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

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...

Read This Paper Even Later: Procrastination with Time-Inconsistent Preferences

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

Ano: 2003

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

Salience costs, along with imperfect foresight, have been used in previous studies to explain procrastination of a one-time task. A companion to this paper, "Read This Paper Later: Procrastination with Time-Consistent Preferences" analyzes the extent to which procrastination of a divisible task is compatible with rational behavior. While the fully rational model explains key qualitative observations, it requires an extremely high rate of time preference or elasticity of intertemporal substitution to generate serious procrastination and cannot explain undesired procrastination at all. This paper investigates the extent to which dynamically inconsistent preferences can better explain such impatience and address the issue of self-control failures. Two types...

How Important is Technological Innovation in Protecting the Environment?

Palavras-chave: Procrastination; Natural resource economics; Hyperbolic discounting; Differential discounting; Institutional and Behavioral Economics; Q3; D9; J22; J31.

Ano: 1999

URL: http://purl.umn.edu/10725

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...

Market Power and Output-Based Refunding of Environmental Policy Revenues

Palavras-chave: Environmental Economics and Policy.

Ano: 2000

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

Output-based refunding of environmental policy revenues combines a tax on emissions with a subsidy to output. With imperfect competition, subsidies can discourage output underprovision. However, when market shares are significant, endogenous refunding suffers compared to a fixed subsidy. Refunding the emissions tax according to market share reduces the incentive to abate, and marginal abatement costs will not be equalized if market shares differ. In a Cournot duopoly, endogenous refunding leads to higher output, emissions, and possibly costs compared to a fixed rebate program. These results hold whether emission rates are determined simultaneously or strategically in a two-stage model.

Instrument Choice for Environmental Protection When Technological Innovation Is Endogenous

Palavras-chave: Emissions tax; Earmarking; Tradable performance standards; Imperfect competition; Cournot; Duopoly; Refunding; Subsidy; Environmental Economics and Policy; H21; H23; Q2.

Ano: 2003

URL: http://purl.umn.edu/10893

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

This paper presents an analytical and numerical comparison of the welfare impacts of alternative instruments for environmental protection in the presence of endogenous technological innovation. We analyze emissions taxes and both auctioned and free (grandfathered) emissions permits. We find that under different sets of circumstances each of the three policies may induce a significantly higher welfare gain than the other two policies. In particular, the relative ranking of policy instruments can crucially depend on the ability of adopting firms to imitate the innovation, the costs of innovation, the slope and level of the marginal environmental benefit function, and the number of firms producing emissions. Moreover, although in theory the welfare impacts of...

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

Palavras-chave: Technological innovation; Externalities; Environmental policies; Welfare impacts; Environmental Economics and Policy; Q28; O38; H23.

Ano: 1998

URL: http://purl.umn.edu/10812

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...

Multilateral Trade Agreements and Market-Based Environmental Policies

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; 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...

Corporate Codes of Conduct: Is Common Environmental Content Feasible?

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

Ano: 2002

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

Fischer, Carolyn; Parry, Ian W.H.; Aguilar, Francisco X.; Jawahar, Puja.

In a developing country context, a policy to promote adoption of common environmental content for corporate codes of conduct (COCs) aspires to meaningful results on two fronts. First, adherence to COC provisions should offer economic benefits that exceed the costs of compliance; i.e., companies must receive a price premium, market expansion, efficiency gains, subsidized technical assistance, or some combination of these benefits in return for meeting the requirements. Second, compliance should produce significant improvements in environmental outcomes; i.e., the code must impose real requirements, and monitoring and enforcement must offer sufficient incentives to prevent evasion. With those goals in mind, we explore options for establishing common...

Determining Project-Based Emissions Baselines with Incomplete Information

Palavras-chave: Corporate social responsibility; Codes of conduct; Environmental management; Environmental Economics and Policy; Q2; O19.

Ano: 2005

URL: http://purl.umn.edu/10889

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

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.

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 ¾ 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.

The Complex Interaction of Markets For Endangered Species Products

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/10448

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.

Monopoly Extraction of an Exhaustible Resource with Two Markets

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; 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.

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

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

Ano: 2004

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

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....

Is There a Rationale for Rebating Environmental Levies?

Palavras-chave: Emissions trading; Output-based allocation; Tax interaction; Carbon leakage; Environmental Economics and Policy; Q2; Q43; H2; D61.

Ano: 2004

URL: http://purl.umn.edu/10654

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...

Optimal Investment in Clean Production Capacity

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

Ano: 2001

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

Fischer, Carolyn; Toman, Michael; Withagen, Cees.

For the mitigation of long-term pollution threats, one must consider that both the process of environmental degradation and the switchover to new and cleaner technologies are dynamic. We develop a model of a uniform good that can be produced by either a polluting technology or a clean one; the latter is more expensive and requires investment in capacity. We derive the socially optimal pollution stock accumulation and creation of nonpolluting production capacity, weighing the tradeoffs among consumption, investment and adjustment costs, and environmental damages. We consider the effects of changes in the pollution decay rate, the capacity depreciation rate, and the initial state of the environment on both the steady state and the transition period. The...

Project-Based Mechanisms for Emissions Reductions: Balancing Trade-offs with Baselines

Palavras-chave: Pollution accumulation; Clean technology; Capacity investment; Environmental Economics and Policy; Q2; Q42.

Ano: 2002

URL: http://purl.umn.edu/10622

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, so it will not occur without sufficient credits. Evaluating reductions requires assigning an emissions 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, and 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 benchmarking...

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

Palavras-chave: Climate policy; Clean Development Mechanism; Baselines; Asymmetric information; Offsets; Emissions reduction; Tradable emissions permits; Environmental Economics and Policy; D8; Q4.

Ano: 2004

URL: http://purl.umn.edu/10836

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.

Output-Based Allocation of Environmental Policy Revenues and Imperfect Competition

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

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...

Environmental and Technology Policies for Climate Change and Renewable Energy

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; 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...

Forest Certification: Toward Common Standards?

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

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...