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on Environmental Economics |
| By: | Elofsson, Katarina (Department of Economics, Swedish University of Agricultural Sciences); Gren, Ing-Marie (Department of Economics, Swedish University of Agricultural Sciences) |
| Abstract: | This study investigates the contribution of forest carbon sequestration to a cost-efficient EU climate policy from 2010 to 2050 under conditions of uncertainty. We note that there is a trade-off between sequestration and alternative uses of forests such as bioenergy and timber production. A dynamic and probabilistic cost-minimization model is developed, which includes fossil fuel use within the EU Emissions Trading System and forest management in the EU-27 countries. The results suggest that if policy makers wish to meet emissions targets with 80% certainty, this goal will be eight times more expensive than when they were unconcerned with uncertainty. Policy makers’ risk attitudes affect forest management strategy primarily through the inclusion of wood products, where potential carbon emissions reductions are high but also highly uncertain. Excluding wood products from a climate strategy can be expensive if policy maker are insensitive to uncertainty. |
| Keywords: | uncertainty; carbon sequestration; bioenergy; wood products; climate policy; cost-efficiency; EU. |
| JEL: | Q23 Q28 Q48 Q54 |
| Date: | 2013–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slueko:2013_008&r=env |
| By: | TAKARADA Yasuhiro |
| Abstract: | We develop a two-country, two-good general equilibrium model of international trade that takes international transport sectors into explicit consideration to examine the effects of environmental policy on international transport. International transportation services are traded between two countries. First, we find that international emission permit trading between the international transport sectors of two countries benefits the country that imports transportation services, regardless of the trading price of emission permits. However, a country that exports transportation services may lose from emissions trading even if it receives all of the direct gains from permit trade by buying (or selling) permits at the current market price of the other country. Our results suggest that the trade pattern in transportation services is crucial to the welfare effects of permit trade in international transport sectors. Second, we demonstrate that a country may gain from unilateral reduction in the emission permit of its transport sector despite the fact that the stricter regulation shrinks its transport sector. Both countries can benefit from the voluntary regulation if environmental regulations on international transport are initially weak. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:13061&r=env |
| By: | Shabman, Leonard (Resources for the Future); Lynch, Sarah |
| Abstract: | The Northern Everglades Payment for Environmental Services (NE-PES) program was launched in 2011 by the state of Florida. The NE-PES program was developed through the Florida Ranchlands Environmental Services Project (FRESP), a six-year collaborative effort (2005–2011) that engaged ranchers, government agencies, and environmental NGOs. Through FRESP, eight pilot water management projects were implemented on cattle ranches. The projects demonstrated how ranchland owners, as service sellers, could enter into contracts with a state agency buyer to provide the buyer-desired services of water retention (acre-feet) and/or nutrient load retention (lbs. of phosphorus or nitrogen). Innovative contract elements, based on the experience of implementing the pilot projects, developed by FRESP collaboration partners made the now operating NE-PES possible. |
| Keywords: | environmental services, payment for environmental services, environmental markets, Everglades |
| Date: | 2013–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-13-27&r=env |
| By: | Ben Jebli, Mehdi; Ben Youssef, Slim |
| Abstract: | The authors consider a symmetric model composed of two countries and a firm in each country. Firms produce the same good by means of a polluting technology which uses fossil energy. However, these firms can adopt a clean technology which uses a renewable energy having a lower unit cost. Surprisingly, opening markets to international competition increases the per-unit emission-tax and decreases the per-unit production subsidy. Interestingly, the socially optimal adoption date under a common market better internalizes transboundary pollution than that under autarky. It also better internalizes transboundary pollution compared with the optimal adoption dates for firms. In autarky (resp. a common market), firms adopt the clean technology earlier (resp. later) than what is socially optimal and, therefore, regulators can induce clean technology adoption at the socially optimal adoption date by giving firms postpone (resp. speed up) adoption subsidies. Opening markets to international trade, speeds up socially optimal adoption dates and delays optimal adoption dates for firms. Consequently, with market opening, speed up adoption subsidies are needed to reduce the global flow of pollution. -- |
| Keywords: | regulation,adoption date,renewable energy,transboundary pollution,common |
| JEL: | D62 F18 H57 Q42 Q55 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201350&r=env |
| By: | Christian de Perthuis; Raphael Trotignon |
| Abstract: | The European emissions trading scheme (EU ETS) is the centrepiece of Europe’s climate policy. The system has been undermined variously by the weakness of its regulation, an undesirable overlap with other public policies and the far-reaching economic and financial crisis that caused the market price of allowances to plunge. This article attempts to identify the conditions for making the coming years of the EU ETS a success. It draws historical lessons from the eight years the scheme has been in operation, and then analyzes, using the ZEPHYR-Flex model, the various interventions by the public authorities currently under discussion in order to revive the market. These simulations reveal the risk of carrying forward problems to the future, with further clouding of the visibility needed by ETS actors in the long term. Finally, the article proposes to draw lessons from monetary policy by outlining what might be the mandate of an Independent Carbon Market Authority, with responsibility for the dynamic management of the supply of allowances, and whose main mission would be to ensure the optimal linkage between the different temporal horizons of the climate strategy. |
| Keywords: | Emission trading, EU ETS, governance |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:1307&r=env |
| By: | Fraas, Arthur G. (Resources for the Future); Harrington, Winston (Resources for the Future); Morgenstern, Richard D. (Resources for the Future) |
| Abstract: | The shale gas revolution in the United States has dropped the price of natural gas (NG) significantly. Combined with new fuel and vehicle technologies, an opportunity exists to expand the use of NG throughout the economy, including in the light-duty fleet of cars and trucks. This expansion could involve the direct combustion of the gas in the form of compressed natural gas or liquid petroleum gas or, alternatively, the use of natural-gas-based liquid fuels such as ethanol or methanol. This paper examines the potential economic, environmental, and national security gains from replacing a portion of the domestic gasoline use in the light-duty fleet with these various NG-based fuels. Also examined are the regulatory barriers to the expanded use of the fuels. We find that these NG-based fuels could yield significant fuel cost savings relative to conventional gasoline in the light-duty fleet, along with gains to national security and, possibly, some environmental benefits. |
| Keywords: | energy, natural gas, alternative fuels |
| JEL: | Q42 Q48 Q53 Q55 |
| Date: | 2013–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-13-28&r=env |
| By: | Arif Rahman (Pakistan Institute of Development Economics, Islamabad); Aneel Salman (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | In the wake of devolution and decentralisation in Pakistan there is a greater need to devise localised vulnerability to climate change indices as an easy reference for both policy-makers and the development sector. While global vulnerability indices are commercially motivated and based on country level data, ranking the degree of vulnerability to climate change across nations represents a ‘number’ aimed at directing, inter alia, development, disaster and aid efforts among countries. These indices however, fail to highlight subnational vulnerabilities existing within countries being ranked. Using the IPCC’s definitions of vulnerability in the context of climate change as a reference source, this study devises a district level vulnerability to climate change index for 22 districts of Pakistan. The Index shows that there exists a varying degree of vulnerability between districts and a further variation across the rural and urban divide of each district. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pid:ceeccp:2013:05&r=env |
| By: | Khanna, Shefali (Resources for the Future); Linn, Joshua (Resources for the Future) |
| Abstract: | By decreasing gasoline consumption, greater fuel economy could significantly reduce environmental and energy security concerns. In this paper, we show that since the year 2000, technology and market shares have contributed roughly equally to rising new vehicle fuel economy in the United States. We discuss the implications of these patterns for the safety and welfare effects of fuel economy standards. |
| Keywords: | corporate average fuel economy standards, passenger vehicles, fuel savings, vehicle safety, greenhouse gas emissions rate standards |
| JEL: | Q4 L62 |
| Date: | 2013–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-13-29&r=env |
| By: | Koichiro Ito |
| Abstract: | Many countries use substantial public funds to subsidize reductions in negative externalities. However, such subsidies create asymmetric incentives because increases in externalities remain unpriced. This paper examines implications of such asymmetric subsidy incentives by using a regression discontinuity design in California's electricity rebate program that provided a financial reward for energy conservation. Using household-level panel data from administrative records, I find precisely-estimated zero causal effects in coastal areas. In contrast, the incentive produced a 5% consumption reduction in inland areas. Income and climate conditions significantly drive the heterogeneity. Asymmetric subsidy structures weaken incentives because consumers far from the rebate target show little response. The overall program cost is 17.5 cents per kWh reduction and $390 per ton of carbon dioxide reduction, which is unlikely to be cost-effective for a reasonable range of the social marginal cost of electricity. |
| JEL: | L11 L51 L94 L98 Q41 Q48 Q58 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19485&r=env |
| By: | Dirk Rübbelke; Stefan Vögele |
| Abstract: | In Europe the ambitions of individual countries to deploy carbon capture and storage (CCS) technologies are diverse. Reasons for this are, amongst other things, the heterogeneity of national electricity generation systems and storage capacities and the differences in the public perception of these technologies. In this analysis we investigate the consequences of partial deployment of CCS, i.e. we consider a situation where some European countries (the “pioneersâ€) actively deploy CCS technologies, while others (the “laggardsâ€) do not use CCS. Our study focuses on the question whether it pays throughout to be a pioneer and whether laggards will generally be disadvantaged. In our assessment, we take into account impacts on consumers affected from rising electricity prices, electricity suppliers whose profits are influenced by changes in both electricity prices and sales, and international trade-flow changes (modifications in European electricity import/export patterns). |
| Keywords: | Carbon capture and storage (CCS); electricity generation; environmental technology; load dispatch approach. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2013-13&r=env |
| By: | Walls, Margaret (Resources for the Future); Kousky, Carolyn (Resources for the Future); Chu, Ziyan (Resources for the Future) |
| Abstract: | Modern geographic information system (GIS) tools have allowed a more careful examination of how the physical characteristics of a property’s neighborhood and surrounding land uses are capitalized into property values. The ArcGIS Viewshed tool is a case in point: it identifies the cells in an input raster that can be seen from one or more observation points. In this study, we use the tool in a hedonic property value model that estimates a home’s sale price as a function of the percentage of its view that encompasses various “green” land covers—forest, farmland, and grassy recreational lands—as well proximity to such green spaces. We use 25 years of data from St. Louis County, Missouri, along with land cover data from 1992, 2001, and 2006, to estimate a property fixed-effects model. This approach, which minimizes the bias from omission of time-constant unobservable variables, is a methodological advance over some prior studies of the value of a view. We find that forest views negatively affect home prices, whereas farmland and grassy area views have positive effects (though only the farmland results are statistically significant). Proximity to each of these types of lands has value, however: more of each type in a close buffer around the property increases the property’s sale price. We hypothesize that our results are related to two factors: the topography of the study area and the fact that farmland has been converted to development over time, leading to a relative increase in its value. |
| Keywords: | hedonic pricing, view, open space, land cover, geographic information systems |
| JEL: | Q51 Q24 R0 |
| Date: | 2013–08–02 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-13-25&r=env |
| By: | Dikgang, Johane; Muchapondwa, Edwin |
| Abstract: | This paper estimates the visitation demand function for Kgalagadi Transfrontier Park (KTP) in order to determine the conservation fee to charge South African residents to maximise park revenue. We conducted contingent behaviour experiments at KTP and three other national parks, which we assume are either substitutes or complements for visitors to KTP. Our random effects Tobit model shows that there is a wide variation in the own-price elasticities of demand between the parks, but they are generally not elastic. The cross-price estimates indicate that there is limited substitutability in visitation demand among the four parks. The study uses the unitary elasticity rule to demonstrate that there is a possibility of raising conservation fees to revenue-maximising levels at KTP, as well as the other parks, using methods such as a mandatory conservation fee increment or a community-bound voluntary donation above the regular conservation fee. Sharing conservation revenue with communities surrounding parks could demonstrate the link between ecotourism and local communities’ economic development, promote a positive view of land restitution involving national parks, help address South Africa’s heavily skewed distribution of income, and act as an incentive for the local communities to participate in conservation even more. |
| Keywords: | contingent behaviour, conservation fee, demand, land claim, national park |
| Date: | 2013–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-13-09-efd&r=env |
| By: | Gabriel M. Ahlfeldt; Kristoffer Moeller; Sevrin Waights; Nicolai Wendland |
| Abstract: | Provided there are positive external benefits attached to the historic character of buildings, owners of properties in designated conservation areas benefit from a reduction in uncertainty regarding the future of their area. At the same time, the restrictions put in place to ensure the preservation of the historic character limit the degree to which properties can be altered and thus impose a cost to their owners. We test a simple theory of the designation process in which we postulate that the optimal level of designation is chosen so as to Pareto-maximize the welfare of local owners. The implication of the model is that a) an increase in preferences for historic character should increase the likelihood of a designation, and b) new designations at the margin should not be associated with significant house price capitalization effects. Our empirical results are in line with these expectations. |
| Keywords: | Designation, difference-in-difference, RDD-DD, England, gentrification, heritage, property value |
| JEL: | H23 H31 R40 R58 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0143&r=env |