC (2007) with the IPCC SRES scenario A1B. Finally, to explore the market outcomes and welfare implications of economic units given climate-induced shifts in yields across US regions, we plug in our projected percentage changes of mean crop yields into the agricultural sector model (ASM), a price endogenous, spatial equilibrium mathematical programming of the agricultural sector in the US. Our initial results find that yields of C-3 crops, soybeans, cotton, and wheat, positively respond to the elevated CO2, while yields of C-4 crops, corn and sorghum do not. However, we find that C-4 crops indirectly benefit from elevated CO2 in times and places of drought stress. We find the effect of crop technological progress to mean yields is non-linear with inverted-U shape in all crops, except cotton. Our study also reveals that ignoring the atmospheric CO2 in econometric model of crop yield studies is likely to overestimate the pure effect of climate change on crop yields as CO2 enhances those yields. For climate change impact, the average climate conditions and their variability appear to contribute in a statistically significant way to both average crop yields and their variability. Moreover, generally we find that the effect of CO2 fertilization generally outweighs the effect of climate change on mean crop yields in many regions. In terms of market outcomes and welfare distribution, we find the yield growth under the combined climate change and CO2 effect tends to decrease price in 2050. Planted acreage of all crops in North Plains, except wheat winter, is projected to increase, while it tends to decrease in South Plains, Lake States, Delta States, Southeast, and Mountains for almost all crops. Overall consumersâ surplus is projected to increase, while producersâ surplus is heterogeneously affected across US regions, but in total decreases by about $ 4.72 billion. Overall the total US welfare is increased about $ 2.27 billion compared to the base scenario. There are several clear implications of above findings. For example, 1) returns to agricultural research should be reevaluated in the light of climate change influences as for example aggressive CO2 mitigation will decrease returns; 2) models using econometric methods to predict future crop yields should be aware that ignoring CO2 fertilization may overestimate the real effect of climate change on crop yields; and 3) welfare losses for producers under climate change are likely with consumers gaining. |
| Keywords: | Carbon Dioxide Fertilization, Crop Yield, Yield Variability, Climate Change, Crop Production Technology, Welfare Distribution, Market Outcomes, Stochastic Production Function, the Agricultural Sector Model, Feasible Generalized Least Squares, Crop Production/Industries, Land Economics/Use, Production Economics, Research and Development/Tech Change/Emerging Technologies, C61, C13, Q16, Q54, D69, D24, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103324&r=env |
| By: | Cui, Jingbo; Ji, Yongjie |
| Abstract: | We employ a two-sector heterogeneous firms model in the presence of endogenous innovation and environmental constraints. We perform simple numerical simulations concerning the implication of a stringent environmental policy and trade cost differences between dirty and clean inputs. Our objective is to highlight the effects of these policy proposals on the process innovation, trade pattern, and productivity dynamics. |
| Keywords: | Cap and Trade, Heterogeneous Firms, Process Innovation, Trade Pattern, Environmental Economics and Policy, International Relations/Trade, Research and Development/Tech Change/Emerging Technologies, F18, Q55, Q56, C63, |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103478&r=env |
| By: | Hennessy, David A.; Miao, Ruiqing; Feng, Hongli |
| Abstract: | The U.S. Federal Government implements environmental, biofuels and crop insurance programs that influence land use. They are not well-integrated in that cost savings from crop insurance subsidies are not acknowledged when screening land for retirement or when calculating the cost of land retirement programs. We identify and evaluate an optimal benefit index for enrollment in a land retirement program that includes a sub-index to rank land according to insurance subsidy savings. All else equal, land ranked higher in the Lorenz stochastic order should be retired first. Empirical analysis based on field level data will be provided. |
| Keywords: | Agro-environmental policy, Budget, Conservation reserve program, Crop failure, Environmental benefit index, Lorenz order, Land Economics/Use, Risk and Uncertainty, Q18, Q28, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:104002&r=env |
| By: | Egbendewe-Mondzozo, Aklesso; Swinton, Swinton M.; Izaurralde, R. Cesar; Manowitz, David H.; Zhang, Xuesong |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, Production Economics, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103435&r=env |
| By: | Cleary, Rebecca; Grainger, Corbett; Zipp, Katherine |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103465&r=env |
| By: | Davis, Clay D.; Gotham, Douglas J.; Preckel, Paul V. |
| Keywords: | Wind Energy, System Costs, Alternative Energy, Electricity Generation, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q4, Q42, Q54, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103770&r=env |
| By: | Pham, Matthew |
| Abstract: | Poster prepared for presentation at the Agricultural & Applied Economics Associationâs 2011 AAEA & NAREA Joint Annual Meeting, Pittsburgh, Pennsylvania, July 24-26, 2011 |
| Keywords: | Willingness-to-pay, Perennial Grass, Contingent Valuation, Economic Feasibility, Credit Stacking, Minnesota, Row Crops, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2011–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103604&r=env |
| By: | Ma, Shan; Lupi, Frank; Swinton, Scott M.; Chen, Huilan |
| Abstract: | The public demand for ecosystem services measured by willingness to pay (WTP) in contingent valuation studies provides important information for designing Payment-for-Ecosystem-Service (PES) programs. However, the hypothetical markets for contingent valuation and respondentsâ unfamiliarity with certain ecosystem services may increase their preference uncertainty, which may increase variance and even cause bias in WTP estimates. Taking advantage of a unique stated preference data set that includes a follow-up question rating the respondentâs certainty level, this study evaluates alternative methods of modeling certainty-adjusted WTP for cleaner lakes and abated global warming. Results suggest that the incorporation of self-reported uncertainty into binary choice models significantly reduces the median WTP and appears to improve our understanding of the demand for ecosystem services. |
| Keywords: | Contingent valuation, Willingness to Pay, Preference Uncertainty, Numerical certainty scale, Ecosystem services, Environmental Economics and Policy, Research Methods/ Statistical Methods, Risk and Uncertainty, Q51, Q57, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103734&r=env |
| By: | L. Lambertini; A. Tampieri |
| Abstract: | We extend the analysis carried out by Valletti (2000) by considering an environmental externality in a vertically differentiated duopoly where firms compete à la Cournot with fixed costs of quality improvement. We show that, if the weight of the external effect is high enough, the resulting minimum quality standard is indeed binding. |
| JEL: | L13 L51 Q50 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp749&r=env |
| By: | Lin, C.-Y. Cynthia; Zhang, Wei; Umanskaya, Victoria I. |
| Abstract: | In a typical driving restriction, vehicle use is restricted based on the vehicleâs license plate; one cannot drive vehicles with certain license plate numbers on certain days. Driving restrictions have been used as a method to reduce urban air pollution or traffic congestion because they are easy and inexpensive to implement. We investigate whether driving restrictions introduced in São Paulo, Bogotá, Beijing and Tianjin have improved air quality. Across different versions of the driving restrictions there is no evidence that the overall air quality at different places has been improved. However, several important results show up in this extensive analysis. Temporal shifting of driving is likely to appear when the restrictions are only effective during certain hours of weekdays. Driving restrictions could potentially reduce the extreme concentrations of air pollutants. Driving restrictions can only be expected to alleviate air pollution when implemented with an extended schedule or in an extended region. The effects of the driving restrictions are primarily on the concentrations of CO and PM10. |
| Keywords: | driving restriction, air quality, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103381&r=env |
| By: | Cho, Seong-Hoon; Roberts, Roland K.; Kim, SeungGyu |
| Abstract: | The following hypothesis was tested: Willingness to bear a negative water impairment externality differs between those who do and those who do not receive economic benefit from the impairment source, e.g., a paper mill. The hypothesis was tested using a hedonic analysis of ambient water quality in two discrete housing markets in the Pigeon River Watershed, which have been polluted by the operation of a paper mill. The results suggest that North Carolina residents of the subwatersheds with impaired river, who experience economic benefits from the paper mill in addition to harmful effects, do perceive the pollution as a negative externality, whereas they may have a willingness to bear a similar type of negative externality associated with impaired streams. In contrast, the effects of both degraded river and streams on property values is perceived as a negative externality by residents in the Tennessee side, who experience only harmful effects from the pollution. North Carolina residents may hold greater willingness to bear the harmful effects of pollution as a given condition in their decision-making process because they receive economic benefits from the paper mill, while this internalization of the negative externality is weaker for residents in the Tennessee side. |
| Keywords: | negative Externalities, water quality, spatial hedonic model, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103762&r=env |
| By: | Chadourne, Matthew H.; Cho, Seong-Hoon; Roberts, Roland K. |
| Abstract: | Many communities in the United States face the decision about whether to protect or restore forests on environmentally sensitive sites. The objective of this research is to identify priority areas for forest landscape restoration in Knox County, Tennessee. A cost-benefit analysis is conducted to determine individualsâ willingness to accept reforestation as a substitute for other potential land uses, given the explicit costs and benefits of reforestation. A sequence of hedonic models is used to estimate differences in values attached to housing prices of multiple potential sites for restoration projects values. This approach allows the establishment of an overall price-distance relationship between the amenity values attributable to both deforested and forested areas and their proximities to housing locations within the county. Based on the overall price-distance relationship, the sum of the differences between amenity values of deforested and forested areas is estimated, as reflected in housing prices across different proximities to potential restoration sites. The results of this study show that there are potentially great gains to the community through reforestation projects but those benefits can vary greatly depending on the acreages of potential target sites, the number of houses in the surrounding area, and the proximity of houses surrounding the site. |
| Keywords: | Amenity Valuation of Forest Land, Cost-Benefit Analysis, Hedonic Price Model, Reforestation Decision., Community/Rural/Urban Development, Environmental Economics and Policy, Land Economics/Use, Public Economics, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103846&r=env |
| By: | Van Winkle, Andrea; Hadrich, Joleen |
| Abstract: | Best Management Practices (BMPâs) relating to surface water pollution abatement for North Dakota beef cow operations are of particular importance due to the production practices used. Probit models were used to estimate the likelihood of ND beef cow producers adopting specific production practices to ensure environmental compliance. Number of beef cows on operation, education, awareness of cost share programs, contact with extension service, ownership structure, debt level, record keeping method, and pasture season usage were found to be significant in the likelihood of adopting a BMP. |
| Keywords: | Beef Cow, Adoption of BMPs, Agribusiness, Farm Management, Livestock Production/Industries, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103873&r=env |
| By: | Howard, Peter H. |
| Abstract: | Scientists predict that global warming will cause suitable habitat ranges to shift for many plant species, including blue oak in California. If proximity to particular land cover types significantly affects human welfare, any such shifts will affect household welfare, resulting in an indirect cost that is currently unaccounted for in the climate change literature. Using a hedonic pricing model, the marginal values of blue oaks and the land cover types most likely to replace them are estimated at multiple spatial scales using single family residences sold in Kern County from 1997 to 2003. In addition to the common identification problems of specification error and omitted variable bias, the variables measuring the degree of proximity of a property to land cover types are endogenous. To identify the marginal values of land cover types at multiple spatial scales using two-stage least squares, instrumental variables are developed using soil data. The results show that the value of blue oaks and other land cover types capitalize at different spatial scales, and these values differ at these various scales. The overall welfare effect of a marginal loss of blue oaks depends on the spatial distribution of the surrounding population, its spatial relationship with respect to blue oaks, and the type of vegetation that replaces blue oaks. With respect to the goal of maximizing social welfare, these results suggest that blue oaks should be preserved from agricultural and urban development in some, but not all, situations. |
| Keywords: | Hedonic, Multi-scale capitalization, Housing demand, Species distribution model, Climate change, Displacement of native species, Vegetation movement, Geographic Information System (GIS), Amenity value, Land use, Consumer/Household Economics, Demand and Price Analysis, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2011–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103640&r=env |
| By: | Sproul, Thomas; Zilberman, David |
| Abstract: | Major externality cases are random accidents which are not adequately addressed by the deterministic environmental policy literature -Ââ that of Pigouvian taxes, abatement subsidies and cap-Ââand-Ââtrade. We consider a risk-Ââneutral industry where firms control the probability and Severity of accidents by preventive and responsive choices, but asymmetric information means Government only observes outcomes. We show that even without intervention, some care will be taken, however -Ââ we identify three policies that lead to the optimal solution: strict liability, a Stochastic subsidy, and a mandatory mutual insurance scheme. The subsidy policy may be very costly to taxpayers, especially when prevention affects the probability of accident occurrence, and strict liability may be excessively draconian; polluters are also victims and liabilities must exist regardless of adherence to professional standards of care. Thus, we propose a revenue-Ââneutral liability-Ââpooling scheme which plays a similar role to tradable pollution permits in the deterministic case. |
| Keywords: | Agricultural and Food Policy, Risk and Uncertainty, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103927&r=env |
| By: | Chalak, Morteza; Pannell, David; Polyakov, Maksym |
| Abstract: | Invasive species are significant threats to biodiversity, natural ecosystems and agriculture leading to large worldwide economic and environmental damage. Spread and control of invasive species are stochastic processes with important spatial dimensions. Most economic studies of invasive species control ignore spatial and stochastic aspects. This paper covers this gap in the previous studies by analysing a spatially explicit dynamic process of controlling invasive species in a stochastic setting. We show how stochasticity, spatial location of infestation and control can influence the spread, control efficiency and optimal control strategies. The main aim of this paper is to analyse the relationship between economic parameters and stochastic spatial characteristics of infestation and control. In the model used, there are two ways to control infestation: border control, under which the spread of invasive species from any of its infested neighbouring cell is prevented, and cell control, which removes the infestation from the existing cell. An integer optimisation model is applied to find the optimal strategies to deal with invasive species. Results show that it is optimal to eradicate or contain for a larger range of border control and cell control costs when the invasion is in the corner or on the edge as compared to the case where the initial infestation is in the middle of the landscape. Decrease in the probability of successful border control makes containment an unfavourable control option even for low border control costs. We show that decrease in the rate of spread can result in switching optimal strategies from containment to abandonment of control, or from eradication to containment. We also showed when the probability of successful cell control decreases, a lower eradication cost is required for eradication to remain the optimal strategy. In summary, this paper shows that in order to avoid providing misleading recommendations to environmental managers, it is important to include uncertainty in the spatial dynamic analysis of invasive species control. |
| Keywords: | Spatial, Dynamics, Invasive, Economics, Stochastic, Optimisation, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103325&r=env |
| By: | Lim, Youngah; Gopinath, Munisamy; Chan, Samuel; Harte, Michael |
| Abstract: | Quantitative approach for invasive species risk assessment |
| Keywords: | Invasive speices, New Zealand mudsnail, Gravity model, Maxent model, Risk assessment, Environmental Economics and Policy, Risk and Uncertainty, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103646&r=env |
| By: | K.C., Arun; Collins, Alan R. |
| Abstract: | A surface water quality valuation index is developed and used to compare counties across the Appalachian Region. This index was based on a meta-analysis of non-market water quality valuation studies along with an application of benefit transfer. The results reveal that Pennsylvania, Georgia, and New York had the highest percentages of counties with high index values within the Appalachian Region. As this research was part of an inter-disciplinary team assembled by the Appalachian Regional Commission, results of this index can be compared to other indices computed for water resources in the region. |
| Keywords: | Meta-analysis, benefit transfer, contingent valuation, willingness-to-pay, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103653&r=env |
| By: | Maguire, Karen |
| Abstract: | This paper focuses on the role of electricity markets and renewable energy regulation in wind development across the United States. My findings, using a random effects Tobit model with a 25-state sample, from 1994-2008, indicate that the implementation of state Renewables Portfolio Standards (RPS), Green Power Purchase programs (GPP), and the Federal Production Tax Credit (PTC) positively influenced a stateâs added wind capacity. The influence of GPP programs continued to increase in the years after implementation, while for RPS it diminished. Also, other programs such as State Loan and Grant programs directed at increasing renewable energy development have not had a significant impact on wind capacity. The role of market factors is less significant, although there is some evidence that increases in natural gas prices had a positive influence. |
| Keywords: | Wind Energy, Energy Policy, Renewable Energy Development, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103599&r=env |
| By: | Abbott, Joshua K.; Klaiber, H. Allen |
| Abstract: | Urban lakes located in arid environments require large quantities of water to maintain their water levels, with much of this water associated with high opportunity costs. Many of these lakes are manmade and provide various amenities to surrounding residents. In this paper we use matching techniques to recover the average capitalized value of lakes to surrounding communities and differentiate between community members and adjacent households to recover heterogeneous treatment effects. Importantly, we consider the role of both unobservable and observable features of matching to recover heterogeneous capitalization across lake communities. Our results suggest that the capitalized value of lakes to community residents is highly heterogeneous and ranges from an annual value of -$29 to +$20 per homeowner per acre foot of water. These results suggest that small changes in water pricing could remove the surplus benefits of lakes to community residents. |
| Keywords: | Matching, Treatment effects, Urban lakes, Capitalization, Environmental Economics and Policy, Political Economy, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103781&r=env |
| By: | Cai, Ruohong; Bergstrom, John C.; Mullen, Jeffrey D.; Wetzstein, Michael E.; Shurley, W. Don |
| Abstract: | The objective of this study is to compare the effects of climate change on crop yields across different regions. A Principal Component Regression (PCR) model is developed to estimate the historical relationships between weather and crop yields for corn, soybeans, cotton, and peanuts for several northern and southern U.S. states. Climate change projection data from three climate models are applied to the estimated PCR model to forecast crop yield response. Instead of directly using weather variables as predictor variables, the PCR model uses weather indices transformed from original weather variables by the Principal Component Analysis (PCA) approach. A climate change impact index (CCII) is developed to compare climate change effects across different regions. The key contribution of our study is in identifying a different climate change effects in crop yields in different U.S. states. Specifically, our results indicate that future warmer weather will have a negative impact for southern U.S. counties, while it has insignificant impact for northern U.S. counties in the next four decades. |
| Keywords: | Principal component regression, Crop yield response, Climate change., Crop Production/Industries, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ugeofs:103947&r=env |
| By: | Moeltner, Klaus; Kim, Man-Keun; Yang, Wei; Zhu, Erqian |
| Abstract: | Existing studies on the economic impact of wildfire smoke have focused either on single fire events or entire fire seasons without distinguishing between individual occurrences. Neither approach allows for an examination of the marginal effects of fire attributes, such as distance and fuel type, on health impacts and costs. Yet, improved knowledge of these marginal effects can provide important guidance for efficient wildfire management strategies. This study aims to bridge this gap using detailed information on 35 large-scale wildfires in the California and Nevada Sierras that have sent smoke plumes to the Reno / Sparks area of Northern Nevada over a three-year period. We relate the daily acreage burned by these fires to daily data on local hospital admissions for acute respiratory syndrome. Using information on treatment expenses, we compute the per-acre cost of wildfires of different attributes with respect to respiratory admissions. We find that while nearby fires are four-five times more damaging than remote fires, hospital admissions can be causally linked to fires as far as 200-250 miles form the impact area. Our results highlight the economic benefits of fire suppression, and the importance of inter-regional agency collaboration in the management of forest fires. |
| Keywords: | Wildfires, air quality, respiratory illness, distributed lag models, count data models, Environmental Economics and Policy, Health Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2011–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103433&r=env |
| By: | Lu, Liang; Elbakidze, Levan |
| Abstract: | In this paper, we examine conditional, forecast-based dynamic pest management in agricultural crop production given stochastic pest infestations and stochastic climate dynamics throughout the growing season. Using stochastic optimal control we show that correlation between forecast error for climate prediction and forecast error for pest outbreaks can be used to improve pesticide application efficiency. In the general setting, we apply modified Hamiltonian approach to discuss the steady state equilibrium. Given specific functional forms, a closed form solution can be found for the stochastic optimal control problem. Moreover, we find conditions for model parameters so that the optimal pesticide usage path will be monotonically increasing or decreasing in the correlation coefficient between climate forecast errors and pest growth disturbances. |
| Keywords: | Pest Management, Stochastic Optimal Control, Production Economics, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103655&r=env |
| By: | Yu, Chin-Hsien; Park, Seong C.; McCarl, Bruce A.; Amosson, Stephen H. |
| Keywords: | animal feeding operation, dust, odor, externality, social welfare, Agricultural and Food Policy, Environmental Economics and Policy, Livestock Production/Industries, Productivity Analysis, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103786&r=env |
| By: | Chen, Min; Lupi, Frank |
| Abstract: | Researchers have been using the latent class model (LCM) to value recreational activities for years. Then the reliability of this model becomes an issue. We conduct Monte Carlo simulations to test if the latent class model is able to recover the truth. The simulation results show that LCM does a better job on recovering population average values than recovering underlying population segments. |
| Keywords: | Monte Carlo Simulations, Latent Class Model, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103449&r=env |
| By: | Taheripour, Farzad; Hertel, Thomas W.; Liu, Jing |
| Abstract: | In recent years there has been a flurry of activity aimed at evaluating the land use consequences of biofuels programs and the associated carbon releases. In this paper we argue that these studies have tended to underestimate the ensuing land use change, because they have ignored the role of irrigation, and associated constraints on cropland expansion. In this paper, we develop a new general equilibrium model which distinguishes irrigated and rainfed cropping industries at a global scale. Using the new model we evaluate the implications of land use change due to US ethanol programs, in the context of short run constraints on the expansion of irrigated cropland. Since irrigated area tends to offer a higher yield than its rainfed counterpart, this provides an upper bound on the change in cropland following biofuel expansion. We find that the biofuel-induced expansion in global cropland cover is about 16 percent larger when the irrigation constraint is imposed. This translates into a 21 percent increase in land use emissions due to US ethanol production. This estimate represents an upper bound, since irrigated area can be expanded over the medium run in many places around the world. |
| Keywords: | Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103843&r=env |
| By: | Johnston, Robert J.; Ramachandran, Mahesh; Schultz, Eric T.; Segerson, Kathleen; Besedin, Elena Y. |
| Abstract: | Stated preference analyses commonly impose strong and unrealistic assumptions in response to spatial welfare heterogeneity. These include spatial homogeneity or continuous distance decay. Despite their ubiquity in the valuation literature, global assumptions such as these have been increasingly abandoned by non-economics disciplines in favor of approaches that allow for spatial patchiness. This paper develops parallel methods to evaluate local patchiness and hot spots in stated preference welfare estimates, characterizing relevant patterns overlooked by traditional approaches. The analysis draws from a choice experiment addressing river restoration. Results demonstrate shortcomings in standard treatments of spatial heterogeneity and insights available through alternative methods. |
| Keywords: | Willingness to Pay, Hot Spot, Stated Preference, Ecosystem Service, Valuation, Environmental Economics and Policy, Research Methods/ Statistical Methods, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103374&r=env |
| By: | Ma, Shan; Swinton, Scott M.; Lupi, Frank |
| Abstract: | Payment-for-Ecosystem-Services (PES) programs are gaining appeal as flexible approaches to inducing the voluntary provision of ecosystem services (ES). Farmers, who manage agricultural ecosystems, provide important nonmarket ecosystem services to the public by their choice of production inputs and management practices. Although there exist various PES programs in the United States and Europe, we are aware of none that was designed based on a comprehensive understanding of the underlying supply and demand of ecosystem services. Taking advantage of unique, coupled datasets of stated preferences, this paper combines a supply-side cost function of farmersâ willingness to adopt practices that provide increased ES with a demand-side social benefit function of residentsâ willingness to pay (WTP) for these ES. The result is an empirically based, welfare-maximizing price and quantity of ES that can inform the design of future PES programs. |
| Keywords: | Payment-for-Ecosystem-Services (PES), Contingent valuation, Aggregate supply and demand, Cropland, Eutrophication, Greenhouse gas, Agricultural and Food Policy, Environmental Economics and Policy, Q11, Q51, Q57, Q58, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103501&r=env |
| By: | Murray, Anthony G.; Mills, Bradford F. |
| Abstract: | The Energy Star label program to promote the diffusion of energy efficient home appliances is arguably the most significant government effort to reduce U.S. residential energy consumption. Program effectiveness requires that consumers are aware of the labeling scheme and also change their purchase decisions based on label information. This paper examines the factors associated with consumer awareness of the Energy Star label of recently purchased âwhiteâ major appliances and the factors associated with the choice of Energy Star labeled appliances. The paper finds that household characteristics have a much stronger association with consumers awareness of labels than with the choice of Energy Star appliances. Renting the home, Hispanic ethnicity, being poor or near poor, and living in regions with lower ACEEE scores do, however,decrease the propensity for households to purchase Energy Star appliances. Eliminating these gaps in Energy Star appliance adoption would result in house electricity cost savings of $164 million per year and associated carbon emission reductions of about 1.1 million metric tons per year. |
| Keywords: | Energy Star, Household Energy Efficiency, Technology Adoption, Consumer/Household Economics, Resource /Energy Economics and Policy, O33, Q40, Q48, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103328&r=env |
| By: | Dun, Zhe; Mithcell, Paul |
| Abstract: | Transgenic plants producing insecticidal protein derived from Bacillus thuringiensis (Bt) have been widely adopted since their commercial introduction in 1996. The widespread adoption of such plants has reduced use of conventional insecticides while attaining yield gains, thus providing economic, environmental and human health benefits. However, the benefits from Bt crops will be reduced or even eliminated if pests develop resistance to these toxins so that Bt crops are less or no longer effective. Although field resistance to Bt crops has not yet been found in the continental U.S., resistance to Bt sprays has been found in diamondback moth and greenhouse populations of cabbage looper. Hence, considerable attention has been devoted to developing management programs to prevent, delay or even reverse the spread of resistance. The existing literature on the economic management of pest resistance has generally assumed that pest susceptibility (the converse of pest resistance) is nonrenewable, which means resistance can only increase once it has happened. With the assumption of irreversible resistance, the optimal policy is not to exhaust susceptibility before the new technology, if any, becomes available. Following this logic, the U.S. Environmental Protection Agency (EPA) currently requires Bt crop growers to also plant non-Bt (conventional) crops on a minimum percentage of their total Bt crop acreage as a refuge for susceptible (Bt toxin sensitive) pests. Refuge allows susceptible pests to survive and mate with resistant adults surviving on Bt crops and so delays the development of resistance in the pest population. The cost of this resistance control method includes yield loss of conventional crops relative to Bt crops and sometimes conventional pesticide use. Instead of assuming susceptibility is nonrenewable, some have proposed an alternative source of susceptibility â mass-rearing and releasing harmless susceptible (toxin-sensitive) pests into the environment (Alphey et al. 2007). With this resistance control method in hand, pest susceptibility is now renewable and resistance could be reversed. Based on this method, it is plausible to predict that the optimal resistance management policy should take a cycling pattern, i.e., not planting refuge and allowing resistance to increase until a critical threshold is reached. Once resistance exceeds this threshold, it becomes economical to release susceptible pests to reverse the development of resistance. After resistance is reduced to a desired level, again no refuge needs to be planted and no alternative resistance management actions need to be used until the resistance reaches the threshold again. The cycling feature of the optimal path is due to the reversibility of resistance under this scenario. Also, there is no need to continuously use a resistance control method (as in the case of current refuge policy), since the desired level of resistance can be achieved, at a cost, when needed. However, the crucial consideration is that it is less costly to manage resistance when it is low rather than high. The task of dynamic programming is to find the optimal path where the marginal benefit of resistance control can just cover the marginal cost of resistance. We notice the cycling pattern of this resistance management model and introduce a real options approach originally used in financial analysis. We propose to view pest susceptibility as an investment and the possibility to release susceptible pests as a real option, which can be exercised to improve the expected value of this investment. We formulate the social plannerâs decision of releasing susceptible pests as an optimal sequential stopping problem and solve it using stochastic dynamic programming. We first consider releasing pests with a constant ratio for released to natural pests, but then extend the model to allow for selection of a time-varying ratio. The cost of this resistance control technology includes only the cost of monitoring resistance and rearing and releasing susceptible pests. The cycling pattern of this resistance management method is attractive since cost tends to be lower than continuous refuge-based resistance management, as costs are targeted to areas and times when it is needed, rather than being annually implemented across all acres planted to Bt crops. We compare three resistance management programs: refuge only, releasing susceptible pests only, and using both refuge and released pests. The dynamic optimizations are solved numerically using parameters for Bt corn and western corn rootworm. Consistent with previous economic analyses, our dynamic refuge study finds that more refuge should be planted early in commercialization to prevent the rapid development of resistance and that refuge should be planted continuously so that the evolution of resistance is always under control. Once refuge is no longer planted, resistance develops rapidly. For the dynamic releasing of susceptible pests, there is a steady state (economic threshold) of the level of resistance. Whenever the threshold is crossed, resistance control is triggered. The optimal path of the pest population peaks whenever the resistance control (releasing susceptible pests) is exercised. Intuition might consider the pest population peaks as a failure of optimization, however, taking into account that those pests are harmless as long as Bt toxins stay effective, these âbumpsâ in pest population are fairly acceptable. Our analysis compare these three resistance management programs and find that the optimal resistance control strategy depends on many factors such as yield loss on refuge, the cost of monitoring resistance and rearing and releasing pests, as well as the natural growth rate of pests and the discount rate. We see high potential for generating discussion as the EPA and researchers have been examining changes in refuge requirements for Bt corn, including the recent approval use of mixed seed; however, mitigation once resistance has developed has received little attention. Although we discuss resistance control mostly in the scenario of agricultural pests, the same or similar methodology can also be used in a much broader context in public heath economics such as antibiotic resistance or using genetically engineered mosquitoes to fight malaria. |
| Keywords: | resistance, bio-tech, sustainable, Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103581&r=env |
| By: | Kaczan, David |
| Abstract: | Payment for ecosystem services schemes can take a variety of approaches. They may provide payment for avoided actions which would otherwise be environmentally detrimental (known as âcompensation for opportunities skippedâ) or provide co-investment in activities that have environmental benefits (known as âco-investment in ecosystem servicesâ). We use a choice experiment survey to test farmersâ preferences for these different approaches in the East Usambara Mountains, Tanzania. We show that the form of payment (individual, collective or individual co-investment) has a large influence on likely participation in PES schemes. We also show that surprisingly, minimal conditionality is not necessarily preferred. |
| Keywords: | choice experiments, payment for ecosystem services, conditionality, willingness to accept, Tanzania, biodiversity, Agricultural and Food Policy, Community/Rural/Urban Development, Environmental Economics and Policy, International Development, Land Economics/Use, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103673&r=env |
| By: | Serrao, Amilcar |
| Abstract: | The studies of performance and production efficiency have ignored additional products of most transformation processes classified as undesirable outputs. Without the inclusion of the undesirable outputs, the efficiency measurement is a purely technical measure, and it does not account for the interaction of the system with the environment and the impact of policy decisions on the system. Moreover, there are technological dependencies between the desirable and the undesirable outputs which have to be included in the analytical tools used to measure efficiency. The relationships between the desirable and the undesirable outputs motivate the exploration of new areas of the measurement of efficiency to incorporate policy decisions and address new issues. This research develops a formulation that uses goal programming in conjunction with Data Envelopment analysis â known as GoDEA approach â to deal with the conflict between the desirable and the undesirable outputs. This approach is used to assess the environment impact of the Agenda 2000 and the 2003 Common Agricultural Policy reform on agricultural production in fifteen European countries. Model results show that the 2003 CAP reform strengthens environmental policies and has a better performance than the Agenda 2000 for some European countries. The North and Central European countries have been dealing better with environmental issues than the Mediterranean countries. |
| Keywords: | Data Envelopment Analysis, Performance Measurement, Undesirable Outputs, Technological Dependence, Goal Programming, Common Agricultural Policy, Environmental Economics and Policy, CO2, DO1, Q15, Q58, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103409&r=env |
| By: | Chadourne, Matthew H.; Cho, Seong-Hoon; Roberts, Roland K. |
| Keywords: | Community/Rural/Urban Development, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103842&r=env |
| By: | Wang, Chenguang |
| Abstract: | Policies such as Biomass Crop Assistance Program (BCAP) which aim to assist farmers with biomass production may act as a double-edged sword. On one hand, they lure farmers to adopt biomass production in the short term. On the other hand, they canât be irresponsible for farmersâ abandonment of biomass production in the long run. The paper sharpens this idea in a principal-agent setting and argues that by offering a timely loyalty premium the agentsâ take-and-run behavior can be mitigated. Moreover, the model shows that effort and investment in human capital are increasing in loyalty premium when agents decide to continue providing biomass after testing-water contract expires. |
| Keywords: | BCAP, incentive, contract duration, Take-and-Run, Environmental Economics and Policy, Industrial Organization, Production Economics, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103335&r=env |
| By: | Crago, Christine Lasco; Khanna, Madhu |
| Abstract: | The ethanol tariff is one of the instruments used by the government to encourage domestic ethanol production. Existing literature analyzing the market and welfare effects of the US ethanol tariff has concluded that removing the tariff would increase social surplus and reduce greenhouse gas (GHG) emissions, due to the replacement of corn ethanol with lower cost and lower GHG intensive sugarcane ethanol. This paper re-examines these findings in the presence of a domestic cellulosic ethanol industry. The current RFS mandate requires 21 billion gallons of advanced biofuel, a portion of which could be met by any non-starch based biofuel that reduces emissions by at least 50% compared to an energy equivalent amount of gasoline. Sugarcane ethanol has been classified as an advanced biofuel, and competes for market share with domestic advanced biofuels such as cellulosic ethanol. In addition, it also competes with corn ethanol for market share in the non-advanced biofuel market. The dual market for sugarcane ethanol raises the question of which domestic biofuel market the tariff protects. Our results show that the effect of removing the tariff on social welfare and GHG emissions is ambiguous and depends on which biofuel market the tariff is protecting. If the tariff protects the corn ethanol market, its removal increases welfare and GHG emissions. However, if the tariff protects the cellulosic ethanol market, removing the tariff could increase emissions. Whether the tariff protects either the corn ethanol or cellulosic ethanol market, or both depends on the relative costs and supply elasticities of the three types of biofuel. In general, the removal of the tariff leads to an increase in social surplus, although in some cases, such as when the excess supply elasticity of sugarcane ethanol is not very elastic, net welfare could decrease when the tariff is removed. Removal of the tariff also reduces the share of domestically produced fuel, and this effect is greater when the tariff is protecting both the cellulosic and corn ethanol markets, i.e. the removal of the tariff causes a reduction in the production of both biofuels. |
| Keywords: | biofuel, ethanol tariff, fuel externalities, Agricultural and Food Policy, Resource /Energy Economics and Policy, Q17, Q18, Q42, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103784&r=env |
| By: | Parkins, John R.; Haluza-DeLay, Randolph |
| Abstract: | A new urgency is emerging around nuclear power development and this urgency is accentuated by the post-tsunami events at the Fukushima Daiichi nuclear power plant in Japan. This urgency extends beyond these dramatic events in Japan, however, to many other regions of the world and situations where nuclear power development is receiving renewed attention as an alternative to carbon-based energy sources. As a contribution to the growing public debate about nuclear power development, this paper offers a set of insights into the social and ethicalaspects of nuclear power development by drawing from published literature in the humanities and social sciences. We offer insights into public risk perception of nuclear power at individual and national levels, the siting of nuclear waste repositories, the changing policy context for nuclear power development, social movements, and the challenges of risk management at the institutional level. We also pay special attention to the ethical aspects of nuclear power withattention to principles such as means and ends, use value and intrinsic value, private goods and public goods, harm, and equity considerations. Finally, we provide recommendations for institutional design and performance in nuclear power design and management. |
| Keywords: | nuclear power, risk perception, social context, megaprojects, energy production, applied ethics, social values, social movements, complexity, hazards, disaster response, Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty, Q40, Z00, |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ualbsp:103237&r=env |
| By: | Bi, Xiang; Deltas, George; Khanna, Madhu |
| Abstract: | Interest in promoting Pollution Prevention (P2) has been increasing since 1991, following the passage of the Pollution Prevention Act (PPA) of 1990. As part of the PPA, facilities that are subject to the Toxics Releases Inventory (TRI) are required to disclose the number of incremental P2 activities for each listed chemicals from 1991 onward. Though the disclosure is required by the PPA, the adoption of P2 remains a voluntary initiative by firms. To promote P2 ethic among firms, the U.S.EPA has established several voluntary programs and P2 information clearinghouse. P2 technologies were more likely to be facility- and operation- specific and involved considerable information costs and uncertainty. Firms might learn about P2 technologies from their peers through information spillovers. Furthermore, the adoption of P2 technologies might have been motivated in part by regulatory pressures and in part by voluntary commitments. To investigate the role of information spillover, regulatory pressure and voluntary commitment in motivating the adoption of P2 technologies, we focus on the first voluntary program initiated by the U.S. EPA, the 33/50 program. The objective of the program was to reduce the releases of 17 chemicals by 33% by 1992 and by 50% by 1995. It also sought to promote P2 as the preferred method to achieve the reduction. We conduct the empirical analysis on 6974 facilities that were eligible for the 33/50 program from 1991 to 1995. We estimate the number of P2 technologies adopted for 33/50 chemicals and other TRI chemicals at the facility level with respect to program participation, compliance costs to regulations, prior P2 experience by the neighbors on the respective chemicals, and the program participation ratio in the neighborhood. We address the endogeneity of program participation with instrumental variables, and control for location and industry fixed effects. We find that facilities were more likely to learn about adoption of P2 technologies from their industry peers. The direct impact of program participation was only evident for 33/50 chemicals, and the presence of program participants did not significantly motivate P2 adoption in the neighborhood. |
| Keywords: | Pollution prevention, Toxics Release Inventory (TRI), Voluntary 33/50 program, Information spillover, Environmental Economics and Policy, Q55, C21, L51, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103741&r=env |
| By: | Pelton, Marie; Hu, Wuyang; Pagoulatos, Angelos |
| Abstract: | A conjoint analysis of equestrian trail characteristics (trail length, scenic views, open land, bathroom/shower facilities, restricted use, distance, and entrance fee) is conducted for the state of Kentucky. The conditional logit results show location is an important determiner of willingness to pay. In particular, scenic views and restricted use are highly valued (WTP above $20). However, increased distance from home to the trail results in a negative willingness to pay. |
| Keywords: | Equestrian trail characteristics, Conditional logit, Conjoint analysis, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103624&r=env |
| By: | Sardana, Kavita; Bergstrom, John C. |
| Abstract: | Using estimation of demand for the George Washington/Jefferson National Forest as a case study, it is shown that in a stratified/clustered on-site sample, latent heterogeneity needs to be accounted for twice: first to account for dispersion in the data caused by unobservability of the process that results in low and high frequency visitors in the population, and second to capture unobservable heterogeneity among individuals surveyed at different sites according to a stratified random sample (site specific effects). It is shown that both of the parameters capturing latent heterogeneity are statistically significant. It is therefore claimed in this paper, that the model accounting for site-specific effects is superior to the model without such effects. Goodness of fit statistics show that our empirical model is superior to models that do not account for latent heterogeneity for the second time. The price coefficient for the travel cost variable changes across model resulting in differences in consumer surplus measures. The expected mean also changes across different models. This information is of importance to the USDA Forest Service for the purpose of consumer surplus calculations and projections for budget allocation and resource utilization. |
| Keywords: | Recreational Demand models, Clustering, Subject-specific effects, Truncated Stratified Negative Binomial Model, Overdispersion., Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103868&r=env |
| By: | Kim, Man-Keun; Pang, Arwin |
| Keywords: | Cattle Export, Gravity Model, Greenhouse Gas Emission, Trade Competitiveness, International Relations/Trade, Livestock Production/Industries, F18, Q17, Q54, |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103705&r=env |
| By: | Trindade, Federico J. |
| Abstract: | I studied the impact that high temperatures have over the agricultural performance for countries in Nebraska. |
| Keywords: | Crop Production/Industries, Farm Management, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103416&r=env |
| By: | Lowdermilk, Jamey M.; Templeton, Scott R.; Privette, Charles V. III; Hayes, John C. |
| Abstract: | Soil erosion from construction sites can cause sedimentation of nearby water bodies. Mandatory sediment controls can reduce sedimentation. What determines the degree to which sediment controls meet regulatory standards for installation and maintenance? A conditional-multinomial logit model is estimated with data from 85 construction sites that were audited in 2001 or 2005 in Greenville County, SC to determine whether 147 sediment ponds or traps were installed correctly, properly maintained, or both. Sixty two percent of ponds and traps were installed incorrectly, maintained improperly, or both. Costs of clean out negatively affect the probability that a sediment pond or trap is properly maintained. Construction site distance from the countyâs regulatory office and sales of the plan designerâs firm positively affect the probability that a sediment control is installed incorrectly. Designer firms local to the construction site reduce the probability that sediment controls lack an emergency spillway when required. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103976&r=env |
| By: | Spinelli, Felix |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103841&r=env |
| By: | Gibson, Fiona L.; Burton, Michael P. |
| Abstract: | Observed and unobserved characteristics of an individual are often used by researchers to explain choices over the provision of environmental goods. One means for identifying what is typically an unobserved characteristic, such as an attitude, is through some data reduction technique, such as factor analysis. However, the resultant variable represents the true attitude with measurement error, and hence, when included into a non-linear choice model, introduces bias in the model. There are well established methods to overcome this issue, which are seldom implemented. In an application to preferences over two water source alternatives for Perth in Western Australia, we use structural equation modeling within a discrete choice model to determine whether welfare measures are significantly impacted by ignoring measurement error in latent attitudes, and the advantage to policy makers from understanding what drives certain attitudes. |
| Keywords: | contingent valuation, attitudes, structural equation modeling, recycled water, Environmental Economics and Policy, Research Methods/ Statistical Methods, Q51, Q53, C13, |
| Date: | 2011–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uwauwp:103428&r=env |
| By: | Wright, Christopher; Halstead, John M. |
| Abstract: | The delivery of municipal services for the collection, transfer, and disposal of household solid waste is often provided by local governmental units; typically at the town or city level. Unit-based pricing, also known as pay-as-you-throw (PAYT), is a residential solid waste collection program requiring households to pay a fee per bag of trash disposed. Unit-based pricing represents a significant departure from the historical practice of financing solid waste service from property tax revenues in which the marginal cost to a household for disposing solid waste is effectively zero. Local governments are motivated to adopt unit-based pricing for the purpose of creating a financial incentive for households to reduce the quantity of solid waste disposed and concurrently increasing the level of recycled materials. The objective of this study is to evaluate the impact of unit-based pricing of household solid waste disposal. A counter-factual model is used to estimate the program effect. The study area for this paper consists of the 234 incorporated towns and cities in the state of New Hampshire. As of 2008, 40 towns had adopted a form of unit-based pricing of household solid waste. Results from propensity score matching suggest there is an average annual reduction of 466 pounds of household solid waste due to unit-based pricing. |
| Keywords: | Propensity score matching, unit-based pricing, pay-as-you-throw, municiapl solid waste, Environmental Economics and Policy, |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103812&r=env |
| By: | Sun, Yan; Mwangi, Esther; Meinzen-Dick, Ruth |
| Abstract: | Womenâs participation in decision making at the user-group level and in forest committees has been demonstrated to have a positive impact on forest sustainability. For example, womenâs participation enhances forest regeneration and reduces illegal harvesting through improved monitoring. Their presence in forest user groups increases the groupsâ capacity to manage and resolve conflict, which in turn increases the likelihood that resource users will comply with and respect harvesting and use rules. These insights have been especially useful in informing policy and project interventions designed to strength and amplify womenâs participation. This paper adopts a cross-national approach and employs quantitative techniques to analyze the relative performance of groups with different male-female composition (female-dominated, mixed-gender, and male dominated user groups) in forest management. The study was conducted in Bolivia, Mexico, Kenya and Uganda. Although all four of these countries have decentralized their forestry sectors during the past 15 years, their relevant institutions differ in their design. Also, the conditions leading to the governance reforms in these four countries are diverse. Whereas the East African countries have a long history of protectionist objectives, the Latin American countries have a long history of community forestry enterprises and of the struggle for more inclusive forestry practice and equitable distribution of benefits from forestry enterprises. Data were collected using the methodology of the International Forestry Resources and Institutions (IFRI) research program. Participatory focus groups among community members were used to explore institutions and local perceptions of forest conditions and their demographics, while key informant interviews (with forestry officials for example) were used to obtain official perceptions of forest condition, the nature of conservation measures adopted by user groups. Key informant interviews with local authorities were also conducted to establish the number and nature of activities conducted by community based organizations, private organizations and other government organizations with mandates and/or activities that have implications for local forest management. Data were collected for 39 forests in Bolivia, Mexico, Kenya and Uganda, during two separate visits to each forest between 1993 and 2008. The analysis is conducted at two levelsâthe forest and the user group, this allows us to incorporate the perceptions of forestry authorities as well as that of user groups themselves with regard to forest condition. In total, 290 user groups were divided into three categories based on the proportion of women in each group. These categories were: male dominated (women comprising one-third or less of the group), mixed (women comprising between one-third and two-thirds of the group) and female dominated (women comprising two-thirds or more of the group). These three categories accounted for 40%, 37% and 23% of the 290 user groups, respectively. The research presented in this paper advances our knowledge of how women may influence forest management. The research adopts a comparative approach, which is intended to identify synergies within regions and to create a learning environment that may lead to improved forest management. The study investigates different gender composition groupâs property rights to forest resources, harvesting preferences, participation in rule making, relative investments in forest management and the outcomes of these activities. Our empirical analysis offers three important findings. First, gender composition is important. Female-dominated groups tend to have more property rights to trees and bushes, and collect more fuel wood and less timber than do male-dominated or mixed groups. Mixed-gender groups participate more in forestry decision making and are more likely to exclude other groups from harvesting from the forest. Female-dominated groups invest less, sanction less and exclude less. The finding that female-dominated groups are less likely than other groups to participate in decision making or invest in forest improvements is not controversial. Time constraints, male bias in the delivery of extension services, and a lack of information can depress investments and participation. Moreover, a huge literature has shown that due to social and cultural norms that limit their roles to the private sphere, women often lack experience, confidence and skills to engage in the public sphere. Mixed groups on the other hand, perform consistently better in all forestry functions, including in exclusion. An earlier study has suggested that mixed groups exploit the complementary advantages of men and women and have better access to information and services from external agents. Second, the implementation of decentralization reforms strengthens user groupsâ property rights to forest products and has reduced actual user groupsâ actual harvest levels. Also, decentralization has encouraged user groups to participate in forest management activities, including participation in decision making and sanctioning. These gains sit well with the normative expectations of decentralization reforms. By expanding and/or strengthening property rights and management responsibilities, they were intended to create incentives for sustainable use and management. However, such incentives are even more effective when users have full rights to resource benefits as well. Third, there exists regional difference. User groups in the Latin America tend to invest more, than the ones in Africa. While the exact reasons driving this outcome is not immediately evident, we hypothesize that a longer history and experience of community involvement (the outcome of longstanding struggles in broad policy reforms) in forest management may have also influenced the magnitude of benefits accrued to community actors. |
| Keywords: | gender, forest management, forest user groups, Environmental Economics and Policy, Q01, Q23, J16, |
| Date: | 2011–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103456&r=env |
| By: | Usui, Takehiro; Chikasada, Mitsuko |
| Abstract: | The Japanese government has encouraged reduction, reuse, and recycling of waste with the slogan "3R" under the Basic Law for Establishing a Recycling-based Society. However, the law is non-binding in nature; thus, the collection of each type of recyclable containers and packaging is done at the discretion of the municipalities. Some municipalities do not provide collection services for these recyclables. Why do some municipalities recycle while others do not? Few studies have investigated the determinants of the municipality's decision to collect recyclables. The purpose of this study is to examine the factors affecting a municipality's decision to implement the collection of already sorted recyclable containers and packaging in Japan. We use a panel data at the municipal level, which enabled us to analyze the behavioral characteristics of each municipality more accurately. We investigate the municipality's decision to provide collection service for each type of recyclable containers and packaging, while the other studies looked at recyclables as a whole. Equations for each type of recyclables have been estimated using the random effect probit model. Our results suggest that some socioeconomic and technological factors could keep the municipalities from implementing the collection of sorted recyclables. |
| Keywords: | Recycling, Panel Probit, Landfill, Incineration, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103759&r=env |
| By: | Chen, Xuan; Goodwin, Barry K. |
| Abstract: | In the US forestry industry, wildfire has always been one of the leading causes of damage. This topic is of growing interest as wildfire has caused huge losses for landowners, residents and governments in recent years. While individual wildfire behavior is well studied (e.g. Butry 2009; Holmes 2010), a lot of new literature on broadscale wildfire risks (e.g. by county) is emerging (e.g. Butry et al. 2001; Prestemon et al. 2002). The papers of the latter category have provided useful suggestions for government wildfire management and policies. Although wildfire insurance for real estate owners is popular, the possibility to develop a forestry production insurance scheme accounting for wildfire risks has not yet been investigated. The purpose of our paper is to comprehensively evaluate broadscale wildfire risks in a spatio-temporal autoregressive scenario and to design an actuarially fair wildfire insurance scheme in the U.S. forest sector. Our research builds upon an extensive literature that has investigated crop insurance modeling. Wildfire risks are closely linked to environmental conditions. Weather, forestland size, aspects of human activity have been proved to be crucial causal factors for wildfire (Prestemon et al. 2002; Prestemon and Butry 2005; Mercer et al. 2007). In light of these factors, we carefully study wildfires ignited by different sources, such as by arson and lightning, and identify their underlying causes. We find that the decomposition of forestland ecosystem and socio-economic conditions have significant impacts on wildfire, as well as weather. Our models provide a good fit to data on frequency and propensity for fires to exist (e.g. R-square ranges from 0.4 to 0.8) and therefore provide important fundamental information on risks for the development of insurance contracts. A number of databases relevant to this topic are used. With the Florida wildfire frequency and loss size database, a complete survey of four measurements of annual wildfire risks is implemented. These four measurements are annual wildfire frequency, burned area, fire per acre and burned ratio at county level. In addition, the national forestry inventory and analysis (FIA) database, Regional Economic Information Systems (REIS) database and the national weather database have supplied forestland ecosystem, socioeconomic, and weather condition information respectively. With our spatio-temporal lattice models, impacts of environmental factors on wildfire and implications of wildfire management policies are assessed. Forestland size, private ownersâ share of forestland, population and drought would positively contribute to wildfire risks significantly. Cold weather and high employment are found to be helpful in lessening wildfire risks. Among the forestland ecosystem, oak / pine & oak / hickory forestland would reduce wildfire risks while longleaf / slash & loblolly / shortleaf pine forestland would have a mixed impact. An interesting finding is that oak / gum / cypress forestland would reduce wildfire frequency, but would enhance wildfire propensity at the same time. Hurricanes could intensify wildfire risks in the same year, but would significantly decrease the next yearâs wildfire risks.Meanwhile, cross sample validation verifies that our method can forecast wildfire risks adequately well. Since our approach does not incorporate any fixed-effect indicator or trend as in the panel data analysis (Prestemon et al. 2002), it offers a universal tool to evaluate and predict wildfire risks. Hence, given environmental information of a location, a corresponding actuarially fair insurance rate can be calculated. |
| Keywords: | wildfires, forestry, weather, socio-economic, Spatio-Temporal autocorrelation, Risk and Uncertainty, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103628&r=env |
| By: | Beckman, Jayson; Borchers, Allison; Stenberg, Peter |
| Keywords: | Agribusiness, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103454&r=env |
| By: | Champetier, Antoine |
| Abstract: | We develop a model of honey bee foraging behavior that can be used to simulate crop yields as functions of honey bee densities. These yield functions help us understand the economic behavior of growers who rely on bees for pollination. One important simulation result for the case of almonds is that the production function facing growers is close to one of fixed proportion in pollination input. Accordingly, the modeling of the foraging behavior of bees provides an explanation for the observed lack of variation in pollinator use and shows how the behavior of bees and growers are connected. |
| Keywords: | pollination economics, honey bee foraging, bioeconomics, Crop Production/Industries, Environmental Economics and Policy, Livestock Production/Industries, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103554&r=env |
| By: | Sergio, Colin-Castillo |
| Abstract: | The analysis of technical efficiency (TE) on the small-scale fishery is relevant for several reasons. While this type of fishery is highly common in developing countries like Mexico, there are a very limited number of analyses assessing their efficiency. Indeed, there is no precise information on the contribution of the small-scale fisheries to livelihoods and economies in developing nations. Exploring this gap in the research would be relevant for the decision making policy. On the one hand, small-scale fisheries can generate significant profits and be more resilient to shocks and crises; two important elements to poverty alleviation and food security. But on the other hand, small-scale fisheries may overexploit stocks, harming the environment and generating low profits. Certainly, it is desirable the preservation of resources of common access like lakes or reservoirs, at the same time it is desirable an efficient use of the fishery. The question is what factors constrain the efficiency? Aiming for a contribution on the knowledge of the small-scale fisherâs performance; this research applies âdirected acyclic graphsâ, an innovative technique to explore the causal relationship on the variables to explain the TE. To assess the fisherâs TE, this research uses âstochastic frontier analysisâ, a method commonly used to estimate the efficiency. This study explores the causal pattern among the production function variables to corroborate, by estimating the TE, the hypothesis that: fisherâs skills favor the fisher performance. Compared to previous research, the results show an improvement on the assessment of the variables that constrain the efficiency. Getting a more precise TE assessment is valuable information. It would help to define the strategies for the assistance of the fishing communities; in a search for a policy to remedy the production inefficiencies and increase the competitiveness in small-scale fisheries. |
| Keywords: | Stochastic frontier analysis, technical efficiency, directed acyclic graph, causality analysis, small-scale fishery, Environmental Economics and Policy, Production Economics, Research Methods/ Statistical Methods, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103822&r=env |
| By: | Fang, Lan |
| Abstract: | Chinaâs water resources are scarce. Given its limited water resource, policies in China have been traditionally focused on meeting sectoral demands for water by increasing the supply rather than managing demand. However, effective water resource policies that focus on demand management and encourage efficient water use remain the main weakness of Chinaâs water policy. Main potential for efficiency gain is the agricultural sector, which accounts for 65 percent of the nationâs total water withdrawals. Due to major inefficiencies in irrigation water systems only about 45 percent of water withdrawals for agriculture are actually used by farmers to irrigate their crops. In addition to inefficiencies, the equity of the agricultural water policies is questionable, That is, existing policies lead to an inequitable allocation across different parts of the basin and within a given irrigation system. Designing policies that are both efficient and equitable is a challenge that has yet to be met. In this paper we explore the potential for an improvement in policies that address water use efficiency and equity in one of Chinaâs rural regions. A spatial water allocation model is employed to maximize water use efficiency at both public water conveyance system and private on-farm water use in one of the irrigation districts in Northwest Chinaâs Shaanxi Province. First-hand data which were collected from our field survey will be used in the water allocation model. Water is provided by a government authority via a public canal to farmers. Water use efficiency is modeled along with efficient and optimal cropping patterns to be endogenously determined by the decision makers in the region. The public water conveyance system has a given efficiency that can be improved with investment to reduce deep percolation. This can be done either by farmers or through cost sharing arrangements between farmers and the government. Pumping water from the canal is not regulated and sequencing of the farmers along the canal dictates the amount of water to be used by each farmer. Under the unregulated case equity may be the lowest, where the upstream users may pump unrestricted amounts and the downstream users may use the remainder. Increased efficiency of the public canal may lead to more available water to the upstream users. In a parallel venue, when on-farm efficiency is improved, less water is returned to the aquifer, leaving less water as a return flow to be available to the downstream users. Hence equity is always an issue whenever efficiency is improved. Specifically in our study area farmersâ lands are covered by one irrigation authority and situated along a canal. All farmers have access to public canal water and groundwater. For those situated at plain area, where winter wheat is grown, they have better access to abundant and cheap public canal water. For those farmers living at hilly, higher elevation area, where apple production is dominating, they get water from public canal with a higher price of about 40% compared with the price their counterparts at the plain area due to an additional (stage 1 station) lift-height pumping cost. At last, water will be delivered to mountainous area where corn is grown. A stage 2 lift-height pumping station lifts the water again to irrigate the cornâs fields. Consequently the water price is doubled as compared to the original water price at the plain area. Corn needs less water than wheat and apple. Farmers may reduce their water costs either by reducing canal water application, and groundwater pumping, or by dry land farming. A canal controller or examiner will be introduced to the canal management. By doing so, the policy impacts of regulated and unregulated cases are analyzed. Our framework includes water use efficiency, water pricing and various policy interventions that are aimed at both increasing total welfare and improve income distribution along the canal. We show how important it is for the public agency and the private users to cooperate in order to achieve water use efficiency and equity within the irrigation network. Policies include various water pricing schemes, the unregulated case, increased monitoring and enforcement of various water allocation methods, cost sharing arrangements, side payments, and trade in water rights (that will be allocated by the government). A General Algebraic Modelling System (GAMS) is employed to achieve the optimization process under the water system constraints and other policy regulation constraints. |
| Keywords: | Water efficiency, Equity, Chinaâs rural water management, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103486&r=env |
| By: | Cunado, Juncal; Ferreira, Susana |
| Abstract: | We analyze the economic impacts of floods using new data on 3,184 large flood events in 118 countries between 1985 and 2008. We use panel vector auto-regressions to trace the dynamic response of output to three types of flood shocks. Our results robustly indicate that flood shocks tend to have a positive average impact on GDP growth, that this impact is limited to developing countries, that the effect is not confined to the agricultural sector, and that it is stronger when it is accompanied by an increase in gross fixed capital formation. |
| Keywords: | Natural Disasters, Floods, VAR, Economic growth, Macroeconomic Shocks, Environmental Economics and Policy, International Development, Public Economics, |
| Date: | 2011–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103721&r=env |
| By: | Curtiss, Jarmila; Jelinek, Ladislav |
| Abstract: | Increasing worldwide energy demand and diminishing supplies of fossil fuels have necessitated the development and increasing use of new sustainable energy sources, as well as more parsimonious energy use. In the context of agriculture, research has focused predominantly on the production of bio-energy, while only a limited number of studies have investigated the energy use and possible energy saving in conventional agricultural production. In response to this lack in empirical research this study aims (i) to measure the farm-level energy and cost efficiency of conventional agricultural (wheat) production, (ii) to identify the potential for energy saving in conventional agriculture and quantify its shadow cost, (iii) to identify production technologies and managerial practices that reduce total energy use. We adjusted the method by Coelli, Lauwers, Van Huylenbroeck (2007) introducing analogy between cost and nutrient minimization to measure energy use reduction potential and its costs. The analysis was carried out on survey data for 95 farms for production year 2007/08. Energy coefficients for individual non-renewable inputs were derived from the PLANETE methodology (Méthode Pour L'Analyse EnergéTique de l'Exploitation) developed by SOLAGRO. We applied data envelopment analysis to estimate energy and cost optima and efficiencies, and truncated regression to identify statistically significant determinants of energy efficiency. We found significant differences in energy consumption per unit of wheat production among Czech farms - best producers consume 46% less energy per unit of production than average producers, however, from that ca. 30% is due to variation in production conditions. Marked share of energy inefficiency (over 50% of potential energy savings) originates in technical efficiency, which offers simultaneous cost savings. Producing wheat in energy optimum would increase costs by 9% when compared to cost optimum. The largest potential of energy savings was found in fuel, and fertilizers and other chemicals. Regression analysis implies that use of more fuel-efficient machinery or machinery with other energy-saving technical parameters (e.g., higher utility weight) and optimizing material transport could increase energy efficiency, while some commonly applied technological practices (such as conventional soil preparation) have a negative energy efficiency effects. |
| Keywords: | Energy efficiency, cost efficiency, shadow cost of energy saving, agriculture, Czech farm, wheat production, Agribusiness, Crop Production/Industries, Production Economics, Productivity Analysis, D24, |
| Date: | 2011–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103410&r=env |
| By: | Ubilava, David; Helmers, C. Gustav |
| Abstract: | Cocoa beans are produced in equatorial and sub-equatorial regions of West Africa, Southeast Asia and South America. These are also the regions most affected by El Nino Southern Oscillation (ENSO) -- a climatic anomaly affecting temperature and precipitation in many parts of the world. Thus, ENSO, has a potential of affecting cocoa production and, subsequently, prices on the world market. This study investigates the benefits of using a measure of ENSO variable in world cocoa price forecasting through the application of a smooth transition autoregression (STAR) modeling framework to monthly data to examine potentially nonlinear dynamics of ENSO and cocoa prices. The results indicate that the nonlinear models appear to outperform linear models in terms of out-of-sample forecasting accuracy. Furthermore, the results of this study indicate evidence of Granger causality between ENSO and cocoa prices. |
| Keywords: | Cocoa Prices, El Nino Southern Oscillation, Out-of-Sample Forecasting, Smooth Transition Autoregression, Demand and Price Analysis, Environmental Economics and Policy, Research Methods/ Statistical Methods, C32, Q11, Q54, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea11:103528&r=env |
| By: | María Aguilera Díaz |
| Abstract: | El complejo lagunar de la ecorregión Ciénaga Grande de Santa Marta, ubicado al norte de Colombia, es de gran importancia ecológica y económica, pues los humedales y bosques de mangle permiten la reproducción de peces, crustáceos y moluscos y son refugio de aves migratorias y nativas y de otras especies de fauna. La apertura de canales, la desecación de ciénagas menores y, principalmente, la construcción de la vía Barranquilla- Ciénaga, afectaron este ecosistema ocasionando la pérdida de gran parte de sus bosques de manglar. El objetivo de este estudio es determinar el potencial ecológico y económico del complejo lagunar y caracterizar la población que habita dentro de sus ciénagas. Se encontró que los complejos lagunares son de gran productividad, pero la producción pesquera está en riesgo de sobreexplotación por el incremento de pescadores y la captura por debajo de la talla media de madurez sexual. Además, los habitantes de los pueblos de palafitos tienen ingresos bajos y necesidades básicas insatisfechas. ABSTRACT: The lagoons in the ecoregion of the Cienaga Grande of Santa Marta are of great ecological and economic importance, since wetlands and mangrove forests allow the reproduction of fish, crustaceans and mollusks and host native and migratory birds and other wildlife species. The opening of canals, the draining of minor swamps and mainly, the construction of the Barranquilla-Cienaga road, affected the ecosystem causing the loss of much of its mangrove forests. The aim of this study is to determine the ecological and economic potential of the lagoon system and the characteristics of the human population living within its marshes. The lagoon complex is highly productive, but fish production is at risk of overexploitation because of the increase of fishermen and the catching of fish below the mean size of maturity. In addition, the villagers, which inhabit stilt houses in the lagoon, have low incomes and unattended basic needs. |
| Date: | 2011–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:col:000102:008543&r=env |