Impact of environmental regulation on economic activity-Austria

Zusammenfassung Die Umweltbelastung und Maßnahmen zur Verbesserung der Situation sind ein zentrales Thema der öffentlichen Debatte und Politik. Die vorliegende Arbeit erweitert Ansätze aus der Input-Output-Analyse (im Rahmen eines allgemeinen Gleichgewichtsmodelles) um Umweltbilanzen und Entsorgungskosten. Dies ist ein Ansatz, die wirtschaftlichen Auswirkungen der aktuellen umweltpolitischen Zielvorstellungen in Österreich zu quantifizieren. Dabei zeigt sich, daß die Auswirkungen auf die gesamte Volkswirtschaft überraschend gering bleiben (selbst bei radikaler Schadstoffreduktion), aber sektoral unterschiedliche Belastungen zu erwarten sind. Dies könnte bereits bestehende Strukturprobleme verschärfen.

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I am grateful for the assistance of Florian Gollob; he complied the voluminous data. The cooperation with Roland Pumberger was essential in order to complete this task. I also like to thank Bernhard Böhm, Josef Christl, and Elisabeth Szirucsek for their support. The suggestions and comments of the editor and two anonymous referees were very helpful in revising an earlier draft of this paper. Of course, I am responsible for any remaining error.     

Structural reform of the electricity industry and economic growth

Using 782 panel data from 34 OECD countries from 1991 to 2013, this study aims to evaluate how structural reform affects GDP growth rate. We use the Barro-type GDP growth rate regression model and apply both fixed and random effect models. Eight structural reform variables are selected: (i) third party access, (ii) wholesale market dummy, (iii) choice of supplier, (iv) private ownership, (v) generation-others separation, (vi) transmission-others separation, (vii) distribution-others separation and (viii) overall vertical separation. Major finding results are as follows: (i) third party access can positively contribute to GDP growth rate, (ii) wholesale market and overall vertical separation might have a small negative effect, and (iii) other variables have no significant effect.     

Economies of scope and scale in the Norwegian electricity industry

An important issue for multi-product firms to consider is economies of scope, i.e., whether there is any benefit from producing two or more products, or whether specializing in producing only one product would be less costly. We examined the economies of scope for Norwegian electricity companies because policy makers have decided to force companies that both generates and distributes electricity to split their operations into two companies, one engaged in generation only and the other in distribution only. We set out to test the validity of the policy makers decision on unbundling generation and distribution. Using data from Norwegian electricity companies for the period 2004–2014, we found evidence of economies of scope, meaning that policy makers’ insistence on separating generation and distribution companies will have increased costs. We also found evidence of economies of scale, meaning that there are cost savings in expanding outputs. Our findings provide important information to consider in future policy decisions in the Norwegian electricity industry, probably with implications for other countries.     

Standards and the regulation of environmental risk

We study regulatory design for a pollution-generating firm who is better informed than the regulator regarding pollution mitigation possibilities, and who chooses an unobservable action when employing a particular mitigation plan. We distinguish among performance, process, and design standards, and study the relative merit of each type of regulatory instrument. Relative to previous work on standards design, we emphasize technology and process verification. An optimal performance standard is relatively strict when regulator and firm preferences are congruent, but the regulator may prefer no performance standard at all if verification costs are sufficiently high. A process standard unambiguously increases expected surplus (relative to no regulation) in some environments, and otherwise improves welfare only when it is unlikely to generate a “bad” technology choice by the firm. A design standard can improve welfare if the regulator is sufficiently well informed about the technological possibilities for pollution control, but only when the firm’s private benefits from technology choice are sufficiently small.     

Impact of environmental information disclosure and real estate segments on cost of debt: Evidence from the Chinese real estate industry

The novel part of this paper is to examine the individual and joint effects of the real estate segments (RETs) and environmental information disclosure (EID) on the cost of debt (COD) in the real estate industry in China. Building on extant literature, using 1,250 firm‐year observations from 2006 to 2016 and applying both Feasible General Least Squares and Two‐stage Least Squares Instrumental Variable approaches, we provide evidence that the commercial RET leads to an increase in the COD, while EID leads to a decrease in the COD. The joint effects of the RETs and EID on the COD indicate a significantly positive relationship with the COD. This signifies that even with the increased levels of EID in commercial real estate sectors, its COD is higher than for residential real estate sectors. These findings have important policy implications for environmental risk assessments for real estate sectors, their lending institutions and wider stakeholder groups.     

Challenging the enforcement of environmental regulation

If a firm can contest the enforcement of an environmental regulation, neither increasing the probability nor severity of the fine will guarantee a reduction in a firm's illegally dumped waste. A policy that can unambiguously decrease illegal dumping is lowering the cost of legal disposal. This result occurs because the use of monitoring and fines to increase the probability or severity of enforcement triggers investment to evade enforcement, while a decrease in the costs of legal disposal does not. Investment in the resources to evade enforcement decreases the attractiveness of monitoring by significantly increasing the costs of environmental audits, administrative hearings, and judicial procedures. This occurs even with a high degree of regulator information about the firm's cost structure and no monitoring errors. In addition, if the regulator can only imperfectly monitor a firm's behavior so the firm can be accused of another firm's behavior, observable commitment to challenge enforcement will lead to overinvestment in resources to evade enforcement, an increased level of illegal dumping, and an overall increase in total costs relative to the unobservable case.     

The effect of regulation on nonuniform electricity price schedules in the united states

An empirical examination of factors that influence a public utility's choice regarding the degree of nonuniformity in its price schedules is reported in this paper. In particular, the results support the Sherman-Visscher theory that tighter rate-of-return regulation encourages a monopolist to adopt more rapidly declining rate structures. Some types of regulatory authority have flatter rate structures than others, suggesting that the rate-of-return induced distortion may be countered by direct regulatory oversight. Somewhat surprisingly, scale economics influence rate structures only weakly, casting doubt on the traditional claim that average price declines because of decreasing average cost.     

EU Emission Allowances and the stock market: Evidence from the electricity industry

This paper constitutes - to our best knowledge - the first econometric analysis on stock market effects of the EU Emission Trading Scheme (EU ETS). Our results suggest that EU Emission Allowance (EUA) price developments matter to the stock performance of electricity firms: EUA price changes and stock returns of the most important European electricity corporations are shown to be positively related. This effect does not work asymmetrically, so that stock markets do not seem to react differently to EUA appreciations in comparison to depreciations. The carbon market effect is shown to be both time- and country-specific: It is particularly strong for the period of EUA market shock in early 2006, and differs with respect to the countries where the electricity corporations analysed are headquartered. Stock market reactions to EUA volatility could not be shown.     

Community-based incentives for environmental protection: the case of green electricity

This paper examines the effectiveness of using community-level rewards to subsidize environmental protection. Specifically, we study the Connecticut Clean Energy Communities (CCEC) program that provides mostly symbolic rewards in the form of municipal photovoltaic installations in proportion to the number of households that voluntarily purchase green electricity. We find that the program causes a 22 % increase in the number of households purchasing green electricity in CCEC municipalities. The pattern of results suggests that the CCEC leads to the mobilization of community-based recruitment campaigns that increase signup rates by up to 700 % around the period of initial qualification. We also find that a change in the marginal incentive created by the program has little consequence on signup behavior. The implication for policy is that community-based incentives can be effective, but the size of the subsidy itself appears less important. Finally, simple calculations based on CCEC up-front costs reveal upper-bound, cost-effectiveness measures of $570 per household signup, 6.7 $\not {c} $ per kilowatt-hour of annual green-electricity demand, and $113 per ton of annual carbon-dioxide emission reductions.     

Estimating the environmental costs of electricity: An overview and review of the issues

This paper provides an overview of the issues associated with environmental costing and the specific questions raised by the effort to measure the environmental costs of electricity. It identifies the key methodology questions identified by these studies and discusses their relevance for more general applications of methods to estimate the monetary losses due to environmental externalities.     

The impact of carbon cap and trade regulation on congested electricity market equilibrium

Greenhouse gas regulation aimed at limiting the carbon emissions from the electric power industry will affect system operations and market outcomes. The impact and the efficacy of the regulatory policy depend on interactions of demand elasticity, transmission network, market structure, and strategic behavior of generators. This paper develops an equilibrium model of an oligopoly electricity market in conjunction with a cap-and-trade policy to study such interactions. We study their potential impacts on market and environmental outcomes which are demonstrated through a small network test case and a reduced WECC 225-bus model with a detailed representation of the California market. The results show that market structure and congestion can have a significant impact on the market performance and the environmental outcomes of the regulation while the interactions of such factors can lead to unintended consequences.     

Environmental regulation and the productivity of Japanese manufacturing industries

This paper attempts to provide empirical evidence on issues concerning: (a) the effect of the stringency of environmental regulations (as measured by pollution control expenditures) on innovative activity (as measured by R&D expenditures) and on the average age of capital stock and (b) the productivity enhancement effect of environmental regulations in Japanese manufacturing industries. The empirical findings in the paper show that the pollution control expenditures have a positive relationship with the R&D expenditures and have a negative relationship with the average age of capital stock. It is also shown that increases in R&D investment stimulated by the regulatory stringency have a significant positive effect on the growth rate of total factor productivity.     

Optimum management and environmental protection in the aquaculture industry

The sustainability of the aquaculture industry has recently been the object of social and scientific debate, due to the contamination caused by the culture to the surrounding environment. As a contribution to the debate, this paper analyses the effect of adopting a Pigovian tax to internalise the environmental costs on the optimal management of farms. To do so, we make use of dynamic stochastic models of fish growth and contamination diffusion. Farms can also implement some measures to abate pollution, which are divided into two types: those applied continuously (“managerial” measures) and those once in a culture cycle (“structural” measures). The results reveal that the tax imposition lowers the optimum size in the farm. The type of abatement strategy plays a central role in the determination of the optimum harvest size. A need for caution in internalisation policies is emphasized, as negative consequences could arise in certain cases, putting the farms' survival at risk.     

National Treatment and the optimal regulation of environmental externalities

Abstract. We analyze the role of National Treatment in the regulation of environmental product standards for an open economy. A social planner uses product standards to control emissions from the consumption of a traded good. We show that whether National Treatment of standards interferes with welfare‐maximizing policy depends on the instruments available to the policy maker (consumption or emissions tax) and differences in the cost of complying with the standard. We also highlight the asymmetric incidence of the domestic and import product standard when taxes are suboptimal. This asymmetric incidence can also cause welfare‐maximizing policy to violate National Treatment.     

Hot spots regulation and environmental justice

This paper analyzes whether regulating “hot spots” of toxic air pollution by increasing the spatial resolution of regulation could address environmental justice (EJ) concerns. To examine this question, this paper develops a decision model of a regulator choosing emission controls within a net cost minimizing framework. An empirical application of the model using air toxic emission data for Escambia and Santa Rosa Counties in Florida estimates the emission standards and spatial distribution of risks at a coarse and a finer spatial resolutions. Implications for EJ are analyzed by combining the simulated spatial risk distributions at the two resolutions with the demographic data. Results indicate that different measures of EJ point to different conclusions regarding the question of whether finer resolution regulation alleviates EJ concerns. The paper concludes with a discussion of the implications for EJ policy.     

Local environmental regulation and plant-level productivity

This paper examines the impact of environmental regulation on the productivity of manufacturing plants in the United States. Establishment-level data from three Censuses of Manufactures are used to estimate 3-factor Cobb-Douglas production functions that include a measure of the stringency of environmental regulation faced by manufacturing plants. In contrast to previous studies, this paper examines effects on plants in all manufacturing industries, not just those in “dirty” industries. Further, this paper employs spatial-temporal variation in environmental compliance costs to identify effects, using a time-varying county-level index that is based on multiple years of establishment-level data from the Pollution Abatement Costs and Expenditures survey and the Annual Survey of Manufactures. Results suggest that, for the average manufacturing plant, there is no statistically significant effect on productivity of being in a county with higher environmental compliance costs. For the average plant, the main effect of environmental regulation may not be in the spatial and temporal dimensions.     

Solvency regulation in the property-liability insurance industry

This paper evaluates guaranty funds and solvency regulations. One main question addressed is how solvency regulations will benefit consumers. Many previous studies have found that most forms of solvency regulations do not have significant deterrent effects on insolvency. Even when solvency regulations are effective, they might still adversely affect consumers. This could happen because increasing the probability of solvency usually requires raising premiums. Therefore, it is interesting to see how regulators should design insurance regulations that benefit consumers. Insolvency of insurance firms provides a unique environment under which one is able to analyze the effects of solvency regulations and guaranty funds on the quality of insurance products and on consumers. This paper shows that guaranty funds are always desirable, but solvency regulations are of certain value only when they have the effect of protecting guaranty funds and alleviating the disincentives which they create.     

Technology and incentive regulation in the Italian motorways industry

Making use of an original dataset containing information on 20 Italian motorways concessionaires over the 1992–2004 period, we study the technology prevailing in the motorways industry in Italy. We focus on the estimation of the technical progress for the years covered by our sample, and on the measurement of the economies of scale and density. We find that the industry has experienced significant technical progress and that there are sizeable economies of density and scale (at least up to a medium-large network size). These results provide valuable insights for regulatory purposes, notably for the definition of the optimal dimension of the network of a concessionaire and the correct setting of the X factor in the price cap formula, which is used to regulate the toll levels. We also control for the effects on the performance of the concessionaires due to the changes in the ownership structure and the regulatory regime, both introduced by the recent reform of the industry. We find that the productivity of the concessionaires has not increased with the adoption of a price cap regime, while it has benefited from the privatization process.      

加入WTO对福建省纺织服装业的影响

纺织工业是福建省传统产业,服装工业是我省改革开放以来发展最为迅猛的产业之一。1999年,全省规模以上纺织、服装企业完成工业总产值(当年价)186.29亿元,占全部规模以上工业总产值的8.4％。同时纺织服装企业也是我省出口的生力军,1999年全省规模以上纺织服装业完成出口交货值78.97亿元,占纺织眼装业销售产值的比     

Impact of FDI and trade on environmental quality in the CAFTA-DR region

This study investigates the relationship between foreign direct investment (FDI), trade and industrial emissions in member countries of the Central American Free Trade Agreement–Dominican Republic (CAFTA-DR) between 1979 and 2010. Our model is based on extant literature about the Environmental Kuznets’ Curve framework. In this study, we consider sulphur dioxide (SO₂), nitrogen oxides (NO_x) and carbon dioxide (CO₂) as our dependent variables. Our key independent variables are FDI and trade. Our study finds evidence that foreign investment and trade have had a negative impact on our selected emissions. However, our models also estimate turning points which are below the current GDP per capita values for all CAFTA-DR member countries. This is an encouraging trend in terms of the potential reduction in emissions in the region.