Reprint of: A common-pool resource experiment with postgraduate subjects from 41 countries

This study reports results from a new series of experiments that examine the robustness of face-to-face communication as a cooperation-facilitating institution in common-pool resource settings. Results are reported from nine experiment sessions, initially designed for pedagogical purposes. The sessions were conducted between 1998 and 2007 as part of a series of summer institutes on institutional analysis and environmental change. Subjects were graduate students and professionals from diverse disciplines, representing 41 countries of residence. The participants in this study stand in sharp contrast to most previous studies, which used undergraduates who self-select into experiments by volunteering to participate. Results from these experiments substantiate earlier findings that non-binding communication can serve as an effective mechanism for solving social dilemma problems, with subjects achieving near socially efficient outcomes.     

Price discovery and intermediation in linked emissions trading markets: A laboratory study

Many new and proposed emissions trading systems involve multiple countries and regions. The introduction of interregional trading raises questions about how flexible state- or national-level authorities should be in allowing individual firms to trade with firms or authorities in other states or countries. This paper uses laboratory methods to evaluate the efficiency and pricing performance of linking trading across regions at the firm-to-firm level. In one treatment, individual firms trade directly with firms or authorities in other regions. We compare performance in this treatment to an intergovernmental trading treatment, where emissions trading is restricted to occur only between intermediaries. A baseline treatment of autarky, where firms only trade with other firms in their country or region, provides a benchmark to assess the efficiency benefits of allowing linking. Although efficiency and price discovery are both improved by allowing intermediation in linked permit markets, we find that further gains can be realized through direct firm to firm trading. Buyers in high cost regions and sellers in low cost regions benefit the greatest from linking.     

Agriculture production versus biodiversity protection: The impact of North-South unconditional transfers

The purpose of this paper is to explore whether international income transfers can improve or worsen the global level of biodiversity and global social welfare by changing the relative contributions to biodiversity protection and to agricultural production. Because of the public good nature of biodiversity, Warr's neutrality theorem suggests that such transfers may have no effects at all (Warr, 1983). A model is developed, based on the simplifying assumption that northern countries have little biodiversity whereas southern countries are endowed with natural capital in the form of (generally unspoilt) biodiversity-rich land. Southern countries allocate optimally land and capital to two competing productive activities, agriculture and eco-tourism. When transfers are organized from the North to the South, we show that Warr's neutrality theorem collapses. Transfers can either reduce or increase the natural capital in the South, depending on some empirically verifiable hypotheses concerning the characteristics of the eco-tourism and agricultural production functions. In addition, we demonstrate that welfare improvements can be obtained even with reductions in the level of biodiversity.     

Is fairness blind?—The effect of framing on preferences for effort-sharing rules

This paper uses a choice experiment to study citizens' preferences for effort-sharing rules for reducing carbon dioxide emissions. For a given global cost and level of emission reduction, we study the willingness to pay for various rules that imply different distributions of the cost between EU, the US, China and Africa. The focus of this paper is on the use of two different treatments, one where the respondents were informed about the country (or country group) names and one where the names were replaced with anonymous labels A-D. This allows us to test whether people's preferences for effort-sharing rules depend on the framing of the problem. We find that the ranking of the rules and the strength of the preferences are not significantly different between the two treatments, and hence we find no evidence of ingroup bias in preferences for effort-sharing rules.     

Farmers adoption of integrated crop protection and organic farming: Do moral and social concerns matter?

We investigate empirically the role of moral and social concerns in farmers' decision to adopt integrated crop protection (IP) and organic farming (OF). A survey questionnaire has been sent to 1286 fruit-growers and vegetable producers located in the French areas of Alpes de Haute Provence, Hautes-Alpes and Vaucluse. Analysis of individual responses (N = 243) shows that, although economic concerns play a strong role, a significant number of respondents give high importance to moral and social ones. We also examine how these considerations matter according to different crop protection strategies, that is, conventional farming, IP and OF. Using a multinomial logistic regression, we find that (1) social concerns (e.g., showing to others one's environmental commitment) drive both IP and OF adoption, (2) moral concerns (e.g., do not feel guilty about one's choices) increase the probability of organic farming adoption only, and (3) farmers who give high importance to economic concerns (e.g., cutting production costs) are less likely to adopt OF.     

Stimulating different types of eco-innovation in the UK: Government policies and firm motivations

In this paper, we adopt a recent OECD framework and examine the role of external policy tools and internal firm specific factors for stimulating three different types of eco-innovations that range on a spectrum of lower to higher technological and environmental impacts: End-of-Pipeline Pollution Control Technologies, Integrated Cleaner Production Technologies and Environmental R&D. Using a novel firm-level dataset from a DEFRA survey, we estimate a Tobit model, which provides empirical evidence showing that these eco-innovations are motivated by different external policy tools and internal firm specific factors. Our findings indicate that End of Pipeline Technologies and Integrated Cleaner Production Technologies are mainly driven by equipment upgrade motives with a view of improving efficiency while environmental regulations are effective in stimulating the End-of-Pipeline technologies and Environmental R&D. Interestingly, alongside government induced regulations, we find that market factors, mainly motivated by cost savings, are effective in driving Environmental R&D. Finally, ISO14001 certification is effective in strengthening the positive impact of environmental management systems on both End-of-Pipeline technologies and Environmental R&D while CSR policies have no significant impact on motivating any of the eco-innovations.     

Correcting for the endogeneity of pro-environment behavioral choices in contingent valuation

In contingent valuation studies, observed behavioral choices often enter as independent variables in the willingness to pay function. However, these variables may be endogenously determined when the error term in the behavioral model is correlated with the error term in the willingness to pay model. We investigate the effects of correcting for the endogeneity of a variable, namely membership status in environmental organizations that proxies unobservable characteristics of the respondents. Jointly modeling the membership variable and the willingness to pay response yields an estimate for the effect of the former that contradicts previous findings but is intuitive and agrees with theoretical expectations.     

Comparative costs and conservation of wild species in situ, e.g. orangutans

The extent to which conservation is feasible is constrained by budgets and the financial sacrifice stakeholders are willing to bear. Therefore a possible objective for conserving a species is to minimise the cost of achieving that stated aim. For example, if a minimum viable population (MVP) of a species is to be conserved, the size and type of habitats reserved for this could be selected to minimise cost. This requires consideration of the comparative (relative) opportunity costs of reserving different land types for conservation. A general model is developed to demonstrate this and is applied to the case of the orangutan. In the ecological literature, recommendations for reserving different types of land for conservation have been based on comparisons of either the absolute economic returns they generate if converted to commercial use or on differences in the density of a species they support. These approaches are shown to be deficient because they ignore relative trade-offs between species population and economic conversion gains at alternative sites. The proposed model is illustrated for orangutan conservation.     

Anomalies in green national accounting

We “extend” standard arguments for greening the product side of the national accounts to the income side of the accounts and turn up an anomaly. For an economy with oil use, no entry for oil income, a supposed primary factor, appears in the income side of the national accounts when the depletion of natural capital is accounted for on the product side of the accounts. We resolve this issue by applying an income definition developed in the theory of national accounting. This, however, leads to another anomaly on the income side of the national accounts.