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on Environmental Economics |
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Issue of 2018‒02‒26
twenty-one papers chosen by Francisco S. Ramos Universidade Federal de Pernambuco |
| By: | Antonescu, Daniela |
| Abstract: | Between mountain regions and biodiversity exists a direct and indissoluble link: the mountain areas represent, perhaps, the most important source of eco-systems at global level, true scientific laboratories for researching and learning about the evolution and distribution of species and live bodies, about the relationships between these and about their adjustment to various environments and about the crucial influences of human actions, that led to the current climate changes. The mountains operate as true refuge for endemic species affected by uncontrolled human actions, while alpine meadows are exposed to losses of traditional pasture practices. The diverse and complex mountainous regions are the core elements of the environmental and sustainable development policies, the difficulties and problems encountered by these areas in adjusting to the new climate changes requiring adequate, swift and especially permanent (continuously supported) measures. The mountains belong, as a rule, to environmental geography but, just the same, they may be analysed also from the economic, social, cultural viewpoint, etc. as their multi-disciplinary nature is acknowledged both in the academic milieu but also by the decision factors involved in territorial development policy. Recently, the New Economic Geography, promoted intensively at global level, considers economic and social development of mountain regions of particular importance: mountain areas are important sources for raw materials and materials necessary for basic output and consumption (agriculture, industry, services) an aspect which affects under the present circumstances, both biodiversity and the living standard of local communities. The economic perspective is of particular importance both at the level of regional groups of interest, but the more so at the local level for the communities depending directly and permanently on the resources and conditions provided by the mountain. The negative impact on the mountain area of economic activities is increasingly more visible both at high and low altitude and therefore it should lead to a common vision and sustainable approach regarding the state of the biodiversity for this area because affecting a habitat might attract also the destruction of the entire ecologic balance which is already very fragile nowadays. Having as starting point the above considerations, the present paper provides a broad image of the relationship between the biodiversity of the mountain area and the implications of its economic and social development by resorting foremost to national and international documentary sources, to statistic data and information which attempt to complete the global image about the evolution of the relationship in time and space. |
| Keywords: | biodiversity, mountain area, natural heritage, sustainable development, local communities |
| JEL: | Q2 Q28 Q5 Q51 Q54 Q57 |
| Date: | 2018–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:84460&r=env |
| By: | Ke Wang; Zhifu Mi; Yi-Ming Wei |
| Abstract: | Previous studies of the efficiency of Chinese electricity industry have been limited in providing insights regarding policy implications of inherent trade-offs of economic and environmental outcomes. This study proposes a modified data envelopment analysis method combined with materials balance principle to estimate ecological and cost efficiency in the Chinese electricity industry. The economic cost and ecological impact of energy input reallocation strategies for improving efficiency are identified. The possible impacts of pollution taxes upon the levels of sulfur dioxide (SO2) emissions are assessed. Estimation results show that (i) both energy input costs and SO2 could be reduced through increasing technical efficiency. (ii) It is possible to adjust energy input mix to attain ecological efficient, and correspondingly, SO2 would reduce by 15%. (iii) The Chinese electricity industry would reduce its unit cost by 9% if optimal ecological efficiency is attained and reduce its unit pollution by 13% if optimal cost efficiency is attained, implying that there are positive ecological synergy effects associated with energy cost savings and positive economic synergy effects associated with SO2 pollution reductions. (iv) Estimated shadow costs of SO2 reduction are very high, suggesting that, in the short term, the Chinese electricity industry should pursue cost efficient point instead of ecological efficient point, since alternative abatement activities are less costly and some of the abatement cost could be further offset by energy input cost savings. (v) There would be no significant difference between the impacts of pollution discharge fees and pollution taxes on SO2 emissions levels because of the relatively low pollution tax rate. |
| Keywords: | Data envelopment analysis (DEA); Emission reduction; Energy efficiency; Environmental economics; Material balance; Sulfur dioxide (SO2) |
| JEL: | Q54 Q40 |
| Date: | 2018–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:114&r=env |
| By: | Dolphin, G.; Pollitt, M. |
| Abstract: | Globally coordinated climate action has resulted in sub-optimal emissions reductions and unilateral (second-best) climate policies have so far provided the bulk of emissions reductions. This paper argues that the development of new unilateral carbon pricing policies was fostered by international signalling and technological spillover effects. The strength of both effects hinges, for each jurisdiction, on trade relations with other CO2-abating jurisdictions. We provide a stylised theoretical discussion in support of our proposition and investigate it using data on a panel of 121national jurisdictions over the period 1990-2014. Results show a strong positive association between import-weighted exposure to CO2-pricing partners and domestic environmental policy. The analysis also supports the technological spillover channel: trade-weighted installed capacity of wind and solar energy seems to prompt implementation of and more stringent carbon pricing policies. |
| Keywords: | international spillovers, trade, carbon pricing |
| JEL: | F18 Q56 Q58 |
| Date: | 2018–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1803&r=env |
| By: | Aris Christodoulou (European Commission - JRC); Hande Demirel (Istanbul Technical University (Istanbul, Turkey)) |
| Abstract: | The report assesses the impacts of climate change on transport for Europe using projections of climate data, coastal inundation, river flooding and river discharge data. Impacts considered include those of sea level rise, storm surges, extreme weather events and floods on airports and seaports, as well as floods and droughts on inland waterways. Main outputs include the identification of transport infrastructure at risk in future time periods and the estimation of economic impacts. |
| Keywords: | climate change, transport, sea level rise, inundation, droughts, floods, airports, seaports, inland waterways |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc108865&r=env |
| By: | Germeshausen, Robert |
| Abstract: | I investigate the impact of the European Union Emissions Trading Scheme (EU ETS) on fuel efficiency of fossil fuel power plants using administrative micro data on power plants in Germany from 2003 to 2012. I find positive efficiency effects in fuel use, leading to a decrease in fuel input of 0.4 percent for an increase in carbon cost of one Euro. A back-of-the-envelope calculation suggests that the reduction in fuel use by fossil fuel power plants due to the introduction of the EU ETS translates into reductions in annual carbon emissions within the German electricity sector by around seven million tonnes in 2012. This represents about 2.4 percent of total annual carbon emissions in the German electricity sector and exemplifies the potential magnitude of efficiency improvements as a measure for reducing carbon emissions. |
| Keywords: | EU ETS,Carbon Pricing,Fossil Fuel Power Plants,Treatment Intensity |
| JEL: | D24 L94 Q48 Q58 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:18007&r=env |
| By: | Feucht, Yvonne; Zander, Katrin |
| Abstract: | The purchase of products labelled with Carbon footprints is one option for consumers to act climate-friendly and consumers frequently state that they are interested in this kind of labels. But even though various carbon footprint labelling schemes exist throughout Europe, their market relevance is low. In this context, the present research investigates preferences for climate-friendly food and identifies barriers for climate friendly food choices in the European market. Using a mixed methods approach combining an online survey (choice experiments and a questionnaire) with qualitative face-to-face interviews, the preferences and willingness to pay for different carbon labels and a climate-friendly claim were explored in six European countries. While the online survey mainly aimed at eliciting consumer preferences for different ways of communicating climate-friendliness, the face-to-face interviews which were based on the results of the online survey, deepened and broadened the quantitative results. Thereby, consumers' perceptions of climate-friendly food and their information needs with respect to climate-friendly food are elicited. Our results show that the presence of a carbon label on a product increases the purchase probability and that consumers are willing to pay a (small) price premium for a carbon label in all countries under investigation (France, Germany, Italy, Norway, Spain, Germany, UK). However, the contribution of a carbon label to a more climate-friendly consumption will be limited. Main reasons are the lack of knowledge of climate friendly actions, reluctance to change consumption habits (e.g. meat and dairy consumption), time preference and uncertainty regarding the relevance of climate change. Consumers appear to be frequently overstrained with respect to climate-friendly buying decisions. Policy makers and retailers are challenged to set appropriate structures to support climate-friendly consumption. |
| Keywords: | carbon footprint labelling,consumer research,climate change,climate-friendly food,mixed methods,choice experiments,CO2-Labels,Verbraucherforschung,Klimawandel,Klimafreundliche Lebensmittel,Mixed methods,Kaufexperimente |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:jhtiwp:78&r=env |
| By: | Mutanga, Shingirirai Savious; Quitzow, Rainer; Steckel, Jan Christoph |
| Abstract: | Focusing on critical aspects of infrastructure, such as energy, this paper argues that African countries, and African cities in particular, need infrastructure that advances both basic needs and industrialization, and avoids a lock-in of unsustainable, high-carbon technologies. G20 countries can promote and support quality of life in African countries by: (1) aligning and cementing the G20 Agenda for Africa with African initiatives, SDGs and the Paris Agreement, (2) mitigating economic risks of climate change through supporting low carbon development pathways in Africa, (3) creating and enabling a level playing field for low carbon technologies, which includes integrated strategies for derisking renewable energy investments, and (4) supporting smart and sustainable urban planning. |
| Keywords: | sustainable development,climate policy,Africa |
| JEL: | Q01 Q54 H23 R11 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201815&r=env |
| By: | ten Brink, Patrick; Schweitzer, Jean-Pierre; Watkins, Emma; Janssens, Charlotte; De Smet, Michiel; Leslie, Heather; Galgani, François |
| Abstract: | We live in the plastic age (the "plasticene"), producing over 300 million tonnes (mt) of plastic every year globally, 5-15 mt of which flow into already polluted oceans. Plastic remains a key material in the global economy, but low rates of collection, reuse and recycling, emissions of microplastic from product wear and tear, and often insufficient disposal measures are leading to far-reaching environmental, health, social and economic impacts. The costs of inaction are unacceptably high. Globally there is a growing recognition of the need to address marine litter and rethink our approach to plastics and plastic packaging within the economy. Measures that enable a transition to a circular economy can avoid waste and reduce marine litter, and contribute to keeping plastics and their value in the economy. |
| Keywords: | G20,circular economy,plastics,marine pollution |
| JEL: | E23 F53 Q01 Q20 Q52 Q53 Q57 L65 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20183&r=env |
| By: | Raphael Calel |
| Abstract: | Environmental regulations have consistently been found to spur innovation in ‘clean’ technologies, with one significant exception. Past cap-and-trade programs have encouraged adoption of existing pollution control technologies, but had little effect on innovation. Several explanations have been offered, including secondary market failures and a lack of polluter sophistication. In this paper I argue that it likely has more to do with the state of the technologies. Using a newly constructed panel of British companies, I show that the European carbon market - the world’s largest cap-and-trade program - has, contrary to past experience, encouraged innovation rather than adoption. I discuss how these contrasting findings can be reconciled, and the implications for planned reforms. |
| Keywords: | EU emissions trading system, induced innovation, directed technological change, technology diffusion |
| JEL: | O30 Q55 Q58 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6847&r=env |
| By: | Verdolini, Elena; Bak, Céline; Ruet, Joël; Venkatachalam, Anbumozhi |
| Abstract: | The authors recommend that the G20 target innovative green-technology SMEs as an opportunity to promote financial de-risking while addressing Paris Agreement commitments and UN Sustainable Development Goals. This should be achieved by creating signals for private investors through: (1) a reporting system that can help monitor the scale-up of green-technology SMEs; (2) the use of public funds to signal innovative green-technology SMEs to investors; and (3) the inclusion of SMEs in the design of green finance platforms. By implementing these recommendations, the G20 will ensure that innovative, low-carbon SMEs become attractive, low(er)-risk investment opportunities for the private sector. |
| Keywords: | innovation,green technology,eco-efficiency,SMEs,financial de-risking |
| JEL: | O31 Q55 Q58 E60 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20188&r=env |
| By: | Newbery, David M G |
| Abstract: | Given the agreed urgency of decarbonizing electricity and the need to guide decentralized private decisions, an adequate and credible carbon price appears essential. The paper defines and quantifies the useful concept of the break-even carbon price for mature zero-carbon electricity investments. It appears an attractive alternative given the difficulty of measuring the social cost of carbon, but modelling shows it extremely sensitive to projected fuel prices, the rate of interest, and the capital cost of generation options, all of which are very uncertain. This has important implications, and justifies combining a carbon price floor with suitable long-term contracts for electricity investments. |
| Keywords: | carbon price; electricity; investment; renewables |
| JEL: | C65 Q42 Q48 Q51 Q54 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12647&r=env |
| By: | OECD |
| Abstract: | This Policy Paper summarises key messages from the case study on European Union payments to Mauritania and Guinea-Bissau for the conservation of marine protected areas under the Fisheries Partnership Agreements. The detailed case study is available in the 2017 OECD report The Political Economy of Biodiversity Policy Reform. A separate “Policy Highlights” brochure, which distils key messages and lessons learned from the full report is also available. |
| Date: | 2018–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaac:10-en&r=env |
| By: | Joltreau, Eugénie (Université Paris-Dauphine); Sommerfeld, Katrin (ZEW Mannheim) |
| Abstract: | Environmental policies may have important consequences for firms' competitiveness or profit-ability. However, the empirical literature shows that hardly any statistically significant effects on firms can be detected for the European Union Emissions Trading Scheme (EU ETS). We explain why there are arguably no significant competitiveness effects on firms, at least not during the first two phases of the scheme (2005-2012). We also reason why the third phase (2013-2020) is likely to reveal similar results. We show that the main explanations for this finding are a large over-allocation of emissions allowances leading to a price drop and the ability of firms to pass costs onto consumers in some sectors. Cost pass-through combined with free allocation, in turn, partly generated windfall profits. In addition, the relatively low importance of energy costs indicated by their average share in the budgets of most manufacturing industries may limit the impact of the EU ETS. Finally, small but significant stimulating effects on innovation have been found so far. |
| Keywords: | employment effects, firm-level competitiveness, environmental policies, EU ETS |
| JEL: | Q52 Q58 D22 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11253&r=env |
| By: | Halkos, George; Gkargkavouzi, Anastasia; Matsiori, Steriani |
| Abstract: | Environmental education’s teachers are responsible to endow students with the knowledge, values, attitudes and skills necessary to protect and sustain the environment. The current study investigates Greek teachers’ environmental attitudes, behavior and knowledge via Connectedness to Nature Scale (CNS) and Environmental Identity (EID) Scale. The approach combines applied methodological research like item analysis and Factor Analysis. Teachers’ derived scores in both scales were high confirming their positive attitudes in terms of the environment. Furthermore, teachers have positive environmental attitudes, showing pro-environmental behavior but also a moderate level of environmental knowledge. |
| Keywords: | Environmental attitudes; pro-environmental behavior; teachers; CNS; EID scale. |
| JEL: | I29 Q56 Q57 |
| Date: | 2018–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:84505&r=env |
| By: | Schoenmaker, Dirk |
| Abstract: | To guide the transformation towards a sustainable and inclusive economy, the United Nations has developed the Sustainable Development Goals (SDGs). Sustainable development is an integrated concept with three aspects: economic, social and environmental. This paper starts by reviewing the environmental and social challenges that society is facing. Why should finance contribute to sustainable development? The main task of the financial system is to allocate capital to its most productive use. Financial institutions have started to avoid unsustainable companies from a risk perspective, which we label as Sustainable Finance 1.0 and 2.0 in our new framework. The frontrunners are now increasingly investing in sustainable companies and projects to create long-term value for the wider community (Sustainable Finance 3.0). |
| Keywords: | corporate governance; Environmental; Short-termism; Social and Governance (ESG) Risks; Sustainable Development; Sustainable Finance |
| JEL: | G11 G21 H23 H41 Q01 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12603&r=env |
| By: | Debabrata Chattopadhyay; Jacek Filipowski; Michael Stanley; Samuel Oguah |
| Keywords: | Energy - Coal and Lignite Energy - Electric Power Energy - Energy Policies & Economics Energy - Energy Production and Transportation Energy - Power & Energy Conversion Energy - Renewable Energy |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:28624&r=env |
| By: | Chelminski, K. |
| Abstract: | Located along the Ring of Fire in the Asia Pacific, both Indonesia and the Philippines have tremendous natural resource endowments in geothermal energy. Yet, the two countries have dramatic differences in the share of installed capacity they have developed with international development assistance for geothermal development over the last decades. This paper investigates the major interests, institutions and barriers to geothermal development in Indonesia and the Philippines and then examines how closely clean energy development finance has addressed these barriers. Using qualitative analysis and data from field research in both countries, this paper investigates the effectiveness of the clean energy development finance for renewable energy development. The main findings of this research show that clean energy development finance targeted major barriers to geothermal energy development, but the finance was limited in its impacts on removing the barriers or addressing major domestic political interests, particularly in the case of Indonesia. This research also illuminated limitations of the project-based development approach to solving macro-level problems in clean energy development. |
| Keywords: | clean energy development, development finance, energy policy, geothermal energy |
| JEL: | O13 Q42 N55 |
| Date: | 2018–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1804&r=env |
| By: | Ni, Yuanming (Dept. of Business and Management Science, Norwegian School of Economics); Sandal, Leif K. (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | Many biological and economic processes in fishery happen seasonally. Most of the extant literature tends to neglect this fact. This work is an initial attempt to treat seasonality in a systematic and proper way. We apply a periodic Bellman approach to obtain the optimal feedback policy of each season. Our approach has rich potentials. It could deal with seasonal patterns of uneven lengths: some may span years and some within the year. We find that, in some cases the equilibrium consists of one harvesting season followed by a moratorium period, indicating an optimal closure of the fishery that would be overlooked by a yearly model. Unlike a typical policy that enforces a moratorium to recover the stock, we find that many states first undergo harvesting all year round and later evolve into the seasonal moratorium. A rising group biomass could be the overshooting effect instead of a clear sign to increase harvest. We sometimes observe declining optimal harvest with increasing states (‘valley’), which may relate to the unit profit difference between seasons. Fishing pressure on the mature elicits even heavier harvest in the next season on the same group. A protective moratorium of the immature seems to hinder the value of the whole stock. |
| Keywords: | OR in natural resources; Seasonality; Dynamic programming; Feedback policy; Fisheries |
| JEL: | C44 C61 Q00 Q20 Q22 Q50 |
| Date: | 2018–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2018_002&r=env |
| By: | Stefano BOSI; David DESMARCHELIER |
| Abstract: | In this article, we embed a model of disease spread into a Ramsey model. A stock of pollution, viewed as a productive externality, affects both the disease transmission and the consumption demand. An ecofriendly government levies a proportional Pigouvian tax on production to depollute. We show the coexistence of two steady states in the long run: a disease-free and an endemic steady state. At the endemic steady state, a higher green-tax rate always reduces the pollution level. In the short run, we show the existence of limit cycles (through a Hopf bifurcation) as well as more complex dynamics of codimension two (a Gavrilov-Guckenheimer bifurcation). We complete the study with a numerical illustration of these bifurcations and a new facet of the Green Paradox: a higher tax rate can allow more scope for cycles by lowering the critical aversion to pollution and, thus, contribute to destabilize the economy and promote intergenerational inequalities. |
| Keywords: | SIS model, Ramsey model, pollution, transcritical bifurcation, Hopf bifurcation, Gavrilov-Guckenheimer bifurcation. |
| JEL: | C61 E32 O44 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2018-11&r=env |
| By: | Paramita Sinha; Martha L. Caulkins; Maureen L. Cropper |
| Abstract: | Amenities that vary across cities are typically valued using either a hedonic model, in which amenities are capitalized into wages and housing prices, or a discrete model of household location choice. In this paper, we use the 2000 Public Use Microdata Sample (PUMS) to value climate amenities using both methods. We compare estimates of marginal willingness to pay (MWTP), first assuming homogeneous tastes for climate amenities and then allowing preferences for climate amenities to vary by location. We find that mean MWTP for warmer winters is about four times larger using the discrete choice approach than with the hedonic approach; mean MWTP for cooler summers is twice as large. The two approaches also differ in their estimates of taste sorting. The discrete choice model implies that households with the highest MWTP for warmer winters locate in cities with the mildest winters, while the hedonic model does not. Differences in estimates are due to three factors: (1) the discrete choice model incorporates the psychological costs of moving from one’s birthplace, which the hedonic models do not; (2) the discrete choice model allows for city-specific labor and housing markets, rather than assuming a national market; (3) the discrete choice model uses information on market shares (i.e., population) in estimating parameters, which the hedonic model does not. |
| JEL: | Q51 Q54 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24290&r=env |
| By: | Wulandaria, Febi (Jönköping International Business School); Schäfer, Dorothea (German Institute for Economic Research DIW Berlin); Stephan, Andreas (The Ratio Institute); Sun, Chen (CERBE) |
| Abstract: | This study analyses how liquidity risk affects bonds’ yield spreads after controlling for credit risk, bond-specific characteristics and macroeconomic variables. Using two liquidity estimates, LOT liquidity and the bid-ask spread, we find that, in particular, the LOT liquidity measure has explanatory power for the yield spread of green bonds. Overall, however, the impact of LOT decreases over time, implying that, nowadays liquidity risk is negligible for green bonds. |
| Keywords: | Green Bond; Liquidity Risk; Yield Spread; Sustainable Investment; Fixed Income Security; Financial Innovation |
| JEL: | G12 G32 |
| Date: | 2018–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0305&r=env |