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on Environmental Economics |
| By: | Waldhoff, Stephanie; Anthoff, David; Rose, Steven; Tol, Richard S. J. |
| Abstract: | We use FUND 3.5 to estimate the social cost of carbon dioxide, methane, nitrous oxide, and sulphur hexafluoride emissions. We show the results of a range of sensitivity analyses, focusing on the impact of carbon dioxide fertilization. Ignored in previous studies of the social cost of greenhouse gas emissions, carbon dioxide fertilization has a positive effect at the margin, but only for carbon dioxide. Because of this, the ratio of the social cost of a greenhouse gas to that of carbon dioxide (the global damage potential) is higher - that is, previous papers underestimated the importance of reducing non-carbon dioxide greenhouse gas emissions. When leaving out carbon dioxide fertilization, our estimate of the social cost of methane is comparable to previous estimates. Our estimate of the global damage potential of methane is close to the estimates of the global warming potential because discounting roughly cancels carbon dioxide fertilization. Our estimate of the social cost of nitrous oxide is higher than previous estimates, also when omitting carbon dioxide fertilization. This is because, in FUND, vulnerability to climate change falls over time (with development) while in the long run carbon dioxide is a more potent greenhouse gas than nitrous oxide. Our estimate of the global damage potential of nitrous oxide is larger than the global warming potential because of carbon dioxide fertilization, discounting, and rising atmospheric concentrations of both gases. Our estimate of the social cost of sulphur hexafluoride is similar to the one previous estimate. Its global damage potential is higher than the global warming potential because of carbon dioxide fertilization, discounting, and rising concentrations. -- |
| Keywords: | climate change,social cost,carbon dioxide,methane,nitrous oxide,sulphur hexafluoride |
| JEL: | Q54 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201143&r=env |
| By: | Frank Jotzo (Crawford School of Economics & Government, Australian National University, Canberra, ACT, Australia); Jonathan Pickering (Centre for Applied Philosophy and Public Ethics, The Australian National University); Peter J. Wood (Resource Management in Asia-Pacific Program, Crawford School of Economics and Government, The Australian National University) |
| Abstract: | Developed countries have pledged to mobilise $100 billion per year by 2020 for climate change action in developing countries. Progress on financing is necessary to ensure broader progress on climate change cooperation. Supporting the global commitment is in Australia's interests, since climate finance can harness low-cost mitigation opportunities and help vulnerable countries in the Asia-Pacific region adapt to climate change. Based on Australia's wealth and emissions, we find that a fair share for Australia may be around 2.4 per cent, or $2.4 billion a year by 2020. We analyse possible sources of finance in Australia. Carbon markets could provide large financial flows but their short-term prospects are uncertain, and additional public finance is needed in any event. While Australia currently draws its climate finance from a growing aid budget, a large scale-up of climate change aid could raise concerns that aid is being diverted from existing development priorities. A carbon levy on international transport could provide considerable revenue and could be implemented unilaterally ahead of a global scheme. Reducing tax breaks for fossil fuel using and producing activities could raise revenue well in excess of Australia's total climate finance commitment, while improving economic efficiency and cutting carbon emissions. Further, Australia's exports of coal and other resources provide a very large tax base which could be tapped to a greater extent. |
| JEL: | H20 F35 Q54 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1115&r=env |
| By: | Yang, Boqiong; Chen, Jianguo |
| Abstract: | From the 1970's, Foreign Direct Investment (FDI) flowed into host countries. With the development of economy in host countries the environment deteriorated. The overall goal of this paper is to estimate whether the impacts of FDI positive or negative on environment in host countries. To meet this overall goal, it is constructed a simultaneous system with data of 28 provinces in China (1992-2008). This system supposes the pollution indicators to be determined by economic scale, industrial composition and pollution density of a province, in which pollution density is created to estimate the environmental effect of FDI more exactly than traditional technological character. Also the domestic and foreign capital is tried to distinguish to make the pollution source clear. Based on a panel data of 28 provinces (1992-2008) with the three-stage least squares (3sls) estimator, the results of the system show that with the domestic investment, the environmental effect is positive, which means that FDI increases pollution emission. The direct environmental effect of FDI, which does not include domestic investment, is different decided by various pollution indicators. -- |
| Keywords: | FDI,pollution emission, host countries |
| JEL: | F23 F18 O13 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iamo11:3&r=env |
| By: | Matthew J. Kotchen; Kevin J. Boyle; Anthony A. Leiserowitz |
| Abstract: | This paper provides the first willingness-to-pay (WTP) estimates in support of a national climate-change policy that are comparable with the costs of actual legislative efforts in the U.S. Congress. Based on a survey of 2,034 American adults, we find that households are, on average, willing to pay between $79 and $89 per year in support of reducing domestic greenhouse-gas (GHG) emissions 17 percent by 2020. Even very conservative estimates yield an average WTP at or above $60 per year. Taking advantage of randomized treatments within the survey valuation question, we find that mean WTP does not vary substantially among the policy instruments of a cap-and-trade program, a carbon tax, or a GHG regulation. But there are differences in the sociodemographic characteristics of those willing to pay across policy instruments. Greater education always increases WTP. Older individuals have a lower WTP for a carbon tax and a GHG regulation, while greater household income increases WTP for these same two policy instruments. Republicans, along with those indicating no political party affiliation, have a significantly lower WTP regardless of the policy instrument. But many of these differences are no longer evident after controlling for respondent opinions about whether global warming is actually happening. |
| JEL: | Q4 Q48 Q5 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17539&r=env |
| By: | Monjon, Stéphanie; Quirion, Philippe |
| Abstract: | The EU ETS has been criticised for threatening the competitiveness of European industry and generating carbon leakage, i.e., increasing foreign greenhouse gas emissions. Two main options have been put forward to tackle these concerns : border adjustments and output-based allocation, i.e., allocation of free allowances in proportion to current production. We compare various configurations of these two options, as well as a scenario with full auctioning and no border adjustment. Against this background, we develop a model of the main sectors covered by the EU ETS: electricity, steel, cement, and aluminium. We conclude that the most efficient way to tackle leakage is auctioning with border adjustment, which generally induces a negative leakage (a spillover). This holds even if the border adjustment does not include indirect emissions, if it is based on EU (rather than foreign) specific emissions, or (for some values of the parameters) if it covers only imports. Another relatively efficient policy is to combine auctioning in the electricity sector and output-based allocation in exposed industries, especially if free allowances are given both for direct and indirect emissions, i.e., those generated by the generation of the electricity consumed. Although output-based allocation is generally less effective than border adjustment to tackle leakage, it is more effective to mitigate production losses in the sectors affected by the ETS, which may ease climate policy adoption. |
| Keywords: | Emission trading; border adjustment; output‐based allocation; competitiveness; carbon leakage; |
| JEL: | Q38 Q58 Q54 L94 L61 L51 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ner:dauphi:urn:hdl:123456789/7346&r=env |
| By: | Olivier Sterck (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579) |
| Abstract: | Geoengineering, i.e. the use of artificial techniques aiming at cooling the planet, is increasingly considered as a realistic alternative to emission mitigation. Several methods are promising for their capacity to quickly halt global warming at a moderate cost. Such cheap technologies might be very beneficial to countries profoundly affected by global warming. In this paper, I propose a dynamic model in which geoengineering is introduced as an alternative to mitigation. Contrary to abatement, geoengineering is fast and cheap, but requires a large initial investment in research and development. Within this framework, I confirm the fear which is common among geoengineering opponents: abatement is reduced if geoengineering is expected to be available in the future. The long-run implications of the model are also alarming as geoengineering will not be undertaken progressively. The sudden implementation of geoengineering, together with the sharp jump in temperature induced, may disturb climate equilibrium and fragile ecosystems. Furthermore, the availability of geoengineering will exacerbate intergenerational issues: while current generations will anticipate the use of geoengineering by increasing their emissions, future generations will have to reduce their emissions, to bear the cost of sustaining geoengineering for centuries and to suffer from its negative side-effects. |
| Keywords: | Geoengineering; Abatement; Climate change; Global warming; R&D; Intergenerational issues |
| Date: | 2011–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00635487&r=env |
| By: | Olivier STERCK (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | Geoengineering, i.e. the use of artificial techniques aiming at cooling the planet, is increasingly considered as a realistic alternative to emission mitigation. Several methods are promising for their capacity to quickly halt global warming at a moderate cost. Such cheap technologies might be very beneficial to countries profoundly affected by global warming. In this paper, I propose a dynamic model in which geoengineering is introduced as an alternative to mitigation. Contrary to abatement, geoengineering is fast and cheap, but requires a large initial investment in research and development. Within this framework, I confirm the fear which is common among geoengineering opponents: abatement is reduced if geoengineering is expected to be available in the future. The long-run implications of the model are also alarming as geoengineering will not be undertaken progressively. The sudden implementation of geoengineering, together with the sharp jump in temperature induced, may disturb climate equilibrium and fragile ecosystems. Furthermore, the availability of geoengineering will exacerbate intergenerational issues: while current generations will anticipate the use of geoengineering by increasing their emissions, future generations will have to reduce their emissions, to bear the cost of sustaining geoengineering for centuries and to suffer from its negative side-effects. |
| Keywords: | Geoengineering, Abatement, Climate change, Global warming, R&D, Intergenerational issues |
| JEL: | Q01 Q52 Q54 Q55 |
| Date: | 2011–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2011035&r=env |
| By: | Christin, Clémence; Nicolai, Jean-Philippe; Pouyet, Jerome |
| Abstract: | The issue of how to allocate pollution permits is critical for the political sustainability of any cap-and-trade system. Under the objective of offsetting firms' losses resulting from the environmental regulation, we argue that the criteria for allocating free allowances must account for the type of abatement technology: industries that use process integrated technologies should receive some free allowances, whereas those using end-of-pipe abatement should not. In the long run, we analyze the interaction between the environmental policy and the evolution of the market structure. In particular, a reserve of pollution permits for new entrants may be justified when the industry uses a process integrated abatement technology. -- |
| Keywords: | Cap-and-trade system,profit-neutral allocations,abatement technologies |
| JEL: | L13 Q53 Q58 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:34&r=env |
| By: | Michida, Etsuyo; Atici, Cemal; Kojima, Michikazu |
| Abstract: | This paper sheds light on the iron and steel (IS) scrap trade to examine how economic development affects the quality demanded of recyclable resource. A simple model is presented that show a mechanism of how scrap quality impacts the direction of trade due to comparative advantage. We find that economic development in both importing and exporting countries has a positive effect on the quality of traded recyclables. Developed countries that intend to improve the domestic recovery of recyclables should raise the quality of separating recyclables while developing countries should tighten environmental regulations to help decrease the import of recyclables that cause pollution. |
| Keywords: | Recycling (waste, etc.), Iron, International trade, Environmental problems, Developing countries, Developed countries, Iron and steel, Scrap, Environment, Trade |
| JEL: | F18 O13 Q53 Q56 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper282&r=env |
| By: | Bernardo Mueller |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2009:184&r=env |
| By: | T. Elias Asproudis (School of Business and Economics, Loughborough University, UK); Tom Weyman Jones (School of Business and Economics, Loughborough University, UK) |
| Abstract: | This paper analyses the behaviour, influence and role of third parties in tradable permits markets. Following the literature, it focuses on a framework in order to understand how society and third parties react against the firms’ emissions due to their participation in the tradable permits market. Therefore the paper reveals the tradable permits mechanism as a new way for public direct action and highlights the possible benefits for the regulator. An important part of the third parties consists of the very active participation of the Environmental Non-Governmental Organisations. Therefore, this paper argues that the third party’s participation and specifically the environmental groups’ participation in tradable permits market could drive the market to the optimum equilibrium. In order to examine this proposition we use some data from the first phase of the permits market in European Union and some available data for the environmental groups’ income. We conclude that the environmental groups could purchase the exceeded, over-allocated permits and could drive the market in the equilibrium point. Finally, for the regulator the environmental groups participation could be desirable given that they could improve the efficiency of the tradable permits market. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2011_02&r=env |
| By: | Paul J. Burke (Crawford School of Economics & Government, Australian National University, Canberra, ACT, Australia) |
| Abstract: | This paper documents an energy ladder that nations ascend as their per capita incomes increase. On average, economic development results in an overall substitution from the use of biomass to fulfill energy needs to energy sourced from fossil fuels, and then toward nuclear power and certain low-carbon modern renewables such as wind power. The results imply an inverse-U shaped relationship between per capita income and the carbon intensity of energy, which is borne out in the data. Fossil fuel-poor countries are more likely to climb to the upper rungs of the national-level energy ladder and experience reductions in the carbon intensity of energy as they develop than fossil fuel-rich countries. Leapfrogging to low-carbon energy sources on the upper rungs of the national-level energy ladder is one route via which developing countries can reduce the magnitudes of their expected upswings in carbon dioxide emissions. |
| JEL: | O11 O13 Q43 Q54 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1116&r=env |
| By: | Karel Janda (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Ladislav Kristoufek (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); David Zilberman (University of California, Berkeley) |
| Abstract: | This paper provides a general overview of the social, environmental, and economical issues related to biofuels and a review of economic modeling of biofuels. The increasing importance of biofuels is driven primarily by government policies since currently available biofuels are generally not economically viable in the absence of fiscal incentives or high oil prices. Also the environmental impacts of biofuels as an alternative to fossil fuels are quite ambiguous. The literature review of the most recent economic models dealing with biofuels and their economic impacts provides a distinction between structural and reduced form models. The discussion of structural models centers primarily on computable general equilibrium models. The review of reduced models is structured toward the time series analysis approach to the dependencies between prices of biofuels, prices of agricultural commodities used for the biofuel production and prices of the fossil fuels. |
| Keywords: | Biofuels; Ethanol; Biodiesel; Prices; Time-series |
| JEL: | Q16 Q42 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2011_33&r=env |
| By: | Sharma, Harsh |
| Abstract: | The paper seeks to explore the opportunities created by climate change and mitigation efforts in agriculture sector in India for creating more, newer and better jobs. These new jobs which are termed as green jobs are not always going to be decent jobs and there is also uncertainty about the number of jobs so created vis-à-vis number of jobs destroyed in traditional fossil fuel based economy. Pivotal role played by agriculture in developing country's economy makes it ideal sector to study in this context. There is growing consensus that organic, sustainable agricultural practices can provide synergistic benefits that include adaptation and mitigation of climate change with addressing concerns like livelihood, employment and working conditions. In an emerging country like India, sustainable agriculture can help in meeting twin challenges of food security and job creation. This so called Double Dividend can positively affect the thinking of policy makers and public at large towards contributing to meeting of mitigation and adaption challenge with respect to climate change. However, this requires close integration of agricultural, environmental and labour policy. The present study is based on extensive literature survey and expert interaction. Paper seeks to integrate these varied factors and it is argued that emphasis on sustainable/organic farming will create more and better jobs in India and help in poverty reduction and improving life standards. -- |
| Keywords: | Agriculture,Green Jobs,India |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iamo11:4&r=env |
| By: | William D. Nordhaus |
| Abstract: | A new and important concept in global warming economics and policy is the social cost of carbon or SCC. This concept represents the economic cost caused by an additional ton of carbon-dioxide emissions or its equivalent. The present study describes the development of the concept as well as its analytical background. We estimate the SCC using an updated version of the RICE-2011 model. Additional concerns are uncertainty about different aspects of global warming as well as the treatment of different countries or generations. The most important results are: First, the estimated social cost of carbon for the current time (2015) including uncertainty, equity weighting, and risk aversion is $44 per ton of carbon (or $12 per ton CO2) in 2005 US$ and international prices). Second, including uncertainty increases the expected value of the SCC by approximately 8 percent. Third, equity weighting generally tends to reduce the SCC. Finally, the major open issue concerning the SCC continues to be the appropriate discount rate. |
| JEL: | H21 H23 H87 Q5 Q54 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17540&r=env |
| By: | Peter Gallagher; Ysé Serret |
| Abstract: | This document sets out a framework for evaluating the implementation of environmental provisions in Regional Trade Agreements. The checklist approach to the evaluation of countries‘ experience of implementation complements the OECD‘s Checklist for Negotiators (2008). Among the issues addressed are institutional arrangements, co-operation, capacity building, public participation, resolution of differences and assessment. |
| Keywords: | trade policy, regional trade agreements, trade and environment, free trade agreements, environmental provisions |
| JEL: | F13 F18 N50 Q56 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaaa:2011/6-en&r=env |
| By: | Baddeley, M. |
| Abstract: | Evidence of climate change is largely undisputed but moderating the impacts not only of climate change but also of resource depletion is a complex, multi-faceted problem. Technical solutions will have a large role to play but engineering behaviour change within households and firms is essential to harnessing the potential for energy efficient consumption, production and investment. To inform debates about behavior change, this paper explores some insights from behavioural economics including analyses of bounded rationality, cognitive bias / heuristics, temporal discounting, social in uences, well-being and emotions. |
| JEL: | Q5 Q58 |
| Date: | 2011–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1162&r=env |
| By: | Bert Brys |
| Abstract: | This paper discusses the objectives of tax reform and explores the most important environmental factors that influence the reform process, focusing on the circumstances that explain when these objectives and environmental factors may become an obstacle to the design and implementation of tax policies. The second part of this paper discusses strategies that might help policy makers to successfully implement fundamental tax reforms. |
| Date: | 2011–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ctpaaa:3-en&r=env |
| By: | Kostka, Genia |
| Abstract: | This paper analyzes the career backgrounds of local government officials in provincial Environmental Protection Bureaus (EPBs) in China and explains appointment processes of Chinese EPB bureaucrats. Using biographical information of provincial EPB heads and drawing on extensive fieldwork conducted in 2010 in Shanxi Province and Inner Mongolia, this paper finds that only one-fourth of current EPB heads were promoted through the bureau ranks within the EPB, while the remaining three-fourths were appointed from positions outside the environment field. Further, nearly all EPB heads' professional backgrounds and associated networks can be clearly categorized as environmental, business, provincial government, or local government oriented. The paper delineates these four types of Chinese EPB leaders and explains why an awareness of the different professional orientations is critical to understanding environmental protection in China. These findings have implications for inferring the unique characteristics of a province's EPB leadership, the implementation capacities of provincial EPBs, and the appointment preferences of provincial leaders. -- |
| Keywords: | agency,environmental protection,policy implementation,networks,China |
| JEL: | P28 Q28 O18 R58 Q48 Q58 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fsfmwp:174&r=env |
| By: | Bigerna, Simona; Polinori, Paolo |
| Abstract: | EU Directive 2009/72/CE imposes to the European Countries environmental and energy targets. The Italian goal is to attain a 17% share in electricity production from renewable energy sources (RES) by 2020. To make investment in renewables attractive, market prices must be profitable and the gap between the private and social costs of renewables must be filled using “persuasive” tools. The acceptance of such a burden may be controversial because it results in an increase in prices. It is interesting to estimate the consumer’s willingness to pay (WTP) for green electricity. We based our research on a national survey conducted in November 2007 in Italy. We used a stochastic payment card (SPC) including a “certainty correction” and proposing five degrees of acceptance. An empirical analysis shows that there is a substantial willingness among Italian consumers to partially cover the cost of achieving the RES goal. |
| Keywords: | contingent valuation; interval data; stochastic payment card; renewable energy sources |
| JEL: | Q41 Q26 C24 |
| Date: | 2011–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34408&r=env |
| By: | Moraga, Jesús Fernández-Huertas; Rapoport, Hillel |
| Abstract: | International migration is maybe the single most effective way to alleviate poverty at a global level. When a given host country allows more immigrants in, this creates costs and benefits for that particular country as well as a positive externality for all those (individuals and governments) who care about world poverty. This implies that the existing international migration regime is inefficient as it fails to internalize such externality. In addition, host countries quite often restrict immigration due to its apparently unbearable social and political costs. However these costs are never measured and made comparable across countries. In this paper we first discuss theoretically how tradable immigration quotas (TIQs) can reveal information on such costs and, once coupled with a matching mechanism taking into account migrants’ preferences, generate substantial welfare gains for all the parties involved. We then propose two potential applications: a market for the resettlement of international (e.g., climate change) refugees, and an extension of the US diversity lottery to a larger set of host countries and other immigration targets. Both applications are seen as possible precursors to a full implementation of a TIQs system. |
| Keywords: | immigration; immigration policy; tradable quotas; refugees; climate change; international public goods |
| JEL: | F22 F5 H87 I3 K33 O19 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1114&r=env |
| By: | Luiz Fernando Ohara Kamogawa; Ricardo Shirota |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2009:187&r=env |
| By: | Daniel Caixeta Andrade; Ademar Ribeiro Romeiro |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2009:185&r=env |
| By: | FLAVIANE SOUZA SANTIAGO (UNIVERSIDADE FEDERAL DE MINAS GERAIS-UFMG); TERCIANE SABADINI CARVALHO (UNIVERSIDADE FEDERAL DE MINAS GERAIS-UFMG); FERNANDO SALGUEIRO PEROBELLI (UNIVERSIDADE FEDERAL DE JUIZ DE FORA-UFJF) |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2010:025&r=env |