Biofuel policies and the environment: Do climate benefits warrant increased production from biofuel feedstocks?

We examine whether climate benefits warrant policies promoting biofuel production from agricultural crops when other environmental impacts are accounted for. We develop a general economic-ecological modelling framework for integrated analysis of biofuel policies. An economic model of farmers' decision making is combined with a biophysical model predicting the effects of farming practices on crop yields and relevant environmental impacts. They include GHG emissions over the life cycle, nitrogen and phosphorus runoff, and the quality of wildlife habitats. We apply our model to crop production in Finland. We find that under current biofuel production technology the case for promotion of biofuels is not as evident as has been generally thought. Only reed canary grass for biodiesel is unambiguously desirable, whereas biodiesel from rape seed and ethanol production from wheat and barley cause in most cases negative net impacts on the environment. Suggested policies in the US and the EU tend to improve slightly the environmental performance of biofuel production.     

Corporate responsibility activities and economic performance: a theory of why and how they are connected

Whether a firm undertakes corporate responsibility (CR) activities for strategic or altruistic reasons, it is important to understand the relationship between such activities and economic performance. CR activities may be distinguished based on which combination of three possible outputs – learning, reputation and CR outcomes – they produce. This distinction matters not only for the ultimate environmental and social sustainability but also for the relationship between CR activities and economic performance. Taking advantage of this distinction, an integrative synthesis of knowledge of the relationship between CR activities and economic performance can be developed that presents the relationship in terms of a dynamic, case‐specific, inverted U‐shaped efficiency frontier and the vertical distance from this frontier. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.     

No-till technology: benefits to farmers and the environment? Theoretical analysis and application to Finnish agriculture

We assess theoretically and empirically the private profitabilityand social desirability of conventional tillage and no-tillwhen crop yields, production costs and nutrient and herbiciderunoff damages are taken into account. Based on Finnish experimentaldata, no-till provides higher social and private profit thanconventional tillage for barley but not for oats and wheat,for which the production cost advantage of no-till does notcompensate for lower yields in the private optimum. As regardssocial returns, no-till provides slightly better overall environmentalperformance but, given the existing valuation of nutrient andherbicide runoff damage, this is not enough to give no-tillan advantage in oats and wheat cultivation. Thus, the key factorsdetermining the private and social profitability of no-tilland conventional tillage are yields and production costs ratherthan environmental performance.     

Forced Choice Restriction in Promoting Sustainable Food Consumption: Intended and Unintended Effects of the Mandatory Vegetarian Day in Helsinki Schools

This paper discusses the use of forced restriction of food choice as an instrument of food policy by using the mandatory Helsinki School District weekly vegetarian day as a natural experiment. Overall, the results show that the initiative produced a mixture of intended and unintended effects. On vegetarian days, there were clear signs of non-compliance in the short term, manifested as a decrease in the participation in school lunches and in the amount of food taken to the plate and as an increase in plate waste. In the medium term, the only sign of non-compliance was a decrease in the amount of food taken to the plate. The difference between the short- and medium-term effects can be interpreted as a weakening of non-compliance, as a change in the way it manifested itself, or a combination of both. The effects of the vegetarian day differed between school levels. In the short term, the clearest indications of non-compliance were found in lower-secondary schools. However, these schools also registered positive spillover effects in the medium term. The best way to reduce the unintended effects of a policy involving forced choice restriction depends on the causes of such effects. In the case of psychological reactance, default options may be preferable to forced choice restriction. For hedonic dislike, menu development should be prioritized, and moral suasion and information campaigns may help where non-compliance stems from a disagreement with the objectives and effectiveness of the intervention. Thus, forced choice restriction should be accompanied by detailed data collection to understand the possible causes of intended and unintended effects and to tailor the intervention to the target group.     

Agri‐environmental auctions for phosphorus load reduction: experiences from a Finnish pilot

We examine environmental auctions on working agricultural lands. We organized a discriminatory auction where farmers were asked to make bids on spreading gypsum on their fields to reduce phosphorus loads to surface waters. The parcel‐specific bids were ranked based on their load reduction–compensation ratios. To assess load reductions, we built an environmental benefit index (EBI) based on three factors: P‐status of the soil (phosphorus available for crops), field slope and location with respect to waterways. As the per tonne price of gypsum delivery from the factory was higher for small quantities, the auction format allowed bundling of field parcels to reduce transportation costs. We evaluate auction's ability to target the environmental (or abatement) measures to field parcels with the highest load reduction potential and analyse the economic efficiency of the auction by comparing the pilot auction with simulated bidding behaviour and with hypothetical flat rate payment schemes. The pilot auction targeted the environmental measures effectively. It was also more efficient than a flat rate payment, even when the flat rate scheme was combined with an EBI eligibility criterion.     

Agri-Environmental Program Compliance in a Heterogeneous Landscape

Heterogeneity of agricultural landscapes may necessitate the use of spatially targeted instruments. But costly enforcement may be needed to ensure compliance with these policies. This paper examines the design of agri-environmental policies designed to achieve reductions in fertilizer application rates and installation of riparian buffers through the use of incentive-based instruments. We derive monitoring strategies capable of ensuring perfect compliance from risk neutral farmers given realistic limits on penalties for non-compliance. We then apply that framework empirically using a parametric model reflecting Finnish agricultural and environmental conditions. The results of our simulations indicate that subsidies for installing and maintaining buffer strips, used alone, are the most cost effective means of reducing nitrogen runoff from crop production. This policy is also the most attractive politically, in that it reduces farm income less than the alternatives considered.