Optimal Investment in Urban Drainage: A Framework for Cost-Benefit Analysis

This article addresses some basic issues (including distributional weights, discount rates, and the value of life) in the cost-benefit analysis of urban drainage and provides a framework for the estimation of the optimal amount of investment for flood mitigation. This involves: (i) estimating the expected total damage from flooding in present-value terms before flood mitigation; (ii) deriving the reduction in expected total damage as the average recurrent interval of flooding increases; (iii) estimating how this interval increases with the amount of investment in flood mitigation; and (iv) choosing the optimal investment by equating marginal benefit and marginal cost. The framework is also applicable to other accident or damage mitigation investments and some issues discussed are relevant to all types of cost-benefit analysis.     

The Demand for Index‐Based Flood Insurance in a High‐Income Country

Increased flooding is expected to be one of the greatest threats caused by climate change. Flood insurance helps to cope with the risk of flooding, but take‐up rates are relatively low in many places. Mainly in developing countries, index‐based flood insurance – where the insurer's payout is based on pre‐agreed weather indices instead of actual loss – has been marketed recently. In this paper, we investigate whether the introduction of index‐based flood insurance with relatively low premiums is likely to attract new customers in a high‐income country, namely Germany. We use data from a discrete choice experiment combined with damage data for a major flood in 2013. We find index‐based flood insurance to attract similar customers as traditional damage‐based, while the latter is preferred on average. Our results suggest that not many new customers would enter the market, once index‐based flood insurance were available.     

Integrated hydrodynamic and economic modelling of flood damage in the Netherlands

This paper presents a model developed in the Netherlands for the estimation of damage caused by floods. The model attempts to fill the gap in the international literature about integrated flood damage modelling and develop an integrated framework for the assessment of both direct hazard-induced damages and indirect economic damages such as the interruption of production flows outside the flood affected area, as well as loss of life due to flooding. The scale of damage assessment varies from a specified flood-prone area in a river basin or a coastal region to the country's entire economy. The integrative character of the presented model is featured by the combination of information on land use and economic data, and data on flood characteristics and stage-damage functions, where the geographical dimension is supported by modern GIS to obtain a damage estimate for various damage categories. The usefulness of the model is demonstrated in a case study estimating expected flood damage in the largest flood-prone area in the Netherlands.     

Flooding risk and housing values: An economic assessment of environmental hazard

Climate change, the ‘boom and bust’ cycles of rivers, and altered water resource management practice have caused significant changes in the spatial distribution of the risk of flooding. Hedonic pricing studies, predominantly for the US, have assessed the spatial incidence of risk and the associated implicit price of flood risk. Using these implicit price estimates and their associated standard errors, we perform a meta-analysis and find that an increase in the probability of flood risk of 0.01 in a year is associated to a difference in transaction price of an otherwise similar house of - 0.6%. The actual occurrence of a flooding event or increased stringency in disclosure rules causes ex-ante prices to differ from ex-post prices, but these effects are small. The marginal willingness to pay for reduced risk exposure has increased over time, and it is slightly lower for areas with a higher per capita income. We show that obfuscating amenity effects and risk exposure associated with proximity to water causes systematic bias in the implicit price of flood risk.     

Physical and Economic Consequences of Sea-Level Rise: A Coupled GIS and CGE Analysis Under Uncertainties

This paper develops a modelling framework that links GEMINI-E3, a multi-regional, multi-sectoral computable general equilibrium model with a cost-benefit analysis approach at local level using geographical information system tools to assess the physical and economic consequences of sea-level rise (SLR) in the twenty first century. A set of future scenarios is developed spanning the uncertainties related to global warming, the parameters of semi-empirical SLR estimates, and coastal developments (cropland, urban areas and population). The importance of incorporating uncertainties regarding coastal development is highlighted. The simulation results suggest that the potential development of future coastal areas is a greater source of uncertainty than the parameters of SLR itself in terms of the economic consequences of SLR. At global level, the economic impact of SLR could be significant when loss of productive land along with loss of capital and forced displacement of populations are considered. Furthermore, highly urbanised and densely populated coastal areas of South East Asia, Australia and New Zealand are likely to suffer significantly if no protective measures are taken. Hence, it is suggested that coastal areas needs to be protected to ameliorate the overall welfare cost across various regions.     

Urban flood control strategy based on new relationship of human and flood

China is one of the countries with the most serious flooding disasters.In China,above 70% of big cities,50% of population and 75% of industrial and agricultural output value are distributed in eastern coastal areas with serious flooding.Therefore,enhancement of theoretical study and experience summarization of urban flood control is of great theoretical and practical significance.As economy is developing rapidly,urban scale is expanding fast,and urban flood control stand is promoted.Urban flood control calls for new concept and methods.This paper makes a systematic summarization of concept evolution and advanced methods concerning urban flood control at home and abroad.The concept of urban flood control has transformed from simple flood control and drainage to coexistence with and use of flood.Flood control measures have transferred form emphasis upon engineering ones to priority to both engineering and non-engineering ones,with special attention to ecological flood control,such as making full use of ecological revetment,ecological realignment of a river,multi-objective management of urban flood detention region,turning flood into resources and utilization of wetlands.     

洪水资源化利用的经济学分析

我国治水正由防范洪水向利用洪水方向探索,并且在实践中收到一定效果。本文探析了我国治水理念的转变,并构建出了洪水利用的有效途径,最后对洪水导致的损失与洪水利用的成本收益进行了分析,从收益的角度论证了洪水利用理念的正确性。     

Speculative behavior in a housing market: Boom and bust

We study a housing market with household buyers, speculative investors and property developers in a Walrasian scenario. We show that in addition to the factors that affect the real demand of household buyers and the development cost of property developers, investors' speculative behavior is an important factor explaining housing price evolution and dynamics. In particular, investors' extrapolative expectations may drive the housing price to persistently deviate from its benchmark value and even to explode. In contrast, investors' mean-reverting strategy can balance out the position of trend extrapolators, which may stabilize an otherwise explosive housing market. Moreover, the evolutionary process of housing prices driven by investors' speculative behavior is path-dependent in the sense that different initial market conditions may result in different price paths, which corresponds to the localization property empirically documented in the real housing market. In addition, within the stylized model, we provide some policy implications through analyzing the limitation and effectiveness of policy adjustments via down payment and development cost, and find that the decrease of development cost is a better measure to adjust the housing market when it booms or busts.     

The use of the scaling property in a frontier analysis of a system of equations

ABSTRACT

This article presents a one-stage efficiency frontier analysis based on the scaling property. This type of analysis is a not very often applied in empirical work in spite of its nice features. Due to the scaling property the influence of exogenous (managerial) variables on efficiency can be modelled and estimated in one stage. It also opens the possibility of estimating a system of equations, consisting of a cost function and the corresponding cost share equations. The model is applied to a unique data set of Dutch secondary education school boards in the period 2007–10, not only consisting of regular data on cost, inputs and outputs, but also of specific data on operational management. The model provides reliable and plausible estimates for the cost efficiency, scale elasticity, and technical change. Average cost efficiency is about 96%. Economies of scale prevail for school boards with size less than 0.8 times average size, whereas annual productivity growth is 2.2% on average.     

External Costs of Aquaculture Production in West Virginia

Temperate hill-lands of the U.S.A. such as those in West Virginia are areas from which increasing output of farm-raised fish may be possible. However, the downstream economic impacts of current and projected future effluent as a result of aquaculture production have not been extensively studied. Using an externality framework and a combination of primary and secondary data, this study determines pollution prevention costs (PPC), and downstream pollution damage costs resulting from fish farm wastewater effluent measured as willingness to pay (WTP) for restoring water quality. PPC is estimated at $0.11 per kg of trout produced (which would add 6% to private production cost), and WTP is estimated at $0.49 per kg of trout produced (representing 25% of private production cost) at current production and price levels. This study shows that installation of filtration units is a low-cost (less than 6% of total cost) and an effective technology for controlling pollution at the source. Internalizing external costs (adding this 6% to private production costs) is one strategy that could contribute to sustainable growth of the aquaculture industry.     

Flood Risk Information,Actual Floods and Property Values: A Quasi‐Experimental Analysis

Hedonic property price analysis tells us that property prices can be affected by natural hazards such as floods. This paper examines the impact of flood‐related variables (among other factors) on property values, and examines the effect of the release of flood risk map information on property values by comparing the impact with the effect of an actual flood incidence. An examination of the temporal variation of flood impacts on property values is also made. The study is the first of its kind where the impact of the release of flood risk map information to the public is compared with an actual flood incident. In this study, we adopt a spatial quasi‐experimental analysis using the release of flood risk maps by Brisbane City Council in Queensland, Australia, in 2009 and the actual floods of 2011. The results suggest that property buyers are more responsive to the actual incidence of floods than to the disclosure of information to the public on the risk of floods.     

新制度经济学的新发展:历史比较制度分析

新制度经济学在完全理性与有限理性之间左右摇摆,限制了制度理论的发展。以格雷夫为代表的历史比较制度分析,在有限理性前提下,通过大量案例研究,提出了自己关于制度及其变迁的真知灼见:(1)克服两个“两分法”,发展了统一的制度概念;(2)将制度理解为博弈均衡,重点解释古典博弈论成为制度分析有用工具的条件;(2)研究制度在变化的环境中如何存续、内生的制度变迁以及过去制度影响后续制度的原因和作用机制;(3)提出了独具特色的互动的特定历史情景分析,将重复博弈理论与特定历史情景结合起来去识别制度,解释其出现、存续和变迁。     

Concepts of learning and experience in developing solar thermal technologies

This study presents a plausible picture of development of solar thermal technology, using the learning and experience curve concepts. The cost estimates for solar thermal energy technologies are typically made assuming a fixed production process, characterized by standard capacity factors, overhead, and labor costs. The learning curve is suggested as a generalization of the costs of potential solar energy system. The concept of experience is too ambiguous to be useful for cost estimation. There is no logical reason to believe that cost will decline purely as a function of cumulative production, and experience curves do not allow the identification of logical sources of cost reduction directly. The procedures for using learning and aggregated cost curves to estimate the costs of solar technologies are outlined. Because adequate production data often do not exist, production histories of analogous products/processes are analyzed, and learning and aggregated cost curves for these surrogates estimated. If the surrogate learning curves apply, they can be used to estimate solar thermal technology costs. The steps involved in generating these cost estimates are given. Second-generation glass-steel heliostat design concept developed by MDAC is described; a costing scenario for 25,000 units/year is detailed; surrogates for cost analysis are chosen; learning and aggregated cost curves are estimated; and the aggregate cost curve for the MDAC designs is estimated. The surrogate concept of cost estimation combines qualitative steps, which are highly subjective, with quantitative techniques, which require thorough knowledge and understanding to justify their use. As such, the results, interpretations, and inferences must be qualified by an understanding of the process by which they were developed. The method of surrogate learning curves had limitations in both the data acquisition and data analysis phases of activity. Improvements in the validity of cost data and in the task used for this type of study are necessary to enhance the reliability of unit cost predictions resulting from this technique.     

External Financial Fragility and Capital Flight in Mexico

Mexico suffered capital flight from 1973 up to 1988 practically without interruption. This paper attempts to evaluate the real cost to Mexico of capital flight. A simple macro-economic model is specified on whose basis an estimate of this cost is attempted. It is found that the cost of this capital flight has been enormous. It gave rise to over-indebtedness when financing was still available from external sources, and it entailed short- and long-term losses of output which the country might have generated. The loss of output was estimated at between 1.5% and 2.5% of the total GDP for the period 1973–1991, between 0.9% and 2% for the 1982–1991 period, and between 3.1% and 5.7% for the 1982–1988 adjustment period.     

Climate change and economic growth: An intertemporal general equilibrium analysis for Egypt

This study advances the state of the art in country-level computable general equilibrium analysis for climate change impact and adaptation analysis by incorporating forward-looking expectations. The analytic framework is used to explore the long-run growth prospects for Egypt in a changing climate. Based on a review of existing estimates of climate change impacts on agricultural productivity, labour productivity and the potential losses due to sea-level rise for the country, the model is used to simulate the effects of climate change on aggregate consumption, investment and income up to 2050. Available cost estimates for adaptation investments are employed to explore adaptation strategies.The simulation analysis suggests that in the absence of policy-led adaptation investments, real GDP towards the middle of the century will be 6.5% lower than in a hypothetical baseline without climate change. A combination of adaptation measures, that include coastal protection investments for vulnerable sections along the low-lying Nile delta, support for changes in crop management practices and investments to raise irrigation efficiency, could reduce the GDP loss in 2050 to around 2.6%.Further work along these lines for developing countries in climate change hotspot regions deserves a high priority on the research agenda in economic modelling.     

Economic costs and impacts of climate-induced sea-level rise and storm surge in Canadian coastal provinces: a CGE approach

We estimated the economic costs and impacts of future sea-level rise (SLR) and storm surge due to climate change in Canada’s coastal provinces using regional, dynamic computable general equilibrium models that track provincial welfare, GDP, trade, prices and inputs over the 2009–2054 period. We also assessed the economic costs of coastal adaptation investments, to determine whether such investments can be justified on economic grounds. Results indicated that SLR and storm surge could cost Canada in the range of $4.6–$25.5 billion in present value welfare, and between $53.7 and $108.7 billion in present value GDP. We found significant variation in costs and impacts across coastal provinces, with some provinces such as Newfoundland and Labrador experiencing only marginal costs/impacts, and others such as British Columbia experiencing costs as high as $21 billion in welfare over the period. Coastal adaptation investments were supported on economics grounds. Overall, this study provides the first (and preliminary) provincial economic impact estimates of climate-induced SLR and storm surge, as well as adaptation investments, in Canada. Additional research is needed to refine the analysis in order to produce reliable estimates that can be used to guide coastal adaptation policies in Canada.     

The economic costs of biological predation

This paper developes a bioeconomic model to analyse the economic losses from the reduced harvesting of prey species resulting from an increase in the stock of a natural predator. Examples of large mammals creating economic damage are whales and African elephants. The economic losses depend critically on the actual management of the prey stock, although the three measures we develop are equal when the stock is managed so as to maximize the sustained economic rent from the prey species. Predation losses are illustrated by the case of the Northeastern Atlantic Minke whale, where the estimate of the average predation cost per whale in 1991–1992 is between $US 1780 and $US 2370, using Norwegian cost and earnings data. A ten percent stock increase is estimated to cause a loss of almost $US 19 million to the fishers of the prey species. If half of this cost were assigned to Norway it would be equivalent to 2.8 and 6.7 percent of the gross profits of the Norwegian cod and herring fisheries, respectively.     

我国生态补偿主客体界定与标准核算方法分析

通过分析已有的生态补偿研究的具体实例,探讨生态补偿主客体的界定和生态补偿标准的核算方法,为进一步开展实质性的生态补偿研究提供科学依据。在界定生态补偿主客体概念内涵的基础上,强调生态补偿主客体的界定应根据利益相关者在特定生态保护、破坏事件中的责任和地位加以确定。文章将我国的生态补偿的客体归纳为四类,即为生态保护做出贡献者、生态破坏的受损者、生态治理过程中的受害者和减少生态破坏者。根据利益相关方分析,所涉及的生态补偿主体范围较广,目前在我国生态补偿具体实施过程中,生态补偿的主体主要是各级政府。研究表明,目前有关生态补偿的核算方法主要有按生态系统服务的价值、按生态保护者的直接投入和机会成本、按生态破坏恢复或修复成本、按支付意愿和受偿意愿,以及基于生态足迹确定生态补偿标准等。在实践中,应在充分考虑生态系统的特征和地区特点的基础上,选取适宜、综合的方法,以便构建兼顾各利益相关方的补偿机制。     

Do emission subsidies reduce emission? In the context of environmental R&D organization

This paper, which reexamines the Poyago-Theotoky model, provides additional investigation that was conducted under a corrected environmental damage parameter. As new findings, we obtain the following. First, social welfare under a time-consistent emission tax (emission subsidy) policy is always welfare-enhancing rather than the case of laissez-faire. Second, if the environmental damage parameter is sufficiently small, then the equilibrium emission tax rate is invariably negative. It is therefore an emission subsidy. Moreover, total emissions under the emission subsidy scenario become less than those under laissez-faire if the damage parameter is sufficiently small, and if the R&D cost is low. However, total emissions under the emission subsidy become greater than those under laissez-faire if the damage parameter is sufficiently small, and if the R&D cost is high.     

地权稳定性、土地流转与农地资源持续利用

土地使用权的稳定性、土地流转等农地产权制度对农地资源的影响一直是农村经济改革和农地制度绩效评价中备受关注的问题之一。本文通过建立土壤肥力变化的社会经济及政策影响因素模型 ,利用 6省 1 5县市 1 80个样本地块在 2 0世纪 80年代初期和 2 0 0 0年的土壤实验数据 ,结合同时期这些样本地块所在生产小组的社会经济调查数据 ,对于地权稳定性、农户间非正式土地流转等社会经济及政策因素如何影响农地土壤的可持续生产能力进行了实证分析。模型估计结果表明 :稳定的土地使用权有助于改善农地土壤的长期肥力 ;农户之间的非正式土地流转容易造成农地土壤长期肥力的衰退 ,但对土壤的短期肥力无显著影响 ;同时 ,农村劳动力机会成本提高并没有引起农地土壤肥力的损耗