SABIIA - Sistema Aberto e Integrado de Informação em Agricultura (Sabiia)

In a second-best world of below-optimal pollution pricing, the public return to R&D may be greater than under Pigouvian pricing, due to excess benefits of increasing abatement, or it may be lower, since private actors lack the incentives to take full advantage of the new, cleaner technologies. This paper uses a simple model to demonstrate the interaction between environmental policies, R&D externalities, and the social return to innovation. The results indicate that strong public support for innovation is only justified if at least a moderate emissions policy is in place and spillover effects are significant. Furthermore, in most cases, policy constraints that limit regulatory burdens tend to further limit the scope for public support, even when...

How Large Are the Welfare Gains from Technological Innovation Induced by Environmental Policies?

Palavras-chave: Emissions price; Technological innovation; Spillovers; R&D policy; Environmental Economics and Policy; Q28; O38; H23.

Ano: 2004

URL: http://purl.umn.edu/10648

Parry, Ian W.H.; Pizer, William A.; Fischer, Carolyn.

This paper examines whether the welfare gains from technological innovation that reduces future abatement costs are larger or smaller than the "Pigouvian" welfare gains from optimal pollution control. The relative welfare gains from innovation depend on three key factors - the initially optimal level of abatement, the speed at which innovation reduces future abatement costs, and the discount rate. We calculate the welfare gains from innovation under a variety of different scenarios. Mostly they are less than the Pigouvian welfare gains. To be greater, innovation must reduce abatement costs substantially and quickly and the initially optimal abatement level must be fairly modest.

Determining Project-Based Emissions Baselines with Incomplete Information

Palavras-chave: Innovation; Welfare; Regulation; Endogenous; Technological; Change; R&D; Environmental Economics and Policy; Q16; Q28; O32; O33.

Ano: 2002

URL: http://purl.umn.edu/10621

Project-based mechanisms for emissions reductions credits, like the Clean Development Mechanism, pose important challenges for policy design because of several inherent characteristics. Participation is voluntary. Evaluating reductions requires assigning a baseline for a counterfactual that cannot be measured. Some investments have both economic and environmental benefits and might occur anyway. Uncertainty surrounds both emissions and investment returns. Parties to the project are likely to have more information than the certifying authority. The certifying agent is limited in its ability to design a contract that would reveal investment intentions. As a result, rules for baseline determination may be systematically biased to overallocate, and they also...

How Important is Technological Innovation in Protecting the Environment?

Palavras-chave: Climate policy; Clean Development Mechanism; Baseline emissions; Asymmetric information; Environmental Economics and Policy; D8; Q4.

Ano: 2002

URL: http://purl.umn.edu/10520

Parry, Ian W.H.; Pizer, William A.; Fischer, Carolyn.

Economists have speculated that the welfare gains from technological innovation that reduces the future costs of environmental protection could be a lot more important than the "Pigouvian" welfare gains over time from correcting a pollution externality. If so, then a primary concern in the design of environmental policies should be the impact on induced innovation, and a potentially strong case could be made for additional instruments such as research subsidies. This paper examines the magnitude of the welfare gains from innovation relative to the discounted Pigouvian welfare gains, using a dynamic social planning model in which research and development (R&D) augments a knowledge stock that reduces future pollution abatement costs. We find that the...

Monopoly Extraction of an Exhaustible Resource with Two Markets

Palavras-chave: Environmental Economics and Policy.

Ano: 2000

URL: http://purl.umn.edu/10883

Fischer, Carolyn; Laxminarayan, Ramanan.

Although much has been written about the implications of monopoly power for the rate of extraction of natural resources, the specific case in which the resource can be sold in two markets with different elasticities of demand has escaped notice. We find that a monopolist facing two markets with differing iso-elastic demand schedules extracts more rapidly than the social planner, whether or not arbitrage prevents price discrimination between markets. This analysis is relevant in the case of many resources -such as natural gas used for power generation and household heating, or petroleum used for making plastics and as fuel.

Carbon Abatement Costs: Why the Wide Range of Estimates?

Palavras-chave: Exhaustible resources; Monopoly; Markets; Price discrimination; Environmental Economics and Policy; D42; Q3.

Ano: 2004

URL: http://purl.umn.edu/10704

Fischer, Carolyn; Morgenstern, Richard D..

Estimates of marginal abatement costs for reducing carbon emissions in the United States by the major economic-energy models vary by a factor of five, undermining support for mandatory policies to reduce greenhouse gas emissions. We use meta analysis to explain these cost differences, holding policy regimes constant and focusing on the role of baseline emissions projections and structural characteristics of the models. The results indicate that certain assumptions, like freer trade and greater disaggregation of regions and nonenergy goods, lead to lower estimates of marginal abatement costs, while more disaggregated energy goods raise them. Other choices, like myopic optimization by households or the inclusion of an international finance sector, seem less...

Rebating Environmental Policy Revenues: Output-Based Allocations and Tradable Performance Standards

Palavras-chave: Climate models; Carbon tax; Environmental Economics and Policy; Q4; Q25; D58.

Ano: 2003

URL: http://purl.umn.edu/10537

Political pressure often exists to earmark environmental tax revenues or permit rents to the industry affected by the regulation. This paper analyzes schemes that rebate revenues based on output shares: tradable performance standards, an emissions tax with market-share rebates, and tradable permits with output-based allocation. All three policies effectively combine a tax on emissions with a subsidy to output. The result is a shifting of emissions control efforts toward greater emissions rate reduction and less output contraction, with higher marginal costs of control and lower output prices compared to the social optimum, given any targeted level of abatement. These welfare costs depend on the degree of output substitutability and are likely to be much...

Once-and-for-All Costs and Exhaustible Resource Markets

Palavras-chave: Emission tax; Permit allocation; Earmarking; Tradable performance standards; Environmental Economics and Policy; H21; H23; Q2.

Ano: 2001

URL: http://purl.umn.edu/10709

This paper analyzes the impact on exhaustible resource markets of setup or shut-down costs, a sparsely analyzed category of nonconvex production technologies. This paper proves that, even under idealized circumstances for competition, a competitive equilibrium will fail to exist in the presence of setup costs, for any utility and cost functions such that a planner would exploit exhaustible resource pools sequentially.

The Complex Interaction of Markets For Endangered Species Products

Palavras-chave: Natural resources; Setup costs; Shutdown costs; Nonconvexities; Competitive equilibrium; Resource /Energy Economics and Policy; Q3; C62.

Ano: 1998

URL: http://purl.umn.edu/10623

Economic models of trade in endangered species products often do not incorporate four focal arguments in the policy debate over trade bans: 1) law-abiding consumers may operate in another market, separate from illegal consumers, that trade would bring online; 2) legal trade reduces stigma, which affects demand of law-abiding consumers; 3) laundering may bring illegal goods to legal markets when trade is allowed; 4) legal sales may affect illegal supply costs. This paper analyzes systematically which aspects of these complicated markets, separately or in combination, are important for determining whether limited legalized trade in otherwise illegal goods can be helpful for achieving policy goals like reducing poaching.

Environmental and Technology Policies for Climate Change and Renewable Energy

Palavras-chave: Endangered species; Black markets; CITES; Poaching; Stigma; Environmental Economics and Policy; K42; Q21; D11.

Ano: 2002

URL: http://purl.umn.edu/10525

Fischer, Carolyn; Newell, Richard G..

We assess different policies for reducing carbon dioxide (CO2) emissions and promoting the innovation and diffusion of CO2-reducing power technologies: (1) emissions price, (2) tax on fossil power, (3) tradable emissions performance standard, (4) market share requirement for renewables, (5) renewables production subsidy, and (6) R&D subsidy for renewables. We evaluate the relative performance of the policies according to incentives they provide along different avenues for emissions reduction, their efficiency, and other salient outcomes. We also assess how the nature of technological progress-whether it occurs by learning by doing or R&D investment and the degree of knowledge spillovers -affects the desirability of different policies. In a...

Should Corporate Average Fuel Economy (CAFE) Standards Be Tightened?

Palavras-chave: Environment; Technology; Policy instruments; Climate change; Renewable energy; Environmental Economics and Policy; Q21; Q28; Q48; O38.

Ano: 2005

URL: http://purl.umn.edu/10789

Parry, Ian W.H.; Fischer, Carolyn; Harrington, Winston.

This paper develops analytical models to estimate the welfare effects of higher Corporate Average Fuel Economy (CAFE) standards on new passenger vehicles. The analysis incorporates a broad range of fuel-and-driving-related externalities, fuel taxes, different assumptions concerning consumers' valuation of fuel saving technologies and their alternative value in enhancing other vehicle attributes, and endogenous vehicle fleet composition. To implement the analysis, we develop estimates of CAFE's impact on local pollution, nationwide congestion, and traffic accidents. We find that higher fuel economy standards can produce anything from moderate welfare gains, to very little or no effect, to substantial welfare losses, depending on how consumers value fuel...

Forest Certification: Toward Common Standards?

Palavras-chave: Fuel economy standards; Oil dependency; Carbon emissions; Rebound effect; Gasoline tax; Resource /Energy Economics and Policy; R48; Q48; H23.

Ano: 2004

URL: http://purl.umn.edu/10605

Fischer, Carolyn; Aguilar, Francisco X.; Jawahar, Puja; Sedjo, Roger A..

The forestry industry provides a good illustration of the active roles that industry associations, environmental nongovernmental organizations (NGOs), national governments, and international organizations can play in developing and promoting codes of conduct that are formally sanctioned and certified. It also reflects some of the challenges of disseminating codes of conduct in developing countries and ensuring market benefits from certification. We describe the emergence of forest certification standards, outline current certification schemes, and discuss the role of major corporations in creating demand for certified products. We also discuss the limited success of certification and some of the obstacles to its adoption in developing countries. The...

Air Pollution Control Policy Options for Metro Manila

Palavras-chave: Forest certification; Codes of conduct; Forest Stewardship Council; PEFC; Sustainable Forestry Initiative; Sustainable forest management; Resource /Energy Economics and Policy; Q23; Q56; L73; Q13.

Ano: 2005

URL: http://purl.umn.edu/10838

Krupnick, Alan J.; Morgenstern, Richard D.; Fischer, Carolyn; Rolfe, Kevin; Logarta, Jose; Rufo, Bing.

The Asian Development Bank has sponsored research on market-based instruments for managing pollution in Metro Manila, Philippines, where air quality is seriously degraded. This report offers three policy options for reducing particulate emissions and their precursors. For stationary sources, we recommend an emissions fee that creates efficient financial incentives to reduce emissions while raising revenues for monitoring and enforcement activities. For mobile sources, we propose a pilot diesel retrofit program using a low-cost technology that is effective at existing 2,000 ppm sulfur content. Second, we recommend a charge on the sulfur content of diesel fuel to encourage meeting and surpassing the 500 ppm standard to allow for more advanced particulate...

Multinational Taxation and International Emissions Trading

Palavras-chave: Air pollution; Emissions tax; Philippines; Particulates; Environmental Economics and Policy; Q25; Q01.

Ano: 2003

URL: http://purl.umn.edu/10612

Many studies have shown that the activities of multinational corporations are quite sensitive to differences in income tax rates across countries. In this paper I explore the interaction between multinational taxation and abatement activities under an international emissions permit trading scheme. Four types of plans are considered: (1) a single domestic permit system with international offsets; (2) separate national permit systems without trade; (3) separate national permit systems with limited offsets; and (4) an international permit trading system. For each plan, I model the incentives for the multinational firm to choose abatement activities at home and abroad and to transfer emissions credits between parent and subsidiary. Limits on trading across...

Multilateral Trade Agreements and Market-Based Environmental Policies

Palavras-chave: Emission permits; Transfer pricing; Taxation; Multinational corporations; Environmental Economics and Policy; Public Economics; H2; F2; Q2.

Ano: 2001

URL: http://purl.umn.edu/10816

Fischer, Carolyn; Hoffmann, Sandra A.; Yoshino, Yutaka.

We review the legal provisions of the WTO regime that have important implications for national, market-based environmental policies. We evaluate those provisions for their effects on a member country's ability and incentives to design economically efficient environmental policies. International trade institutions do not recognize the polluter pays principle, posing some challenges for unilateral policies addressing cross-border pollutants and leakage. Nor do they recognize the economic equivalence of emission tax and permit regimes, leading to different potential constraints on policy design and leaving some environmental policies open to influence by protectionist motives. As many legality issues have yet to be disputed and resolved, opportunities exist...

Is There a Rationale for Rebating Environmental Levies?

Palavras-chave: Trade; Environment; WTO; GATT; Market-based policies; Environmental Economics and Policy; F1; Q38.

Ano: 2002

URL: http://purl.umn.edu/10758

Bernard, Alain; Fischer, Carolyn; Vielle, Marc.

Political pressure often exists for rebating environmental levies, particularly when incomplete regulatory coverage allegedly creates an"unlevel playing field" with other, unregulated firms or industries. This paper assesses the conditions under which rebating environmental levies is justified for the regulated sector. It combines a theoretical approach based on second-best modeling with numerical simulations aimed at determining the most sensitive parameters. We find that if an adequate tax on production can be levied in the unregulated sector, no rebate is justified for the regulated sector. Moreover, even in the case of constrained taxation in the unregulated sector, a tax rebate or a subsidy in the regulated sector is not necessarily a...

Read This Paper Later: Procrastination with Time-Consistent Preferences

Palavras-chave: Environmental levy; Tax rebate; Fiscal distortions; Environmental Economics and Policy; Q2; Q43; H2; D61.

Ano: 2001

URL: http://purl.umn.edu/10512

A model of time-consistent procrastination is developed to assess the extent to which the observed behavior is compatible with rational behavior. When a finite work requirement must be completed by a deadline, the remaining time for leisure is an exhaustible resource. With a positive rate of time preference, the optimal allocation of this resource results in more hours spent working (and fewer in leisure) the closer the deadline. Key qualitative findings of psychological studies of academic procrastination are consistent with the standard natural resource management principles implied by the model, when suitably adapted to task aversiveness, uncertainty, and multiple deadlines. However, quantitatively, the fully rational model requires an extremely high...

Bioeconomic Model of Community Incentives for Wildlife Management Before and After CAMPFIRE

Palavras-chave: Procrastination; Natural resource economics; Resource /Energy Economics and Policy; Q3; D9; J22; D81.

Ano: 1999

URL: http://purl.umn.edu/10590

Fischer, Carolyn; Muchapondwa, Edwin; Sterner, Thomas.

This paper formulates a bioeconomic model to analyze community incentives for wildlife management under benefit-sharing programs like the Communal Areas Management Programme for Indigenous Resources (CAMPFIRE) in Zimbabwe. Two agents influence the wildlife stock: a parks agency determines hunting quotas, and a local community chooses to either aid or discourage outside poachers. Wildlife generates revenues from hunting licenses and tourism; it also intrudes on local agriculture. We consider two benefit-sharing regimes: shares of wildlife tourism rents and shares of hunting licenses. Resource sharing does not necessarily improve community welfare or incentives for wildlife conservation. Results depend on the exact design of the benefit shares, the size of...

Output-Based Allocation of Environmental Policy Revenues and Imperfect Competition

Palavras-chave: Bioeconomic; CAMPFIRE; Community; Poaching; Wildlife; Benefit sharing; Resource /Energy Economics and Policy; H41; Q20.

Ano: 2005

URL: http://purl.umn.edu/10717

Environmental policies with output-based refunding of the revenues effectively combine a tax on emissions with a subsidy to output. Three similar forms exist: tradable performance standards, an emissions tax with rebates, and tradable permits with output-based allocation. Two arguments for including an output subsidy are imperfect competition, in which an environmental regulation alone could exacerbate output underprovision, and imperfect participation, in which imposing a regulation on a subset of polluters could cause output to shift to exempt firms. However, both these scenarios imply that output shares among program participants are likely to be significant. In this situation, output-allocated permits offer less of a subsidy than a fixed rebate, and...

Output-Based Allocations of Emissions Permits: Efficiency and Distributional Effects in a General Equilibrium Setting with Taxes and Trade

Palavras-chave: Emission tax; Permit allocation; Earmarking; Tradable performance standards; Resource /Energy Economics and Policy; H21; H23; Q2.

Ano: 2003

URL: http://purl.umn.edu/10764

Fischer, Carolyn; Fox, Alan K..

The choice of mechanism for allocating tradable emissions permits has important efficiency and distributional effects when tax and trade distortions are considered. We present different rules for allocating carbon allowances within sectors (lump-sum grandfathering, output-based allocation [OBA], and auctioning) and among sectors (historical emissions and value-added shares). Using a partial equilibrium model, we explore how OBA mitigates price increases, limits incentives for conservation in favor of lowering energy intensity, and changes relative output prices among sectors. We then use a computable general equilibrium model from the Global Trade Analysis Project, modified to incorporate a labor/leisure choice, to compare overall mechanism performance....