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.     

On the economics of energy labels in the housing market

Energy efficiency in the residential housing market can play an important role in the reduction of global carbon emissions. This paper reports the first evidence on the market adoption and economic implications of energy performance certificates implemented by the European Union. The results show that adoption rates are low and declining over time, coinciding with a negative sentiment regarding the label in the popular media. Labels are clustered among smaller, post-war homes in neighborhoods with more difficult selling conditions. We also document that geographic variation in the adoption rate of energy labels is positively related to the fraction of “green” voters during the 2006 national elections. Within the sample of labeled homes, the energy label creates transparency in the energy efficiency of dwellings. Our analysis shows that consumers capitalize this information into the price of their prospective homes.     

Re-evaluating the role of energy efficiency standards: A behavioral economics approach

The economic models that prescribe Pigovian taxation as the first-best means of reducing energy-related externalities are typically based on the neoclassical model of rational consumer choice. Yet, consumer behavior in markets for energy-using durables is generally thought to be far from efficient, giving rise to the concept of the “energy-efficiency gap.” This paper presents a welfare analysis of energy policies that is based on a behavioral model of temptation and self-control, introduced by Gul and Pesendorfer 23 and 24. We find that, in the presence of temptation, (i) Pigovian taxes alone do not yield a first-best outcome, (ii) when viewed as substitutes, energy efficiency standards can dominate Pigovian taxes, and (iii) a policy combining standards with a Pigovian tax can yield higher social welfare than a Pigovian tax alone, implying that the two instruments should be viewed as complements rather than substitutes.     

What does ecological modelling model? A proposed classification of ecological niche models based on their underlying methods

Species distribution model is the term most frequently used in ecological modelling, but other authors used instead predictive habitat distribution model or species-habitat models. A consensual ecological modelling terminology that avoids misunderstandings and takes into account the ecological niche theory does not exist at present. Moreover, different studies differ in the type of niche that is represented by similar distribution models. I propose to use as standard ecological modelling terminology the terms “ecological niche”, “potential niche”, “realized niche” models (for modelling their respective niches), and “habitat suitability map” (for the output of the niche models). Therefore, the user can understand more easily that models always forecast species’ niche and relate more closely the different types of niche models.     

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.     

What did Lotka really say? A critical reassessment of the “maximum power principle”

This paper presents a critical discussion of the so-called “maximum power principle”, often quoted in studies about the energy balance of living systems and also known in the emergy literature as “maximum em-power principle”. Several authors consider this principle highly relevant and some even proposed it as a “fourth law of thermodynamics”. A critical analysis of the original source, namely Alfred Lotka's 1921-22 papers, conducted both in an historical perspective (the connection between Lotka's writings and the ongoing debate at his time) and in a more modern context, leads to a more detailed and less biased assessment. It turns out that in spite of Lotka's very anticipatory and incredibly sharp vision of the possible interconnections between the second law of thermodynamics and evolutionism, doubts arise about the general applicability of his “maximum power principle”. From an accurate analysis of his writings, it can be concluded that: (a) Lotka explicitly and consistently addressed the “optimal use” of the flow of exergy (available energy), and therefore the quantity defined as “em-power” is an incorrect interpretation of Lotka's constrained maximum power principle; (b) “Lotka's principle” can be reformulated within Ziegler's “maximum entropy production” or Prigogine “minimum entropy generation” paradigm only under two different respective sets of rather stringent additional conditions which Lotka was probably already aware of but never explicitly stated.     

Models of withdrawing renewable and non-renewable resources based on Odum's energy systems theory and Daly's quasi-sustainability principle

This paper presents a theoretical model of withdrawing resources based on Odum's energy systems diagrams. According to the theory of a general pulsing principle, withdrawing resources changes in time shifting from the initial phases of growth and maturity to the phases of descent and low energy restoration. A simulation was performed in order to hypothesize potential future trends of withdrawing renewable and non-renewable resources and to show some aspects of their sustainability–unsustainability, respectively. According to Odum's theory, after the rapid growth of the last century, our civilization is living in a climax transition phase and it is now approaching a descent phase. A “way down” will be necessary due to the exhaustion of non-renewable and to the limited use of renewable resources. An integrated “renew–non-renew” model was developed by Odum to show how a “business as usual” trend will bring us to a drastic transition to a world that uses scarce renewable resources. Nevertheless, a different choice is possible, based on Daly's concept of quasi-sustainability that can inspire a new model. The latter argued that the exploitation of a non-renewable resource must be paired with a compensating investment in a renewable substitute. Our model shows that we can use non-renewable resources better to considerably improve our capacity of capturing renewable resources in the future. We present this as a necessary condition to address a sustainable environmental policy.     

A revised calculation of the econometric factors α- and β for the Extended Exergy Accounting method

Extended Exergy Accounting (“EEA”) is a method to compute the space- and time integral of the primary exergy required to produce a good or a service: the extended exergy of a commodity measures its “embodied exergy”, including externalities (Labour, Capital and Environmental Costa). A crucial point of the method is the calculation of two econometric coefficients, commonly referred to as “α” and “β”,used to calculate the extended exergy equivalents of Labour and Capital respectively. In previous applications of the EEA method, these coefficients have been assigned approximate values estimated on the basis of global system considerations. In this paper, a novel procedure is described that leads to the calculation of “exact” values of both econometric coefficients, based on detailed exergy- and monetary balances of the Society to which the EEA is applied. It is shown that both α and β depend in a non-trivial way from the consumption patterns, the technological level and the life- and socio-economic standards of each Country. It is also shown that the values are substantially different for developed (OECD) and underdeveloped Countries, and representative samples of values are calculated and critically analysed. On the basis of these new model coefficients, the specific exergy equivalents of Labour (ee_L) and of Capital (ee_K) are calculated, and shown to differ from the values used in previous EEA calculations.     

Generating better energy indicators: Addressing the existence of multiple scales and multiple dimensions

High energy prices and the growing concern for “Peak Oil” have put energy analysis, once again, on the front burner. However, before speculating about possible roadmaps regarding our energy future, it would be wise to develop better quantitative analyses. This paper flags the existence of systemic epistemological flaws in the current use of aggregate energy indicators and presents an alternative approach capable of dealing with the issue of multiple dimensions and multiple scales. Starting from a critical appraisal of the aggregate indicator “Economic Energy Intensity” it shows that economic and biophysical variables are often correlated and that their value is determined by characteristics which can only observed across different levels and scales. Complex metabolic systems (systems that use energy to maintain and reproduce themselves) are operating simultaneously at different scales. This implies that changes in the characteristics of parts, defined at the local scale, and changes in the characteristics of the whole, defined at the large scale can only be obtained after establishing a scaling mechanism in the analysis. In order to deal with the issue of scale in energy accounting, we propose to make a distinction between three different categories: (i) primary energy sources (PES) - establishing a link between energy quantities and the associated requirement of biophysical gradients, at the large scale, on the interface black-box/context; (ii) energy carriers (EC) - defining the set of energy inputs required by technical devices for expressing useful functions, at the local scale, within the parts operating inside the black-box; (iii) end uses (EU) the set of functions to be expressed by society across hierarchical levels for reproducing itself. Finally, the paper presents examples of quantitative results obtained using an innovative method of analysis - Multi-Scale Integrated Analysis of Societal and Ecosystem Metabolism (MuSIASEM). We conclude that by using this new accounting method it is possible to generate a better understanding of external and internal constraints determining the desirability and viability of the metabolic pattern of societies.     

Predicting national sustainability: The convergence of energetic,economic and environmental realities

The “constraint space” dictated by energetic, economic and environmental realities on scenarios for future organization of humanity and nature is explored from the perspective of the energy and resources driving economies. Net energy of energy sources is presented as an index (Emergy Yield Ratio; EYR) that must be evaluated for energy sources to better understand their potential contributions to society, but more important, as an indicator of the changes needed in the future if lower net yielding sources are to be relied upon. An aggregate EYR was calculated for the USA economy and shown to have decreased by 38% since 1950, from 11/1 to 6.8/1. Several measures of efficiency at the scale of national economies are explored and the data suggest that the most efficient economies are also the most energetically intense (as measured by empower intensity). An index of environmental loading is suggested as a measure to evaluate environmental efficacy. An obvious outcome is that the smallest most energetically intense countries have the highest environmental loads, and those with large land area and/or continental shelves have the lowest ratios. An Emergy Sustainability Index (EmSI) is defined, computed for countries, and proposed as a multi-dimensional measure of long-term sustainability. The most sustainable economies are those with the highest EYR and lowest environmental loads.     

Thermodynamics of irreversible processes and quantum field theory: An interplay for the understanding of ecosystem dynamics

Ecological modelling has not yet received from basic “hard” sciences, like conventional physics and chemistry, an adequate conceptual support. Mechanistic simulation techniques are very far from achieving a satisfactory understanding of ecosystem dynamics.     

Using accelerometer,high sample rate GPS and magnetometer data to develop a cattle movement and behaviour model

The study described in this paper developed a model of animal movement, which explicitly recognised each individual as the central unit of measure. The model was developed by learning from a real dataset that measured and calculated, for individual cows in a herd, their linear and angular positions and directional and angular speeds. Two learning algorithms were implemented: a Hidden Markov model (HMM) and a long-term prediction algorithm. It is shown that a HMM can be used to describe the animal's movement and state transition behaviour within several “stay” areas where cows remained for long periods. Model parameters were estimated for hidden behaviour states such as relocating, foraging and bedding. For cows’ movement between the “stay” areas a long-term prediction algorithm was implemented. By combining these two algorithms it was possible to develop a successful model, which achieved similar results to the animal behaviour data collected. This modelling methodology could easily be applied to interactions of other animal species.     

Structuring pelagic trophic networks from the biomass size spectra

The selection and establishment of the structure (number and compartments, aggregation criteria, and trophic links) of the food webs is a critical task in trophic modelling. The present work proposes a systematic method to structure trophic networks in pelagic food webs. The biomass-size spectrum (BSS) is a well-established approach to analyze the structure of pelagic communities, and the body size is especially related to the ecological role of the organisms in the pelagic environment. To structure food webs, this work uses detailed arrangements of the community in size classes with increasing widths (like Sheldon-type BSS) as first aggregation criteria, and BSS theory as a framework to integrate the available knowledge about feeding selectivity in order to obtain a method to identify the trophic links between compartments. Diet composition matrices were estimated through the combination of a probability of encounter for each food type and a specific probability of ingestion related to the food size selectivity and other food quality characteristics (e.g., morphology and nutritional quality). The feasibility of this approach has been illustrated through data of size-structured communities extracted from the literature including different planktonic predator guilds (nanoflagellates, cladoceran-dominated zooplankton and copepod-dominated zooplankton) in a high mountain lake (La Caldera, Spain), two subtropical wetland lakes (meso-oligotrophic Laguna Galarza and eutrophic Laguna Iberá, Argentina) and a marine microcosm (Alborán Sea, Mediterranean). The identification of “who eats whom” and “by how much” also allows for more accurate analyses of the trophic control in the BSS. Extensive analyses of the balance between top-down and bottom-up controls were developed for the feeding interactions of the study cases.     

Announcing climate policy: Can a green paradox arise without scarcity?

Unintended consequences of a pre-announced climate policy are studied within a framework that allows for competition between polluting and clean energy sources. We show that early announcement of a carbon tax gives rise to a “green-paradox,” in that it increases emissions in the interim period (between announcement and actual implementation), irrespective of the scarcity of fossil fuels. The paradoxical outcome is driven by consumption-saving tradeoffs facing households who seek to smooth consumption over time and holds both when the announced implementation date is taken as a credible threat and when households are skeptical about the (political) will or capability of the government to implement the policy as announced.     

Self-organization of tropical seasonal rain forest in southwest China

How to measure development of ecosystems is both a theoretical and practical question in ecology. Species richness and biomass accumulation are familiar figures of merit, but they cannot be instant watched. Self-organization is a tacit character. However, methods to measure the degree of self-organization of ecosystem are problematic. To this end Lin et al. (2009) have devised indicators of energy capture and dissipation so that self-organization defined via maximum energy dissipation can be quantified easily. Here the method is used to analyze long-term data (2004-2006) of a tropical seasonal rain forest included in the ChinaFLUX program. Three years of average self-organization values were clearly separated by seasonal variation. Reflection and long wave radiation are the main two pathways of energy loss. For tropical seasonal rain forest studied, long wave radiation contributed most to energy loss, and was negatively correlated with energy capture ability (Rn/DR). The nocturnal difference between canopy and air temperatures had a strong negative correlation with the long wave radiation loss ratio. However, the long wave radiation loss ratio was slightly lower than the reflection loss ratio in rainy season, when values were very low. Precipitation and wind had significant impact on energy dissipation ability in the hot dry season, but the correlation coefficients between precipitation and wind with thermal response numbers (TRNs) were very low. The results indicated that the self-organization estimation system based on “maximum energy dissipation theory” is applicable for tropical forest.     

Do energy prices influence investment in energy efficiency? Evidence from energy star appliances

I examine whether electricity prices influence the likelihood that consumers purchase high efficiency appliances by using state-year panel data on electricity prices and the proportion of sales of new appliances that involve high efficiency “Energy Star” models. I find no evidence that electricity prices affect the propensity for consumers to choose high efficiency appliances. Point estimates are extremely small and precisely estimated. The findings suggest that price-based energy policies may be limited in the extent to which they increase investment in residential energy efficiency, which has been considered one of the lowest cost opportunities for reducing carbon emissions.     

Time perspective and climate change policy

The tendency to foreshorten time units as we peer further into the future provides an explanation for hyperbolic discounting at an inter-generational time scale. We study implications of hyperbolic discounting for climate change policy, when the probability of a climate-induced catastrophe depends on the stock of greenhouse gasses. We characterize the set of Markov perfect equilibria (MPE) of the inter-generational game amongst a succession of policymakers. Each policymaker reflects her generation's preferences, including its hyperbolic discounting. For a binary action game, we compare the MPE set to a “restricted commitment” benchmark. We compare the associated “constant-equivalent discount rates” and the willingness to pay to control climate change with assumptions and recommendations in the Stern Review on Climate Change.“…My picture of the world is drawn in perspective…. I apply my perspective not merely to space but also to time”—Ramsey.     

Modeling a wetland system: The case of Keoladeo National Park (KNP), India

A model for the wetland part of KNP is presented and analyzed. Two-dimensional parameter scans suggest that this minimal model possesses dynamical complexities. Per capita availability of water to “bad” biomass (W₁) is one of the most vital parameters. One can ensure good health of the park by restricting the par capita availability of water to low values. Getting the “bad” biomass removed by granting permits to villagers should go hand in hand with water management and conservation activities. The model presented in this paper may be helpful in designing the timing and nature of human interventions in the form of implementation of well worked out policies in future.     

An energy budget for individual barnacles (Balanus glandula)

An annual energy budget was constructed for individual adult barnacles (Balanus glandula Darwin) for the first year after settlement. The production of body tissue, egg, shell, aquatic and aerial respiration, molting and faecal production was determined and consumption was derived from the summation of these budget items. To provide an estimation of the accuracy of the budget equation, energy budgets were constructed for three small groups of barnacles (n=40) kept under laboratory conditions, in which the budget items, including consumption, were determined independently. The results of the laboratory energy budgets indicated that consumption values derived from the summation methods for the three groups of barnacles were 7.4% higher and 16.2 and 15.6% lower than those determined by actual feeding experiments. The average consumption, assimilation and production of individual barnacles were estimated to be 699.5, 647.3 and 159.6 cal year^–1, respectively. B. glandula has an exceptionally high assimilation efficiency (92.5% from the annual budget and 99.3% from the laboratory budgets) but a low gross production efficiency (22.8%) and net production efficiency (24.7%). A very large proportion of energy (67.4%) was lost in respiration. The second most important budget item was egg production (12.3%); followed in decreasing order by: shell production (6.6%)> production of body tissue (3.9%)>molting (2.3%).This paper was presented at the 58th Annual Meeting of the American Society of Limnology and Oceanography, San Francisco, 1977, and received the Award for Excellence for the best student paper.     

Challenges for a sustainable resource use: Uncertainty,trade, and climate policies

We integrate new challenges to thinking about resource markets and sustainable resource use policies in a general framework. The challenges, emerging from six papers that JEEM publishes in a special issue, are (i) demand uncertainty and stockpiling, (ii) international trade and resource dependence, (iii) deforestation, and (iv) intertemporal effects of climate change policies (“Green Paradox”). We discuss new insights and results on these issues by fitting them into the Hotelling model of non-renewable resource depletion.