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...

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

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

Ano: 2003

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

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...

Carbon Abatement Costs: Why the Wide Range of Estimates?

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

Ano: 2005

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

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...

Combining Rate-Based and Cap-and-Trade Emissions Policies

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

Ano: 2003

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

Rate-based emissions policies (like tradable performance standards) fix average emissions intensity, while cap-and-trade policies fix total emissions. This paper shows that unfettered trade between rate-based and cap-and-trade programs always raises combined emissions, except when product markets are related in particular ways. Gains from trade are fully passed on to consumers in the rate-based sector, resulting in more output and greater emissions allocations. We consider a range of policy options to offset the expansion, including unilateral ones when jurisdictional differences require. The cap-and-trade jurisdiction could impose an "exchange rate" to adjust for relative permit values, but marginal abatement cost equalization is sacrificed. Still, that...

Corporate Codes of Conduct: Is Common Environmental Content Feasible?

Palavras-chave: Emissions trading; Permit allocation; Tradable performance standards; Climate; Greenhouse gases; Environmental Economics and Policy; H23; H3; Q2; Q48.

Ano: 2003

URL: http://purl.umn.edu/10713

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...

Emissions Pricing, Spillovers, and Public Investment in Environmentally Friendly Technologies

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

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...

Environmental and Technology Policies for Climate Change and Renewable Energy

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

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...

How Important is Technological Innovation in Protecting the Environment?

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

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...

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

Palavras-chave: Environmental Economics and Policy.

Ano: 2000

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

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.

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

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

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.

Instrument Choice for Environmental Protection When Technological Innovation Is Endogenous

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

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...

Is There a Rationale for Rebating Environmental Levies?

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

Ano: 1998

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

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...

Market Power and Output-Based Refunding of Environmental Policy Revenues

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

Ano: 2001

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

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.

Monopoly Extraction of an Exhaustible Resource with Two Markets

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; 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.

Multilateral Trade Agreements and Market-Based Environmental Policies

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

Ano: 2004

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

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...

Multinational Taxation and International Emissions Trading

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

Ano: 2002

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

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...

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

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

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.

Optimal Investment in Clean Production Capacity

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

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...