Stable taxation schemes in regional environmental management

Economists have frequently proposed the use of taxes to internalize externalities, the unit tax on a particular activity being equal to the marginal social damage it generates. This paper introduces such a taxation scheme, comprising a set of rules which, given a set of polluters, their profits, and costs, and a central authority for environmental control, generates a set of taxes to be levied on the waste emissions. Different attributes of the taxation schemes are then presented, the most important of which (stability) refers to the possibility of overall cooperation between all the polluters. The paper concludes by examining the implications of the existence of stable taxation schemes and of the imposition of constraints either on the emissions or on the percentage of load removed.     

The switching effect of environmental taxation within Bertrand differentiated duopoly

We investigate second-best optimal taxation of the polluting variety of a product in a Bertrand duopoly with differentiated varieties. The analysis provides novel insight on a useful social function of environmental regulation. Besides internalizing the environmental externality, the taxation of the polluting variety improves the matching of consumers and product varieties, and so creates a socially desirable business switching between the differentiated varieties.     

A note on environmental risk and the rate of discount: Comment

The sign of the adjustment to the riskless discount rate for environmental risk depends on whether the price of avoiding the consequences of the externality is seen as reducing expected net benefits or increasing expected costs. The conclusion is that the risk adjustment is positive when the externality is defined as reducing expected net benefits.     

Tax evasion and optimal environmental taxes

This paper introduces a new argument to the debate about the role of environmental taxes in modern tax systems. Some environmental taxes, particularly taxes on gasoline or electricity, are more difficult to evade than taxes on labor or income. When the tax base is shifted in a revenue-neutral manner toward these environmental taxes, the result is a net reduction in the amount of tax evasion. Using a carbon tax as a motivating example, the “tax evasion effect” is shown to sharply reduce the welfare cost of controlling emissions. A simple computable general equilibrium model suggests that the impact of considering tax evasion can be large: costs are lowered by 28% in the United States, by 89% in China, and by 97% in India. In countries with high levels of pre-existing tax evasion, a carbon tax will pay for itself through improvements in the efficiency of the tax system.     

A note on the use of property values in estimating marginal willingness to pay for environmental quality

The principle purpose of this paper is to discuss the theoretical background of the use of property values in estimating damage function. In the first part of the paper a general equilibrium model is constructed in which environmental quality differences are capitalized into land rents. In the second part of the paper some of the assumptions needed for this result are scrutinized, and it is found that they are hardly realistic. The main conclusion is, thus, that the study of property values cannot give viable estimates of the marginal willingness to pay for environmental quality.     

A note on natural production functions

Two techniques are presented for estimation of natural animal populations, both of which may incorporate the effect of pollutants on populations. Both techniques assume specific underlying population dynamics which may not be applicable to certain species or ecosystems. However, both techniques allow for testing the hypothesis that the population dynamics specified is applicable. The techniques are used to criticize two recent empirical investigations of fisheries.     

A note on the allocation of investment

It is shown by example that the results obtained by Gruver [11 concerning specialization of investment in either directly productive or pollution control capital arise because of an implicit linearity assumption on the underlying technology. Utilizing a strictly concave “eighth sphere” technology, results are obtained which imply joint investment in the two types of capital except in “rare” instances. The results indicate the need for incorporating more general technologies into the analysis of such problems.     

A note on the feeding of Calanus helgolandicus on detritus

Experiments on the feeding of Calanus helgolandicus females on detrital material were carried out. Natural detritus from the ocean was never ingested, whereas dead diatoms were readily eaten. Furthermore, it was shown that C. helgolandicus females ingested large amounts of fecal material produced by the same species in other vessels. These results indicate that the copepod C. helgolandicus feeds not only on living organisms, but also on dead particles.     

A note on density dependence in population models

One of the most studied phenomena in ecology is density dependent regulation. The model most frequently used to study this behaviour is the theta-logistic model. However, disagreement has developed within the ecology community pertaining to the interpretation of this model’s parameters, and thus as to appropriate values for the parameters to assume. In particular, the parameter θ$\theta$ has been allowed to take negative values, resulting in the ‘growth rate parameter’ estimated to be negative for species which are extant and exhibit no signs of becoming extinct in the short-term. Here we explain this phenomenon by formulating the theta-logistic model in the manner in which the original logistic model was formulated by Verhulst (1838), in doing so providing a simple interpretation of model parameters and thus restrictions on values the parameters may assume. We conclude that θ$\theta$ should (almost always) be restricted to values greater than −1$-1$. This has implications for studies assessing the form of density dependence from data. Additionally, another model appearing in the literature is presented which provides a more flexible model of density dependence at the expense of only one additional parameter.     

Valuing eco-assets: A note on valuation methods

SUMMARY

The valuation of eco-assets should take into account the perceptions and judgments of the public. However, the value of eco-assets based on conventional calculations has often been unreliable as a result of differing situations and individuals involved. Therefore, a reasonable and efficient method for valuing eco-assets is needed. In this paper, a brief summary of the history of valuing eco-assets is provided, followed by a summary of conventional methods of valuation. This summary of the currently used methods revealed that they do not take into account the effect of the stage and development of the population determining the value of the eco-assets. Therefore, we have developed a social development stage coefficient (l), based on Engel's coefficient. A new valuation method was then created by integrating the development stage coefficient (l) with a conventional model. Finally, possible future strategies for valuing eco-assets are discussed.     

The economics of enforcing pollution taxation

The efficient structure of pollution tax policy is examined when it is recognized that enforcing compliance will be costly. There are two components of this cost: (1) the direct cost of enforcement and (2) the cost polluters incur avoiding enforcement. Considering only the first cost, the efficient pollution policy calls for a tax in excess of that conventionally recommended as efficient, T¹ but with little enforcement. Once avoidance cost is recognized the efficient policy can be substantially altered; requiring a tax lower than T¹, but with greater enforcement. Even when direct enforcement cost is zero, it is shown that there is no unique advantage to T¹ in the absence of avoidance cost.     

Efficiency of pollution taxation and market structure

This paper looks at the performance of a uniform pollution tax in achieving a given level of pollution abatement at least cost. It is shown that market structure is an important consideration in this performance and that in general least-cost abatement will not result from a pollution tax uniformly applied. The pattern of pollution taxes that will achieve least-cost abatement when differing degrees of market power exist among polluters is developed and discussed.     

A note on the welfare-economic consequences of extended fishing limits

A standard two countries-two commodities model is developed to consider the gains in efficiency resulting from transferring common property fish stocks to the jurisdiction of coastal states attempting to reach allocative efficiency. As a result of this transfer, the long-term catch from seriously overexploited fish stocks will be greater than otherwise, causing the price of fish to fall. This will transfer some, and possibly all, of the gains from more efficient fishing to fish consumers in the rest of the world. The note concludes with some remarks on the plausibility of the assumption that governments will pursue allocative efficiency.     

A note on the sufficiency of low resolution ecosystem models

Analysis of a system of non-linear differential equations illustrates the effects of interactions between biotic and abiotic components of a complex aquatic ecosystem model. A stochastic analysis shows that the variance of the abiotic variables is related in a simple manner to the autocorrelation function of the biotic variables. The results suggest that for oligotrophic and eutrophic conditions, relatively simple ecosystem models may be sufficient for studies of an aquatic environment. Under mesotrophic conditions, the high state variable resolution of a complex model may be necessary.     

A note on a non-stationary point source spatial model

A point source, non-stationary covariance structure model is proposed, having only one additional parameter over a standard, stationary covariance structure, spatial model. Additionally, the proposed model is demonstrated to fit better than the three extra parameter, point source, non-stationary spatial model proposed by Ecker and De Oliveira (Commun Stat Theory Methods 37:2066–2078, 2008). The proposed model is fit from a Bayesian perspective and illustrated using a house sales dataset from Cedar Falls, Iowa.     

Dynamic aspects of effluent taxation under uncertainty

The optimal adjustment process for an effluent charge is derived when the firm's response to the charge is uncertain. The optimal process is shown to exhibit the dual effects of caution and probing. Because of uncertainty, society should be risk averse or cautious when setting the charge. However, because of the possibility of generating information for improved future control, this caution is balanced by the incentive to probe for additional information. Finally, if the uncertain parameters of the firm's response function are nonautonomous, their change over time must be explicitly considered to avoid bias in estimation.