Hurricane strikes and local migration in US coastal counties

We examine the effects of hurricane shocks on key migration variables in US coastal counties. Results show that hurricane strikes increase the outward migration rate and that these migrants were somewhat wealthier, but that there was no impact on inward migration.     

Insurance,credit, and technology adoption: Field experimental evidencefrom Malawi

Does production risk suppress the demand for credit? We implemented a randomized field experiment to ask whether provision of insurance against a major source of production risk induces farmers to take out loans to adopt a new crop technology. The study sample was composed of roughly 800 maize and groundnut farmers in Malawi, where by far the dominant source of production risk is the level of rainfall. We randomly selected half of the farmers to be offered credit to purchase high-yielding hybrid maize and groundnut seeds for planting in the November 2006 crop season. The other half of farmers were offered a similar credit package, but were also required to purchase (at actuarially fair rates) a weather insurance policy that partially or fully forgave the loan in the event of poor rainfall. Surprisingly, take-up was lower by 13 percentage points among farmers offered insurance with the loan. Take-up was 33.0% for farmers who were offered the uninsured loan. There is suggestive evidence that reduced take-up of the insured loan was due to farmers already having implicit insurance from the limited liability clause in the loan contract: insured loan take-up was positively correlated with farmer education, income, and wealth, which may proxy for the individual's default costs. By contrast, take-up of the uninsured loan was uncorrelated with these farmer characteristics.     

The macroeconomic consequences of disasters

Natural disasters have a statistically observable adverse impact on the macro-economy in the short-run and costlier events lead to more pronounced slowdowns in production. Yet, interestingly, developing countries, and smaller economies, face much larger output declines following a disaster of similar relative magnitude than do developed countries or bigger economies. A close study of the determinants of these adverse macroeconomic output costs reveals several interesting patterns. Countries with a higher literacy rate, better institutions, higher per capita income, higher degree of openness to trade, and higher levels of government spending are better able to withstand the initial disaster shock and prevent further spillovers into the macro-economy. These all suggest an increased ability to mobilize resources for reconstruction. Financial conditions also seem to be of importance; countries with more foreign exchange reserves, and higher levels of domestic credit, but with less-open capital accounts appear more robust and better able to endure natural disasters, with less adverse spillover into domestic production.     

Information technology and efficiency in trucking

Abstract .  We develop an econometric model to estimate the impact of Electronic Vehicle Management Systems ( EVMS ) on the load factor ( LF ) of heavy trucks. This technology is supposed to improve capacity utilization. The model is estimated on the Quebec subsample of the 1999  National Roadside Survey . The  LF  is explained as a function of truck, trip, and carrier characteristics. We show that the use of  EVMS  results in an increase of 16 percentage points of  LF  on backhaul trips. However, we also find that there is a rebound effect on fronthaul movements, with a reduction of  LF  by about 7.6 percentage points.     

Consumer support for environmental policies: An application to purchases of green cars

This paper focuses on how consumer motivation can be tapped in order to encourage the adoption of cleaner technologies. Consumers are heterogeneous — they may be guided by intrinsic motivation or extrinsic motivation. While information provision policies (such as the energy label for cars) may be effective in encouraging certain consumers to adopt green cars, financial incentive schemes (such as subsidies or fines) may be more persuasive for extrinsically-motivated consumers. We develop a dynamic theory of adoption of environmental innovations, in which information-provision policies are followed by financial incentives (first ‘carrot’, then ‘stick’ incentives). Analysis of a survey dataset of Swiss households observes considerable heterogeneity in terms of support of information-provision or financial incentive policies, in line with our conjectures. Our results will be of particular interest to policymakers interested in guiding consumers towards cleaner technologies.     

Consumption risk, technology adoption and poverty traps: Evidence from Ethiopia

Much has been written on the determinants of technology adoption in agriculture, with issues such as input availability, knowledge and education, risk preferences, profitability, and credit constraints receiving much attention. This paper focuses on a factor that has been less well documented: the differential ability of households to take on risky production technologies for fear of the welfare consequences if shocks result in poor harvests. Building on an explicit model, this is explored in panel data from Ethiopia. Historical rainfall distributions are used to identify consumption risk. Controlling for unobserved household and time-varying village characteristics, it emerges that not just ex ante credit constraints, but also the possibly low consumption outcomes when harvests fail, discourage the application of fertilizer. The lack of insurance or alternative means of keeping consumption smooth leaves some trapped in low return, lower risk agriculture, one of the mechanisms through which poverty perpetuates itself in agrarian settings.     

What triggers environmental management and innovation? Empirical evidence for Germany

It is frequently hypothesized that environmental management systems (EMSs) may improve firms' environmental innovation performance. Whether this hypothesis is true is as critical for environmental policy as questions pertaining to the relevant incentives for (1) a firm's voluntary adoption of an EMS and (2) its environmental innovation behavior. Based on ample empirical evidence for German manufacturing, this paper addresses the simultaneity of these issues on the basis of a recursive bivariate probit model that explores the hypothesis that a facility's decision on innovation activities is correlated with the decision on EMS adoption. Our empirical results, indicating that environmental innovation activities are not associated with EMS implementation nor any other single policy instrument, reflect the perceptions of the survey respondents and, hence, should be interpreted as correlations rather than causal relationships. According to these perceptions, innovation behavior seems to be mainly correlated with the stringency of environmental policy.     

Learning or lock-in: Optimal technology policies to support mitigation

We investigate conditions that amplify market failures in energy innovations, and suggest optimal policy instruments to address them. Using an intertemporal general equilibrium model we show that ‘small’ market imperfections may trigger a several decades lasting dominance of an incumbent energy technology over a dynamically more efficient competitor, given that the technologies are very good substitutes. Such a ‘lock-in’ into an inferior technology causes significantly higher welfare losses than market failure alone, notably under ambitious mitigation targets. More than other innovative industries, energy markets are prone to these lock-ins because electricity from different technologies is an almost perfect substitute. To guide government intervention, we compare welfare-maximizing technology policies including subsidies, quotas, and taxes with regard to their efficiency, effectivity, and robustness. Technology quotas and feed-in-tariffs turn out to be only insignificantly less efficient than first-best subsidies and seem to be more robust against small perturbations.     

Issues in environmental justice within the European Union

This paper surveys pressing issues facing current and future social policies in the European Union (EU) at the juncture of social justice demands and environmental concerns. European policy-makers have in fact only recently acknowledged the notions of environmental justice and environmental inequalities, which have been part of the US policy arsenal for almost two decades. Yet, challenges to equality and fairness in the environmental domain are many and growing within the European Union. After having defined environmental justice and environmental inequalities in the European context, the paper addresses two contemporary dimensions of those challenges for EU social policies: vulnerability and exposure to environmental disaster and risk; and fairness in environmental taxation and the related issue of fuel poverty.     

Unsustainable timber harvesting, deforestation and the role of certification

Deforestation is a major environmental issue, while demand for timber products increases rapidly in the developing world. One can thus wonder whether forest harvesting is sustainable worldwide, or if demand for timber products is fulfilled with the products from deforestation. Our panel data analysis shows that countries where timber harvesting is more important tend to experience larger deforestation rates than others, giving the intuition that forest harvesting is generally not sustainable. We also show that timber certification is negatively related to deforestation and thus seems to be a good indicator of harvesting sustainability.     

An evolutionary model of recycling and product lifetime extension

This paper presents a model-based analysis of the development and diffusion of so-called ‘green’ products, i.e. those which are easily recyclable and which have a long lifetime. We address this problem by developing an evolutionary simulation model to identify the impact of the environmental R&D strategies of business firms on the economy and the environment. The simulation results show that R&D investment both in product recyclability and in product lifetime extension can be positive for the firm. Adopting such a strategy means that the firm can then market green products, which provides it with a competitive advantage on firms investing mainly in product recyclability whatever consumers' preferences. From an environmental point of view, the diffusion of green products will reduce both waste flows in the economy and pressure on virgin resources. However, diversifying R&D investment to develop both product recyclability and lifetime can mean slowing down the flow of recycled materials and may lead to even greater quantities of unrecycled waste. Our results suggest introducing regulation policies aiming at encouraging firms to invest both in product recyclability and lifetime in order to benefit from their complementarities. Furthermore, simulations show that it should be better to direct environmental policies on firms' environmental innovation strategies than on demand attributes because significant changes in these strategies would provide much more radical environmental changes.     

Resource abundance and economic growth in the United States

It is a common assumption that regions within the same country converge to approximately the same steady-state income levels. The so-called absolute convergence hypothesis focuses on initial income levels to account for the variability in income growth among regions. Empirical data seem to support the absolute convergence hypothesis for US states, but the data also show that natural resource abundance is a significant negative determinant of growth. We find that natural resource abundance decreases investment, schooling, openness, and R&D expenditure and increases corruption, and we show that these effects can fully explain the negative effect of natural resource abundance on growth.     

What will be the environmental effects of new free-floating car-sharing systems? The case of car2go in Ulm

The purpose of this paper is the discussion of the environmental effects of a free-floating car-sharing system operating in Ulm, Germany. The system, called car2go, allows users to take and leave vehicles at any point within the city limits. Thus opposed to traditional car-sharing, there are no fixed stations and in particular one-way trips of any length are possible without a booking requirement. Since this is the first free-floating system in operation, there is as yet no associated empirical research. Based on primary data from a survey, a model was developed to forecast the environmental impact of car2go. The prognosis considers the period of five years after the launch of car2go in 2009 and indicates a CO₂-reduction per average car2go-user. In addition, more than a quarter of the survey respondents stated that they may forgo a car purchase if car2go was offered permanently. By reaching a greater share of citizens than traditional systems, the results indicate that free-floating car-sharing systems could contribute to reducing private vehicle ownership in cities.