Optimal Environmental Policy Differentials in Open Economies under Emissions Constraints

Is there a case for preferential treatment of the exposed sector in an economy when compliance to an aggregate emissions constraint induced by an international environmental agreement is mandatory? This question is being debated in many countries in the context of the implementation of the Kyoto Protocol. We address the issue in a general equilibrium framework and theoretically cover several market structures, including perfect competition, the large country case and oligopoly. We identify the conditions under which preferential treatment of the exposed sector is not warranted from the point of view of maximizing social welfare. In addition, we demonstrate that in the case of oligopoly, instituting a more stringent environmental policy on the exposed sector might be profit-enhancing for this sector. This finding lends theoretical support to a specific interpretation of the Porter hypothesis.     

Environmental Liability and Privatization in Central and Eastern Europe: Toward an Optimal Policy

It has been estimated that the costs of remediating contaminated sites in Central and Eastern Europe (CEE) will be very high. These contingent environmental liabilities have emerged precisely at the time CEE countries are attempting to privatize their capital stocks, creating major challenges for privatization agencies. It is also generally agreed that an inadequate handling of these liabilities in the past has reduced sales of state-owned enterprises in Central and Eastern Europe.This paper uses an analytical model to identify optimal policies for minimizing the damage to privatization processes from environmental liabilities. Policy simulations are conducted which evaluate the effects of the use of liability indemnifications and environmental audits on privatization sales, prices and government revenues net of environmental costs. The major finding of the paper is that goals to mitigate the effects of environmental liability on privatizations and maximize government net revenues from privatization sales require equivalent environmental liability policies. Both goals require optimal provision of information and indemnifications to investors, and moreover it is found that the two policies are complementary rather than substitutes.     

排污权交易政策对企业环保行为的传导机制研究

从企业的目标函数和生产函数两个角度出发,分析了排污权交易政策对企业环保行为的影响机理,并讨论了排污权交易政策下企业的环保行为选择。研究发现：排污权交易政策通过影响企业的资本要素分配,从而影响企业环境资源的使用成本,进而影响企业的生产和环保行为决策;在排污权交易政策的作用下,企业主要采取不同的污染治理投资策略来满足该政策的规制。基于此,政府应制定配套政策和措施,引导企业沿着“政策遵从—环保投资策略—新环保技术采纳”的行为选择路径进行行为决策,以实现排污权交易政策的目标。     

Energy taxation in Southern Europe: The case of Portugal

We investigate whether or not the imposition of a common EC energy-tax will penalize more the poorer Southern European economies and if this will harm convergence at the EC level. We start by surveying briefly the existing studies and empirical evidence. Then we exploit the results obtained when using the macroeconometric HERMES models to simulate the introduction of an energy-tax. Unfortunately, as we only have HERMES results for one Southern European economy, Portugal, our conclusions are limited. Finally, we investigate convergence in Europe and the effects of energy taxation on convergence. We conclude that energy taxation will harm growth all over the EC, penalizing more one of the less developed countries, Portugal, and having most probably adverse effects on convergence.This paper was prepared for presentation at the Conference Energy Tax in Europe organized jointly by the SEO-University of Amsterdam and the DG XII of the CEC and held in Amsterdam on 13th December 1991. I would like to thank the participants in the Conference and two anonymous referees for helpful comments. Of course, the usual disclaimer applies.     

The Political Economy of Austerity in Southern Europe

ABSTRACT

Europe’s response to the sovereign debt crisis in Southern Europe has been premised on the idea that these states can return to growth through internal devaluation and fiscal consolidation. This article explores the distributive consequences of that strategy in Greece, Portugal, Italy, and Spain. We argue that standard measures of poverty do not capture the deterioration in living standards as fully as anchored poverty. Moreover, we show that inequality trends conceal considerable re-ranking within the income distribution: those who were rich in 2012 had got richer in 2009–12, but those who were rich in 2009 lost ground in 2009–12. We find that in all four countries the new poor include significantly fewer pensioners and more unemployed workers, and are considerably poorer than the old poor had been. We demonstrate that there was significant variation in the magnitude and design of austerity, with Italy imposing a far smaller adjustment than Spain, and Portugal achieving less inequality in spite of robust fiscal consolidation. Nevertheless, even when austerity measures were designed to reduce inequality by compressing incomes downward, their second-order macro-economic effects ultimately increased inequality (except in Portugal). In the last section, we explore the political reasons for this variation.     

Trading Sulphur Emissions in Europe: `Guided Bilateral Trade'

In this paper a system of `guided permit trading' is developed for SO₂emissions reduction which considers permit trading as a bilateral andsequential process. This implies that in order to meet the deposition targetsat the end of the trading process, not every single trade transaction hasto meet the deposition targets. To ensure that the target is ultimately met,the number of permits traded should be controlled by a trade coordinatinginstitution. A simulation of the system of guided bilateral trading ofSO₂ permits among European countries on the basis of the SecondSO₂ Protocol indicates that some non-profitable trade transactionstake place. This prevents the cost effective emission allocation from beingfully achieved. However, the calculations show that guided bilateral permittrading may generate substantial cost savings while contributing toenvironmental protection.     

Sustainability Policy and Environmental Policy

A theoretical, representative‐agent economy with a depletable resource stock, polluting emissions and productive capital is used to contrast environmental policy, which internalises externalised environmental values, with sustainability policy, which achieves some form of intergenerational equity. The obvious environmental policy comprises an emissions tax and a resource stock subsidy, each equal to the respective external cost or benefit. Sustainability policy comprises an incentive affecting the choice between consumption and investment, and can be a consumption tax, capital subsidy or investment subsidy, or a combination thereof. Environmental policy can reduce the strength of the sustainability policy needed. More specialised results are derived in a small open economy with no environmental effects on utility.     

我国二氧化碳排放的特点、趋势及政策取向

我国二氧化碳排放量不断增加,但排放的总体强度不断下降,尽管如此也明显高于国际水平。我国二氧化碳排放还处于较快增长阶段,"十二五"期间二氧化碳减排形势仍不容乐观。为实现减排目标,必须充分发挥政府和市场的作用,加快提高能源技术效率。     

Involuntary Unemployment and Environmental Policy: The Double Dividend Hypothesis

An environmental tax reform might bring about gains over and above improved environmental quality. In particular, if tax revenues from environmental taxes are used to reduce the tax on wage income, positive employment effects can result in second-best economies. An efficiency wage model is used to analyze the impact of an ecological tax reform on involuntary unemployment. The government controls emissions by selling emission permits. Employment of labor and wages are determined endogenously. Conditions are identified under which an environmental tax reform reduces unemployment and increases welfare.     

Valuing Climate Change Effects Upon UK Agricultural GHG Emissions: Spatial Analysis of a Regulating Ecosystem Service

This article provides estimates of the physical and economic value of changes in greenhouse gas (GHG) emissions projected to arise from climate change induced shifts in UK agricultural land use during the period 2004–2060. In physical terms, significant regional differences are predicted with the intensity of agricultural GHG emissions increasing in the upland north and western parts of the UK and decreasing in the lowland south and east of the country. Overall these imply relative modest increases in the physical quantity of emissions. However, rapid rises in the expected marginal value of such emissions translate these trends into major increases in their economic costs over the period considered.     

Environmental Policy and Industrial Competitiveness: The Pollution-Haven Hypothesis Reconsidered

The pollution-haven hypothesis suggests that strict environmental standards reduce domestic producers' competitiveness and result in relocation to countries with more lenient standards. This paper examines the question of whether relocation is always caused by reduced competitiveness at home. By using a signaling approach, it is shown that relocation can be undertaken for purely strategic reasons. Relocation is the producer's tool of indirect rent-seeking to convince the policymaker to refrain from a further tightening of environmental control. It is also shown that trade liberalization increases the probability of strategic relocation.     

Endogenous Policy Choice: The Case of Pollution and Growth

What determines the relationship between pollution and growth? Are the forces that explain the behavior over time of these quantities potentially useful for understanding more generally the relationship between policies and growth? In this paper we make a first attempt to analyze the equilibrium behavior of two quantities—the level of pollution and the level of income— in a setting in which societies choose, via voting, how much to regulate pollution. Our major finding is that, consistent with the evidence, the relationship between pollution and growth need not be monotone, and that the precise equilibrium nature of the relationship between the two variables depends on whether individuals vote over effluent charges or directly restrict the choice of technology. Moreover, our analysis of the pollution problem suggests that, more generally, endogenous policy choices should be taken seriously as potential sources of heterogeneity when cross-country differences in economic performance are studied. Journal of Economic Literature Classification Numbers: E2, O1, O2, Q2.     

Environmental Policy with Endogenous Technology from a Game Theoretic Perspective: The Case of the US Pulp and Paper Industry

The merits of different types of regulatory tools in eliminating pollution and at the same time inducing innovation have long been an interest of researchers in both environmental economics and industrial organization. Although there is a substantial theoretical literature investigating the potential for various environmental policies to attain these dual goals, this is a challenging empirical problem because every industry has its own inherent characteristics that play an important role in determining the performance of different regulatory tools. The majority of the work to date focuses on pollution abatement while leaving pollution prevention understudied. In most of the literature firms are also assumed to be symmetric. Asymmetries among firms add another degree and level of complexity to their strategic interactions, and affect the performance of different regulatory tools. This paper investigates the performance of two alternative regulatory tools, an emissions performance standard and an emissions tax, in reducing pollution and inducing pollution prevention and abatement R&D in the US pulp and paper industry. We construct a model representing the industry in an asymmetric Cournot duopoly framework, calibrate the model to disaggregated industry data, and run scenarios to replicate the behavior of the firms in an imperfectly competitive output market. Our results suggest that pollution prevention R&D can respond quite differently than abatement R&D to different policy instruments. The results indicate that R&D spillovers among firms play crucial role in technology development and strategies of the firms. Our results also suggest that strategic interactions between firms in an imperfectly competitive industry can have significant impacts of the levels of both types of R&D.      

公众环境诉求对企业污染排放的影响——来自百度环境搜索的微观证据

公众环境诉求是倒逼企业污染减排的重要力量,同时也是政府环境规制水平提升的重要推力。文章先采用动态优化模型,在环境规制政策差异性和不确定性条件下,探讨了公众环境诉求对企业污染排放的影响机理,在此基础上将中国工业企业数据库、中国工业企业污染排放数据库和专利统计数据库匹配,得到1998-2012年41.42万个样本观测值,并通过百度环境搜索构建企业层面的公众环境诉求指标,就公众环境诉求对企业污染排放的影响及作用路径进行了实证检验。结果发现,公众环境诉求的增加有助于抑制企业污染排放,工具变量法等稳健性考察进一步验证了该结论的稳健性;公众环境诉求对企业污染排放的影响具有即时性、规模异质性、产权属性异质性、区域异质性和行业异质性,小型、非国有、中西部以及重污染型企业更倾向于诉求漠视;公众环境诉求的增加有利于促进政府加大环境规制力度。文章在丰富现有理论研究的同时,为提升公众环境参与水平和建立多元参与的环境治理体系提供了思路。     

Trade Openness and Environmental Emissions: Evidence from a Meta-Analysis

Environmental and Resource Economics - How trade affects environmental emissions has generated heterogeneous results over the years. This is due to empirical ambiguities that are endemic in the...     

Environment and Trade: The Relationship of International Trade and Environmental Policy

Followers of urban affairs and public policy have written much over the years about the rise of suburbia and development beyond older city boundaries in the US, whether such development is called urban, suburban, or ex-urban sprawl. Many researchers have focused on various issues concerning sprawl, especially on the unintended consequences that new development has had for municipal finances, neighborhood income and residential segregation, and transportation planning, among other issues. Over the last decade, a new area in the literature on sprawl has focused on how the “built environment” of residential areas can impact health and emergency services. We contribute to this latest set of papers on sprawl by trying to empirically estimate the impact of sprawl in metropolitan regions on the Federal Emergency Management Agency’s (FEMA) spending on “public assistance.” This assistance encompasses spending on debris removal, emergency protective measures, and rehabilitating or rebuilding of infrastructure, public buildings, public utilities, parks and recreational areas, in post-disaster relief efforts. In our exploratory analysis, the results indicate that urban sprawl is a factor in influencing the level of FEMA’s public assistance spending.     

Thinking Critically: The Case of Health Policy Research

In this paper, we focus upon the recent work of one of health policy's leading academics. We then explore policy developments and show that where 'mainstream' health policy analysis implicitly supports the managerialization of health services, our critical perspectives reveal the existence of four male power blocs: management, medicine as science, medicine as practice, and the academic discipline of political science. Finally we suggest how the use of our perspectives enhances the possibility for bringing about meaningful change in health policy.     

Thinking Critically: The Case of Health Policy Research

In this paper, we focus upon the recent work of one of health policy's leading academics. We then explore policy developments and show that where 'mainstream' health policy analysis implicitly supports the managerialization of health services, our critical perspectives reveal the existence of four male power blocs: management, medicine as science, medicine as practice, and the academic discipline of political science. Finally we suggest how the use of our perspectives enhances the possibility for bringing about meaningful change in health policy.     

International Environmental Agreement and Trade in Environmental Goods: The Case of Kyoto Protocol

Environmental and Resource Economics - The Kyoto Protocol has received much criticism for its effectiveness as well as the spillover effect (i.e. carbon leakage and competitiveness loss). This...