Inefficient environmental instruments and the gains from trade

The primary result from the trade and environment literature is that countries never lose from trade liberalization as long as they implement optimal pollution targets or if they hold emissions constant. These results are derived in models where the regulators use efficient instruments such as tradable permits or emission taxes. Regulators, however, continue to prefer command and control instruments. I show that regulation under these inefficient instruments (such as design standards or concentration standards) can lead to net losses under trade liberalization even if emissions are optimally adjusted for trade. Furthermore, holding the line on emissions need not guarantee welfare improvements either. The problem is that institutional distortions, the excess costs of inefficient instruments, can rise with trade and offset the material gains from trade. Hence the presumption that we can achieve gains from trade by considering only the level of emissions fails to recognize that the mode of regulation also matters.     

Are energy efficiency standards justified?

This paper develops an analytical framework for comparing the welfare effects of energy efficiency standards and pricing policies for reducing gasoline, electricity, and nationwide carbon emissions. The model is parameterized with US data and includes key externalities in the energy/transportation sectors and possible underinvestment in energy efficiency due to “misperceptions” over energy savings. Even with large misperceptions, the extra welfare gains from complementing efficient pricing policies with energy efficiency standards are zero for reducing gasoline and 5 percent for reducing electricity. And when viewed as substitutes, these standards forgo 60 percent or more of the potential welfare gains from corresponding pricing policies. A combination of energy efficiency and emissions standards is more than three times as costly as carbon pricing when there is no misperception over energy savings, and even with large misperceptions, combining carbon pricing with gasoline/electricity taxes is better than combining it with energy efficiency standards.     

Impacts of inter-sectoral trade on carbon emissions—a case of China in 2007

With the increase in international trade, more attention has been given to quantifying the impacts of international trade on energy use and carbon emissions. Input-output analysis is a suitable tool for assessing resources or pollutants embodied in trade and it has become a critical tool for performing such analysis. This study estimated the national and sectoral carbon emissions embodied in Chinese international trade using the latest available China input-output table of 2007. The results showed that a significant exporting behavior of embodied carbon emissions existed in China??s trade. Over 1/3 of the emissions in Chinese domestic production processes were generated for exports in 2007. The net balance of emissions embodied in exports and imports accounted for nearly 30% of China??s domestic emissions, which means that any policy made to increase the exports would result in a significant growth of China??s domestic emissions. Since over half of China??s export trade is processing trade, the re-exported emissions could not be overlooked; otherwise, it would hard to capture the actual emissions generated abroad to obtain China??s domestic consumption. The enlargement of export scale is a primary driven factor to the rapid growth of China??s exported emissions. It is necessary for China to adjust its economic and industrial structure to reduce the dependence of economic growth on the export trade. However, when adjusting industry structures or making policies on carbon emission reduction, it will be more reasonable to consider the relationship between production and consumption, rather than just focus on the emission values of sectors?? direct production, as a large part of carbon emissions emitted by the principal direct polluters were generated to obtain the products which were required by other sectors.     

The private and social economics of bulk electricity storage

The ability to store excess intermittent renewable electricity is increasingly being seen as a key option for integrating large quantities of renewable capacity. However, intermittent energy sources currently account for very small amounts of total generation. Despite this fact, policymakers have begun implementing requirements that will dramatically increase the amount of bulk storage capacity. This paper examines the social benefits provided by bulk storage in the Texas electricity market, which has a large amount of renewable capacity relative to other states, but still quite limited renewable penetration. We focus on the impact of arbitraging electricity across time—a major service of bulk storage. Using current storage technologies, we demonstrate that electricity arbitrage will increase daily CO₂ emissions by an average of 0.19 tons for each MWh stored. In addition, daily SO₂ emissions will increase by an average of 1.89 pounds/MWh while NO_X emissions will fall by an average of 0.15 pounds/MWh.     

Benefits and challenges of streamlined life-cycle assessment for SMEs – findings from case studies on climate change impacts

ABSTRACT

Small and medium-sized enterprises (SMEs) have a substantial role in the economy and job creation, but they are a remarkable source of environmental impacts. SMEs often lack skills and resources to compile environmental impact assessments; Streamlined Life Cycle Analysis (LCA) can provide efficient tools for this. An application of streamlined LCA relying heavily on database data, LCA clinic, was developed and tested on 23 SMEs in Finland. The climate change impacts were mainly caused by the production of raw materials, electricity and heating, whereas packaging and transportation were not influential. A significant amount of emissions were indirect, i.e. caused by production of raw materials. Thus, decreasing emissions from raw material production or selecting raw materials with a smaller environmental load could be a more efficient way to decrease emissions than reducing direct emissions such as those from electricity use. Lack of data in the LCA-databases was considered a challenge. An access to regionally customised datasets is important for the implementation of LCA clinics. Company feedback indicated that LCA clinics were useful in climate-friendly product design and increased environmental awareness, but did not lead to immediate actions to reduce emissions because of inadequate investment capabilities. Company managers had limited possibilities to use the results in marketing as comparative assessments would require a full LCA. Many company managers were willing to pay a fee sufficient to cover the costs of an LCA clinic, but some considered that the costs should be covered by external funding sources.     

When do environmental regulations backfire? Onsite industrial electricity generation,energy efficiency and policy instruments

More than half of all energy produced by electric utilities is lost in the form of waste heat. However, when manufacturing facilities choose to produce their own electricity, this waste heat is captured by Combined Heating and Power (CHP) technologies and used in the production process. As a result, manufacturers' pollution footprint can be dramatically reduced by choosing to produce electricity onsite rather than purchasing it from a utility. This paper uses Census microdata to study manufacturers’ decision to produce electricity onsite and examines how plants adjust onsite generation when they are subject to environmental regulations. Environmental regulations will backfire if they cause manufacturers to produce less electricity onsite and shift to electricity from less efficient, offsite electric utilities. We find that manufacturing plants subject to NOx command-and-control regulations decrease onsite electricity generation, increase electricity purchases from off-site utilities and see declines in their energy efficiency. However, manufacturers subject to cap-and-trade see no decline in onsite generation and experience improvements in energy efficiency. These findings demonstrate the importance of instrument selection and identify a new pathway through which emissions leakage may occur.     

A decomposition analysis of CO2 emissions: evidence from Malaysia’s tourism industry

The most important question raised from issues of environmental degradation is how economic activities bring about changes that will result in pollution. In the pursuit of tourism economy, contrary to popular interest, the travel and tourism (T&T) industry may cause environmental damages through the emissions of carbon dioxide (CO₂) from energy consumption in areas such as transportation and delivery of amenities. Given this major concern, this paper attempts to investigate the linkage between tourism and CO₂ emissions in Malaysia between 1981 and 2011. In particular, this study fills the knowledge gap by taking a closer look at the impact of international tourist arrivals on CO₂ emissions by sector – electricity and heat generation and transport. Results from the bound test method suggest that there exists a long-run relationship among the variables under consideration when CO₂ emissions become the dependent variable. The original result is similarly robust to alternatives, which are CO₂ emissions from sectors of electricity and heat generation and transport. Furthermore, the vector error correction model causality analysis indicates a causal relationship between tourism and CO₂ emissions by transport and electricity and heat generation. Subsequently, several tourism-related policies are drawn from these findings.     

中国燃煤电厂碳排放量计算及分析

人类活动造成的温室气体排放已经对自然生态造成了巨大的影响。如果无法有效解决气候变化问题,到2030年将有超过1亿人因此而失去生命,且全球经济增长将削减3.2%。有效地控制和减少温室气体的排放是人类急需解决的问题。目前中国温室气体排放总量已经超越美国成为全球第一大温室气体排放国,中国的能源结构决定了中国燃煤发电是中国CO2主要排放源之一,因此实现燃煤发电碳减排对降低中国碳排放总量,减少温室气体排放具有重要意义。准确地计算燃煤电厂产生的碳排放量是进行碳排放权交易、低碳火电厂在经济上具有可行性,最终实现燃煤电厂碳减排的前提条件之一。本研究根据世界资源研究所提供的计算工具首先界定了本研究对于碳排放计算的范围,其次阐述了不同电厂应针对其使用的燃煤进行工业分析的精细化程度不同而采用不同的计算方法,最后对两组不同机组类型的中国火电厂进行了碳排放量计算和对比分析。根据以上分析得出了大容量、高参数的燃煤发电机组相比小容量发电机组不仅能提高能源利用效率,同时也能相对减少因生产电能而产生的CO2排放。其次,燃煤电厂CO2排放中煤炭固定燃烧占有绝对比例,脱硫及外购电力所占比例较小,但排放的绝对总量并不小。再次,由于大容量、高参数机组与小容量发电机组相比在生产单位电能所消耗的燃煤量更少、其排放的废弃中的CO2浓度相对较高,应此更适合安装碳捕捉系统,有助于提高捕捉效率,降低捕捉CO2的成本。因此,建议在未来建设碳捕捉系统时应优先选择大容量、高参数机组。本研究的创新点在于在上述研究的基础上考虑单个燃煤电厂的煤质、考虑电厂脱硫、外购电力的因素,根据电厂对煤质不同程度的工业分析采用不同的计算方法,目的在于更?     

An assessment of China-Japan-Korea Free Trade Agreement’s economic and environmental impacts on China

Recently, China, Japan, and the Republic of Korea (Korea) are conducting a government-commissioned feasibility study on the Free Trade Agreement among the three countries (CJKFTA) to form a regional free trade zone in East Asia. Considering that freer trade can cause unexpected impact on domestic environment, there is a need to evaluate the environmental impact of such a trade policy. This move should be made to help negotiators understand and pay more attention to environmental issues during CJKFTA negotiations, and to help lobby with the government to carry out appropriate policy instruments for adaptation or mitigation. Following the Chain Reaction Assessment Method that integrates and links the elements of trade, production, and environment, the present research aims to quantitatively assess CJKFTA’s possible impact on China’s environment. This is done by estimating the variations of China’s major conventional pollutants and greenhouse gases (GHGs) emission in two policy scenarios to represent CJKFTA’s scale and composition effects on China’s environment. Estimating the variations is based on a static Computable General Equilibrium model, working with Global Trade Analysis Project (GTAP) 7 database and China’s energy-environment statistics. Based on these assessments, CJKFTA is predicted to lead to notable environmental impact, including increased emissions of agricultural total nitrogen, agricultural total phosphorus, chemical oxygen demand, and GHGs. On the other hand, decreased emissions of industrial SO₂ and dust are also expected to happen. Suitable policies need to be made to combat negative effects and amplify positive ones, while aiming at a more sustainable regional freer trade system.     

Acknowledging Conservation Trade‐Offs and Embracing Complexity

Abstract: There is a growing recognition that conservation often entails trade‐offs. A focus on trade‐offs can open the way to more complete consideration of the variety of positive and negative effects associated with conservation initiatives. In analyzing and working through conservation trade‐offs, however, it is important to embrace the complexities inherent in the social context of conservation. In particular, it is important to recognize that the consequences of conservation activities are experienced, perceived, and understood differently from different perspectives, and that these perspectives are embedded in social systems and preexisting power relations. We illustrate the role of trade‐offs in conservation and the complexities involved in understanding them with recent debates surrounding REDD (Reducing Emissions from Deforestation and Degradation), a global conservation policy designed to create incentives to reduce tropical deforestation. Often portrayed in terms of the multiple benefits it may provide: poverty alleviation, biodiversity conservation, and climate‐change mitigation; REDD may involve substantial trade‐offs. The gains of REDD may be associated with a reduction in incentives for industrialized countries to decrease carbon emissions; relocation of deforestation to places unaffected by REDD; increased inequality in places where people who make their livelihood from forests have insecure land tenure; loss of biological and cultural diversity that does not directly align with REDD measurement schemes; and erosion of community‐based means of protecting forests. We believe it is important to acknowledge the potential trade‐offs involved in conservation initiatives such as REDD and to examine these trade‐offs in an open and integrative way that includes a variety of tools, methods, and points of view.     

Teil II: Die Energiebilanz der Universität Osnabrück

One central aspect of the environmental management system for universities developed in Osnabrück is the environmental audit of universities as realized by an ecobalance. This article deals with modelling of the material and energy flows caused by the energy supply of the University in Osnabrück using the software Umberto^®. The result is the university’s energy balance. 37% of the primary energy gets lost in the pre-processes of energy production, mainly during electricity generation. The final energy consumption of the university can be split into 37% electricity and 63% heat, whereas the relation of CO₂ emissions is almost the opposite. Related to this area, the electricity consumption in the different buildings is partially above that seen in similar university buildings in Germany, but below that of all the other values observed for universities located in Lower Saxony. Both the electricity and heat consumption, and therefore also the climate-damaging emissions of CO₂, have increased over the past years. Without further measures the university will not be able to achieve the CO₂-reduction target of the federal government. Recommended are the increased use of district heating power stations to produce the university’s own electricity with lower emissions and energy saving measures, especially in the field of electricity which is responsible for high CO₂-emissions.     

Quantitative analysis of CO2 embodiment in international trade: An overview of emerging literatures

The increasing volume of CO₂ embodiment in international trade adds a layer of complexity to environmental policies and has raised arguments on the traditional production based responsibility for CO₂ emissions. In order to help understand the quantity of CO₂ embodiment in trade and its policy implications, this paper gives observations to recently emerging literatures that quantitatively discuss CO₂ embodiment in trade. The analytical approaches share the principle of using input and output modeling but vary dramatically in study boundary and estimation accuracy. The calculations can be roughly categorized into three types: direct quantification of CO₂ embodiments in multiregional trade, direct quantification of CO₂ embodiment in bilateral trade, and indirect analysis by comparing the scenarios with or without trade. The practical estimations strongly rely on trade partner selection and data availability. An obvious imbalance of net CO₂ embodiment in the commodity trade between major developed countries and developing economies as a whole was confirmed by these literatures. Carbon taxes and other possible limitations on CO₂ emissions have been addressed. The consistency across the calculations could be enhanced by systematic analyses in more detail to convince the international community to take binding commitments for the reduction of global CO₂ emissions.     

Analysis of household energy consumption and related CO2 emissions in the disregarded villages of Lijiang City,China

Energy is one of the most important elements required for poverty alleviation and socioeconomic development, and it has a particularly strong impact on households in rural areas. An extensive survey on household energy consumption patterns that interrelates socioeconomic and demographic factors was conducted in the disregarded villages of Lijiang City by using the stratified random sampling technique for 120 households. This study focuses on household energy consumption and the related carbon dioxide (CO₂) emissions in the study area. Firewood, biogas, and electricity were identified as the main energy sources of the rural households. This study demonstrates that 100% of the households use firewood, 52% use biogas, and 95% use electricity as fuel types. On average, each household consumed 1752 kg of firewood, 280 m³ of biogas, and 392 kWh of electricity annually. All households generated an annual average amount of CO₂ emissions of 3851 kg, of which 85.08% come from firewood, 7.66% from biogas, and 7.26% from electricity. Family size, income, and educational level were found to be the major factors that influence CO₂ emissions. The results of this study may be useful in explaining the energy consumption characteristics in the rural areas of Lijiang City and are expected to be useful in policy formulation for energy consumption and environmental protection.     

The effects on electricity prices in england and wales of notional sulphur dioxide emission standards for power stations

Reducing emissions of sulphur dioxide from the electricity industry in England and Wales would require application of abatement technology and raise electricity prices through increases in marginal supply costs. Capital and operating costs of alternative abatement techniques and their application under possible long-term investment and retirement plans for the industry are discussed. An approximate halving of projected emissions is found to have an effect of the order of 5% on prices under the existing tariff structure. Reductions of up to one-fifth are found to have an effect of under 1% on electricity prices.     

Does trade openness improve environmental quality?

The literature on trade openness, economic development, and the environment is largely inconclusive about the environmental consequences of trade. This study treats trade and income as endogenous and estimates the overall impact of trade openness on environmental quality using the instrumental variables technique. We find that whether or not trade has a beneficial effect on the environment varies depending on the pollutant and the country. Trade is found to benefit the environment in OECD countries. It has detrimental effects, however, on sulfur dioxide (SO₂) and carbon dioxide (CO₂) emissions in non-OECD countries, although it does lower biochemical oxygen demand (BOD) emissions in these countries. We also find the impact is large in the long term, after the dynamic adjustment process, although it is small in the short term.     

Linking permit markets multilaterally

We formally study the determinants, magnitude and distribution of efficiency gains generated in multilateral linkages between permit markets. We provide two novel decomposition results for these gains, characterize individual preferences over linking groups and show that our results are largely unaltered with strategic domestic emissions cap selection or when banking and borrowing are allowed. Using the Paris Agreement pledges and power sector emissions data of five countries which all use or considered using both emissions trading and linking, we quantify the efficiency gains. We find that the computed gains can be sizable and are split roughly equally between effort and risk sharing.     

Does trade openness improve environmental quality?

The literature on trade openness, economic development, and the environment is largely inconclusive about the environmental consequences of trade. This study treats trade and income as endogenous and estimates the overall impact of trade openness on environmental quality using the instrumental variables technique. We find that whether or not trade has a beneficial effect on the environment varies depending on the pollutant and the country. Trade is found to benefit the environment in OECD countries. It has detrimental effects, however, on sulfur dioxide (SO₂) and carbon dioxide (CO₂) emissions in non-OECD countries, although it does lower biochemical oxygen demand (BOD) emissions in these countries. We also find the impact is large in the long term, after the dynamic adjustment process, although it is small in the short term.     

Do lower electricity storage costs reduce greenhouse gas emissions?

In the electricity sector, innovation in large-scale storage is anticipated to reduce costs and improve performance. The effect on greenhouse gas emissions of lower storage costs depends on the interactions between storage and the entire grid. The literature has disagreed on the role of storage in reducing emissions. In this paper we present a stylized model, which suggests that the effect of storage costs on emissions depends on the supply responsiveness of both fossil and renewable generators. Under common conditions in the United States, lower storage costs are more likely to reduce emissions when wind investment responds to equilibrium electricity prices and when solar investment does not. Simulations of a computational model of grid investment and operation confirm these intuitions. Moreover, because of its effect on coal and natural gas–fired supply responsiveness, introducing a carbon dioxide emissions price may increase the likelihood that lower storage costs reduce emissions.     

Trade''s Dynamic Solutions to Transboundary Pollution

This study develops a differential game to examine the effects of trade liberalization on transboundary water pollution. Water pollution is due to wastewater emissions from countries in a shared waterway along the U.S.–Mexico border with available data of pollution abatement costs, public health damages, and trade benefits. Noncooperative and cooperative games are examined with changes in trade policy and public health damages. Results show trade liberalization leads Mexico to curtail pollution in both games. Cooperation and trade liberalization limit emissions from both countries and curtail strategic behavior of the United States from Mexico's pollution control efforts in the noncooperative game.     

Groundwater depletion in India: Social losses from costly well deepening

We develop a dynamic groundwater model that incorporates both groundwater pumping and investment in deeper wells and apply the model to the arid, alluvial aquifer region of Northern India that is experiencing rapid depletion. We compute the potential benefits of regulating groundwater use by comparing the net benefits of groundwater under optimal management to the net benefits under a common pool regime with two different cost structures: one with flat electricity tariffs, which are widespread in India, and a second with full marginal cost electricity pricing. Using numerical simulation, we find that the opportunity to invest in deeper wells significantly exacerbates the common pool problem and suggests the potential for large benefits (66% of common pool benefits) from optimally managing groundwater use or new drilling. Flat tariffs exacerbate the problem, but large gains (almost 23%) remain even if farms are charged the full marginal cost of electricity.