We introduce a model of strategic environmental policy where two firms compete á la Cournot in a third market under the presence of multiple pollutants. Two types of pollutants are introduced, a local and a transboundary one. The regulator can only control local pollution as transboundary pollution is regulated internationally. The strategic effect present in the original literature is also replicated in this setup.
This policy brief discusses the whether the preference of Swedish forestry stakeholders is biodiversity or production goals. Healthy and productive forests benefit us all, but what are the priorities of those directly managing Swedish forests? This brief presents a comparison of the preferences of key stakeholders regarding Swedish forest management and biodiversity protection.
States have treaty-based and customary international law-based responsibilities to ensure that greenhouse gas emissions emanating from their territory do not cause transboundary harm. However, those international legal responsibilities conflict with the observed behavior of states, which suggests a general rule of irresponsible treatment of the global commons.
A revised application of Ostrom's (Ostrom, 2007) Social-Ecological System (SES) framework to Hardin's ‘tragedy of the commons’ (Hardin, G. (1968), Science, 162(3859): 1243–1248) demonstrates that its institutional structure is more complex than either Hardin or Ostrom had imagined.
Top-down climate negotiations embodied by the Kyoto Protocol have all but stalled, chiefly because of disagreements over targets and objections to financial transfers. To avoid those problems, many have shifted their focus to linkage of bottom-up climate policies such as regional carbon markets.
We measure people's pro-social behavior, in terms of voluntary money and labor contributions to an archetypical public good, a bridge, and in terms of voluntary money contributions in a public good game, using the same non-student sample in rural Vietnam at four different points in time from 2005 to 2011.
The optimal provision of a state-variable public good, where the global climate is the prime example, is analyzed in a model where people care about their relative consumption.
Building on new institutional theory, this paper develops an analytical framework for analyzing constraints to the institutionalization of strategic environmental assessment (SEA) at four different institutional levels.
In this paper, we study the determinants of rental values in urban housing markets in Kigali, Rwanda.
Traditional sectors such as agriculture and fishing often receive special treatment from policymakers because such sectors are perceived to be associated with traditional cultural public good values. However, these values are often difficult to measure and few attempts have been made to do so.
We live at a unique moment in history when rapid economic growth has finally lifted hundreds of millions out of deep poverty, not only in Asia and Latin America but increasingly in Africa (Sala-i-Martin and Pinkovskiy, 2010). Yet the impending damage of climate change could reverse this.
Purpose: Empirical studies have found an inverted-U curve relationship between emigration and per capita income. In this paper, a theoretical underpinning for this phenomenon is presented based on credit restrictions. The implications for tax policy are also analyzed.
The European Union's Emissions Trading Scheme (EU ETS) is so far the largest emissions trading system in the world. A rigorous ex post empirical analysis of the scheme is presented. The effect of the scheme on firms' investment decisions in carbon-reducing technologies is analysed by using detailed firm-level data from Swedish industry. Based on difference-in-difference estimation as well as a before–after difference estimation, the results reveal that the EU ETS has not had a significant effect on firms’ decisions to invest in carbon-mitigating technologies. However, although the EU ETS appears to have no direct effect on investments, it is too early to dismiss the system. Consideration is given to how the EU ETS can realize its potential to become an effective tool in the EU climate and energy policy portfolio.
This article reviews the history of the Environment for Development (EfD) initiative, its activities in capacity building and policy-oriented research, and case studies at its centres in Chile, China, Costa Rica, Ethiopia, Kenya, South Africa and Tanzania.
Previous studies on improved cook stove adoption in developing countries use cross-sectional data, which make it difficult to control for unobserved heterogeneity and investigate what happens to adoption over time. We use robust non-linear panel data and hazard models on three rounds of panel data from urban Ethiopia to investigate the determinants of adoption and disadoption of electric cook stoves over time.
Previous studies of poverty in developing countries have to a great extent focused on the characteristics of the household head and used these as proxies for the underlying ability of the household to generate income. This paper uses five rounds of panel data to investigate the persistence of poverty in urban Ethiopia, with a particular focus on the role of intra-household heterogeneity in occupations.
We study the optimal and equilibrium distribution of industrial and residential land in a given region. The trade-off between the agglomeration and dispersion forces, in the form of pollution from stationary forces, production externalities, and commuting costs, determines the emergence of industrial and residential clusters across space. In this context, we define two kinds of spatial policies that can be used in order to close the gap between optimal and market allocations.
When designing choice experiments for nonmarket valuation the role of the price attribute is of major importance. In the energy sector the uncertainty of future direction of changes in prices makes it difficult to include an adequate price vector in the design.
The joint EfD Report 2013/14 showcases the work undertaken by the Environment for Development Initiative.
The U.S., Brazil and a number of European and other countries worldwide have introduced various support schemes for bioethanol and biodiesel. The advantage of these biofuels is that they are relatively easily integrated with the current fossil fuel-based transport sector, at least up to a certain point.
This paper investigates how different levels of entrance fees affect donations for a public good, a natural park.
The bulk of existing work on the statistical forecasting of air quality is based on either neural networks or linear regressions, which are both subject to important drawbacks.
Financial insurance for extreme events can play an important role in hedging against the implications of climate change. This paper combines a comprehensive estimation strategy and a unique panel dataset to study the role of financial insurance in farmers' welfare under uncertainty.
Because the effectiveness of payment for ecosystem services (PES) programs depends on landowners’ engagement, understanding the relationship between the type of payment and participation is a key issue. This paper reports on a choice experiment that quantifies landowners’ preferences for cash and educational in-kind payment. The main results indicate a positive correlation between participation in a PES contract and the magnitude of the cash payment, while participation seems uncorrelated with the magnitude of the educational in-kind payment.
In this paper, we investigate how different levels of entrance fees affect donations for a public good, a natural park.
On 31 March, the Intergovernmental Panel on Climate Change (IPCC) released its latest report on the impacts of climate change on humans and ecosystems (see go.nature.com/ad5v1b). These are real risks that need to be accounted for in planning for adaptation and mitigation. Pricing the risks with integrated models of physics and economics lets their costs be compared to those of limiting climate change or investing in greater resilience.
This paper concerns optimal redistributive non-linear income taxation in an OLG model, where people care about their own consumption relative to (i) other people's current consumption, (ii) own past consumption, and (iii) other people's past consumption. We show that both (i) and (iii) affect the marginal income tax structure whereas (ii) does not. We also derive conditions under which atemporal and intertemporal consumption comparisons give rise to exactly the same tax policy responses.
Although the financial and economic crises have diverted attention from global and local environmental threats and natural resources management issues in developing and developed economies, environment and development concerns must remain on the agendas. The IPCC just released the Working Group I contribution to the IPCC 5th Assessment Report, which will focus World’s attention on topics such as the impact of climate change and the possible mitigation and adaptation options. This report follows the June 2012 United Nations Conference on Sustainable Development held in Rio.
Previous studies of poverty in developing countries have to a great extent focused on the characteristics of the household head and used these as proxies for the underlying ability of the household to generate income.
Unlike most studies of subjective well-being in developing countries, we use a fixed effects regression on three rounds of rich panel data to investigate the impact of relative standing on
life satisfaction of respondents in urban Ethiopia.
In the contingent valuation method, both the goods being valued and the payment vehicles used to value them are mostly hypothetical. However, although numerous studies have examined the impact of experience with the good on the willingness to pay, less attention has been given to experience with the payment vehicles.
This paper studies how different NOx abatement technologies have diffused under the Swedish system of refunded emissions charges and analyzes the determinants of the time to adoption. The policy, under which the charge revenues are refunded back to the regulated firms in proportion to energy output, was explicitly designed to affect investment in NOx reducing technologies.
Uncertainty about the future is an important determinant of well-being, especially in developing countries where financial markets and other market failures result in ineffective insurance mechanisms. However, separating the effects of future uncertainty from realised events, and then measuring the impact of uncertainty on utility, presents a number of empirical challenges.
The People’s Republic of China-Global Environment Facility Partnership to Combat Land Degradation in Dryland Ecosystems promotes an integrated ecosystem management (IEM) approach to restore, sustain and enhance the productive capacity of dryland ecosystems.
The transport sector contributes almost a fifth of the current global emissions of greenhouse gases (GHG), and its share is likely to increase in the future. The US, Brazil, and a number of European and other countries worldwide have introduced various support schemes for biofuels.
This paper reviews and in part extends an emerging literature that integrates development and environmental thinking. It focuses on a small part of the literature: economic evaluation, and goes on to develop the notion of sustainable development and construct a unified language for sustainability and policy analyses.
In Rwanda, access to water is seen as a significant constraint to development in both urban and rural areas. The government and foreign donors give priority to improving access to water for agricultural use.
Using data spanning 15 years, we study subjective and consumption poverty in urban Ethiopia. Despite rapid economic growth and declining consumption poverty, subjective poverty remains largely unchanged.
Levels of trust are measured by asking standard survey questions on trust and by observing the behaviour in a trust game using a random sample in rural Bangladesh.
This book is about land tenure policies from an international perspective. It adds on the first book published by Holden and Otsuka entitled The Emergence of Land Markets in Africa: Assessing the Impacts on Poverty, Equity, and Efficiency (2009) in a much deeper way with a stronger and clearer focus on policy issues.
Incentives conditioned on socially desired acts such as donating blood, departing conflict or mitigating climate change have increased in popularity. Many incentives are targeted, excluding some of the potential participants based upon characteristics or prior actions. We hypothesize that pro-sociality is reduced by exclusion, in of itself (i.e., fixing prices and income), and that the rationale for exclusion influences such 'behavioral spillovers'.
This is a PhD dissertation by Haileselassie Medhin and containing seven self-contained papers:
This article analyses the Total Factor Productivity (TFP) performance of fisheries in Iceland, Norway and Sweden during the period 1973 to 2003. We measure TFP growth using real gross value added as output and capital input, labour input and a stock input index based on the major fish stocks. In developed neighbouring countries, we expect rapid diffusion of fishing technology innovations contributing to productivity convergence. In addition, innovations in the public regulation and the industrial organization may also have influenced productivity growth during the period.
The type and combination of sustainable agricultural practices (SAPs) adopted have a significant effect on agricultural productivity and food security. This study develops a multinomial endogenous switching regression model of farmers' choice of combination of SAPs and impacts on maize income and agrochemicals and family labor use in rural Ethiopia.
We use a natural field experiment to investigate the hypothesis that generosity is partly involuntary, by examining whether individuals tend to avoid opportunities to act generously.
Several previous studies have demonstrated the importance of relative consumption comparisons for public policy. Yet, almost all of them have ignored the role of leisure for status comparisons. Inspired by Veblen (The theory of the leisure class. Macmillan, New York, 1899), this paper assumes that people care about their relative consumption and that leisure has a displaying role in making relative consumption more visible, based on a two-type model of optimal income taxation.
We study household decision making in a high-stakes experiment with a random sample of households in rural China. Spouses have to choose between risky lotteries, first separately and then jointly.
This article is a good example of EfDs mission: combining policy advice and research. It is based on a consultancy for the US EPA who asked Maureen Cropper to lead a process with a panel of experts to help advise them on what discount rate to use for climate change – and specifically about falling discount rates. This paper (and a longer one in REEP that is forthcoming) is a byproduct of that work.
We examine the choice of policy instruments (price, quantity or a mix of the two) when two pollutants are regulated and firms’ abatement costs are private information.
This report presents the Environment for Development Initiative (EfD), its members and work during 2012/13. For a free hardcopy, please send an email to: firstname.lastname@example.org