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on Environmental Economics |
| By: | Pannell, David J |
| Abstract: | Environmental agencies and organisations face the challenge of deciding which of the many possible environmental projects they should support with their limited resources. Projects vary greatly in environmental benefits and costs, so selecting the best projects can make a major difference to the level of environmental benefits that can be generated for a given budget. Key principles for ranking environmental projects are presented and explained. A suitable formula to use as a metric for ranking projects is developed and explained. The formula accounts for environmental values, the effectiveness of management, time lags, behaviour change, various risks and various costs. The suggested formula includes a number of appropriate simplifications. A number of common mistakes to avoid are outlined. |
| Keywords: | environment, economics, project prioritisation, uncertainty, behaviour change, risk, environmental values, technical feasibility, Environmental Economics and Policy, D82, Q20, Q28, |
| Date: | 2013–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uwauwp:156482&r=env |
| By: | Wesley R. Brooks; Stephen C. Newbold |
| Abstract: | The impacts on biodiversity and ecosystems are among the key reasons for concern about climate change. Integrated assessment models are the main tools used to estimate the global economic benefits of policies that would address climate change, but these models typically include only a partial accounting and idiosyncratic treatment of ecosystem impacts. This report reviews several recent studies of the impacts of climate change on biodiversity. We also review recent quantitative estimates of the rate of species extinctions, the impact of climate change on biodiversity, and the value of biodiversity loss. Based on these estimates, we re-calibrate the biodiversity loss function in the FUND integrated assessment model, and we develop a new global biodiversity nonuse value function. These could serve as replacements for the functions currently used in FUND, or as a preliminary ecosystem damage function in a new integrated assessment model. We also highlight areas where further research is needed for developing more comprehensive and reliable forecasts of ecosystem damages as a result of climate change. |
| Keywords: | climate change, ecosystem, biodiversity, integrated assessment model, structural benefit transfer |
| JEL: | Q51 Q54 Q57 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201302&r=env |
| By: | Edward L. Glaeser |
| Abstract: | Long before economics turned to psychology, environmentalists were nudging and framing and pushing their cause like highly gifted amateur psychologists. Their interventions seem to have changed behavior by altering beliefs, norms and preferences, but because psychological interventions are often coarse, inadvertent, offsetting side effects occur. After discussing the interplay between environmental preference-making and economics, I turn to three areas where strong, simple views have spread—electric cars, recycling and local conservation efforts. In all three areas, environmental rules of thumb can lead to significant, adverse environmental side effects. Local environmentalism, for example, may increase carbon emissions by pushing development from low emission areas, like coastal California, to high emissions areas elsewhere. I end by discussing how economic analysis of the political market for ideas can make sense of the remarkable disparity of views on global warming. |
| JEL: | Q0 Q5 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19359&r=env |
| By: | Yang, Zhenzeng |
| Abstract: | I use cross-country panel data to show that strengthening of private property rights protection lowers pollution emission intensity. The finding is robust to the inclusion of many controls and use of different independent variables. This paper provides preliminary empirical evidence for property rights theory of environmental goods, and suggests that completely specifying property rights is an important approach to response to environmental degradation. |
| Keywords: | Private Property Rights, Pollution, Emerging Market, CO2 Emission |
| JEL: | Q28 Q56 |
| Date: | 2013–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48717&r=env |
| By: | Baumann, Florian; Friehe, Tim |
| Abstract: | This paper examines the consequences of an increase in the expected fine for non-compliance with an environmental design standard for an industry with Cournot competition and free entry. Our analysis is quite timely, given recent policy proposals to raise environmental fines. We describe the range in which changes in the environmental fine have no consequences, and detail the various other effects that emerge. It is established that an increase in the expected fine for non-compliance may have adverse welfare consequences, while it always serves the purpose of inducing a greater share of firms to adopt the prescribed technology. -- |
| Keywords: | pollution,regulation,design standard,endogenous number of firms,environmental fines,SEC |
| JEL: | D62 Q55 Q58 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:106&r=env |
| By: | International Monetary Fund. Asia and Pacific Dept |
| Keywords: | Poverty Reduction Strategy Papers;Economic policy;Economic growth;Employment policy;Monetary policy;Investment policy;Debt management;Human capital;Social policy;Environmental policy;Climate policy;Governance;Economic indicators;Bangladesh; |
| Date: | 2013–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:13/63&r=env |
| By: | Oskar Lecuyer; Philippe Quirion |
| Abstract: | This article constitutes a new contribution to the analysis of overlapping instruments to cover the same emission sources. Using both an analytical and a numerical model, we find that when the risk that the CO2 price drops to zero and the political unavailability of a CO2 tax (at least in the European Union) are taken into account, it can be socially beneficial to implement an additional instrument encouraging the reduction of emissions, for instance a renewable energy subsidy. Our analysis has both a practical and a theoretical purpose. It aims at giving economic insight to policymakers in a context of increased uncertainty concerning the future stringency of the European Emission Trading Scheme. It also gives another rationale for the use of several instruments to cover the same emission sources, and shows the importance of accounting for corner solutions in the definition of the optimal policy mix |
| Keywords: | Uncertainty, Policy overlapping, Mitigation policy, Energy policy, EU-ETS, Renewable energy, Corner solutions, Nil CO2 price, European Union |
| JEL: | Q28 Q41 Q48 Q58 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:1301&r=env |
| By: | Vincent Bertrand |
| Abstract: | This paper reviews the development of emission trading models from the earliest to recent contributions. First, we introduce the economics of pollution control and the origins of emission trading. We give a brief description of policy instruments for the control of pollution, and explain why economic instruments (Pigouvian tax and emission trading) produce better results than “command-and-control” approaches. Second, we review several papers on modeling of emission trading systems, with a focus on dynamic models in case of perfect competition. We begin with the earliest static models, investigating a number of factor that can affect the effectiveness of emission trading (e.g. market power, transaction-costs, political pressures, etc). Next, we present dynamic models of permit markets, analysing questions such as banking/borrowing, relationship between spot and future markets, exogenous factors influencing the marginal abatement cost, etc. Finally, we end the paper with recent studies that model the main features of the European Emission Trading Scheme (EU ETS) in a dynamic framework with stochastic emissions. |
| Keywords: | Emission Trading, EU ETS, Partial Equilibrium Modeling |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:1304&r=env |
| By: | International Monetary Fund. Asia and Pacific Dept |
| Keywords: | Poverty Reduction Strategy Papers;Economic policy;Economic growth;Public investment programs;Private investment;Industrial policy;Public-private sector cooperation;Trade policy;Agricultural development;Infrastructure;Climate policy;Human capital;Social policy;Governance;Environmental policy;Bangladesh; |
| Date: | 2013–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:13/62&r=env |
| By: | Richard S.J. Tol (Department of Economics, University of Sussex; Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands; Department of Spatial Economics, Vrije Universiteit, Amsterdam, The Netherlands; Tinbergen Institute, Amsterdam, The Netherlands) |
| Abstract: | Bootstrap and smoothed bootstrap methods are used to estimate the uncertainty about the total impact of climate change, and to assess the performance of commonly used impact functions. Kernel regression is extended to include restrictions on the functional form. Impact functions do not describe the primary estimates of the economic impacts very well, and monotonic functions do particularly badly. The impacts of climate change do not significantly deviate from zero until 2.5-3.5°C warming. The uncertainty is large, and so is the risk premium. The ambiguity premium is small, however. The certainty equivalent impact is a negative 1.5% of income for 2.5°C, rising to 15% (50%) for 5.0°C for a rate of risk aversion of 1 (2). |
| Keywords: | impacts of climate change, kernel regression, bootstrap, risk aversion, ambiguity aversion |
| JEL: | C14 Q54 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:6413&r=env |
| By: | Emhjellen, Magne (Petoro); Osmundsen, Petter (UiS) |
| Abstract: | . |
| Keywords: | Climate Projects; Decision Analysis; CO2 |
| JEL: | A10 |
| Date: | 2013–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:stavef:2013_007&r=env |
| By: | Henrique N. S\'a Earp; Ademar R. Romeiro |
| Abstract: | Every production-recycling iteration accumulates an inevitable proportion of its matter-energy in the environment, lest the production process itself would be a system in perpetual motion, violating the second law of Thermodynamics. Such high-entropy matter depletes finite stocks of ecosystem services provided by the ecosphere, hence are incompatible with the long-term growth in the material scale of the economic process. Moreover, the complex natural systems governing such stocks respond to depletion by possibly sudden environmental transitions, thus hindering markets' very ability to adapt to the new equilibrium conditions. Consequently, uncertainty of critical resilience thresholds constrains material economic growth. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1309.2274&r=env |
| By: | Nicholas Rivers (Graduate School for Public and International Affairs, University of Ottawa, Ottawa, ON); Brandon Schaufele (Department of Economics and Institute of the Environment, University of Ottawa, Ottawa ON) |
| Abstract: | This study evaluates the implications of an actual carbon tax on the international competitiveness of the agricultural sector. Applying uniformly to all fossil fuels combusted within its borders, the province of British Columbia unilaterally introduced a carbon tax on July 1, 2008. Using commodity-specific trade flows and exploiting cross-provincial and inter-temporal variation, we find little evidence that the implementation of the carbon tax is associated with any meaningful effects on agricultural exports despite the sector being singled out as “at risk” by the provincial government. Allowing for heterogeneous responses by commodity, some statistically insignificant negative effects are shown for specific exports. Discussion of potential policy remedies to address the potential impacts of the tax on firm profitability and international competitiveness is also included. |
| Keywords: | Agricultural trade; British Columbia; carbon tax; competitiveness; unilateral climate policy. |
| JEL: | H23 Q17 Q5 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:1302e&r=env |
| By: | Berger, Lars; Huettel, Silke; Hagedorn, Konrad |
| Abstract: | The eutrophication of Lake Tai in the mid-east of China caused by an excessive import of nutrients from agricultural non-point-source pollution impedes social and economic development. In our research we aim to improve the understanding of the farmers’ decision-making process applying chemical fertilizers. Based on data gained in household interviews in 2011 and 2012 we follow the question: Which factors influence the individual decision on the use of fertilizers? Our approach is twofold: first, we estimate a production function to assess nitrogen overuse. Second, based on qualitative data we analyse the influence of the institutional context on individual decision-making. |
| Keywords: | non-point source pollution, farm-level decision-making, institutional analysis, China, Environmental Economics and Policy, Institutional and Behavioral Economics, Resource /Energy Economics and Policy, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi13:156224&r=env |
| By: | Comin, Diego; Rode, Johannes |
| Abstract: | We estimate the effect of the diffusion of photovoltaic (PV) systems on the fraction of votes obtained by the German Green Party. The logistic diffusion of PV systems offers a new identification strategy. We take first differences and instrument adoption rates (i.e. the first difference in the diffusion level) by lagged diffusion levels. The existing rationales for non-linearities in diffusion, and ubiquity of logistic curves ensure that our instrument is orthogonal to variables that directly affect voting patterns. We find that the diffusion of domestic PV systems caused 25 percent of the increment in green votes between 1998 and 2009. |
| Keywords: | feed-in tariff; PV systems; technology diffusion; voting |
| JEL: | E13 O14 O33 O41 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9573&r=env |
| By: | M. Scott Taylor (University of Calgary); Juan Moreno Cruz |
| Date: | 2013–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:clg:wpaper:2013-19&r=env |
| By: | Holst, Gesa Sophie; Mußhoff, Oliver; Dörschner, Till |
| Abstract: | Die Maisanbaufläche in Deutschland ist in den vergangenen Jahren aufgrund der steigenden Anzahl Biogasanlagen und der guten Eigenschaften von Mais als Biogassubstrat stark ausgedehnt worden. Zur Begrenzung des Maisanbaus hat die Politik bereits Maßnahmen eingeleitet. Dazu zählt z.B. die Begrenzung des Maiseinsatzes in Biogasanlagen auf 60 Masseprozent und eine Förderung alternativer Biogassubstrate. Ein zurzeit viel diskutiertes Biogassubstrat sind spezielle Blühstreifenmischungen. Diese liefern eine hohe Methanausbeute je Hektar und weisen einen Zusatznutzen für die Umwelt auf. Mit einem Unternehmensplanspiel wird untersucht, ob Landwirte durch eine Belohnungs- und Bestrafungspolitik Blühstreifen in das Anbauprogramm aufnehmen. Die Ergebnisse zeigen, dass die Implementierung von Bestrafungs- und Belohnungspolitiken auf die Blühstreifenfläche eine anbaufördernde Wirkung hat. Außerdem zeigt sich, dass die Bestrafungspolitik eine stärkere verhaltenssteuernde Wirkung als die Belohnungspolitik hat, obwohl sich die Politikmaßnahmen nicht in ihrer Gewinnwirksamkeit unterscheiden. Des Weiteren weisen die Ergebnisse darauf hin, dass der Blühstreifenanbau durch soziodemografische Parameter in unterschiedlicher Weise beeinflusst wird. |
| Keywords: | Politikfolgenabschätzung, Blühstreifen, Experimentelle Ökonomik, Unternehmensplanspiele, Landwirtschaft, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi13:156114&r=env |
| By: | Grüner, Sven; Fietz, Anica |
| Abstract: | Die regulatorischen Aktivitäten des Staates werden oftmals mit dem Vorliegen von Marktversagen begründet. Diese Perspektive ist allerdings zu eng und vernachlässigt das Auftreten von Staatsversagen. Der vorliegende Beitrag untersucht staatliche Eingriffe aus einer verhaltensökonomischen Perspektive. Dabei werden bedeutsame Erkenntnisse aus der experimentellen Wirtschaftsforschung vorgestellt. Zunächst werden systematische Verhaltensabweichungen des Homo sapiens vom Modell des rationalen Erwartungsnutzenmaximierers und dessen politische Relevanz für den Agrar- und Umweltbereich aufgezeigt. Anschließend liegt der Fokus auf den ökonomischen Kosten der Regulierung. Als zentrale Faktoren werden neben der fehlenden Treffsicherheit hinsichtlich der Zielgröße, nicht-intendierte Folgen auf zielgrößenferne Bereiche und direkte Kosten der Politikfolgenabschätzung identifiziert und diskutiert. Sofern die an der Regulierung beteiligten Akteure (Regulierer und Regulierte) nur über unvollständige Informationen verfügen und die Informationsverarbeitung Grenzen unterliegt, ist Regulierung stets mit Kosten verbunden. Festzuhalten bleibt: Um ein gegebenes Regulierungsziel zu erreichen ist ein Abwägungsprozess zwischen der Vor- und Nachteilhaftigkeit von Markt- und Staatslösungen erforderlich. |
| Keywords: | Regulierung, Staatsversagen, experimentelle Wirtschaftsforschung, (un)begrenzte Rationalität, individuelle Verhaltensdeterminanten, deskriptive Entscheidungstheorie, Environmental Economics and Policy, Institutional and Behavioral Economics, Risk and Uncertainty, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi13:156109&r=env |
| By: | Raballand, Gael; Rajaram, Anand |
| Abstract: | Starting with the hypothesis that behaviors are the critical (and often overlooked) factor in public sector performance, this paper explores the notion of how behavioral change (and thus institutional change) might be better motivated in the public sector. The basis for this study is"an accidental experiment"resulting from the World Bank's operational engagement in Cameroon. In 2008, World Bank staff successfully concluded preparation on a project to support the Government of Cameroon to improve transparency, efficiency, and accountability of public finance management. The US$15 million project supported a number of ministries to strengthen a broad range of management systems and capacities. Independently and concurrently, other Bank staff initiated a low-profile, technical assistance project to improve performance in Cameroon's Customs, supported by a small trade facilitation grant of approximately US$300,000. One approach appears to have succeeded in initiating change while the other has signally failed. The two projects of different scale, scope and design in the same governance environment offer a very interesting natural experiment (unplanned but accidental for that reason) that allows insights into the nature of institutional change and the role of behavior and incentives and approaches that offer greater prospects for making reform possible. The paper confirms the value of using ideas from behavioral economics, both to design institutional reforms and to critically assess the approach to institutional reform taken by development agencies such as the World Bank. |
| Keywords: | Environmental Economics&Policies,Cultural Policy,National Governance,E-Business,Public Sector Economics |
| Date: | 2013–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6595&r=env |
| By: | Nürnberger, Karin; Hahn, Andreas; Jörg, Rößiger; Thomas, Knoke |
| Abstract: | Diese Arbeit untersucht anhand einer Simulationsstudie, ob die Einkommensteuerregelung des § 34b EStG Einfluss auf das waldbauliche Optimum risikomeidender Investoren nimmt und inwieweit dies aktuellen forstpolitischen Zielsetzungen zuwiderläuft. Die Ergebnisse zeigen einen Einfluss der Einkommensteuer auf das Portfoliooptimum aus Baumarten und Umtriebszeiten. In der Variante ohne Einkommensteuer lässt sich das Gesamtportfolio als eine Form des naturnahen Waldbaus deuten. Für die Varianten mit Einkommensteuer ergibt sich ein maximaler Value-at-Risk, bei dem das optimierte Portfolio durch einen höheren Anteil risikoreicherer Fichte, eine Konzentration der Holzentnahmen auf das maximale Bestandsalter und reduzierte Flächenanteile von Verjüngungshieben in geringeren Bestandsaltern gekennzeichnet ist. Diese Tendenzen verstärken sich in der Variante mit Einkommensteuerermäßigung im Kalamitätsfall. Deshalb können die beiden steuerintegrierenden Varianten als Waldbaustrategien verstanden werden, die im Vergleich zur Basisvariante tendenziell zu gleichaltrigen Reinbeständen mit höheren Anteilen an risikoreichen Baumarten führen. Die Ergebnisse führen zu dem Schluss, dass die Anwendung der Steuerregelung des § 34b EStG tendenziell zu gleichaltrigen Beständen mit mehr Fichte führt. Die Kosten des höheren Risikos von fichtendominierten Waldbaustrategien werden durch die Steuerermäßigung und damit von der Allgemeinheit abgefedert. Diese risikoförderne Wirkung einer staatlichen Risikobeteiligung ist in der Literatur als Domar-Musgrave-Effekt bekannt. Von der Anwendung dieser Norm profitieren Waldbesitzer mit höherem Einkommen und somit oftmals die größeren Waldeigentümer tendenziell stärker als Kleinprivatwaldbesitzer. Forstpolitisch ist eine Vereinfachung der Rechtsvorschrift anzustreben, in der risikoreiche Baumarten nicht begünstigt werden. Eine Bindung der Steuerprivilegien an Maßnahmen des Waldumbaus erscheint vor dem Hintergrund der erwarteten Zunahme von Kalamitätsnutzungen nötig und zeitgemäß. |
| Keywords: | Forstwirtschaft, Portfoliooptimierung, Besteuerung, Einkommensteuer, außerordentliche Holznutzungen, Environmental Economics and Policy, Risk and Uncertainty, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi13:156102&r=env |
| By: | Stefano Bosi; Lionel Ragot |
| Abstract: | On the one hand, the adoption of polluting technologies can enhance the factor productivity; on the other hand, pollution lowers the stock of human capital by weakening physical and mental performances, and short-ening the life expectancy at the end. To capture the impact of pollution on economic growth, we compute the optimal policy in an endogenous growth model `a la Lucas (1988) and we study the effects of pollution in the short and the long run. |
| Keywords: | pollution, human capital, endogenous growth |
| JEL: | D90 J24 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2013-25&r=env |
| By: | Delaney, Jason (School of Business, Georgia Gwinnett College, 1000 University Center Lane, Lawrenceville, GA 30043, USA); Jacobson, Sarah (Department of Economics, Williams College, 24 Hopkins Hall Dr., Williamstown, MA 01267, USA) |
| Abstract: | We study the comparative effectiveness of three policy interventions in a lab experiment that models common pool resources. The interventions we examine are a Pigouvian subsidy, information provision, and an appeal to social norms. The subsidy successfully reduces over-extraction to close to the efficient level on average, but even groups that were not over-extracting are induced to extract less. Because the social optimum is interior, over-compliance reduces efficiency. Moreover, when the subsidy is removed, extraction reaches its least efficient level. Both information provision and normative appeals increase efficiency by reducing over-extraction without exacerbating over-compliance, although the reduction in extraction is much less than that seen with the subsidy. Some of the effect of normative appeals persists even after messages stop being sent. Net of estimates of the marginal cost of raising public funds to pay for a subsidy, the efficiency achieved by the two nonpecuniary treatments is comparable to that achieved by the Pigouvian subsidy. |
| Keywords: | laboratory experiment, Pigouvian tax, Pigouvian subsidy, common pool resource, information provision, normative messaging |
| JEL: | H41 H21 C91 C92 D62 D83 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:wil:wileco:2013-02&r=env |
| By: | Rohlfs, Wilko (RWTH Aachen University); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)) |
| Abstract: | In this paper we identify optimal strategies for the investment in power generation assets. The investments are characterized by multiple available technologies whose economic value is driven by a technology-specific combination of several underlying assets, such as the price of fuel, electricity, and CO2. The correlation between the development of those underlying assets allows for diversification and thus to reduce the overall risk by holding a portfolio of different technologies. This yields an investor-dependent strategy for the deployment of new energy generation assets. The modeling framework developed is based on stochastic real options analysis that enables to account for the additional value of waiting which arises from uncertain commodity price development. In the presentation, we increase the model’s complexity stepwise, in order to depict the influences of various aspects, as for instance the interaction of technologies, value of waiting, or modification of an existing power plant portfolio. We find that including the value of waiting in the decision process not only delays the investment but also leads to an asymmetric risk distribution which features a much lower probability for losses. In addition, the results where the value of waiting is incorporated are more robust with respect to a variation of the investor’s risk- and time-preferences compared to the results gained with the classical net present value model. Finally, we investigate the required market conditions needed for the deployment of carbon capture and storage (CCS) technologies. We find that a carbon dioxide price of 60 e/tCO2 and an electricity price of 70 e/MWh is required in the year 2015 in order to reach a probability of at least 50% for the deployment of CCS in 2022. |
| Keywords: | CCS; Real options; Retrofit; Renewable energies |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2013_012&r=env |
| By: | Yamamura, Eiji |
| Abstract: | This paper uses inter-country panel data obtained during the period 1990 to 2010 to examine how the occurrence of natural disasters has affected corruption within the public sector. There are a number of major findings from this study. (1) Natural disasters lead to corruption within the public sector. (2) Furthermore, disaggregating disasters into various categories for closer examination reveals that floods, which are foreseeable and affect victims that are limited to a particular group, increase corruption; however, other types of disasters do not have such a consequence. (3) The effect of floods is much greater in developed countries than in developing countries. These findings are observed even after considering the time trend, the various characteristics of the countries affected, and statistical outliers. In developed countries, people have an incentive to live within areas prone to flooding because the benefit expected from the occurrence of a flood is greater than its perceived cost. |
| Keywords: | Corruption, Institution, Disasters, Risk |
| JEL: | D7 D81 Q54 |
| Date: | 2013–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:49760&r=env |
| By: | Issouf Samaké; Priscilla S. Muthoora; Bruno Versailles |
| Abstract: | This paper assesses the implications of the use of oil revenue for public investment on growth and fiscal sustainability in Cameroon. We develop a dynamic stochastic general equilibrium model to analyze the effects of such investment on growth and on the path of key fiscal indicators, such as the non-oil primary deficit and public debt. Policy scenarios show that Cameroon’s large infrastructural needs and relatively low current debt levels could justify a temporary deviation from traditional policy advice that suggests saving part of the oil revenue to smooth expenditure over time. Model simulations show that a relatively high degree of efficiency of public investment is needed for scaled-up public investment to make a significant contribution to growth, while maintaining fiscal sustainability. |
| Keywords: | Fiscal sustainability;Cameroon;Economic growth;Oil revenues;Fiscal policy;Public investment;Natural resources;Low-income developing countries;Economic models;Cameroon, fiscal policy, DSGE, natural resource-rich countries, low-income countries, public investment, growth. |
| Date: | 2013–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:13/144&r=env |