The regional economic effects of a reduction in carbon emissions

Concern about climate change has led to policy to reduce CO₂ emissions although it is likely that policy will have differential regional impacts. While regional impacts will be politically important, very little analysis of them has been carried out. This paper contributes to the analysis of this issue by building a small model involving two regions, incorporating the right to emit CO₂ as a factor of production with the level of permitted emissions set by the national government. We argue that there is likely to be pressure on governments to use other policies to offset the possible adverse regional economic consequences of the pollution‐reduction policy; we also consider a range of such policies. Using numerical simulation, we find that a 10 per cent reduction has relatively small but regionally differentiated economic effects. Standard fiscal policies are generally ineffective or counterproductive while labour market policies are more useful in offsetting the adverse effects.     

Allocating provincial CO2 quotas for the Chinese national carbon program

In order to improve the efficiency of climate change initiatives China launched its national carbon market in December 2017. Initial CO2 quota allocations are a matter of significant concern. How should we allocate CO₂ emissions reduction responsibilities among Chinese provinces, assuming that provinces will not or cannot trade these responsibilities among themselves? In this paper, we allocate CO₂ quota from the perspective of cost minimisation. First, we estimate the national CO₂ marginal abatement cost (MAC) function and deduce the interprovincial MAC functions. Second, we build an allocation model with nonlinear programming for cost minimisation. Finally, we obtain the allocation results under the emissions reduction target by 2030. The results are as follows. (i) The national MAC was 134.3 Yuan/t (at the constant price of 1978) in 2011, with an overall upward trend from 1990 to 2011. (ii) The interprovincial MACs differ significantly and decline gradually from east to west. Hebei has the largest emissions reduction quota, and Shandong has the largest emissions quota by 2030. (iii) Compared with other criteria of per capita, gross domestic product (GDP), grandfathering and carbon intensity, the proposed approach is the most cost‐effective in achieving the reduction target, with cost savings of 37.7, 34.5, 47.9 and 33.87 per cent, respectively.     

Non‐Parametric Modelling of CO2 Emission Quota

Dutch glasshouse firms are facing the introduction of a system of tradable CO₂ emission quotas. This paper employs a non‐parametric method for modelling tradable CO₂ emissions of Dutch glasshouse firms. The method is capable of generating shifts in CO₂ emissions across the sample of firms. Moreover, changes in volumes of outputs produced and inputs used are computed. Results show that firms using a conventional heating technology will be net purchasers of CO₂ emissions, whereas firms using more advanced heating technologies will sell part of their emission quota.     

Marginal Abatement Cost Curves for UK Agricultural Greenhouse Gas Emissions

This article addresses the challenge of developing a ‘bottom‐up’ marginal abatement cost curve (MACC) for greenhouse gas (GHG) emissions from UK agriculture. An MACC illustrates the costs of specific crop, soil and livestock abatement measures against a ‘business as usual’ scenario. The results indicate that in 2022 under a specific policy scenario, around 5.38 Mt CO₂ equivalent (e) could be abated at negative or zero cost. A further 17% of agricultural GHG emissions (7.85 Mt CO₂e) could be abated at a lower unit cost than the UK Government’s 2022 shadow price of carbon [£34 (tCO₂e)^?1]. The article discusses a range of methodological hurdles that complicate cost‐effectiveness appraisal of abatement in agriculture relative to other sectors.     

The effect of violent crime on sector-specific FDI in Latin America

ABSTRACT

This article looks at the impact of violent crime on FDI into Latin America and the Caribbean during the 1996–2010 period. FDI is disaggregated into primary, secondary and tertiary sectors and three variables related to violent crime are used: homicides, crime victimization and organized crime. Controlling for institutions and the traditional determinants of FDI, we find that the impact of crime on FDI depends on the sector and types of crime considered. Higher homicide rates are associated with less FDI in the secondary sector while organized crime reduces tertiary sector FDI. Crime victimization has a robust significant negative impact on the tertiary sector and in some estimations of the secondary sector. Crime has no impact on primary sector FDI. Our study highlights the need to continue efforts to decrease crime as we show in our analysis that crime has a negative effect on FDI in the secondary and tertiary sector.     

Modelling the transportation of primary aggregates in England and Wales: Exploring initiatives to reduce CO2 emissions

Millions of tonnes of aggregates are transported across England and Wales each year, which causes constant concerns in regard to CO₂ emissions. Much of that concern arises out of the long journeys from quarries to construction sites, and the fact that the main mode of transfer is by road. The aim of this paper is to describe the construction of a spatial decision support system (SDSS) to examine the impacts of scenarios to reduce the level of CO₂ emissions. The SDSS is made up of a GIS containing a set of spatial models (including a spatial interaction model and a microsimulation model) underpinned by a detailed transport network of road and rail routes across England and Wales. The spatial interaction models are first calibrated to reproduce the existing set of flows of aggregates between quarries and local authority districts. The distance decay component is the travel distance equivalent across the road and rail networks. Based on these flows, linear models can be set up to estimate the amount of CO₂ emissions associated with the existing set of flows. Then a series of what-if scenarios are set up which look at how changes in any part of the geography of production, the level of demand in certain areas or the transport process will impact the CO₂ emissions. The paper demonstrates the capability of the SDSS in responding to the various spatial policies applied in different stages of the supply chain of the aggregates markets.     

基于DNDC的茶园土壤碳素空间分异及其影响因素——以福建省安溪县为例

[目的]通过探究福建省安溪县茶园土壤碳素储量,揭示各碳素指标的空间分异特征及其关键影响因子,有助于为减少茶园温室气体排放和建设生态茶园提供决策支撑。[方法]文章运用反硝化分解（denitrification decomposition, DNDC）模型和空间统计分析方法对茶园土壤碳素进行模拟和研究。[结果]（1）经过参数率定的DNDC模型对茶园土壤碳素动态循环的模拟具有较好的适用性;（2）安溪茶园土壤有机碳含量丰富,土壤肥力较好。凋落物输入碳是茶园土壤碳素输入的主要来源,平均输入量为505.52 kg/hm2,而通过呼吸作用转化为CO2排放是茶园土壤碳素输出的重要途径,平均CO2排放量为883.78 kg/hm2;(3)茶园SOC10～20cm量、凋落物输入碳量、CH4排放量、CO2排放量均呈现空间聚集分布特征,主要分布在安溪县西部的低山与中低山地区;（4）初始土壤属性中黏粒含量和土壤有机碳含量是影响安溪县茶园土壤碳素空间分异的关键因子,其中土壤黏粒含量对茶园土壤CO2排放量和CH4排放量的影响最强且负向作用效果明显。[结论]安溪县西部等低山和中低山区域土壤肥力较好,但亦应谨慎对待该区...     

Policy options towards deforestation reduction in Cameroon: An analysis based on a systematic approach

This study advances measures that can combat deforestation in Cameroon. It also looks at possible carbon dioxide (CO₂) emission reductions and the effects on gross domestic product (GDP) and employment based on selected baseline scenarios based on reductions in deforestation. A systematic approach of analyzing the drivers, agents, socio-economic context, political context, spatial context of deforestation and specific and general deforestation reduction policies is used. The final step of the approach is to verify the repercussions of deforestation reduction on CO₂ emissions, employment and GDP. Monitoring population growth and arable production through intensification of production is promising. The general policies that this study postulates are enforcement, legal adherence, specification of tasks and quotas, collaboration, forest licensing and monitoring. More specific policies could be within the reduction of emissions from deforestation and forest degradation mechanism (REDD+) as well as diversification of livelihoods, mechanization, use of fertilizers and intensive cattle farming inter alia. Reductions in deforestation will reduce atmospheric CO₂, employment in the forestry sector and the share of forestry's contribution to GDP.     

Logs or permits? Forestry land use decisions in an emissions trading scheme

Negative carbon emissions options are required to meet long-term climate goals in many countries. One way to incentivise these options is by paying farmers for carbon sequestered by forests through an emissions trading scheme (ETS). New Zealand has a comprehensive ETS, which includes incentives for farmers to plant permanent exotic forests. This research uses an economy-wide model, a forestry model and land use change functions to measure the expected proportion of farmers with trees at harvesting age that will change land use from production to permanent forests in New Zealand from 2014 to 2050. We also estimate the impacts on carbon sequestration, the carbon price, gross emissions, GDP and welfare. When there is forestry land use change, the results indicate that the responsiveness of land owners to the carbon price has a measured impact on carbon sequestration. For example, under the fastest land use change scenario, carbon sequestration reaches 29.93 Mt CO₂e by 2050 compared to 23.41 Mt CO₂e in the no land use change scenario (a 28% increase). Even under the slowest land use change scenario, carbon sequestration is 25.89 Mt CO₂e by 2050 (an 11% increase compared with no land use change). This is because, if foresters decide not to switch to permanent forests in 1 year, carbon prices and ultimately incentives to convert to permanent forests will be higher in future years.     

Urban sprawl and climate change: A statistical exploration of cause and effect,with policy options for the EU

This study provides a brief evaluation of the relationship between trends in transport emissions and urban land-use by analysing correlation between transport CO₂ emissions data, GDP and population data with land-use change data from the CORINE database for EU Member States between 1990 and 2000.     

Is forest carbon sequestration at the expense of bioenergy and forest products cost-efficient in EU climate policy to 2050?

Forest management affects the quantity of CO₂ emissions in the atmosphere through carbon sequestration in standing biomass, carbon storage in forest products and production of bioenergy. The main question studied in this paper is whether forest carbon sequestration is worth increasing at the expense of bioenergy and forest products to achieve the EU emissions reduction target for 2050 in a cost-efficient manner. A dynamic cost minimisation model is used to find the optimal combination of carbon abatement strategies to meet annual emissions targets between 2010 and 2050. The results indicate that forest carbon sequestration is a low-cost abatement method. With sequestration, the net present costs of meeting EU carbon targets can be reduced by 23%.     

Dairy sheep farms in semi-arid rangelands: A carbon footprint dilemma between intensification and land-based grazing

In recent decades there have been significant changes in land use and production orientation in certain marginal agricultural areas in the southwest of Spain. The abandonment of rainfed cereal crops and their change of use as natural pastures grazed by milk sheep, have led to an improvement in the profitability of the farms, greater industrialisation and a positive impact on rural development.This paper calculates the carbon footprint (CF) of farms in the context of life cycle assessment with the objective to identify the system that accounts for the lowest CF while maintaining adequate levels of profitability and revitalising the rural environment. The data were obtained through surveys carried out on dairy sheep farms of different typologies, ranging from the semi-intensive farms with small grazing areas, to the extensive farms with large areas of natural pastures. Findings could help farmers evaluate the environmental impact of their activities, while at the same time provide consumers with valuable evidence to be used in further marketing actions.Greenhouse gas emissions vary from 1.77 to 4.09 Kg CO₂eq/kg of milk, where the lowest values correspond to the most intensive farms and the highest values to the most extensive and least productive farms. Enteric fermentation, followed by feeding, are the emissions with the greatest impact. Enteric fermentation reaches its maximum value (52.22 % of the total emissions) in the most extensive farms.On other hand, this study found that carbon sequestration varies between 0.09 and 2.04 kg of CO₂eq/kg of milk, a figure that can considerably reduce the carbon footprint calculation and justifies its inclusion in the Life Cycle Assessment.     

Warming temperatures will likely induce higher premium rates and government outlays for the U.S. crop insurance program

Likely climate change impacts include damages to agricultural production resulting from increased exposure to extreme heat. Considerable uncertainty remains regarding impacts on crop insurance programs. We utilize a panel of U.S. corn yield data to predict the effect of warming temperatures on the mean and variance of yields, as well as crop insurance premium rates and producer subsidies. While we focus on corn, we demonstrate that the subsidy impacts are likely to carry over to other major program crops. We find that warming decreases mean yields and increases yield risk on average, which results in higher premium rates. Under a 1°C warming scenario, we find that premium rates at the 90% coverage level will increase by 39% on average; however, there is considerable statistical uncertainty around this average as the 95% confidence interval spans from 22% to 61%. We also find evidence of extensive cross‐sectional differences as the county‐level rate impacts range from a 10% reduction to a 63% increase. Results indicate that exposure to extreme heat and changes in the coefficient of variation are large drivers of the impacts. Under the 1°C warming scenario, we find that annual subsidy payments for the crop insurance program could increase by as much as $1.5 billion, representing a 22% increase relative to current levels. This estimate increases to 3.7 billion (57%) under a 2°C warming scenario. Our results correspond to a very specific counterfactual: the marginal effect of warming temperatures under current technology, production, and crop insurance enrollments. These impacts are shown to be smaller than the forecasted impacts under a commonly used end‐of‐century general circulation model for even the most optimistic CO₂ emissions projection.     

Soil CO2 emission and carbon budget of a wheat/maize annual double-cropped system in response to tillage and residue management in the North China Plain

To investigate the impacts of tillage and crop residue managements on soil CO₂ emission and C budget in a wheat (Triticum aestivum L.)/maize (Zea mays L.) double-cropped system in the North China Plain (NCP), a field experiment was conducted consisting of four treatments: tillage with crop residues retention (CT+), tillage with crop residues removal (CT?), no-till with crop residues retention (NT+), and no-till with crop residues removal (NT?). Daily soil CO₂ fluxes changed with crop growing stage and peaked during the most vigorous growth of period, fluxes in maize season were higher than those in wheat season. Compared to the tilled soils, cumulative CO₂ emissions were significantly lower under no-till treatments. The largest cumulative CO₂ emission occurred under CT+ (65?g CO₂-C m^?2 y^?1) and the smallest was under NT+ (39?g CO₂-C m^?2 y^?1). After 5 years of the experiment, soil organic carbon (SOC) sequestration were greater with crop residues retention (CT+ and NT+) than with crop residues removal (CT? and NT?), the maximum SOC stock was in NT+ (5940?g C m^?2) while the minimum was in CT? (3635?g C m^?2). NT+ could help to mitigate CO₂ emission in the annual wheat/maize double-cropping system of the area.     

Agriculture's Likely Role in Meeting Canada's Kyoto Commitments*

Voluntary adoption of beneficial management practices will be the primary means by which farmers cut net greenhouse gas (GHG) emissions. The offset system will not be a major driver due to (a) the relatively low prices likely to be offered by large final emitters facing an emission cap, (b) discounts applied to those prices for temporary sequestration, (c) the transaction costs and risk premiums associated with signing carbon contracts, and (d) the low elasticity of supply of CO₂ abatement. Although Canadian farmers are likely to participate to only a limited extent in the carbon‐offset market, many will find it profitable to adopt one or more of the BMPs for reducing net GHG emissions. Canadian agriculture is likely to contribute significantly to net emission reductions by voluntarily sequestering carbon due to the adoption of zero till in the last decade, and possibly by cutting fertilizer levels in the next decade. The contribution will be mainly a response to meeting personal economic objectives rather than being induced by direct incentives through the offset program.     

The influence of crediting and permanence periods on Australian forest-based carbon offset supply

Governments globally are developing increasingly ambitious carbon emissions reduction schemes that include significant emissions offset credits for forest-based carbon sequestration. Such strategies can present significant challenges in highly modified and intensively farmed regions where forest land use opportunity and establishment costs are high. This article evaluates the economics of land-use change via active afforestation for local carbon abatement in the Australian state of South Australia, a region with high supply costs representative of long-established temperate farming regions. We found that there is no economically viable abatement below $38 tCO₂e⁻¹, however up to 154 Mt CO₂e of abatement could be available up to prices of $50 tCO₂e⁻¹.Variation in current Australian Emissions Reduction Fund (ERF) policy parameters related to permanence and crediting periods were also assessed. Recent ERF contracts involve a 100-year land-use change commitment (permanence period) and a 25-year crediting period where payments for growth in carbon from the land-use change is contracted. We compared outcomes of this arrangement to a scenario with equal 100-year permanence and crediting periods. We found substantial differences in carbon supply at some price points for a 25 rather than a 100-year crediting period. Under ERF parameters the first economically viable revegetation options occur at $42 tCO₂e⁻¹, however, we found a 69 percent reduction in economically viable supply at a carbon price of $50 tCO₂e⁻¹. The results highlight the role offset crediting policy can have on dis-incentivising land-use change and the need for landholders to be compensated fully for temporal opportunity costs.     

Determining optimal forest rotation ages and carbon offset credits: Accounting for post-harvest carbon storehouses

Sequestering carbon in forest ecosystems is important for mitigating climate change. A major policy concern is whether forests should be left unharvested to avoid carbon dioxide (CO₂) emissions and store carbon, or harvested to take advantage of potential carbon storage in post-harvest wood product sinks and removal of CO₂ from the atmosphere by new growth. The issue is addressed in this paper by examining carbon rotation ages that consider commercial timber as well as carbon values. A discrete-time optimal rotation age model is developed that employs data on carbon fluxes stored in both living and dead biomass as opposed to carbon as a function of timber growth. Carbon is allocated to several ecosystem and post-harvest product pools that decay over time at different rates. In addition, the timing of carbon fluxes is taken into account by weighting future carbon fluxes as less important than current ones. Using simple formulae for determining optimal rotation ages, we find that: (1) Reducing the price of timber while increasing the price of carbon will increase rotation age, perhaps to infinity (stand remains unharvested). (2) An increase in the rate used to discount physical carbon generally reduces the rotation age, but not in all cases. (3) As a corollary, an increase in the price of carbon increases or reduces rotation age depending on the weight chosen to discount future carbon fluxes. (4) Site characteristics and the mix of species on the site affect conclusions (2) and (3). (5) A large variety of carbon offset credits from forestry activities could be justified, which makes it difficult to accept any.     

Climate change: a rational choice politics view*

Reduction in carbon dioxide emissions constitutes a global public good; and hence there will be strong incentives for countries to free ride in the provision of CO₂ emission reductions. In the absence of more or less binding international agreements, we would expect carbon emissions to be seriously excessive, and climate change problems to be unsolvable. Against this obvious general point, we observe many countries acting unilaterally to introduce carbon emission policies. That is itself an explanatory puzzle, and a source of possible hope. Both aspects are matters of ‘how politics works’– i.e. ‘public choice’ problems are central. The object of this paper is to explain the phenomenon of unilateral policy action and to evaluate the grounds for ‘hope’. One aspect of the explanation lies in the construction of policy instruments that redistribute strategically in favour of relevant interests. Another is the ‘expressive’ nature of voting and the expressive value of environmental concerns. Both elements – elite interests and popular (expressive) opinion – are quasi‐constraints on politically viable policy. However, the nature of expressive concerns is such that significant reductions in real GDP are probably not sustainable in the long term – which suggests that much of the CO₂ reduction action will be limited to modest reductions of a largely token character. In that sense, the grounds for hope are, although not non‐existent, decidedly thin.     

On the structural development of arable land in Finland – How costly will it be for the climate?

Finland is the most sparsely populated country in the European Union. Finland's northern location presents special challenges for the profitability of agriculture. At the same time Finland has a fragmented property structure which means that each farmer cultivates a number of separate fields that are scattered into small parcels located around the village. The situation came into being because of land reforms whose purpose was to handle socio-political issues and not to improve the feasibility of farms. It is obvious that this inefficient property structure increases the cultivation costs but what is often forgotten is that it also increases the harmful emissions to the climate.The purpose of this article is to present the property structure of arable land and its development in Finland until 2020. The main objective is to estimate the monetary value for those climate impacts that the development causes. The study was set up to analyze land management tools and their capabilities to handle the future challenges. First, the study estimates how much petrol consumption increases because of the increased need for agricultural traffic due to the forecasted development of property structure. Secondly, the study estimates a monetary value for the increased emissions to the climate due to the changes in petrol consumption. To estimate the monetary value of the climate effect a substitute cost method is used.It was estimated that by year 2020 the agricultural working hours will increase by almost three million hours per year from its current level because of the expected changes in property structure. By using the information about petrol consumption and emission rate of petrol, it was calculated that the total increase in CO₂-emissions will be more than 200 000 tkgCO₂ per year. By using the information about the level of increase in CO₂-emission and their shadow prices, it was calculated that the changes in property structure will cost 37 million euros until year 2020 and 544 million euros until year 2050. The sensitivity analysis showed that the results are strongly dependable on shadow prices of CO₂-emissions, property structure's development scenarios and the expected fuel efficiency of agricultural machinery. On the other hand it also showed that the impact will be remarkable especially in the long run if the changes in property structure cannot be prevented.The study showed that there is a massive potential for land management activities. But since the current land management tools that are utilized in Finland are not efficient to handle the future problems the toolbox should be renewed. As the renewing work requires both legislative and organizational changes the progress will take time. This means that the harmful impacts that the development of property structure causes will be realized in the upcoming decades. The study concludes that the increase in CO₂-emissions doesn’t concern only Finland but also other EU countries and that is why the matter should be investigated in other countries as well.