Cooperative Management of Groundwater Resources in the Presence of Environmental Externalities

This paper investigates how cooperation among users can achieve a better management of groundwater in the presence of environmental externalities. Cooperation allows users to internalize the damages caused by their activities and reduce extractions. The paper develops a game theoretical framework to assess the value of cooperation in an aquifer that is divided into three sub-aquifers that are being overly exploited. Two types of externalities are modeled: first, water extractions in each sub-aquifer impact water levels in neighboring sub-aquifers (extraction externality). Second, the three sub-aquifers are also connected to an ecosystem and thus decisions in each sub-aquifer affect the health of the ecosystem (environmental externality). A cooperative game theory model is applied. The model empirically shows how the uncontrolled extractions in each sub-aquifer affects neighboring groundwater users but also cause severe impacts to the linked ecosystem. The model is tested empirically in one of the most important aquifers in Spain, the Eastern la Mancha aquifer. The results illustrate how both extraction and environmental externalities interact in affecting the likelihood of cooperation among the users. The paper estimates the value of cooperation and its stability with and without the environmental externality.     

Optimal Differentiation of International Environmental Taxes in the Presence of National Labor Market Distortions

We explore the implication of the `doubledividend' debate for international environmentaltaxes. In our scenario, small open economies withdifferent labor market distortions follow a commonenvironmental policy and use national environmentaltax revenues to finance labor tax cuts. Since thedouble dividend hypothesis does not hold, a high labortax implies a low environmental tax relative to othercountries. The optimal differentiation ofinternational environmental taxes is proven to be afunction of the national labor tax rates and theuncompensated elasticities of labor supply.     

Irreversibilities and the timing of environmental policy

The standard framework in which economists evaluate environmental policies is cost–benefit analysis, so policy debates usually focus on the expected flows of costs and benefits, or on the choice of discount rate. But this can be misleading when there is uncertainty over future outcomes, when there are irreversibilities, and when policy adoption can be delayed. This paper shows how two kinds of uncertainty — over the future costs and benefits of reduced environmental degradation, and over the evolution of an ecosystem — interact with two kinds of irreversibilities — sunk costs associated with an environmental regulation, and sunk benefits of avoided environmental degradation — to affect optimal policy timing and design.     

Optimal Commodity Taxation in the Presence of Tourists

Abstract

This paper explores empirically whether Japanese consumers became more prudent in the second half of the 1990s, a decade in which Japan registered historically low economic growth. Employing the methodology developed by Dynan (1993), this study uses micro-level data from the Family Savings Survey and the Family Income and Expenditure Survey to estimate the coefficient of prudence for Japanese households in the second half of the 1990s. The estimates reveal that the coefficient of prudence is positive and statistically significant in the 1998–1999 period. The obtained value for the coefficient of prudence is four, which is much higher than that estimated for US households (not significantly different from zero) or UK households (around 2). The estimated coefficient for young households is higher still, which is consistent with simulation studies conducted by Gourinchas & Parker (2002) showing that precaution is the most important saving motive for younger households.     

Optimal Taxation in the Presence of Black Markets

Received November 21, 2000; revised version received May 19, 2001     

Optimal Management of Environmental Externalities with Time Lags and Uncertainty

Many environmental externalities occur with time lags that can range from a few days to several centuries in length, and many of these externalities are also subject to uncertainty. In this paper, we examine the key features of an optimal policy to manage environmental externalities that are both lagged and stochastic. We develop a two-period, two-polluter model and obtain closed-form solutions for optimal emissions levels under different combinations of damage functions and stochastic processes. These solutions show that it is not obvious whether greater control should be exerted on polluters that generate externalities with longer lags or on polluters that generate externalities with shorter lags. We find that the optimal ranking of polluters with respect to the length of the time lag associated with their externality will depend on (a) the discount rate, (b) conditional expectations of future states of the polluted resource, (c) persistence of the pollutant, and (d) initial conditions.     

Optimal Factor Income Taxation in the Presence of Unemployment

According to conventional wisdom internationally mobile capital should not be taxed or should be taxed at a lower rate than labour. An important underlying assumption behind this view is that there are no market imperfections, in particular that labour markets clear competitively. At least for Europe, which has been suffering from high unemployment for a long time, this assumption does not seem appropriate. This paper studies the optimal factor taxation in the presence of unemployment which results from the union-firm wage bargaining both with optimal and restricted profit taxation when capital is internationally mobile and labour immobile. In setting tax rates the government is assumed to behave as a Stackelberg leader towards the private sector playing a Nash game. The main conclusion is that in the presence of unemployment, the conventional wisdom turns on its head; capital should generally be taxed at a higher rate than labour.     

Environmental Policy in the Presence of Induced Technological Change

We examine the hypothesis that induced technological change (ITC) can dramatically lower the cost of a carbon tax in a static optimal tax model. The research and development sector is represented by an aggregate stock of energy-saving technology, which acts as a weak substitute with a polluting resource in the energy generation sector. Using this model, we analytically show how ITC occurs and affects the cost of a carbon tax. Applying quantitative estimates of the size of ITC to numerical simulations calibrated to the US economy, we find that existing empirical evidence can reduce the welfare cost of environmental tax reform by 12%. Our tests of alternative parameters show that this result is highly sensitive to the assumptions used, suggesting that ITC could result in much larger reductions in cost.     

Optimal Stabilization Policy in the Presence of Learning by Doing

This paper analyses the optimal stabilization policy when growth is driven by learning by doing. If benefits of learning by doing are not fully internalized, the optimal policy is to tax labor during expansions and to subsidize it during recessions. The long-term impact of this policy depends critically on initial conditions: If stabilization starts during an expansion, it has a positive effect on long-term production. When stabilization starts during a recession, its long-term effect is negative. The paper makes a methodological contribution in its analytical derivation of the optimal policy along the transition path as well as in the steady state.     

Environmental Protection in the Presence of Unemployment and Common Resources

This paper examines the effects of an export tax (on a processed resource good), the number of harvesters and an afforestation policy in a small, open economy with urban unemployment. The export tax increases the urban unemployment rate, but improves the quality of the environment. Here, the optimal export tax is lower than the adjusted marginal environmental damage. Reducing the number of harvesters has a similar resource allocation effect to that of an export tax. However, the afforestation policy can resolve the trade‐off between urban unemployment and the quality of the environment and may also improve the welfare of a country.     

Strategic Environmental Policies in the Presence of Foreign Direct Investment

We analyze strategic environmental standards in the presence of foreign direct investment. A number of foreign firms located in a host country compete with a domestic firm in another country to export a homogeneous good to a third country. When the number of foreign firms is exogenous, the host country applies a stricter environmental regulation than the other producing country. However, under free entry and exit of foreign firms, the host country may apply a less severe standard under both non-cooperative and cooperative equilibrium. We also find that the nature market structure does not affect the equilibrium values of total pollution if export subsidies are also used.JEL Classification: F2, H2     

Environmental Abatement and the Macroeconomy in the Presence of Ecological Thresholds

We study the environmental and economic effects of public abatement in the presence of multiple stable steady-state ecological equilibria featuring reversible hysteresis. The isocline for the stock of pollution possesses two stable branches. Assuming that the ecology is initially located on the upper (high pollution) branch of the isocline, a simple time-invariant temporary abatement policy can be used to steer the environment from the high- to the low-pollution equilibrium. In all models considered in this paper, a “cold turkey” abatement policy is optimal within the class of stepwise policies, i.e. the largest feasible shock should be administered for the shortest possible amount of time. The cold-turkey result is robust to alternative models for the economic system, although there is a capital feedback effect that either helps or hinders the speed of transition to the low-pollution equilibrium.     

Co-operation and Unilateral Commitment in the Presence of Global Environmental Problems

This paper focuses on the link between group co-operation and unilateral commitment of some countries in the presence of global environmental problems. We show that in case of a failure of negotiation, some countries can decide to commit unilaterally and reduce their emissions. We call this behaviour precautionary commitment. Absence of international agreement does not mean global defection from the environmental issue.We also show that the emergence of a non-co-ordinatedglobal co-operation can result from a strategic actionfrom the members of the coalition. The insiders of the coalition create an incentive for the non-members to reduce without co-ordinating their emissions.     

The Optimal Distribution of Pollution Rights in the Presence of Political Distortions

A critical issue in designing a system of tradable emission permits concerns the distribution of the initial pollution rights. The purpose of this paper is to investigate how the initial rights should be optimally set, when the determination of the number of tradable permits is subject to the influence of interest groups. According to the Coase theorem, in the case where there are low transaction costs, the assignment of the initial rights does not affect the efficiency of the final resource allocation. In the presence of political pressure, we show that the distribution of the initial rights has a significant effect on social welfare. In contrast to the conventional results, we find that grandfathered permits may be more efficient than auctioned permits, even after taking into consideration the revenue-recycling effect.      

环境管理正式制度与非正式制度研究

经济增长中有两种制度安排:正式制度和非正式制度.正式制度通过法律规定来约束人们的行为;非正式制度通过意识形态、道德潜规则等发挥作用.在环境治理过程中也存在着环境管理的正式制度与非正式制度,二者以不同的形式,对污染治理起到了积极的管制作用.我国环境管理亟需建立正式管理制度与非正式管理制度共同作用的制度体系.     

Optimal Decisions on Pension Plans in the Presence of Information Costs and Financial Literacy

Pension reforms are on the political agenda of many countries. Such reforms imply an increasing responsibility on individuals’ side in building an efficient portfolio for retirement. In this paper, we provide a model describing workers’ choices on the allocation of retirement savings in presence of (1) mandatory pension contribution; (2) different pension plans; and (3) information costs and financial literacy investment decisions. In particular, we characterize the results from both a positive and normative standpoint, by highlighting the determinants of individuals’ choice, with special focus on information costs, on the role of income and preferences, and by characterizing the optimal contribution rate to mandatory complementary pension plans. We also introduce endogenous financial literacy and analyze how its optimal level is determined and how it affects the decisions on pension plans.     

The Superiority of Environmental Federalism in the Presence of Lobbying and Prior Tax Distortions

It is generally believed that environmental federalism tends to generate greater pollution emissions than centralized policymaking. This paper demonstrates that the opposite can occur in the presence of lobbying. Although the decentralized regime gives rise to a tax‐interaction effect, which induces policymakers to set lax environmental policies, it may also reduce the political pressure on enlarging allowed emissions. If the latter outweighs the former, then the decentralized regime will generate less pollution than the centralized regime. Moreover, we also show that the decentralized regime can be more efficient than the centralized regime, which provides an alternative theoretical support for the superiority of environmental federalism.     

基于知识管理的环境管理信息化

基于知识管理的环境管理信息化就是运用技术工具和程序处理来数字化存储环境保护中的知识和智慧,并通过网络使得整个环境管理领域的知识和经验得到传播、共享和访问。本文在分析环境管理信息化与知识管理密切关系的基础上,提出了基于知识管理的环境管理信息化在其发展的进程中所面临的问题,并对需要解决的问题提出了相应对策。     

Corporate Environmental Management and Environmental Efficiency

This paper examines the potential of environmental management systems (EMSs) to provide opportunities for reducing toxic releases cost-effectively and increasing environmental efficiency of a sample of S&P 500 firms. We use directional distance function to estimate firm-specific environmental efficiency. A truncated regression model with bootstraping is then estimated to analyze the determinants of the environmental efficiency of firms. The analysis shows that the comprehensiveness of an EMS, pressures to reduce toxic releases cost-effectively, innovativeness of firms and the threat of costly regulations in the future lead firms to become more environmental efficient. Regression results indicate that increasing the comprehensiveness of EMS by adopting one additional practice benefits the average firm by approximately US$ 35.5 million by increasing its environmental efficiency by 0.3%.