An infinite-horizon model of dynamic membership of international environmental agreements

Much of the literature on international environmental agreements (IEAs) uses static models, although most important transboundary pollution problems involve stock pollutants. The few papers that study IEAs using models of stock pollutants do not allow for the possibility that membership of the IEA may change endogenously over time. In this paper we analyse a simple infinite-horizon version of the static model of self-enforcing IEAs, in which damage costs increase with the stock of pollution, and countries decide each period whether to join an IEA. Using a quadratic approximation of the value function of the representative country we show that there exists a steady-state stock of pollution with corresponding steady-state IEA membership, and that as the stock rises towards steady state the IEA membership falls. Moreover, we find that the greater is the cost of damage, and hence the greater are the potential gains from cooperation, the smaller is the membership of a self-enforcing IEA.     

Externalities and the urban rent and population density functions: The case of air pollution

In this paper, we introduce external diseconomies into the standard model of urban land rent via the case of air pollution, exploring the implications of law making on the urban structure. Three alternative legal arrangements of air pollution damage costs are analyzed: first, the recipient bears the cost; second, the producer bears the cost; and third, the compulsory use of emission control systems in the car.     

Derived decision rules for pollution control in a general equilibrium space economy

This paper attempts to narrow the gap between economic theory and policy inthe field of environmental pollution control by expanding the traditional general equilibrium model to include the kind of spatial detail that is important for describing pollution. This model is then used to derive theorems which provide the basis for the development of spatially differentiated, tax-based decision rules. In spite of the fact that these rules require no information on either damage costs or control costs, they maintain many of the desirable properties of the more conventional informationally intensive tax policies.     

Theoretically optimal environmental metrics and their surrogates

Many environmental pollutants are thought to produce several classes of effects, e.g., morbidity, mortality, property damage. It would be possible to specify a unique theoretically optimal metric for each class of effects. Alternatively a single surrogate metric could be used to represent the combined impact of all classes of effects. Here, the use of surrogates is discussed in the context of regulation of ambient air pollution. It is demonstrated that costs may be associated with the use of surrogates, and that these costs are caused by (1) imprecision in the relationships between the surrogate and each of the theoretically optimal metrics, and (2) reduction in dimensionality of the set of exposure metrics. The factors which govern the magnitude of costs incurred are explored. It is noted that any savings inherent in the operation of simplified systems of monitoring and data management offset to some degree the costs generated by the use of surrogates.     

Optimal pollution in the presence of adjustment costs

This paper explores optimal pollution control when pollution is considered a stock and costs of treating pollution are a function both of the level and rate of change of pollution control. It is shown that even if the long run optimum stock of pollution is below the initial level adjustment costs may imply an optimally increasing stock of pollution in the short run. The results obtained are contrasted with those which emerge when adjustment costs are absent and when damages are taken to be a function of the flow of pollution; the appropriate tax rates of polluting discharges are examined.     

The optimal pricing of pollution when enforcement is costly

We consider the pricing of a uniformly mixed pollutant with a model of optimal, possibly firm-specific, emissions taxes and their enforcement under incomplete information about firms’ abatement costs, enforcement costs, and pollution damage. We argue that optimality requires an enforcement strategy that induces full compliance by every firm, except possibly when a regulator can base the probabilities of detecting individual violations on observable correlates of violators’ actual emissions. Moreover, optimality requires discriminatory taxes, except when a regulator is unable to use observable firm-level characteristics to gain some information about the variation in firms’ abatement costs or monitoring costs.     

Monopoly and external costs: An application of second-best theory to the automobile industry

A monopoly that creates external costs poses a classic second-best problem: Whereas optimal allocation would be achieved by both removal of the monopoly and correction of the externality, it cannot be presumed that either action taken alone would improve welfare. It is shown that the desirability of pursuing either policy in isolation depends on the relative size of the external cost and the monopolist's price-cost margin. The analysis is applied to the automoblie manufacturing industry. Under current estimates of pollution damage and price-cost margin, industry output is suboptimal. Whereas this finding may not be translated directly into policy recommendations, it suggests that some skepticism about internalizing pollution costs is justified unless such action is accompanied by an appropriate reduction in monopoly power.     

Operational dumping and the pollution of the sea by oil: An evaluation of preventive measures

The recent dispute over the impact of economic growth on the environment relative to the (predicted) physical limits imposed by the ecological system hinges on the role of pollution-preventive technology. This paper attempts a cost-effectiveness evaluation of alternative methods of preventing the largest source of marine oil pollution. The first major result of the analysis is that the technology which minimizes internal costs (and is favored by the oil companies) does not minimize the social costs of pollution prevention. The second is that relative to the price of oil the cost of pollution-prevention processes is very small indeed.     

A decision framework for estimating the cost of marine plastic pollution interventions

Marine plastic pollution has emerged as one of the most pressing environmental challenges of our time. Although there has been a surge in global investment for implementing interventions to mitigate plastic pollution, there has been little attention given to the cost of these interventions. We developed a decision support framework to identify the economic, social, and ecological costs and benefits of plastic pollution interventions for different sectors and stakeholders. We calculated net cost as a function of six cost and benefit categories with the following equation: cost of implementing an intervention (direct, indirect, and nonmonetary costs) minus recovered costs and benefits (monetary and nonmonetary) produced by the interventions. We applied our framework to two quantitative case studies (a solid waste management plan and a trash interceptor) and four comparative case studies, evaluating the costs of beach cleanups and waste-to-energy plants in various contexts, to identify factors that influence the costs of plastic pollution interventions. The socioeconomic context of implementation, the spatial scale of implementation, and the time scale of evaluation all influence costs and the distribution of costs across stakeholders. Our framework provides an approach to estimate and compare the costs of a range of interventions across sociopolitical and economic contexts.     

Pollution aspects of nuclear energy use

Models are developed wherein the society, wishing to maximize the present discounted value of energy output net of pollution costs and with fixed resources for energy production, must decide what portion of its energy needs will be met by fossil fuel and what portion by nuclear energy. It is shown that the pollution effects of each alternative are as important in determining the pattern of energy use as the cost of production of each alternative. Several sets of assumptions about production costs and pollution generation are considered.     

Interactive pollutants and joint abatement costs: Achieving water quality standards with effluent charges

This paper extends earlier work on the standards and prices approach to pollution control by considering simultaneously spatial considerations, interactive pollutants, and joint abatement costs. The form of environmental constraints appropriate to water pollution problems is discussed in detail and the implications for the standards and prices approach to water pollution control are assessed. The presence of interactive pollutants and joint abatement costs is shown to have important implications for both the theoretical properties and the implementation of the standards and prices approach.     

Plant vintage, technology, and environmental regulation

We use data on productivity and pollution abatement costs at individual pulp and paper mills to test whether the impact of environmental regulation on productivity differs by plant vintage and technology. Plants with higher pollution abatement costs have significantly lower productivity levels. This relationship differs greatly based on a plant's technology, with productivity at integrated mills being greatly affected by abatement costs, while the impact at non-integrated mills is negligible. Plant vintage does not seem to matter, with older and newer plants showing similar impacts. Reported abatement costs appear to substantially understate the true costs of abatement. Accounting for the impact of technology differences makes some difference in the estimated overall impact of environmental regulation.     

Emissions trading of global and local pollutants, pollution havens and free riding

In the presence of local (sulfur) and global (carbon) pollutants, we examine the pollution haven hypothesis and free riding behavior. Under domestic emissions trading, poorer Southern countries become pollution havens when free trade opens up whenever sulfur damage functions are linear or when sulfur levels in equilibrium are not higher in the South. With global trading of carbon permits, the pollution haven effect emerges in equilibrium whenever the convex sulfur damage functions are nonlinear. Countries that do not participate in a Global Protocol designed to reduce carbon emissions enjoy double benefits, stemming from free riding and cleaner local environments.     

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.     

环境污染和生态破坏经济损失的估算模型

应用江苏省1988—2002年时序数据,建立环境污染与生态破坏经济损失的宏观估算模型,对影响环境污染与生态破坏的限制因子进行定量分析评价。     

Implications of simultaneity in a physical damage function

A modeler must often rely on highly simplified representations of complex physical systems when analyzing associated economic issues. Herein, we consider a management problem in which a bioeconomic system exhibits simultaneity in processes governing productivity and damage. In this case, it may benefit the producer to sacrifice productivity to reduce the costs associated with increased damage. We specify empirically a structural damage relationship that explains the biological process by which an invasive species damages a host and estimate the structural model and its reduced form with an exceptional dataset on infestation of olives by the olive fruit fly. We contrast the results of these models with the approach typically taken in the economic literature, which expresses damage as a function of pest density. The population-based approach introduces significantly greater bias into the individual grower's choice of damage-control inputs than estimates based on the structural model.     

The effect of pollution on crime: Evidence from data on particulate matter and ozone

We estimate the effect of short-term air pollution exposure (PM_2.5 and ozone) on several categories of crime, with a particular emphasis on aggressive behavior. To identify this relationship, we combine detailed daily data on crime, air pollution, and weather for an eight-year period across the United States. Our primary identification strategy employs extremely high dimensional fixed effects and we perform a series of robustness checks to address confounding variation between temperature and air pollution. We find a robust positive effect of increased air pollution on violent crimes, and specifically assaults, but no relationship between increases in air pollution and property crimes. The effects are present in and out of the home, at levels well below Ambient Air Pollution Standards, and PM_2.5 effects are strongest at lower temperatures. The results suggest that a 10% reduction in daily PM_2.5 and ozone could save $1.4 billion in crime costs per year, a previously overlooked cost associated with pollution.     

The cost of tolerance: sensitivity of stream benthic communities to UV-B and metals.

The ability to tolerate disturbance is a defense strategy that minimizes the effects of damage to fitness and is essential for sustainability of populations, communities, and ecosystems. Despite the apparent benefits of tolerance, there may be an associated cost that results in a deficiency of a system to respond to additional disturbances. Aquatic ecosystems are often exposed to a variety of natural and anthropogenic disturbances, and the effects of these compound perturbations are not well known. In this investigation, we examine whether tolerance to one stressor, metals, results in a cost of increased sensitivity to an additional stressor, ultraviolet-B (UV-B) radiation. Heavy metal pollution is recognized as a major environmental problem in Rocky Mountain streams. These high-elevation, typically clear streams may be at particular risk to elevated UV-B levels associated with reduced levels of ozone. Microcosm experiments were conducted using natural stream benthic communities collected from a reference site and a site with a long-term history of heavy-metal pollution. Direct and interactive effects of heavy metals and UV-B radiation on structural and functional characteristics of benthic communities were evaluated among four treatments: control, UV-B, metals, and metal and UV-B. Communities from the metal-polluted site were more tolerant of metals but less tolerant to UV-B compared to reference communities. Increased mayfly drift and reduced metabolism in response to metal exposure were observed in reference communities but not in the metal-polluted communities. In contrast to these results, UV-B radiation significantly reduced community metabolism, total macroinvertebrate abundance, and abundances of mayflies, caddisflies, and dipterans from the metal-polluted site, but had no effects on benthic communities from the reference site. ANOSIM results demonstrated that community responses differed among treatments at both sites. Metals had the largest impact on community differences at both sites, while UV-B had greater impacts at the metal-polluted site. This research demonstrates the need to account for potential costs associated with tolerance and that these costs can result in behavioral, structural, and functional impacts to benthic communities.     

An economic analysis of air pollution from coal-fired power plants

The benefits of air pollution control techniques on a coal-fired power plant are Simulated with a scientifically based environmental model. Air pollution abatement techniques are assessed in terms of their resource cost (measured in dollars) and their effectiveness in reducing environmental damage (measured in dollars and healthy days lost). Which air pollution techniques are most efficient depend upon how much a day of health should be valued. Other factors of potential interest such as uncertainty and equity are also simulated through the model. The paper demonstrates that scientific evidence can be organized around economic principles in order to develop more rational and effective environmental policies.     

Pollution Taxes and Pollution Abatement in an Oligopoly Supergame

This paper investigates the effects of an emissions tax on the incentives for oligopolists to acquire alternative pollution abatement technologies. The analysis is conducted in terms of a repeated game and it is demonstrated that there are circumstances in which the firms may reject the option of acquiring the pollution abatement equipment, even when this lowers their production costs.