Economic and environmental efficiency using a social accounting matrix

This paper aims to show the utility of the so-called Social Accounting Matrix and Environmental Accounts (SAMEA) for economic and environmental efficiency analysis. The article uses the SAMEA for Spain in 2000, applied to water resources and greenhouse gas emissions. This matrix is used as a central core of a multisectorial model of economic and environmental performance, and it calculates the denominated “domestics SAMEA multipliers” and their decomposition into characteristic, direct, indirect and induced effects. These multipliers show some evaluation of economic and environmental efficiency. Also, we present an application of these multipliers that demonstrates that there is no causal interrelation between those sectors with higher economic backward linkages and those with higher environmental deterioration backward linkages.     

Environmental Satellite Models for a Macroeconomic Model

To support national environmental policy, it is desirable to forecast and analyse environmental indicators consistently with economic variables. However, environmental indicators are physical measures linked to physical activities that are not specified in economic models. One way to deal with this is to develop environmental satellite models linked to economic models. The system of models presented gives a frame of reference where emissions of greenhouse gases, acid gases, and leaching of nutrients to the aquatic environment are analysed in line with – and consistently with – macroeconomic variables. This paper gives an overview of the data and the satellite models. Finally, the results of applying the model system to calculate the impacts on emissions and the economy are reviewed in a few illustrative examples. The models have been developed for Denmark; however, most of the environmental data used are from the CORINAIR system implemented in numerous countries.     

Sustainable Development and a Dwindling Carbon Space

Curbing global warming by setting long term maxima for temperature rise or concentrations of greenhouse gases defines spaces within which further emissions of these gases are to remain (referred to here as ‘carbon spaces’). This paper addresses questions related to how to share between countries the carbon space and/or efforts to stay within it, in the perspective of sustainable development; different allocation mechanisms are reviewed, responding to criteria such as ‘responsibility’ for climate change, ‘capability’ to engage in abating it, and ‘potential’ or future contribution. The carbon space remaining at any time will depend on effective mitigation up till that time, and will condense if more stringent maxima are to be set; per capita this space becomes smaller with rising population. Sharing the carbon space in a fair way requires “convergence” of currently widely unequal per capita emissions. If the world is to stay within the carbon space consistent with <2° warming, then developed economies—the wealthiest sources of greenhouse gases should quickly and deeply engage in mitigation. Also, substantial mitigation is to take place in developing countries and that this will require substantial support to developing countries (financially, technologically). Changing development paths can make a major contribution to climate change mitigation; this requires changes in investment, production and consumption patterns. Green New Deals as proposed in the context of a widened response to the current economic crisis could become a first phase of a fundamental transition towards a decarbonised global economy worldwide. Concerns to do with equity as well as sustainability must be incorporated and integrated into coherent transitory strategies.     

Uncertainty,Learning and International Environmental Policy Coordination

In this paper we construct a simple model of global warming which captures a number of key features of the global warming problem: (i) environmental damages are related to the stock of greenhouse gases in the atmosphere; (ii) the global commons nature of the problem means that these are strategic interactions between the emissions policies of the governments of individual nation states; (iii) there is uncertainty about the extent of the future damages that will be incurred by each country from any given level of concentration of greenhouse gases but there is the possibility that at a future date better information about the true extent of environmental damages may become available; an important aspect of the problem is the extent to which damages in different countries may be correlated. In the first part of the paper we consider a simple model with two symmetric countries and show that the value of perfect information is an increasing function of the correlation between damages in the two countries in both the cooperative and non-cooperative equilibria. However, while the value of perfect information is always non-negative in the cooperative equilibrium, in the non-cooperative equilibrium there is a critical value of the correlation coefficient below which the value of perfect information will be negative. In the second part of the paper we construct an empirical model of global warming distinguishing between OECD and non-OECD countries and show that in the non-cooperative equilibrium the value of perfect information for OECD countries is negative when the correlation coefficient between environmental damages for OECD and non-OECD countries is negative. The implications of these results for international agreements are discussed.     

The political economy of global carbon emissions reductions

The discussion about what reductions in greenhouse gas emissions are required and how the emissions rights might be distributed globally has fostered the belief that there is a fundamental conflict between the rich nations of the “North” and the poor but populous nations of the “South.” The argument is that grandfathering the rights will only reinforce existing global inequalities, while per capita distribution of the rights would lead to such huge transfers of wealth to the South as to be unacceptable to the North. However, a very simple general equilibrium model highlighting key elements of the global economy shows that this perception is incorrect under a plausible interpretation of the goal of the United Nations Framework Convention on Climate Change to “avoid dangerous anthropogenic interference with the climate system.” Instead of using an economic damage function to determine the optimal level of emissions reductions, the model's utility functions are calibrated to reflect scientific understanding of what would be required to stabilize the atmosphere at safe concentrations of greenhouse gases. Among policy options that would accomplish this, the United States has a preference for grandfathering the allocation of emissions rights over a per capita allocation, but this preference is not strong and could be offset by other geopolitical considerations.     

Anonymous yes–no voting with abstention and multiple levels of approval

Symmetric (3,2) simple games serve as models for anonymous voting systems in which each voter may vote “yes,” abstain, or vote “no,” the outcome is “yes” or “no,” and all voters play interchangeable roles. The extension to symmetric (j,2) simple games, in which each voter chooses from among j ordered levels of approval, also models some natural decision rules, such as pass–fail grading systems. Each such game is determined by the set of (anonymous) minimal winning profiles. This makes it possible to count the possible systems, and the counts suggest some interesting patterns. In the (3,2) case, the approach yields a version of May's Theorem, classifying all possible anonymous voting rules with abstention in terms of quota functions. In contrast to the situation for ordinary simple games these results reveal that the class of simple games with 3 or more levels of approval remains large and varied, even after the imposition of symmetry.     

Consequences of irreversibilities on optimal intertemporal CO2 emission policies under uncertainty

This paper investigates how irreversibilities affect the optimal intertemporal accumulation of greenhouse gases in the atmosphere under uncertainty. More precisely, the evolution of the future temperature is assumed to follow an Itô-process with the drift provided by greenhouse gas emissions. This paper considers two different kinds of irreversibilities: of emissions (i.e., CO₂ once dissolved into the air cannot be collected later) and of stopping. These issues are investigated first (in the tradition of the real option literature) as pure stopping problems and then allowing for a continuous choice of emissions. Implications for global warming are: an irreversible stopping of greenhouse gas emissions is never optimal in a continuous framework and yields in the real option framework a less conservationist stopping rule in which uncertainty increases the stopping threshold (i.e. works against conservation).     

Can Japan succeed in “Chigyo-ka” (intelprise-formation)?

There are two aspects in today's information revolution that started in the late 1970s. The first is an aspect referred to as “the third industrial revolution,” which triggers the transition to the “21st century system of Industrialization.” The information revolution in this sense brings the creation of new “breakthrough industries (new multimedia industries).” And the second aspect of the information revolution possesses the characteristics of both a technological revolution and a social revolution and brings about the arrival of the third phase of the historical evolutionary process of the modern civilization, which proceeds through three phases, namely “militarization, industrialization, and then informatization.”If the bearers of modern industrialization are a “group of enterprises” that have been engaged in the race in order to gain “wealth” (generalized means of exchange/exploitation power), and if these enterprises' activities have been exercised in the world market where their products have been sold, then it is appropriate to call the bearers of informatization a “group of intelprises.” They will be engaged in the race to gain “wisdom” (generalized means of persuasion/induction power), then stages of their activities can be called a “global intelplace” where “sharables,” that is, information and knowledge, will be disseminated. And now, toward the 21st century, the third phase of modernization, which can be called the “informatization/intelprise formation” or the “wisdom game” (intellectualism), is about to begin.Japan's “ie society (a society based on the ie principle—literally, it means “house” but here it is interpreted as cultural principle for organizing a society), which has been going through the process of evolution on the Japan Archipelago, has developed a network-based organization with little stratification within its infrastructure. In this sense, Japanese society can be characterized as a “network-oriented society” in which intelprises and an intelplace in the broad sense have functioned as the essential components of the society since Middle Ages. In general, an intelplace and intelprises that operate actively within this framework serve as the flexible bases for different types of social relations and institutions, such as states and markets and eventually integrate these into the society to a certain extent. In fact, it took place quite regularly during the modernization “in the narrow sense,” or Westernization of Japanese society after the Meiji Restoration. There exist some problems, however. Some of the characteristics found in Japanese society may become obstacles to activities aimed at the sharing and promotion of information and knowledge in the global intelplace and Japanese participation in the “wisdom game.” Badly needed are serious efforts for Japanese intelprise-formation to reduce these obstacles as much as possible.     

Don’t let your robots grow up to be traders: Artificial intelligence, human intelligence, and asset-market bubbles

Researchers who have examined markets populated by “robot traders” have claimed that the high level of allocative efficiency observed in experimental markets is driven largely by the “intelligence” implicit in the rules of the market. Furthermore, they view the ability of agents (artificial or human) to process information and make rational decisions as unnecessary for the efficient operation of markets. This paper presents a new series of market experiments that show that markets populated with standard robot traders are no longer efficient if time is a meaningful element, as it is in all asset markets. While simple two-season markets with human subjects reliably converge to an efficient equilibrium, markets with minimally intelligent robot traders fail to attain this equilibrium. Instead, these markets overshoot the equilibrium and then crash below it. In addition to firmly establishing the role of trader intelligence in asset-market equilibrium, these experiments also provide insights into why bubbles and crashes are consistently observed in many asset-market laboratory experiments using human subjects.     

Measurement and communication of greenhouse gas emissions from U.S. food consumption via carbon calculators

Food consumption may account for upwards of 15% of U.S. per capita greenhouse gas emissions. Online carbon calculators can help consumers prioritize among dietary behaviors to minimize personal “carbon footprints,” leveraging against emissions-intensive industry practices. We reviewed the fitness of selected carbon calculators for measuring and communicating indirect GHG emissions from food consumption. Calculators were evaluated based on the scope of user behaviors accounted for, data sources, transparency of methods, consistency with prior data and effectiveness of communication. We found food consumption was under-represented (25%) among general environmental impact calculators (n = 83). We identified eight carbon calculators that accounted for food consumption and included U.S. users among the target audience. Among these, meat and dairy consumption was appropriately highlighted as the primary diet-related contributor to emissions. Opportunities exist to improve upon these tools, including: expanding the scope of behaviors included under calculations; improving communication, in part by emphasizing the ecological and public health co-benefits of less emissions-intensive diets; and adopting more robust, transparent methodologies, particularly where calculators produce questionable emissions estimates. Further, all calculators could benefit from more comprehensive data on the U.S. food system. These advancements may better equip these tools for effectively guiding audiences toward ecologically responsible dietary choices.     

In or out: efficient inclusion of installations in an emissions trading scheme?

Regulators around the world are currently considering national emissions trading schemes (ETS) as cost-effective instruments to reduce greenhouse gas emissions. In the process, they are confronted with numerous design issues. The coverage of installations in an ETS is one such issue. While “blanket coverage” that includes all industrial emitters of greenhouse gases in an economy has some intuitive appeal, and seems equitable, it does not take into full account all the costs related to the extent of coverage. This paper shows that an alternative approach of “partial coverage” based on benefit–cost analysis can achieve the same emission reduction outcome at lower social cost. The approach is based on maximizing the benefits from inclusion of installations in an ETS at the same time as taking all relevant transaction costs into account. A broad definition of transaction costs is used, which covers the regulatory costs to the government as well as regulatory costs imposed on covered installations. We find that particularly for relatively modest emissions reduction targets the cost savings of a “partial coverage” compared to “blanket coverage” are significant.     

论温室气体排放管制的政治学根据

温室气体排放管制的政治学根据包括绿色政治和政治合法性两个方面。在绿色政治的大背景下,国际政治和国内政治都将温室气体排放管制问题放到了一个非常重要的位置。政府对温室气体排放行为进行管制是实现和维护其政治合法性的重要途径。温室气体排放管制本身是政府作为公共权力主体应当提供的一种特殊公共产品。温室气体排放管制是政府履行其社会职能的重要方面。温室气体排放管制的目的是为社会提供环境公共产品——安全的气候。作为地球村的一员,每个国家应当积极采取相关法律政策措施促进温室气体减排。     

生物碳汇类型的特性研究

温室气体增加被认为是全球变暖的主要原因,CO2是大气中最重要的温室气体,在对温室效应和全球气候变暖的贡献中,占70％。为应对全球变暖,各国采取多种措施致力于温室气体的减排增汇。减少二氧化碳温室效应,除人工减排增汇外,自然界生态系统的生物碳汇功能起着主导作用。生物碳汇主要类型有森林等陆生植物碳汇、水生高等植物和低等植物碳汇、水生高等动物碳汇等等,各种类型生物碳汇功效不尽相同,各具特性。     

Control of SO2 emissions from power plants: A case of induced technological innovation in the U.S.

This paper investigates how the details of government actions induce innovation—the overlapping activities of invention, adoption and diffusion, and learning by doing—in “environmental technology,” products and processes that either control pollutant emissions or prevent emissions altogether. It applies multiple quantitative and qualitative measures of innovation to a case subject to several “technology-push” and “demand-pull” instruments: sulfur dioxide control technology for power plants. The study employs analyses of public R&D funding, patents, expert interviews, learning curves, conference proceedings, and experience curves. Results indicate that: regulation and the anticipation of regulation stimulate invention; technology-push instruments appear to be less effective at prompting invention than demand-pull instruments; and regulatory stringency focuses inventive activity along certain technology pathways. Increased diffusion of the technology results in significant and predictable operating cost reductions in existing systems, as well as notable efficiency improvements and capital cost reductions in new systems. Government plays an important role in fostering knowledge transfer via technical conferences, as well as affecting the pattern of collaborative relationships within the technical research community via regulatory changes that affect the market for the technology. Finally, the case provides little evidence for the claim that cap-and-trade instruments induce innovation more effectively than other instruments.     

The elusive Phillips curve

The empirical evidence that has accumulated over the past twenty years for major countries, and especially the United States, Canada, and the U.K., suggests three distinct “phases” for the Phillips curve. In the “early” phase the coefficient on the unemployment variable was correctly signed and statistically significant; in the “middle” phase, as further studies were made and the data period extended, the unemployment coefficient tended to become numerically smaller and often to be statistically insignificant; in the “late” phase, as yet more studies accumulated and the data period was extended into the seventies, the unemployment coefficient was sometimes perversely signed and also statistically significant. This paper offers a possible theoretical interpretation of this phenomenon. The theoretical analysis is supplemented with some empirical simulations.     

Rat race, redistribution, and growth

Introducing locally negatively interdependent preferences into a simple AK growth model easily explains the often observed insignificant or positive correlation between distortionary redistribution and growth rates. Positive capital income taxes and lump sum transfers are harmful for growth, but people rationally vote for them in order to reduce “rat race” overaccumulation. A “neutrality proposition” holds if the pivotal voter is the mean voter, as in a representative agent case, but it fails if the pivotal voter is poorer than the average citizen.     

国际碳交易的经济学理论分析

二氧化碳等温室气体的过度排放造成的全球气温上升已经威胁到人类的生存和发展。对国际碳交易的内涵及经济学理论进行了分析,对深入理解、研究国际碳交易理论基础和实践经验具有非常现实的作用和意义。     

Climate Policy with Multiple Sources and Sinks of Greenhouse Gases

This paper studies how inclusion of many sources, sinks and reservoirs -- a comprehensive approach -- affects climate policy, compared with a control merely of CO₂. Two questions of particular importance arise in such an analysis. One is how to aggregate the emissions of different climate gases, and the other is how to include all relevant measures in the analysis. To aggregate gases properly, an intertemporal analysis should be carried out. To assure that all relevant measures are included, we suggest that certain measures to reduce emissions of greenhouse gases are specified explicitly and evaluated together with indirect measures, such as carbon charges. A numerical analysis based on an optimal control model indicates that direct measures may play an important role in the design of climate policy, especially for the control of the emissions of greenhouse gases other than CO₂. Similar to other studies of the time-path for abatement efforts, the bulk of abatement should be taken by the end of the planning period. This result is significantly strengthened if gases with short life-times in the atmosphere, such as methane, are subject to control.     

Global warming and economic externalities

Despite worldwide policy efforts such as the Kyoto Protocol, the emission of greenhouse gases (GHG) remains a negative externality. Economic equilibrium paths in the presence of such an uncorrected externality are inefficient; as a consequence, there is no real economic opportunity cost to correcting this externality by mitigating global warming. Mitigation investment using resources diverted from conventional investments can raise the economic well-being of both current and future generations. The economic literature on GHG emissions misleadingly focuses attention on the intergenerational equity aspects of mitigation by using a hybrid constrained optimal path as the “business-as-usual” benchmark. We calibrate a simple Keynes-Ramsey growth model to illustrate the significant potential Pareto improvement from mitigation investment and to explain the equilibrium concept appropriate to modeling an uncorrected negative externality.     

Environmental efficiency and labour productivity: Trade-off or joint dynamics? A theoretical investigation and empirical evidence from Italy using NAMEA

In this paper we test an adapted EKC hypothesis to verify the relationship between ‘environmental efficiency’ (namely emissions per unit of value added) and labour productivity (value added per employee). We exploit NAMEA data on Italy for 29 sector branches and 6 categories of air emissions for the period 1991-2001. We employ data on capital stock and trade openness to test the robustness of our results.On the basis of the theoretical and empirical analyses focusing on innovation, firm performances and environmental externalities, we would expect a positive correlation between environmental efficiency and labour productivity — a negative correlation between the emissions intensity of value added and labour productivity — which departs from the conventional mainstream view. The hypothesis tested is a critical one within the longstanding debate on the potential trade-off or complementarity between environmental preservation and economic performance, which is strictly associated with the role of technological innovation. We find that for most air emission categories there is a positive relationship between labour productivity and environmental efficiency. Labour productivity dynamics, then, seem to be complementary to a decreasing emissions intensity in the production process. Taking a disaggregate sector perspective, we show that the macro-aggregate evidence is driven by sector dynamics in a non-homogenous way across pollutants. Services tend always to show a ‘complementary’ relationship, while industry seems to be associated with inverted U-shape dynamics for greenhouse gases and nitrogen oxides. This is in line with our expectations. In any case, EKC shapes appear to drive such productivity links towards complementarity. The extent to which this evidence derives from endogenous market forces, industrial and structural change, and policy effects is discussed by taking an evolutionary perspective to innovation and by referring to impure public goods arguments.