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on Environmental Economics |
| By: | Yue, Ian T.; Swallow, Stephen K. |
| Keywords: | Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:173302&r=env |
| By: | Toman, Michael |
| Abstract: | Information on ecosystem characteristics as well as economic statistics is needed to more fully inform decision makers on the impacts of climate change on human well-being. Climate change risks involve potentially large and irreversible as well as highly uncertain impacts that need to be evaluated with information that complements cost-benefit analysis. Information on the irreversibility of impacts also is relevant for evaluating implications for intergenerational equity. In addition, climate change is subject to a large degree of Knightian uncertainty, making it useful to understand how individuals perceive and evaluate climate change risks. |
| Keywords: | Climate Change Economics,Environmental Economics&Policies,Climate Change Mitigation and Green House Gases,Science of Climate Change,Biodiversity |
| Date: | 2014–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7094&r=env |
| By: | Chalak, Morteza; Pannell, David |
| Keywords: | Climate change, threshold, carbon tax, global warming, dynamics, Environmental Economics and Policy, Risk and Uncertainty, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169844&r=env |
| By: | Cho, Sung Ju; McCarl, Bruce A.; Wu, Ximing |
| Abstract: | This study examines how the U.S. crop mix pattern has responded to climate and in turn the potential effects of projected climate change. We find that there are significant effects of temperature and precipitation on the crop choice decisions. |
| Keywords: | Climate change, Land use, Crop mix, Fractional regression, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170015&r=env |
| By: | Zhang, Wendong; Na, Chen; Irwin, Elena G.; Martin, Jay F.; Gebremariam, Seyoum Y.; Gildow, Marie |
| Abstract: | Incomplete and Preliminary Draft – Please Do Not Cite |
| Keywords: | Land use change, crop rotation, SWAT, Lake Erie, Agricultural and Food Policy, Environmental Economics and Policy, Farm Management, Land Economics/Use, Q12, Q28, Q57, Q51, |
| Date: | 2014–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170599&r=env |
| By: | Wang, Weiwei; Khanna, Madhu; Puneet, Dwivedi; Robert, Abt |
| Keywords: | Forest Biomass, Bioenergy, Agricultural biomass, Partial Equilibrium Model, Land Use Change, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170565&r=env |
| By: | Chang, Charles W. |
| Abstract: | The effects of anthropogenic greenhouse gas emission to climate change are uncertain; how does this uncertainty affect the optimal carbon abatement policy? Tackling this classic problem is challenging; not only does it require integrated assessment analyses that consolidate an adequate representation of both climate and economy, but also a sensible understanding of hedging incentives and decision making under uncertainty. In the Integrated Assessment Model (IAM) community, this representation is severely restricted by computational burdens and model intractability (Webster, Santen, and Parpas, 2012). I provide a minimal framework that relies on the transparency of mathematical programming, to assess precautionary mitigation as a means to hedge against the risk and uncertainty of climate catastrophes. The scope of the paper encompasses the following: assessment of optimal abatement under parameter uncertainty and endogenous learning; decomposition of optimal abatement with respect to mitigatory incentives; assessment of policy sensitivity to assumed distributions of uncertain temperature thresholds. I introduce DICESC, a multistage stochastic control version of Nordhaus’ DICE model to demonstrate that policy optimization in which the hazard rates of climate catastrophes can be controlled significantly increases incentives for precautionary abatement. Despite the drastic level increase in precautionary abatement the proposed formulation achieves, I stress the importance of understanding the distributive properties of uncertainty for the robust assessment of optimal policy. |
| Keywords: | Climate Change, Catastrophes, Integrated Assessment Models, Stochastic Control, Environmental Economics and Policy, Risk and Uncertainty, Q50, Q54, Q58, D58, D81, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170831&r=env |
| By: | Christoph Böhringer (University of Oldenburg, Department of Economics); Nicholas Rivers (University of Ottawa); Hidemichi Yonezawa (University of Ottawa) |
| Abstract: | We show that imposition of a state-level environmental tax in a federation crowds out preexisting federal taxes. We explain how this vertical fiscal externality can lead unilateral statelevel environmental policy to generate a welfare gain in the implementing state, at the expense of other states. Using a computable general equilibrium model of the Canadian federation, we show that vertical fiscal externalities can be the major determinant of the welfare change following environmental policy implementation by a state government. Our numerical simulations indicate that - as a consequence of vertical fiscal externalities - state governments can reduce greenhouse<br>gas emissions by over 20 percent without any net cost to themselves. |
| Keywords: | fiscal externality, climate policy, federalism, computable general equilibrium |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:old:dpaper:370&r=env |
| By: | Seixas, Renato; Silveira, José Maria |
| Abstract: | We investigate the environmental effects due to pesticides for two different genetically modified (GM) seeds: insect resistant (IR) cotton and herbicide tolerant (HT) soybeans. Using an agricultural production model of a profit maximizing competitive farm, we derive predictions that IR trait decreases the amount of insecticides used and HT trait increases the amount of less toxic herbicides. While the environmental impact of pesticides for IR seeds is lower, for the HT seeds the testable predictions are ambiguous: scale as substitution effects can lead to higher environmental impacts. We use a dataset on commercial farms use of pesticides and biotechnology in Brazil to document environmental effects of GM traits. We explore within-farm variation for farmers planting conventional and GM seeds to identify the effect of adoption on the environmental impact of pesticides measured as quantity of active ingredients of chemicals and the Environmental Impact Quotient index. The findings show that the IR trait reduces the environmental impact of insecticides and the HT trait increases environmental impact due to weak substitution among herbicides of different toxicity levels. |
| Keywords: | Brazil, Agriculture, Environmental Impact, Genetically Modified Seeds, Herbicide Tolerant Soybeans, Insect Resistant Cotton, Pesticides, Agricultural and Food Policy, Environmental Economics and Policy, Q12, Q18, Q51, Q52, Q53, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170226&r=env |
| By: | Chakrabarti, Anwesha |
| Keywords: | Environmental economics, Ecosystem service market, Payment for ecosystem services, Provision point mechanism, Field experiments, Community/Rural/Urban Development, Environmental Economics and Policy, Research Methods/ Statistical Methods, Q20, Q57, C93, H41, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170643&r=env |
| By: | Foote, Kyleisha; Joy, Mike |
| Abstract: | Over the past two decades, major increases in production have occurred in the New Zealand dairy industry. This has required the use of externally sourced inputs, particularly fertiliser, feed supplements, and irrigation. Contemporary New Zealand dairy farming practice incurs environmental externalities: impacts that are not paid for by the dairy farmer. Hence, the public is left to deal with these externalities, both regarding the economic responsibility and environmental degradation. This study estimated that the economic cost of environmental externalities is higher than the 2012 dairy export revenue of $11.6 billion. |
| Keywords: | New Zealand dairy farming, intensification, externalities, environmental impacts, Agribusiness, Environmental Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nzar14:187496&r=env |
| By: | Gregg, Daniel; Rolfe, John |
| Abstract: | The valuation of environmental assets is a key current issue in the analysis of environmental assets from an economic viewpoint. Economic assessment often involves the assessment of community values for environmental protection (public benefits) and any complementary or offsetting changes to production (net private benefits). Whilst the majority of studies focus on final demand aspects of environmental values (e.g. recreational use, existence and amenity values from better environmental protection) there is a need to consider any associated impacts on production of economic commodities. The shadow prices and elasticity of production with respect to environmental inputs is of interest in determining efficient public procurement mechanisms for environmental improvements. In particular, distributional aspects of the use of environmental assets by agricultural enterprises may have implications for the efficiency of different approaches to environmental benefit procurement. We use production data from rangelands beef enterprises in Australia and nonparametric conditional quantiles to show that the efficiency of enterprises may be associated with the efficiency of utilisation of environmental inputs and thus may indicate that environmental procurement mechanisms may be benefiting relatively inefficient producers. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nzar14:187499&r=env |
| By: | Agüero, Jorge |
| Abstract: | This paper uses year-to-year variation in temperature to estimate the long-term effects of climate change on health outcomes in Mexico. Combining temperature data at the district level and three rounds of nationally representative household surveys,an individual’s health as an adult is matched with the history of heat waves from birth to adulthood. A flexible econometric model is used to the identification of critical health periods with respect to temperature. It is shown that exposure to higher temperatures early in life has negative consequences on adult height. Most importantly,the effects are concentrated at the times where children experience growth spurts: infancy and adolescence. The robustness of these findings is confirmed when using health outcomes derived from accidents,which are uncorrelated to early exposure to high temperatures. |
| Keywords: | Global warming, Climate change, Health, Mexico, Environmental Economics and Policy, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Health Economics and Policy, International Development, I12, Q54, Q41, |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:165044&r=env |
| By: | Yang, Tsung Yu |
| Abstract: | Previous empirical studies of the pollution haven hypothesis (PHH) have not reached a consistent conclusion. The existing literature is primarily based on anecdotes and scattered case studies. This study analyzes the trade flows and composition change of the most polluting industries in manufacturing sectors among countries in order to offer a more general conclusion. This study finds that stricter environmental regulation stringency decreases the net export and production share of the most polluting production, which provides the evidence for pollution haven effect (PHE). However, we find no evidence to support PHH. Contrary, we find stricter environmental regulation stringency corresponds to larger net export and polluting production as trade openness increases. We also find that the ability to innovate in environmental-related technology creates a comparative advantage in polluting production. This finding implies that governments do not have to constrain their policies on the tradeoff between pollution control and international competitiveness since the innovative ability may both obtain the goals of pollution control and strengthening international competitiveness. |
| Keywords: | Environmental Economics and Policy, International Relations/Trade, |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:176181&r=env |
| By: | Khanna, Madhu; Louviere, Jordan; Yang, Xi |
| Keywords: | Energy Crops, Contracts, Environmental Economics and Policy, Q42, Q51, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169970&r=env |
| By: | Stefan Borsky; Esther Blanco |
| Abstract: | This article addresses the mediating effect of corruption on the influence of stringency of environmental regulation on firms' voluntary environmental performance. Using panel data from adoption of the EU Eco-Management and Audit Scheme (EMAS) across European Union countries from 1995 to 2011, we unveil a direct and an interacting effect of countries' corruption and regulatory stringency on the rate of adoption. First, stricter environmental regulation reduces the rate of EMAS certificates, thus supporting a crowding-out effect of mandatory regulation on voluntary action. Second, increased corruption reduces the rate of EMAS certificates. Third, the negative effect of stringency of regulation on EMAS certification rates is reinforced by corruption. In sum, these results suggest that previous studies address- ing the implications from stricter regulations on firms' voluntary action that abstract from corruption might underestimate the potential negative effect of stringency of regulation on firms' voluntary action. |
| Keywords: | Voluntary environmental action, environmental taxes, corruption, negative binomial regression |
| JEL: | F53 Q23 Q27 F18 L15 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2014-29&r=env |
| By: | Chen, Xianwen; Alfnes, Frode; Rickertsen, Kyrre |
| Abstract: | Consumers prefer ecolabeled products. However, little is known about the effects of ecolabels when consumers are simultaneously exposed to negative environmental information. We conducted a stated choice experiment in France with eight fish products that were either ecolabeled or unlabeled. Four types of negative information concerning the potential negative environmental consequences of catching wild fish or producing farmed fish were randomly administered to the participants. The data were analyzed by a mixed logit model. Several results emerged. First, there are positive ecolabeling effects on the willingness to pay (WTP) for fish. Second, ecolabeling cannot fully mitigate the negative effects on WTP of negative environmental information. Third, there is a positive effect on the WTP for substitute fish produced with the same production technology as the type of fish that receives negative environmental information. |
| Keywords: | environmental information, spillover effect, eco-label, fish, discrete choice, stated preferences, Agribusiness, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Q13, Q51, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:168094&r=env |
| By: | Polyakov, Maksym; Pannell, David J. |
| Abstract: | Opportunity cost constitutes a substantial component of the costs of ecological restoration projects undertaken in agricultural landscapes. Private benefits generated by restored environmental assets are also important in determining the success of restoration projects. In this study, we compare the implications of using different assumptions about private benefits and opportunity cost for the optimal spatial pattern of ecological restoration of a cleared agricultural landscape in north-central Victoria, Australia. We employ a spatially explicit bio-economic model that optimizes ecological restoration through revegetation of a cleared landscape. We compare implications of using different assumptions about opportunity cost: (a) fixed marginal opportunity costs based on property value, and (b) variable marginal opportunity costs that take into account land value and private benefits generated by environmental assets on the property. Using variable marginal opportunity costs that account for private benefits captured by the landowners gives a better biodiversity outcome than using fixed marginal opportunity cost subject to the same budget constraints. Spatial patterns of ecological restoration of these scenarios differ substantially, with ecological restoration pattern shifting towards smaller properties (lifestyle landowners) in the variable-marginal-value scenario. Our results show that in order to avoid providing misleading recommendations to environmental managers about priorities for ecological restoration on private lands, it is important to take into account amenity values to land owners of native vegetation and variable opportunity costs. |
| Keywords: | ecological restoration, biodiversity, private benefits, opportunity cost, spatial optimization, Environmental Economics and Policy, Land Economics/Use, Q15, Q57, |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169823&r=env |
| By: | Blankespoor, Brian; Dasgupta, Susmita; Wheeler, David |
| Abstract: | This paper investigates the effectiveness of protected areas in slowing tropical forest clearing in 64 countries in Asia/Pacific, Africa, and Latin America for the period 2001-2012. The investigation compares deforestation rates inside and within 10 kilometers outside the boundary of protected areas. Annual time series of these deforestation rates were constructed from recently published high-resolution data on forest clearing. For 4,028 parks, panel estimation based on a variety of park characteristics was conducted to test if deforestation is lower in protected areas because of their protected status, or if other factors explain the difference. For a sample of 726 parks established since 2002, a test also was conducted to investigate the effect of park establishment on protection. The findings suggest park size, national park status, and management by indigenous people all have significant association with effective protection across regions. For the Asia/Pacific region, the test offers compelling evidence that park establishment has a near-immediate and powerful effect. |
| Keywords: | Wildlife Resources,Climate Change Mitigation and Green House Gases,Climate Change and Environment,Ecosystems and Natural Habitats,Forestry |
| Date: | 2014–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7091&r=env |
| By: | Miranda, Juan Jose; Corral, Leonardo; Blackman, Allen (Resources for the Future); Asner, Gregory; Lima, Eirivelthon |
| Abstract: | Protected areas are a cornerstone of forest conservation in developing countries. Yet we know little about their effects on forest cover change or the socioeconomic status of local communities, and even less about the relationship between these effects. This paper assesses whether “win-win” scenarios are possible—that is, whether protected areas can both stem forest cover change and alleviate poverty. We examine protected areas in the Peruvian Amazon using high-resolution satellite images and household-level survey data for the early 2000s. To control for protected areas’ nonrandom siting, we rely on quasi-experimental (matching) methods. We find that the average protected area reduces forest cover change. We do not find a robust negative effect on local communities. Protected areas that allow sustainable extractive activities are more effective in reducing forest cover change but less effective in delivering win-win outcomes. |
| Keywords: | conservation, deforestation, protected areas, poverty, land use, land conservation |
| JEL: | Q56 Q23 Q24 R14 R52 |
| Date: | 2014–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-14&r=env |
| By: | Liu, Pengfei; Swallow, Stephen |
| Keywords: | Public Good Provision, Multi-units Provision, Experimental Economics, Individualized Pricing, Ecosystem Service, Environmental Economics and Policy, Institutional and Behavioral Economics, Public Economics, Q56, Q57, C72, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169842&r=env |
| By: | Prashant Bharadwaj; Matthew Gibson; Joshua Graff Zivin; Christopher A. Neilson |
| Abstract: | This paper examines the impact of fetal exposure to air pollution on 4th grade test scores in Santiago, Chile. We rely on comparisons across siblings which address concerns about locational sorting and all other time-invariant family characteristics that can lead to endogenous exposure to poor environmental quality. We also exploit data on air quality alerts to help address concerns related to short-run time-varying avoidance behavior, which has been shown to be important in a number of other contexts. We find a strong negative effect from fetal exposure to carbon monoxide (CO) on math and language skills measured in 4th grade. These effects are economically significant and our back of the envelope calculations suggest that the 50% reduction in CO in Santiago between 1990 and 2005 increased lifetime earnings by approximately 100 million USD per birth cohort. |
| JEL: | I10 Q53 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20662&r=env |
| By: | Bezabih, Mintewab; Di Falco, Salvatore; Mekonnen, Alemu |
| Abstract: | Weather fluctuations tend to be as important as climate change in farmers’ decision making in countries such as Ethiopia that have virtually no weather insurance. This paper assesses the distinct impacts of weather and climate change measures on agricultural productivity of households, measured in terms of crop revenue, in the Amhara region of Ethiopia. Four waves of survey data, which included about 1500 households in each round, combined with interpolated daily temperature and monthly rainfall data from the meteorological stations, are employed in the analysis. The distinction between weather and climate is highlighted by observations in the temperature data, which show that the pattern of temperature for both short-term and long-term values follows a bell-shaped distribution, with the striking feature that the extreme ends of the distribution have fatter tails for the long term values. The analysis employs monthly rainfall and 14 temperature categories related to weather measures and four categories corresponding with the extreme ends of the long-term temperature distribution. The analysis also distinguishes between summer and spring seasons and different crops, in recognition that Ethiopia’s agriculture is multi-cropping and multi-season. The major findings show that temperature effects are distinctly non-linear, but only when the weather measures are combined with the extreme ends of the distribution of the climate measures. In addition, rainfall generally has a less important role to play than temperature, contrary to expectations for rainfed agriculture. |
| Keywords: | crop revenue, climate change, weather variability, Mundlak’s Fixed Effects method, Ricardian analysis, Ethiopia |
| JEL: | D2 Q12 Q15 |
| Date: | 2014–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-15-efd&r=env |
| By: | Baumgartner, Kendra; Travadon, Renaud; Cooper, Monica; Hillis, Vicken; Kaplan, Jonathan D.; Lubell, Mark |
| Keywords: | Crop Production/Industries, Environmental Economics and Policy, Farm Management, Production Economics, |
| Date: | 2014–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170437&r=env |
| By: | Igarashi, Yoshiyuki; Coupal, Roger; Finnoff, David; Andersen, Matt |
| Keywords: | Reclamation Bond, Natural Resource, Oil and Natural Gas, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170600&r=env |
| By: | Newburn, David; Ferris, Jeffrey |
| Keywords: | Land Use, Land Use Policy, Community/Rural/Urban Development, Environmental Economics and Policy, Land Economics/Use, |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170446&r=env |
| By: | Pokhrel, Bijay; Paudel, Krishna P. |
| Abstract: | We conducted biophysical simulations using MAPSHED to determine the effects of adopting best management practices to reduce nutrients and sediment in a watershed dominated by row crop agriculture and poultry production. Reduction of three water pollutants nitrogen, phosphorus and sediment from adopting different BMPs are used in the cost reducing optimization model. We considered three weather scenarios (dry, normal and wet) and various levels of BMP parameter efficiencies. The nutrient management plan and vegetative buffer are the dominant cost-effective BMPs in the normal and wet weather conditions. In the dry weather scenario, vegetative buffer and stream-bank stabilization are the most cost effective BMPs. The cost of per kilogram of phosphorus reduction ranges from $10 to $40 depending on levels of desired phosphorus level reduction and efficiency parameters used in the model. It is costly to reduce phosphorus in a dry weather scenario perhaps because runoff is minimal and total costs associated with BMPs do not get distributed much on a per unit effluent basis. |
| Keywords: | best management practices, cost minimization, nutrient and sediment reductions, optimization, Environmental Economics and Policy, |
| Date: | 2014–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170699&r=env |
| By: | Daniel Huppmann; Franziska Holz |
| Abstract: | Climate change mitigation and the transformation to a global low-carbon economy is a pressing issue in policy discussions and international negotiations. The political debate is supported by the scientific community with a large number of projections, pathway simulations and scenario analyses of the global energy system and its development over the next decades. These studies are often based on numerical economy-energy-environment-climate models. This DIW Roundup provides an overview of the model types used in the academic arena to evaluate and quantify the potential impacts of energy and climate policy measures. Their aim is to translate specific mitigation pathways into an economic and socio-political assessment, in order to identify trade-offs between different mitigation options. Since no single modelling framework can adequately capture all relevant aspects, a comprehensive assessment requires a mix of models and approaches. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwrup:44en&r=env |
| By: | Bilby, David B.; Wilson, Paul N. |
| Abstract: | This study explores recent rulemaking interactions of agricultural and regulatory parties in developing best management practices for agricultural dust control. Regulatory outcomes are predicted based on each party’s interests and power utilizing a mutual gains negotiation framework. A triangulated research design reveals that the final rules satisfied the economic objectives of agricultural interests, met the rulemaking expediency of the regulators, and likely failed to significantly mitigate dust pollution. The analysis provides rare empirical support for the concern that a collaborative rulemaking process can be captured by regulated interests in the sense that required changes in regulatee operational practices are minimized in the adopted regulations with the, at least temporary, approval of the regulator. |
| Keywords: | best management practices, dust pollution, negotiation, rulemaking, regulatory capture, Environmental Economics and Policy, Land Economics/Use, Political Economy, Q15, Q53, Q58, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:usazwp:185894&r=env |
| By: | Leopoldo Fergusson; Dario Romero; Juan F. Vargas |
| Abstract: | Despite a growing body of literature on how environmental degradation can fuel civil war, the reverse effect, namely that of conflict on environmental outcomes, is relatively understudied. From a theoretical point of view this effect is ambiguous, with some forces pointing to pressures for environmental degradation and some pointing in the opposite direction. Hence, the overall effect of conflict on the environment is an empirical question. We study this relationship in the case of Colombia. We combine a detailed satellite-based longitudinal dataset on forest cover across municipalities over the period 1990-2010 with a comprehensive panel of conflict-related violent actions by paramilitary militias. We first provide evidence that paramilitary activity significantly reduces the share of forest cover in a panel specification that includes municipal and time fixed effects. Then we confirm these findings by taking advantage of a quasi-experiment that provides us with an exogenous source of variation for the expansion of the paramilitary. Using the distance to the region of Urabá, the epicenter of such expansion, we instrument paramilitary activity in each cross-section for which data on forest cover is available. As a falsification exercise, we show that the instrument ceases to be relevant after the paramilitaries largely demobilized following peace negotiations with the government. Further, after the demobilization the deforestation effect of the paramilitaries disappears. We explore a number of potential mechanisms that may explain the conflict-driven deforestation, and show evidence suggesting that paramilitary violence generates large outflows of people in order to secure areas for growing illegal crops, exploit mineral resources, and engage in extensive agriculture. In turn, these activities are associated with deforestation. |
| Keywords: | Deforestation, Conflict, Instrumental Variables, Colombia |
| JEL: | D74 Q2 |
| Date: | 2014–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:012225&r=env |
| By: | Thai-Thanh Dang; Annabelle Mourougane |
| Abstract: | Now that pollution is reaching worrisome levels in some countries and at the global level, there is a growing consensus that it needs to be explicitly considered as a by-product of the production process and incorporated in economic decisions. But this is not easy in the absence of markets and observable prices. Shadow prices of pollution, the opportunity cost of abating pollution in the form of reduced output, have to be estimated using specific techniques and serve several purposes. It’s a signal firms have to take into consideration when they decide upon their investment decisions. Shadow prices can also inform policymakers when they set policies. They can be used to assess policy ex ante by comparing the marginal benefits of environment policies with the cost they involve for private firms. These prices can be seen as benchmark for allowance price in emission market-based schemes or can be useful in designing optimal environmental tax schemes. The indicator can also be used ex post and can be considered as a policy indicator of pollution regulation and compliance to these regulations. More generally such prices are used each time there is a need to value pollution... |
| Date: | 2014–08–21 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envddd:2014/2-en&r=env |
| By: | Gaudet, Gérard; Salant, Stephen (Resources for the Future) |
| Abstract: | The purpose of this chapter is to provide an elementary introduction to the nonrenewable resource model with multiple demand curves. The theoretical literature following Hotelling (1931) assumed that all energy needs are satisfied by one type of resource (e.g. “oil"), extractible at different per-unit costs. This formulation implicitly assumes that all users are the same distance from each resource pool, that all users are subject to the same regulations, and that motorist users can switch as easily from liquid fossil fuels to coal as electric utilities can. These assumptions imply, as Herfindahl (1967) showed, that in competitive equilibrium all users will exhaust a lower cost resource completely before beginning to extract a higher cost resource: simultaneous extraction of different grades of oil or of oil and coal should never occur. In trying to apply the single- demand curve model during the last twenty years, several teams of authors have independently found a need to generalize it to account for users differing in their (1) location, (2) regulatory environment, or (3) resource needs. Each research team found that Herfindahl's strong, unrealistic conclusion disappears in the generalized model; in its place, a weaker Herfindahl result emerges. Since each research team focussed on a different application, however, it has not always been clear that everyone has been describing the same generalized model. Our goal is to integrate the findings of these teams and to exposit the generalized model in a form which is easily accessible. |
| Keywords: | Climate, Energy, Transportation, Waste Management |
| Date: | 2014–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-21&r=env |
| By: | Zack Dorner (Monash University); Dean Hyslop (Victoria University of Wellington) |
| Abstract: | Rural land use in New Zealand is an important driver of economic activity and has clear implications for the environment, including for biodiversity, climate change emissions and water quality. The spatial distribution and aggregate shares of rural land use is always changing, but change occurs slowly. To better understand the drivers of rural land use change, this paper addresses three questions using the popular multinomial logit modelling approach. First, do recent commodity prices have any predictive power on land use conversions? Second, is recently sold land more likely to change use? Third, does land which is marginal between uses have identifiable characteristics? The data used consists of the New Zealand Landcover Database version 3 (LCDB3), with observations in 1997, 2002 and 2008; 6 year average profitability data for dairy, sheep and beef and forestry; QVNZ land sales data; and I control for land quality and Maori tenure. In answering the first and third questions, I evaluate the predictive power of a spatially explicit land use share multinomial logit model, estimated from 2002 cross-sectional variation. To supplement the land use share multinomial logit for questions one and three, and to address question two, I use a land use transition multinomial logit, estimating the likelihood of transition from a single starting land use between 1997 and 2002, similar to Lubowski et al. (2008). Finally, I compare the two modelling approaches. |
| Keywords: | land use; rural; conversion; multinomial logit; land sales; marginal land |
| JEL: | Q15 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:14_12&r=env |
| By: | Guivarch, Céline; Monjon, Stéphanie; Rozenberg, Julie; Vogt-Schilb, Adrien |
| Abstract: | Energy security improvement is often presented as a possible co-benefit of climate policies. This paper evaluates this claim. It presents a methodology to investigate whether climate policy would improve energy security, while accounting for the difficulties entailed by the many-faceted nature of the energy security concept and the large uncertainties on the determinants of future changes in energy systems. To do so, it uses a set of indicators in a four-dimension analysis grid of the energy security concept, and a database of scenarios exploring the uncertainty space. The results, focusing on Europe, reveal there is no unequivocal effect of climate policy on all the dimensions of energy security and that some trade-offs are involved. The many-faceted nature of energy security matters: energy security has several dimensions, some of which can be heightened by climate policy. Time matters: the effect of climate policy on energy security depends on the time horizon considered. Last, these results are robust to key uncertainties on the future potential and costs of technologies, on future improvements in energy efficiency, on fossil fuel resources and markets and on drivers of economic growth. However, some of these uncertainties determine the magnitude of the effect of climate policy on energy security indicators. |
| Keywords: | Climate policy; energy security; Europe; scenarios database; multi-criteria decision; |
| JEL: | Q48 Q54 Q34 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/13920&r=env |
| By: | Liu, Hongxing; Gopalakrishnan, Sathya; Browning, Drew; Herak, Patrick; Sivandran, Gajan |
| Abstract: | Non-point source pollution and its impact on water quality are of great importance to policy makers, residence and farmers. This paper uses a hedonic property value model to investigate the marginal implicit values of water quality change in Hoover Reservoir in the Upper Big Walnut Creek (UBWC) watershed, Ohio. The estimates are fed into a simple dynamic optimization model which maximizes social welfare while taking into account the damage from production as well as the production profits. This paper uses the Soil and Water Assessment Tool (SWAT) to simulate the quality and quantity of the surface and ground water and uses ArcGIS to link housing transactions in Franklin County and Delaware County with disaggregated flow of nutrient runoff in the watershed. The econometric results indicate that the marginal damage for a one mg/L increase in nitrogen (N) and phosphorus (P) loadings are $7,713.41 and $27,624.05 respectively, and the increase of property value of a one meter increase of secchi depth water clarity is $95,132.07. This paper investigates the effects of multiple water quality parameters on both waterfront and non-waterfront properties, using the yearly maximum loading, sediment, and dissolved oxygen, as well as yearly average secchi disk depth as measurement. A simple dynamic optimization model is included to show the tradeoff between production profits and water quality. |
| Keywords: | Hedonic property model, water quality, dynamic optimization model., Environmental Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170611&r=env |
| By: | Tobias Hahn (Kedge Business School - Kedge Business School, France); Jonatan Pinkse (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)) |
| Abstract: | We analyze the suitability of cross-sector partnerships as an effective mechanism for private environmental governance. By focusing on the interaction between firms within cross-sector partnerships, we analyze how competition between firms affects partnership effectiveness. Marrying insights from the private governance literature with institutional theory and the resource-based view, we identify under which conditions firm-level competition for legitimacy and capabilities, respectively, undermines or enhances effectiveness of cross-sector partnerships to address environmental issues. In doing so, our argument develops the various factors that moderate the relationship between competition and effectiveness for different types of partnerships. We contend that the effectiveness of cross-sector partnerships for governing global environmental issues depends considerably on whether competitive forces at the firm level are aligned with the collective benefits of partnerships. We discuss the consequences for designing effective cross-sector partnerships as well as the implications of a firm perspective on private governance. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00961234&r=env |
| By: | Blare, Trent; Useche, Pilar; Grogan, Kelly A. |
| Abstract: | Ecuadorian women have traditionally been sidelined from full participation in the economy and have lacked equal political rights. Yet, Ecuador has made advances in gender equality in recent years. Women now have greater access to educational and career opportunities, equality in inheritance and martial property rights, and gained positions of authority in Ecuadorian society. However, these advances do not necessarily mean that Ecuadorian women have gained equity with men, especially in rural areas. Even though women legally have been granted greater equality in Ecuadorian society (Correia and van Ironkhorst 2000), many women, especially in rural areas and the coastal region of the country, have not equally participated in these advances. Many of these women have been excluded from utilizing these new rights, participating in economic activities, and being allowed to make important household and farm decisions (ECLAC 2011; Twyman 2012). Our research examines how the changing cultural norms and legal status in Ecuador impact women’s empowerment in the agricultural sector and in rural communities. We study women’s ability to influence household and production decisions. In particular, we examine the common view in the gender literature that sees women as the appropriate target group to mobilize for sustainable production and conservation (Plumwood 1992, Jackson 1993, Agrawal 2010). The cacao sector provides a particularly relevant case because of its economic and ecological importance to Ecuador and the region. This industry employs 12% of Ecuador’s economically active population (CORPEI 2009). In fact, cacao production is often the only source of cash income for many rural Ecuadorian households and traditionally the domain of men, who have usually managed household income and determined the economic activities of the household (ECLAC 2011). Thus, women’s involvement in cacao production is an important indicator of women’s status in a large share of rural Ecuador. The traditional cacao agroforests provide many ecological services such as habitat for many endangered plants and animals. However, they are not as profitable as the monoculture systems. So, smallholder households face a difficult choice between earning larger profits and protecting the ecosystem. Because of these economic and ecological concerns, promotion of cacao agroforests has been the focus of development efforts by the Ecuadorian government, nongovernmental organizations, and international donor agencies (Suarez 2013). Many of these institutions also have the additional goal of empowering women. Past research on gender relations in rural Ecuador only examined the differences in agricultural activities and asset ownership between women and men. There has been little research that examines women’s ability to influence household and production decisions. Due to the laws that protect female property rights, Ecuadorian women own 52% of all assets. However, women in the cacao growing region of coastal Ecuador are less likely to own important agricultural assets such as land than their counterparts in the Andean region, an area culturally distinct from the rest of Ecuador. Coastal women have ownership rights to 49% of agricultural land while women in the Andean had rights to 73% of the agricultural land (Deere and Diaz 2011). Although women may legally own the land, women are generally seen as helpers on cacao farms and are almost entirely excluded from marketing of the product (Ponton Cevallos 2005). Our study builds on this research to better understand women’s influence in the cacao sector and in rural households. We enhance the conjugal contract model developed by Carter and Katz (1997) to include a value for the nonmarket ecological and social benefits in the joint utility function. Through our innovative conceptualization of the model, a household may adopt the production method that does not maximize profits, cacao agroforests, if the utility from more nonmarket benefits are greater than the lost utility from larger profits. Male and female members of the household may differ in the value they place on these nonmarket benefits. Thus, they may have different preferences about whether the household adopts agroforestry or monoculture production systems. Women’s ability to influence production decisions could change the outcome of whether a household adopts production methods that are more sustainable. To determine the value that men and women place on these nonmarket benefits and the ability of women to influence household production decisions, we conducted 320 household interviews throughout coastal Ecuador from February through July, 2013. The household surveys examine not only women’s roles on cacao farms but also who makes production and management decisions on the farms. In addition, we implemented a choice experiment separately with the principle male and female member of the household. The choice experiment consisted of the household member choosing between pictures of two parcels to determine how much more profit he or she would need to receive in order to prefer the monoculture system over the agroforestry system. One picture had characteristics similar to a cacao agroforest and the other similar to a cacao monoculture field. The monoculture parcel was more profitable, but the cacao agroforests included nonmarket benefits. These nonmarket benefits included access to subsistence crops, enhanced soil quality, and a greater diversity of native plants and animals. Each respondent was presented with six choices, where the profits and characteristics of the agroforest differed randomly. By employing a multinomal Logit regression, we were able to estimate the value that men and women place on each of the attributes of the cacao agroforests (Birol et al. 2006) We found distinct differences between men and women in their land use preferences. During the focus group meetings, we discussed the benefits they received from agroforestry production systems. Women were more likely to prefer agroforestry production methods than men were. They were more concerned about food production such as raising plantains, oranges and other fruits than they were about profits. They also were more likely to prefer this production system because of the environmental benefits it provides and the ability to have diversified income sources. Although some men did prefer the agroforestry systems for many of the same reasons as the women did, especially since it provides a method to diversify production and price risk, the men were much more likely to prefer the monoculture system. The opportunity to obtain bigger yields and larger profits was more important to the male participants than the other environmental and social benefits provided by the agroforestry system. Preliminary results show that, despite heterogeneity in preferences across genders, men dominate household spending and production decisions even on the land that is owned by the women or jointly owned by men and women. Men manage the income in 36% of the households, women in 18% and both men and women in 46% of the households. Thus, women have a say in household spending decisions in only 64% of the households interviewed. Women have ownership rights in 44% of the land parcels as 56% of parcels are owned by men, 17% by women and 27% owned jointly. Yet, some women are excluded from managing the parcels they own. Seventy percent of the parcels are managed by men, 8% are managed by women, and 22% are managed by both genders. Women only participate in 30% of land use decisions. Only 17% of participants in agricultural training programs are women. Female empowerment in rural Ecuador, would likely encourage the adoption or continuation of cacao agroforests. Gender equity and female empowerment not only are important moral issue but also have large economic, social, and environmental impacts. Efforts to enhance gender equity in the Ecuadorian cacao sector would likely provide the additional benefits of encouraging the adoption and protection of sustainable production systems. References Agrawal, B. 2010. Gender and Green Governance: The Political Economy of Women's Presence Within and Beyond Community Forestry. Oxford University Press, Oxford, UK. Birol, E, K. Karousakis, and P. Koundouri. 2006. Using a Choice Experiment to Account for Preference Heterogeneity in Wetland Attributes: The Case of Cheimaditida Wetland in Greece. Ecological Economics 60: 145-156. Carter, M.R. and E. Katz. 1997. Separate Spheres and the Conjugal Contract: Understanding Gender-Biased Development. Intrahousehold Resource Allocation in Developing Countries: Methods, Models, and Policy. L. Haddad, J. Hoddinott, and H. Aderman eds. 95-111. Baltimore: John Hopkins. Coporación de Promoción de Exportaciones e Inversiones (CORPEI). 2009. Cacao. Ecuador Calidad de Origen. Quito, Ecuador Correia, M. and B. van Ironkhorst. 2000. Ecuador Gender Review. The World Bank. Washington D. C. Deere, C. D. and J. Contreras Diaz. 2011. Acumulación de Activos: Una Apuesta por la Equidad. Facultad Latinoamericana de Ciencias Sociales (FLASCO): Quito, Ecuador. ECLAC (UN Economic Commission for Latin America & the Caribbean). 2010. What Kind of State? What Kind of Equality? Santiago, Chile: ECLAC. Jackson, C. 1993. “Environmentalisms and gender interests in the Third World,” Development and Change, Vol. 24, No. 4. Potón Cevallos, J. 2005. Relaciones de Género en el Ciclo Productivo de Cacao: ¿Hacia un Desarrollo Sostenible?. Master’s Thesis. Facultad Latinoamericana de Ciencias Sociales (FLASCO). Plumwood, V. 1992. “Beyond the dualistic assumptions of women, men and nature,” Ecologist, Vol. 22, No. 1 (lYY2), pp. 8-13. Suarez, L. Director of Conservation International Ecuador. Personal Interview. 18 Jul. 2013. Twyman, J. 2012. Intra-Household Distribution of Assets and Wealth in Ecuador. Doctorate of Philosophy Dissertation. University of Florida. |
| Keywords: | gender, cacao, Ecuador, willingness to pay, choice experiment, Environmental Economics and Policy, Food Security and Poverty, International Development, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169782&r=env |
| By: | Liu, Xiaoying; Sarr, Mare; Swanson, Timothy |
| Abstract: | We examine the effect of the introduction of uniform water-charging for aquifer management and provide evidence using a survey-based choice experiment of agricultural water users in rural Tunisia. Theoretically, we show that the implementation of the proposed second-best regulation would result both in efficiency gains and in distributional effects in favour of small landholders. Empirically, we find that resistance to the introduction of an effective water-charging regime is greatest amongst the largest landholders. Resistance to the regulation of common resources may be rooted in the manner in which heterogeneity might determine the distributional impact of different management regimes. |
| Keywords: | commons, water, aquifer, heterogeneity, Tunisia |
| JEL: | O13 Q11 Q24 Q25 |
| Date: | 2014–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-17-efd&r=env |
| By: | Perge, Emilie; Sullivan, Clare |
| Keywords: | Environmental Economics and Policy, Food Security and Poverty, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170309&r=env |
| By: | Hiroaki Ino (School of Economics, Kwansei Gakuin University); Norimichi Matsueda (School of Economics, Kwansei Gakuin University) |
| Abstract: | This paper discusses how to deal with low-valued recyclable residual wastes whose reprocessing itself does not pay financially. While such a recycling activity can potentially improve the social welfare if the environmental costs associated with its disposal are sufficiently significant, governmental policies to promote recycling may be taken advantage of and lead to even more harmful consequences, such as illegal dumping. By constructing a model that includes both disposal and recycling activities and, furthermore, by explicitly considering the government’s monitoring cost in preventing firms from disposing of collected wastes illicitly, we identify the second-best depositrefund (D-R) policy for a low-valued recyclable. Our results indicate, however, that in implementing such a policy a policy-maker has to face critical informational issues, which is in stark contrast to the D-R policy for a non-low-valued recyclable. |
| Keywords: | deposit-refund, illegal waste disposal, monitoring, recycling |
| JEL: | H21 Q21 Q28 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:123&r=env |
| By: | Vercammen, James |
| Abstract: | The welfare impacts of a conservation easement are examined in a real options model. The size of the easement payment to the landowner largely determines the efficiency of the easement outcome. An inefficiently small payment results in states where rejection of the easement by the landowner reduces welfare. In contrast, an inefficiently large payment results in states where acceptance of the easement reduces welfare. This latter outcome emerges because the easement reduces the flow of municipal property tax payments, and the corresponding reduction in the provision of public goods is large relative to the environmental externality. A higher level of development value uncertainty raises the value of the real option to defer the land development decision, which in turn decreases the range of states for which acceptance of the easement by the landowner is socially desirable. |
| Keywords: | Conservation Easement, Real Option, Externality, Community Welfare, Environmental Economics and Policy, Land Economics/Use, Q24, R14, H23, L14, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169813&r=env |
| By: | Muscio, Alessandro; Nardone, Gianluca; Stasi, Antonio |
| Abstract: | The importance of eco-innovations for industry has been rising exponentially in recent years. However, even if recent trends show that firms are increasingly committed to eco-innovations, there is little knowledge on why and how companies integrate environmental sustainability into new product development. In this paper we offer a comprehensive analysis of the drivers of eco-innovation in the Italian wine industry on the basis of a large survey on Italian wine producers. We analyse the impact of firms’ characteristics and their technological and organizational capabilities on the introduction of eco-innovations. The relevance of the drivers in influencing the probability of introducing eco-innovations is measured with a latent class econometric model. Our evidence shows that business characteristics and firms’ scientific search processes and their general innovative behaviour are key drivers of eco-innovation. Therefore, according to our results, firms’ commitment to eco-innovate does not differ substantially from other types of innovation activities. |
| Keywords: | Wine industry, eco-innovation, environmental innovation, green innovation, innovation drivers, Agribusiness, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Industrial Organization, Institutional and Behavioral Economics, Research Methods/ Statistical Methods, L2, L6, O3, Q5, |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iefi13:164752&r=env |
| By: | Bluffstone, Randy |
| Abstract: | That wealthier developing country households may rely more heavily on child labor than poorer households has come to be known as the “wealth paradox.” This paper tests for a wealth paradox with regard to common natural resource wealth by analyzing the relationship between child labor and improved common property forest management (CPFM) in Bolivia. Data are analyzed using several econometric methods and it is found that households experiencing more effective CPFM generally use more forest-based and total child labor. The analysis also confirms others’ findings of a private wealth paradox with regard to private land and extends the analysis to evaluate the effect of ownership of animals.Classification-JEL: Q23, Q56 |
| Keywords: | forests, common property, Bolivia, child labor |
| Date: | 2014–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:edf-dp-14-16&r=env |
| By: | Penn, Jerrod; Hu, Wuyang; Cox, Linda J. |
| Abstract: | In this analysis we compare WTP estimates of responses separately modelling choice sets of forced choices from those of unforced choices in order to measure the effect of forced choice in Choice experiment. This comparison is done while still maintain constant task complexity and evaluated in WTP space. We find evidence to suggest that individual WTP are different in forced and unforced choice sets and in joint tests for parameter equality. |
| Keywords: | Choice Experiment, Environmental Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169777&r=env |
| By: | Olmstead, Sheila (Resources for the Future); Richardson, Nathan (Resources for the Future) |
| Abstract: | Booming production of oil and gas from shale, enabled by hydraulic fracturing technology, has led to tension between hoped-for economic benefits and feared environmental and other costs, with great associated controversy. Study of how policy can best react to these challenges and how it can balance risk and reward has focused on prescriptive regulatory responses and, to a somewhat lesser extent, voluntary industry best practices. While there is undoubtedly room for improved regulation, innovative tools are relatively understudied. The liability system predates environmental regulation yet still plays an important—and in some senses predominant—role. Changes to that system, including burden-shifting rules and increased bond requirements, might improve outcomes. Similarly, new regulation can and should incorporate modern understanding of the benefits of market-based approaches. Information disclosure requirements can benefit the liability system and have independent benefits of their own. Policymakers faced with a need for policy change in reaction to shale development should carefully consider alternatives to regulation and, when regulation is deemed necessary, consider which tool is best suited. |
| Keywords: | shale, shale gas, liability, market-based tools, burden shifting, information |
| Date: | 2014–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-15&r=env |
| By: | Busby, Gwen; Geiger, Richelle; Mercer, Evan |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170714&r=env |
| By: | Torres, Marcelo; Howitt, Richard; Rodrigues, Lineu |
| Keywords: | Agricultural Finance, Resource /Energy Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170647&r=env |
| By: | Xie, Jing; Hyeyoung, Kim; House, Lisa |
| Abstract: | Information on production methods (genetic modification or organic production) and locations (country of origin) are commonly found on food package labels. Both pieces of information may be used as a proxy for food safety and quality by consumers. Our study investigates the interactive effects between information on production method and COOL by conducting choice experiments in the European Union, United States and Japan. This study also investigates the effect of information about potential benefits of biotechnology on consumer acceptance of GM foods. Results indicate that consumers preferred GM foods produced domestically to GM foods imported from foreign countries, and individuals with information on consumer benefits, producer benefits, and environmental benefits were willing to pay more than individuals without information in some cases, but the effect of information varied by type of information, location, and the country of origin of the products. |
| Keywords: | Genetically modified food, biotechnology, country of origin, consumer attitudes, Agribusiness, Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Marketing, |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iefi13:164737&r=env |
| By: | Pellow, Ron; Edwards, Grant |
| Abstract: | Lincoln University Dairy Farm is a well-known, frequently visited commercial demonstration farm, operated by the South Island Dairying Development Centre (SIDDC) to showcase best practice sustainable, profitable farming. In late February 2014, part way through a very high payout and production season, the farm adapted its management to ensure predicted nitrogen leaching did not exceed that of past seasons. This action resulted in 8% less N-loss than the 2012-13 season and 17% less than initially forecast for the 2013-14 season (as predicted with Overseer®). The farm therefore made substantial progress in regard to the changing expectations expressed via the community and through the regional council’s (proposed) Land and Water Regional Plan. The cost however was approximately $84,000 for this individual farm. If extrapolated across the Canterbury region’s 1000 dairy farms, this impact would markedly change the local economy. Uncomfortable with the above outcome, yet seeing potential legislative reductions in N-loss within 2.5 years, LUDF is voluntarily changing its management for the 2014-15 season to operate with lower N-loss. The farm is adopting research undertaken within the Pastoral 21 (P21) research programme whereby farm systems research with self-contained farmlets has shown an irrigated nil-infrastructure, low input (N-fertiliser and supplement) system is theoretically as profitable as the previous system at LUDF, yet should further reduce the catchment nutrient loss. The farm management system of a nil-infrastructure, low input farm operated at scale on large dairy farms is still being developed and will determine the opportunity (or cost) of adapting management practices to the changing expectations and requirements of farmers in coming years. |
| Keywords: | DAIRY FARMING SYSTEMS, NITROGEN LOSS, PROFIT, Agribusiness, Agricultural Finance, Environmental Economics and Policy, Livestock Production/Industries, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nzar14:187498&r=env |
| By: | Harold Houba (VU University Amsterdam, the Netherlands); Kim Hang Pham Do (Massey University, New Zealand); Xueqin Zhu (Wageningen University, the Netherlands) |
| Abstract: | This paper studies the relation between optimal dam capacity and water management under rivalry uses and externalities. We extend the hydropower generation model, based on Haddad (2011), by including the competing use of water resource, non-linear building cost of dam capacity and externalities in a welfare optimization model. We obtain the optimal dam capacity for multi-functional dams such as providing infrastructure for industrial and households water use, conjunctive use of hydropower generation and irrigation; storing water in the wet season for use in the dry season, and mitigating flooding damages. The optimal solution shows that optimal dam capacity is characterized by the marginal benefits of hydropower generation, the marginal costs of flooding damages, and the constraining factors. Moreover, the optimal water management can be achieved by using derived sea sonal prices in a decentralized manner. |
| Keywords: | OR in environment and climate change, river-basin management, dam capacity, welfare optimization, externalities |
| JEL: | C71 C72 D62 |
| Date: | 2014–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20140143&r=env |
| By: | Inci Otker-Robe |
| Abstract: | Abstract What do climate change, global financial crises, pandemics, and fragility and conflict have in common? They are all examples of global risks that can cross geographical and generational boundaries and whose mismanagement can reverse gains in development and jeopardize the well-being of generations. Managing risks such as these becomes a global public good, whose benefits also cross boundaries, providing a rationale for collective action facilitated by the international community. Yet, as many public goods, provision of global public goods suffer from collective action failures that undermine international coordination. This paper discusses the obstacles to addresing these global risks effectively, highlighting their implications for the current juncture. It claims that remaining gaps in information, resources, and capacity hamper accumulation and use of knowledge to triger appropriate action, but diverging national interests remain the key impediment to cooperation and effectiveness of global efforts, even when knowledge on the risks and their consequences are well understood. The paper argues that managing global risks requires a cohesive international community that enables its stakeholders to work collectively around common goals by facilitating sharing of knowledge, devoting resources to capacity building, and protecting the vulnerable. When some countries fail to cooperate, the international community can still forge cooperation, including by realigning incentives and demonstrating benefit from incremental steps toward full cooperation. |
| Keywords: | Global Financial Stability Risks;Climatic changes;Risk management;Public goods;Resource mobilization;International cooperation;Global risks; Collective action; Climate change; Crises; Pandemics; Globalization |
| Date: | 2014–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:14/195&r=env |
| By: | Nemec-Boehm, Rebecca L.; Cash, Sean B.; Anderson, Bruce T.; Ahmed, Selena; Griffin, Timothy S.; Orians, Colin M.; Robbat, Albert Jr.; Stepp, Richard A.; Han, Wenyan |
| Abstract: | The objective of this research is to estimate the economic impact of climate change on tea production in China. We use historical weather and production data from 1980 to 2011 to construct a yield response model from panel data that estimates the partial effect of specific weather factors on tea yields in China, with a specific focus on monsoon dynamics. We base our analysis upon methodologies employed in previous studies, many of which use a yield response model to estimate the impact climate change on crop yields or other economic indicators of agricultural productivity. Previous studies have tended to focus mostly on staple crops like maize as well as other food crops like fruits and vegetables, but tea is an important export crop for many developing countries. Instead of estimating the monsoon based on historical dates of onset, duration and retrieval we construct the actual approximated onset and retrieval dates based on the year-by-province cumulative precipitation function. To date our research is the first to estimate the monsoon period using this method. Results indicate that a later monsoon onset date, as well as a later monsoon retrieval date have a small but significant negative impact on yields over the last 30 years. A delay in either the monsoon onset or retrieval of only 3-4 days reduced yields by .1% each. However, we did not find a statistical association between the length of the monsoon. Total rainfall during the monsoon period was found to have a small and positive impact on yields, even when controlling for extreme temperatures and low precipitation. We also found a strong positive effect of increased maximum daily temperatures during the monsoon period on tea yields. Spring maximum daily temperatures did not have a significant impact on tea yields. Our results have important implications for tea producer in China in the face of future global climate changes. |
| Keywords: | climate change, tea, agriculture, China, yield response model, monsoon, Agricultural and Food Policy, Crop Production/Industries, Research Methods/ Statistical Methods, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170486&r=env |
| By: | Li, Zhi; Liu, Pengfei; Swallow, Stephen K. |
| Abstract: | In provision point mechanism, the cost threshold for provision introduces incentives for individuals to contribute toward the public good and, in general, the Pareto efficient outcome is a subset of equilibrium outcomes. However, the threshold cannot eliminate the pure free-rider equilibrium unless refinements are used. In this paper, we examine a set of assurance payment schemes for multi-unit public good provision using individualized price auction (IPA). We find assurance payment significantly eliminates non-provision equilibria, and reduces the multiplicity of provision equilibria suffered by most discrete public good provision games, especially in a multi-unit setup. The assurance payments could be useful in establishing markets for a previously non-marketable good, and thus improve the efficiency regarding the provision of various types of public good currently funded only by government or through traditional non-profit donations. |
| Keywords: | Multi-Unit Public Goods, Lindahl Pricing, Assurance Contract, Environmental Economics and Policy, Public Economics, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170675&r=env |
| By: | Voosholz, Frauke |
| Abstract: | In this paper we discuss the influence of using different production functions on modeling the resource extraction rates and economic growth. The focus is set on the modeling of the production sector, which requires either non-renewable resources, renewable resources or a combination of both resources for production. There are great differences between the possible assumptions when modeling the substitution process between the different input factors. It is shown that the existence of an optimal extraction rate in conjunction with economic growth depends on the specification of the production function even if the same parameterization is used. The target is to provide an overview on the different possibilities of modeling, and to support the decision which kind of production function should be used for modeling different aspects of economic growth. |
| Keywords: | economic growth,natural resources,production function |
| JEL: | E23 O13 O41 O40 Q20 Q32 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cawmdp:72&r=env |
| By: | Colin-Castillo, Sergio; Woodward, Richard |
| Abstract: | The management of common-pool resources (CPR) like fisheries has long been discussed in economics. The association of CPR with degradation and poor economic performance is well known due to excess harvests and poor management. The incentives faced by a CPR user create a dilemma. Users who limit their catch, if others do not; lose. And if no one limits his catch, everyone loses. Hardin’s (1958) “Tragedy of the Commons” still applies in many situations today. However, contrary to Hardin, there exists evidence that common management or self-governance can overcome these incentives. Under self-governance, user groups take control of the CPR to improve the economic viability of the resource (Ostrom 1990; Dietz et al. 2003). The self-governance of a CPR is successful if the users develop solutions by themselves, aligning extraction rates with resource productivity to achieve a common benefit, and developing resource-specific rules that overcome the problems of free riders and opportunistic behavior (Ostrom 2005). CPR users, due the daily use of the resource, have a “solid” knowledge of the situation, which is critical for successful management. Successful cases of self-governance have been documented around the world (see Ostrom 1990; Townsend and Sutton 2008). Study of these cases has been useful to identify the characteristics of “successful” CPR management regimes. However, our ability to predict when and where self-governance is most likely to be successful is still limited. This research reviews the theoretical framework regarding the conditions required for successful self-governance for the management (SGM) of a CPR. Then we propose a method to assess the potential for SGM based on the perceptions of the CPR users’ group and their predisposition toward SGM. Finally, we test our approach in a small-scale fishery in the north side of Mexico, offering insights about whether or not a change in governance is feasible and desirable in the study site. Knowing ex-ante the likelihood that SGM will succeed may save resources and direct the effort to an efficient management of the CPR. Governments and private entities spend effort and scarce resources to regulate environmental issues, and in many cases the implementation of policies is not effective. For example, fisheries have a long history of overexploitation that has reduced the ocean's capacity to provide food, preserve water quality and recover from perturbations (Worm et al. 2009). In many cases, SGM may offer an improvement over traditional regulatory approaches. An ex-ante assessment of the potential for SGM would provide valuable information for policy makers seeking strategies for CPR management. Our model is based on the six conditions (OCs) identified by Ostrom (1990). (1) ‘most users’ conclude that they will be harmed if they do not adopt new rules. (2) ‘most. users’ conclude that they will be affected in a similar way by the new rules, (3) ‘most users’ highly value continuing the activity, (4) users share generalized norms of reciprocity and trust, (5) users face low monitoring and enforcement cost, (6) users are a small and stable group. The basic proposition is that the probability of a community successfully adopting SGM is a function of the six conditions over all the CPR users’ communities. Each of the OCs, however, is actually a function of the perspectives of the users that make up the community. The challenge for ex-ante evaluation is that OCs can´t be directly observed. To overcome this challenge we developed a series of questions, used to create an index that is a function of the responses to such questions question on each condition. To arrive at a valid set of questions, each OC is expressed the language of the CPR user in a survey administered in the summer of 2010. It was pretested in two focus groups, one with students of Universidad Juarez of Durango and another with fishers of Francisco Zarco, another lake in the region. A group of biology students were hired as enumerators to conduct most of the surveys. To increase the response rate, each fisher received a compensation of 50 Mexican pesos (about 4 US dollars), and a prize from a random drawing at the end of the survey. From a total of 148 fishers registered in the three cooperatives, only about 100 were active at the time of the survey. We interviewed 111 individuals, and then our survey is basically a census. After checking for validity and reliability, the final database was reduced to 74 observations. Using the responses of 74 of the LCR fishers, we evaluate the predisposition of the LCR fishers toward SGM based on the six OCs. Our result indicates a high predisposition towards SGM. We find a predisposition of the LCR fishers toward SGM. The strongest measure was that indicating the extent to which users believe that rules affect all fishers similarly. The weakest indicator was regarding the size stability of the fishers’ group. Overall, our measures were consistent with the additional interviews and opinions of leaders and stakeholders of the three LCR fishing communities. Several limitations should be emphasized. The most significant is the lack of a true validity measure. We do not observe ex-post whether SGM was pursued or successful, therefore we do not have strong evidence that answering OCs favor SGM or not. Although Ostrom and others have studied the idea of predicting outcomes for the management of CPR, we are unaware of any attempt to make a systematic ex-ante assessment based on Ostrom’s six conditions. Hence, there has not been an opportunity to compare a measure of a community’s predisposition toward SGM to the outcome over time, which is what would be needed to establish the true validity of such an ex-ante measure. Because of our inability to test for validity, our approach does not yield clear guidance for policy. Fishers’ perspectives might lead to a favorable environment for SGM, but it does not indicate they will adopt self-governance. Finally, as expected in ex-ante analysis, at the time of the survey we did not have specific rules to show fishers the form that SGM might take in the fishery. It increases the level of uncertainty and may affect the responses of the fishers. Despite these caveats, this approach could be valuable. In some cases CPR users have received help from the government officials by giving technical inputs and/or speeding and control the early stages of the process (Townsend 2008). In other cases CPR users and government share the management. In either case, having an indication of whether the policy can work and the dimensions that might require the most attention could save time and money, valuable inputs in the policy making process. The approach that we propose is built on the solid foundation of Ostrom’ work, which distills the experiences in a large set CPRs around the globe. An ex-ante assessment would not only help communities and policy makers in each application, but as it is replicated in more systems, it will provide a valuable baseline that can greatly help in our understanding of the relationship between ex-ante conditions and ex-post success for the management of common-pool resources. |
| Keywords: | Common-pool-resources, self-governance, CPR management, Environmental Economics and Policy, Institutional and Behavioral Economics, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:171750&r=env |
| By: | Empl, Johannes-Baptist; Steinhorst, Martin Philipp; Bahrs, Enno |
| Abstract: | Biogaserzeugungsunternehmen haben noch keine lange Unternehmensgeschichte, weshalb die Erfahrungen im Zusammenhang mit der Unternehmensbewertung begrenzt sind. Die Biogaserzeugung ist vielschichtig beeinflusst und bietet ein großes Spektrum wirtschaftlichen Erfolgs. Diese u. a. unternehmerisch, rechtlich und räumlich induzierte Multivariabilität verlangt biogasspezifische Lösungsansätze in der Unternehmensbewertung. Die Erkenntnisse zur Bewertung von kleinen und mittleren Unternehmen liefern punktuelle Lösungsansätze, wenngleich Teilbereiche einer weiteren Anpassung bedürfen. Spezifische Lösungsansätze sind insbesondere im Bereich des zeitlichen Bewertungshorizontes und der Ermittlung von risikoadjustierter Kapitalisierungszinssätzen erforderlich. Die damit zusammenhängenden Annahmen können zu erheblichen Ergebnisdifferenzen führen, die z. T. rechtlich intendiert sind bzw. bei dem identischen Biogaserzeugungsunternehmen aufgrund unterschiedlicher rechtlicher Rahmenbedingungen zu erheblich unterschiedlichen Ergebnissen führen. |
| Keywords: | Biogasanlagen, Unternehmensbewertung, Bewertungsgesetz, IDW S 1, Terminal Value, risikoadjustierter Zinsansatz, Environmental Economics and Policy, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi14:187897&r=env |
| By: | Lade, Gabriel; Lin, C.-Y. Cynthia; Smith, Aaron |
| Abstract: | Tradeable credits are a central component of many market-based regulations. Whenever the market for compliance credits is efficient and policies are enforced over time, credit prices should reflect both current and expected future discounted marginal compliance costs, which are a function of both expected future market conditions and policy environments. We study credit prices for a relatively recent policy, the market for Renewable Identification Numbers (RINs) under the Renewable Fuel Standard (RFS2). We provide a comprehensive study of RIN markets. Due to the dynamic nature of the program and the feature that credits can be banked and borrowed over time, we specify the first dynamic model of an industry facing a RFS2 to highlight the importance of expectations in driving current RIN prices. We then provide a test of market efficiency, and study historical cost drivers of prices. We find encouraging signs of a maturing over-the-counter market for RINs. Historically, the largest drivers of prices in the program has been policy announcements. We estimate that one particular announcement, the 2013 final rule, was responsible for between a \$10.3 and \$20.7 billion reduction in support the RFS2 provides for the US biofuel industry. The findings call into question the efficacy of using quantity based mechanisms such as the RFS2 to drive innovation and investments in new production technologies, particularly when the regulator faces a classical problem of dynamically inconsistent responses to increases in compliance costs. |
| Keywords: | Renewable Fuel Standard, Tradeable credits, Market Efficiency, Public Economics, Resource /Energy Economics and Policy, Q50, Q42, H23, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170673&r=env |
| By: | McGuire, Julia |
| Keywords: | Farm Management, Production Economics, |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170130&r=env |
| By: | Marc Fleurbaey (Woodrow Wilson School and Center for Human Values - Princeton University); Stéphane Zuber (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | We provide a general method for extending fair social preferences defined for riskless economic environments to the context of risk and uncertainty. We apply the méthod to the problems of managing unemployment allowances (in the context of macroeconomic fluctuations) and catastrophic risks (in the context of climate change). It requires paying attention to individuals' risk attitudes and rationality properties of social preferences, revisiting basic ideas from Harsanyi's seminal work (Harsanyi, 1995). The social preferences that we obtain do not in general take the form of an expected utility criterion, but they always satisfy statewise dominance. We also show how non-expected utility individual preferences can be accommodated in the approach. |
| Keywords: | Social choice; uncertainty; economic environment; social risk |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00973480&r=env |
| By: | Anonymous; Wigier, Marek; Bułkowska, Małgorzata |
| Abstract: | Evaluation of the potential of Polish agriculture and the impact of the new CAP programmes in 2014-2020 on increasing its competitiveness in the European Union and in the world. Distributional and income effects of direct payments under the new CAP – the case of Germany. Effects of the new agricultural policy on the specialised agricultural region of Mecklenburg-Western Pomerania (Germany). The new CAP and competitiveness of agricultural enterprises and the food industry. Structural change in livestock sector as challenge for new CAP: Lithuanian case. The impact of the current and new agricultural policy on the development of the major crops in Bulgaria. Competitiveness of the Romanian agri-food trade and the new agricultural policies. Financial aspects of sustainability of agriculture. Changes in the socio-demographic structure of villagers and employment in individual agriculture. Agriculture and climate change. Political rent and agricultural producers’ investments. The role of government in building the competitiveness of rural areas in Serbia. Some issues of resource management in terms of food shortage and energy gap. Exploring linkages between the Common Agricultural Policy and food security in the Mediterranean region. |
| Keywords: | Polish agriculture, CAP, European Union, competitiveness, direct payments, agricultural enterprises, agricultural policy, agricultural region, food industry, livestock sector, agri-food trade, socio-demographic structure, climate change, political rent, rural areas, food security, Common Agricultural Policy, Agricultural and Food Policy, Agricultural Finance, Production Economics, Evaluation of the potential of Polish agriculture and the impact of the new CAP programmes in 2014-2020 on increasing its competitiveness in the European Union and in the world. Distributional and income effects of direct payments under the new CAP – the case of Germany. Effects of the new agricultural policy on the specialised agricultural region of Mecklenburg-Western Pomerania (Germany). The new CAP and competitiveness of agricultural enterprises and the food industry. Structural change in livestock sector as challenge for new CAP: Lithuanian case. The impact of the current and new agricultural policy on the development of the major crops in Bulgaria. Competitiveness of the Romanian agri-food trade and the new agricultural policies. Financial aspects of sustainability of agriculture. Changes in the socio-demographic structure of villagers and employment in individual agriculture. Agriculture and climate change. Political rent and agricultural producers’ investments. The role of government in building the competitiveness of rural areas in Serbia. Some issues of resource management in terms of food shortage and energy gap. Exploring linkages between the Common Agricultural Policy and food security in the Mediterranean region., |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iafepr:179498&r=env |
| By: | Mahmud, Sakib; Barbier, Edward |
| Abstract: | This paper introduces a theoretical model that allows the estimation of a household’s valuation of health risks from major storms. An endogenous risk framework is developed in which the household can employ ex-ante self-protection and ex-post mitigating activities and treatments strategies to protect against storm-inflicted health problems. Combined with a health production function, our theoretical model reveals possible estimation methods to derive households’ marginal willingness to pay to reduce health risks due to an increase in public programs and the greater storm protection role of mangroves. Results show that these marginal willingness-to-pay measures can be derived without the expected utility terms since they are a function of only prices and technological parameters. Our empirical analysis of coastal households of Bangladesh impacted by 2007 Cyclone Sidr confirms the possible influence of mangroves in reducing storm-inflicted injuries or illness. The probability of a household experiencing adverse health impacts from a major storm is higher if it has access to ex-post public disaster relief programs. However, there is no conclusive evidence of whether the likelihood of facing health impacts is higher if a household is located behind an embankment. Demographic characteristics such as age, number of females and number of children have considerable influence on the likelihood of a household facing storm-inflicted health impacts but not on medical expenditures for storm-inflicted injuries. To reduce damaging health outcomes from a major storm, results reveal that the households are willing to pay the highest amount for greater storm protection from mangroves followed by embankments and disaster relief programs. |
| Keywords: | Self-protection; mitigating activities and treatments; storm-inflicted health outcomes; mangroves; Cyclone Sidr; Bangladesh. |
| JEL: | D81 H31 I12 Q54 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:60003&r=env |
| By: | José Gustavo FERES; Jean-Louis COMBES (Centre d'Etudes et de Recherches sur le Développement International); Claudio ARAUJO (Centre d'Etudes et de Recherches sur le Développement International) |
| Abstract: | This paper aims at assessing the determinants of Amazon deforestation, with an emphasis on the role played by off-farm income. We first present a microeconomic model which relates off-farm income to deforestation patterns. We then test the empirical implications by using data on the 2006 Brazilian Agricultural Census. Our results suggest that an increase in off-farm income tends to reduce deforestation. This may be explained by the fact that greater off-farm opportunities tends to increase the opportunity cost of farm labor. Results also show that smallholders are less responsive to the increase in the returns of off-farm activities than large ones, which is in line with our hypothesis of labor market imperfections regarding off-farm activities. |
| Keywords: | deforestation, farm household, off-farm income, pseudo-panel |
| JEL: | C23 Q23 Q12 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1626&r=env |
| By: | Christman, Laine; Kimberly, Rollins; Micheal, Taylor; Sohan, Agbonlahor |
| Abstract: | Wildfire threat is an intrinsic part of life in rural communities in the arid Western U.S. Western U.S. continues to experience a rapid population growth of Wildland-Urban Interface (WUI) areas, an increase in the frequency of wildfire due to increase human-caused ignition (Cardille et al. 2001), and overall fire severity due to over-accumulation of vegetation density on the surrounding public lands. Due to these trends, wildfire tends to have significantly higher economic cost associated with communities located in the WUI relative to wildfires on more remote public lands since WUI residences have an increased chance of damage (NIFC 2004). Fire protection services within these rural areas are scarce however; fire protection can be leveraged by wildfire risk mitigation actions done to both private properties and public lands adjacent to WUI areas. Private mitigation actions include creating a defensible space zone and use of fire resistant construction materials on the house, such as concrete siding or tiled roofing. Defensible space reduces the chance a wildfire will move from the public lands and damage or destroy a house by eliminating the combustible material and vegetation on the landscape within 30 feet of the home and promotes the use of fire resistant landscaping, i.e., well-irrigated lawns, deciduous shrubs and trees, xeriscaping, etc. Fire resistant construction materials reduce the chance a house will catch fire, given it ignites on the property. Public fuel reduction treatments remove strips of the native vegetation around the community creating a barrier between the public lands and the WUI which fire protection services can use to prevent fire from threatening homes. These public actions can be targeted to high priority areas within the community. Private and public provisions to reduce risk can impose considerable costs to residents and the individual risk of damage to a residence from a wildfire is rather low, therefore decisions about investment in these provisions can be seen as a gamble due to the uncertainty regarding the outcome. In one prospect, the resident can pay nothing and face uncertainty about a loss incurred from a wildfire. In another prospect, the resident can reduce the uncertainty by investing in risk mitigating provisions. Financial incentives for WUI residents in areas of elevated fire risk can be imposed in the form of policies and cost-sharing programs such as block grants. Such incentives can relieve some of the burden placed on residents and increase of overall level of defensible space thereby decreasing the level of risk facing WUI residents. Other incentives include educational components that help residents understand the risk they face. We explore how residents' value these provisions when the stakes are high but the chances of loss are low, as well as, how the value changes between public and private risk reduction provisions. Moreover, we explore the welfare loss given exogenous shifts in wildfire risk. Expected Utility Theory, a generally accepted and widely applied normative model of rational choice (Kahneman and Tversky 1979), would suggest rational individual will base investment decisions under uncertainty on comparison of expected utilities between the two prospects (Mongin 1997). The more risk adverse the individual, the more willing the individual is to forego a riskier situation for a more certain outcome. To investigate these issues, we measure the value of wildfire risk reduction to individual WUI residents using an experimental design based on a stated preference framework. We surveyed residents living in rural communities in Nevada that are representative of the different vegetation types, community designs, and population densities found within the Western U.S. We provide the homeowner two means to reduce the risk. The first method is investment in private defensible space on the property to lower the risk to the homeowner's property. The second method is investment is a community-wide fuel treatment program completed on public lands surrounding the community to lower the overall risk to the community and subsequently to the homeowners. In each case the homeowner was asked to state whether they would be attain those provisions at a given dollar amount. For the private provision the respondent was asked to pay a one-time cost. In the public provision, the cost was an annual fee. Within the survey instrument, the risk reduction from investment is explicitly stated to the homeowner. This reduction is explained as a decrease in the probability of damage to the house if provisions are taken. We employed a discrete choice, polychotomous, contingent valuation method that allowed the level of response intensity to be directly incorporated into the response option. The experiment design included 72 versions of the private provision and 24 versions of the public provision, which were randomly assigned to the respondents. For both provisions, there are multiple risk reduction categories that were randomly assigned to the respondents. Similarly, for both there were two year spans for which the risk reduction was valid, e.g, 5 or 10 years. Within the private provision there are three possible loss amounts ($50,000, $100,000, $200,000) to the homeowner, should a wildfire reach the home, which are also varied across respondents. Within the public provision, no loss amount was specified in order to view residents' value for reducing wildfire risk to the community in general. Our results indicate that willingness to pay (WTP) for private provisions of defensible space are higher than public provisions, i.e., $297 for the private provision and $47 per year for the public provision on average. When considering a 5 year time period the two WTP measures are relatively similar. When considering a 10 year period, the WTP for the public provision becomes greater however our models reveal respondents' WTP are not sensitive to the different time horizons. The similarity between the two provisions indicates that the incentives from private or public program would likely have similar outcomes in reducing risk, therefore it should be left to the policy makers to determine the priority each provision has to a given community. Our results for both provisions indicate that as risk reduction increases, so does WTP. For the private provision the average WTP for a 1% reduction is $147 and increases to $450 for a 4% reduction, while the average annual WTP for a 1% reduction is $36 and increases to $51 for a 4% reduction, suggesting people are considering the magnitude of the risk reduction when making decision about investment in fire mitigation provision across the board. From a policy perspective this would indicate people have a higher value for programs that strategically target areas where risk reduction is most effective. Furthermore, educational programs that inform residents about the how effective mitigation actions are from both private property and within the community as a whole can increase support of the provisions. Moreover, because the risk reduction is identical across the two provision but the expected value i.e., the reduction of risk and loss amount, was explicitly stated to the homeowner only for the private provision, the similarity between the two WTP estimates suggest that residents seem more concerned with the overall reduction in risk rather than the actual expected value gained from the provision. Furthermore, within the private provision our results reveal concavity in WTP over expected value which suggests the decreasing marginal value of investment. This finding is consistent with the EUT literature which assumes a diminishing marginal utility of wealth. This notion that marginal WTP incremental declines as expected value increases suggests incentives to increase private levels of defensible space only work up to a certain point. Beyond that, people begin to experience disutility with increased investment. Therefore, incentives to raise levels of defensible space in the most at-risk WUI communities must account for this lower marginal WTP and possible consider cost-sharing programs to offset this diminishing utility. |
| Keywords: | wildfire risk, wildland-urban interface, mitigation, contingent valuation, Community/Rural/Urban Development, Institutional and Behavioral Economics, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170703&r=env |
| By: | Tangaoui, Abbes; Michael, Farmer |
| Abstract: | This research is a feasibility study of a multiproduct Biorefinery from using cotton gin waste in West Texas. This region is traditionally known by its important production of upland cotton and where there is an important concentration of gin mills. An important and cheap quantity of cotton gin waste results from the ginning process could be transformed from a liability with respect to environment to a valuable feedstock to produce a portfolio of bio-products in small and distributed biorefineries. This research shows that such small projects are promising with weather and market risks taken into account. |
| Keywords: | Feasibility Study, Multiproduct Biorefinery, West Texas, Cotton Gin Waste, Resource /Energy Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:171881&r=env |
| By: | F. Blaeschke; Peter Haug |
| Abstract: | This paper analyzes the relationship between intermunicipal cooperation and efficiency of public service provision. The organizational arrangements, including self-provision, joint pro-vision or contracting, affect politicians’ and bureaucrats’ incentives as well as internal transaction costs. Hence, cooperation gains from scale effects have to be weighed against technical inefficiencies. We analyze wastewater disposal for a unique dataset of small and medium-sized Hessian municipalities. We employ a two-stage DEA (DEA = Data Evelopment Analysis) bootstrap approach to calculate relative efficiency measures controlling for organizational arrangements and further environmental variables. Jointly providing municipalities and contractor municipalities score lower in terms of technical efficiency than self-providing and contracting municipalities. The scope for increasing scale efficiency turns out to be limited and hence, only small municipalities may benefit from scale economies from cooperation. The findings suggest that small municipalities should rely on contracting or on joint provision with a high degree of vertical integration. |
| Keywords: | municipal cooperation, local public finance, efficiency, DEA, sewage disposal |
| JEL: | D23 D24 D73 H72 R5 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:11-14&r=env |
| By: | Köthke, Margret |
| Abstract: | This report summarises existing knowledge on costs of sustainable forest management (SFM) in tropical and sub-tropical forests. First, the scope of forest-related cost studies and background information on definitions of and obstacles for SFM are given (Sections 1 and 2). The main part of this report gives a review on existing studies about costs of SFM and answers the questions: - What is known about costs of SFM? And who is researching in this field? - How reliable are the existing estimates? - Which research gaps still exist? The different studies' findings are summarised and compared among each other. Furthermore, the coverage and reliability of the existing figures are evaluated. The main question of this report "What are the costs of sustainable forest management in tropical and sub-tropical primary forests?" is not addressed and answered directly by any study. Therefore, studies which tackle part of the problem are included in the review. Section 1.2 gives an overview of the broad scope of forest-related cost studies. Under this scope the studies, which are reviewed in the following, are classified and the study review in this report (Section 3) is structured accordingly. The report concludes on further research needed (Section 4). |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:jhtiwp:27&r=env |
| By: | Aronsson, Thomas (Dept of Economics, Umeå School of Business and Economics, Umeå University); Johansson-Stenman, Olof (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | This paper deals with optimal income taxation and relative consumption under a welfarist government that fully respects people’s preferences and a paternalist government that does not share the consumer preference for relative consumption. Consistent with previous findings, relative consumption concerns typically lead to higher marginal income tax rates in the welfarist case. A remarkable result is that the optimal tax rules turn out to be very similar when people’s preferences for social comparisons are not respected. Indeed, if the relative consumption concerns are based on mean value comparisons and all consumers are equally positional, or if they are driven by within-type comparisons, the paternalist and welfarist governments can implement their respective first-best allocations through exactly the same marginal income tax formulas. Yet, also in these cases, there are some remaining differences that follow from second-best considerations. |
| Keywords: | Paternalism; nonlinear taxation; redistribution; status; positional goods |
| JEL: | D62 H21 H23 H41 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0606&r=env |