Does Technological Innovation Really Reduce Marginal Abatement Costs? Some Theory,Algebraic Evidence,and Policy Implications

The existing literature models innovation in pollution control as a reduction in marginal abatement costs. We show that this assumption is inappropriate for production process innovations such as fuel switching. Algebraically, we examine the effects of different innovation types on marginal abatement cost curves, showing that some desirable innovations increase marginal abatement costs. Empirically, we estimate marginal abatement costs for sulfur dioxide by measuring the output distance function for electric power in Korea. Regression results confirm that production process innovations did raise marginal abatement costs in this case. One policy implication: economic instruments do not always provide stronger innovation incentives than command-and-control policies.      

Ecotour Guide Training in Less Developed Countries: Some Preliminary Research Findings

This paper presents a critical discussion of the internationally prevailing understanding of the concept 'sustainable tourism'. It is argued that the current focus on stationary activities and local, intensive environmental issues is too limited both in relation to the concept of tourism and the concept of sustainable development. There is no tourism without travel. And, as shown in a Norwegian research study, tourist travel is a major source of serious environmental problems. The paper emphasises that sustainable tourism should be linked to a concept of sustainable mobility. However, this mobility would imply not only a change in the means of transport but also a reduced level of mobility in the rich part of the world. As this would entail new forms of tourism, other than those solely based on auto- and aeromobility, it represents a major challenge for the future development of tourism.     

The Asset Approach to Pricing Urban Land: Empirical Evidence

Many papers have attempted to explain Intelmetropolitan variations in the price of housing using multi-equation models of the metropolitan housing market. This paper uses a long-run equilibrium urban asset model to explain such variations. The model builds upon previous models that introduce uncertainty into the dynamic urban model of land conversion. The empirical results strongly support the asset approach to valuing land in urban areas.     

Musgrave’s vision of the public sector: the complex relationship between individual, society and state in public good theory

Richard Musgrave introduced the notion of a public good after reading an obscure publication by Lindahl in German in 1910. His great contribution to knowledge was to provide a clear and comprehensive structure for thinking about the process of achieving an “optimal” allocation of resources across public and private goods based individual preferences and the role of government in that process. A number of ambiguities and issues in Musgrave’s vision remain only partially resolved including the need to incorporate “higher laws” or community values into the allocation process.      

Improving footprint calculations of small open economies: combining local with multi-regional input–output tables

In a small, open and resource-poor economy, import and export dependency have an ever-growing impact on local policy decisions, which makes local (environmental) policy-makers increasingly depend on global data. This increases the interest in models that link local production and consumption data to global production, trade and environmental data. The recent increase in availability of global environmentally extended multi-regional input-output tables (EE-MRIO tables) provides an opportunity to link them with existing local environmentally extended input-output tables (EE-RIO tables). These combined tables make it possible (1) to analyse the links between local and global production and consumption and (2) to study global value chains, material use and environmental impacts simultaneously. However, estimations using input-output (I–O) analyses contain errors due to imperfect databases. In this article the magnitude of specification, aggregation and time errors are estimated and compared. The results show the need to combine local datasets with multi-regional ones and show that highest detailed (country and sector levels) as well as time series of I–O tables are the way forward for using I–O analyses in local policy-making. The paper provides guidance on trading off investments in model adoption and/or extension and the reliability of estimation results.     

Measuring the Economic Effect of Global Warming on Viticulture Using Auction,Retail, and Wholesale Prices

In this paper we measure the effect of year-to-year changes in the weather on wine prices and winery revenue in the Mosel Valley in Germany in order to determine the effect that climate change is likely to have on the income of wine growers. A novel aspect of our analysis is that we compare the estimates based on auction, retail, and wholesale prices. Although auction prices are based on actual transactions, they provide a thick market only for high quality, expensive wines and may overestimate climate’s effect on farmer revenues. Wholesale prices, on the other hand, do provide broad coverage of all wines sold and probably come closest to representing the revenues of farmers. Overall, we estimate a 1°C increase in temperature would yield an increase in farmer revenue of about 30%.