Economic Evaluation of Carbon Dioxide Emission Abatement Measures in the Greek Energy Sector

This paper outlines a methodological framework for the economic evaluation of carbon dioxide (CO 2 ) emission abatement policies and measures, formulating a basis for the selection of those options of climate change mitigation interventions that minimize economic cost and maximize social welfare. To this purpose, a cost-benefit analysis has been implemented in order to evaluate a variety of CO 2 emission abatement measures in the Greek energy sector on the basis of their social (i.e. the sum of the private and external) costs and benefits, and it is compared with a cost-effectiveness analysis, which takes into account only the net financial costs of the examined interventions. The analysis clearly reveals that a significant decrease in CO 2 emissions is possible without great cost to the economy. Moreover, the monetization of environmental benefits (e.g. the restriction of impacts on human health, agriculture and biodiversity, etc.) associated with the above-mentioned interventions represents a powerful tool for highlighting priority actions in the context of a climate change mitigation policy and for quantifying their overall economic and environmental effectiveness.     

Social cost‐benefit analysis of intensive versus traditional shrimp farming: A case study from India

This paper attempts a social cost‐benefit analysis of intensive versus traditional shrimp farming in West Bengal, India. Using primary data, the paper shows that although intensive shrimp farming yields high returns as compared to traditional shrimp farming, when the opportunity costs and environmental costs of shrimp farming, including disease risk, are accounted for, intensive shrimp farming loses its advantage. Sensitivity analysis shows that if the expected benefits were to fall short by 15% and costs rise by a similar proportion, intensive shrimp farmers would report higher losses than traditional shrimp farmers. Large traditional shrimp farmers continue to report positive net returns. These results are also most pronounced for small and marginal intensive shrimp farmers. Further, if the probability of disease risk is also accounted for, intensive shrimp farming reports significant losses whereas traditional shrimp farming in most cases shows positive net returns. In light of the high social costs and risks, this paper questions the rationale behind promoting intensive shrimp farming, especially among small and marginal holdings, as an income‐generating activity or poverty alleviation measure in the absence of an enabling environment. It suggests that policymakers need to factor in sustainability concerns and the local context when formulating policies to promote intensive shrimp farming.     

Value of information for climate observing systems

The Interagency Working Group Memo on the social cost of carbon is used to compute the value of information (VOI) of climate observing systems. A generic decision context is posited in which society switches from a business as usual (BAU) emissions path to a reduced emissions path upon achieving sufficient confidence that a trigger variable exceeds a stipulated critical value. Using assessments of natural variability and uncertainty of measuring instruments, it is possible to compute the time at which the required confidence would be reached under the current and under a new observing system, if indeed the critical value is reached. Economic damages (worldwide) from carbon emissions are computed with an integrated assessment model. The more accurate observing system acquires the required confidence earlier and switches sooner to the reduced emissions path, thereby avoiding more damages which would otherwise be incurred by BAU emissions. The difference in expected net present value of averted damages under the two observing systems is the VOI of the new observing system relative to the existing system. As illustration, the VOI for the proposed space-borne CLARREO system relative to current space-borne systems is computed. Depending on details of the decision context, the VOI ranges from 2 to 30 trillion US dollars.     

Estimating the benefits of pollution reduction on agricultural yields: Taiwan's air pollution emission fees program

Taiwan's implementation of the 1997 Air Pollution Emissions Fees Program will conceivably lead to long-term reductions in pollution emissions. The purpose of this paper is to estimate the benefits to Taiwan from the expected reduction in crop losses as a direct result of such a decrease in air pollution. We employ a demand-supply framework for rice production to estimate the change in social welfare resulting from changes in the concentration of certain pollutants in the atmosphere. Our empirical results show that, in the year 1997, social welfare increments resulting from the decline in sulfur dioxide concentrations in the atmosphere ranged between US dollars 946200 and US dollars 2435800. Meanwhile, during the same period, the increase in social welfare due to the decline in the ozone concentration in the atmosphere ranged between US dollars 838100 and US dollars 1927000. The average benefit from the reduction in both sulfur dioxide and ozone concentrations is calculated to be between US dollars 2.67 and US dollars 6.86 per acre (for sulfur dioxide), and from US dollars 2.36 to US dollars 5.43 per acre (for ozone).     

The pricing of water services in developing countries

This paper focuses on improving efficiency in the water and sewerage sectors through long-run marginal cost pricing, adjusted for financial needs, externalities, second best considerations, lifeline tariffs and cross subsidization within an integrated water resource planning (IWRP) framework. Supply efficiency suggests that for a given price structure, an optimal long-run investment plan and a corresponding level of supply quality should be determined which maximizes net social benefits. Supply efficiency also requires efficient operation of the water system, including optimization of losses.     

Incentive pricing and cost recovery at the basin scale

Incentive pricing programs have potential to promote economically efficient water use patterns and provide a revenue source to compensate for environmental damages. However, incentive pricing may impose disproportionate costs and aggravate poverty where high prices are levied for basic human needs. This paper presents an analysis of a two-tiered water pricing system that sets a low price for subsistence needs, while charging a price equal to marginal cost, including environmental cost, for discretionary uses. This pricing arrangement can promote efficient and sustainable water use patterns, goals set by the European Water Framework Directive, while meeting subsistence needs of poor households. Using data from the Rio Grande Basin of North America, a dynamic nonlinear program, maximizes the basin's total net economic and environmental benefits subject to several hydrological and institutional constraints. Supply costs, environmental costs, and resource costs are integrated in a model of a river basin's hydrology, economics, and institutions. Three programs are compared: (1) Law of the River, in which water allocations and prices are determined by rules governing water transfers; (2) marginal cost pricing, in which households pay the full marginal cost of supplying treated water; (3) two-tiered pricing, in which households' subsistence water needs are priced cheaply, while discretionary uses are priced at efficient levels. Compared to the Law of the River and marginal cost pricing, two-tiered pricing performs well for efficiency and adequately for sustainability and equity. Findings provide a general framework for formulating water pricing programs that promote economically and environmentally efficient water use programs while also addressing other policy goals.     

CONSERVATIONAL WATER PRICING FOR INCREASED WATER SUPPLY BENEFITS1

ABSTRACT: A study was undertaken to see if benefits from water supply could be increased by utilizing price-usage information in reservoir design studies. Three pricing policies were examined. The first policy assumed no price-use relationship, and quantity demanded was based on existing community usage with a low water rate. The price of water was set to recover system costs. A price-use relationship was assumed in the second policy and the water rate was constant. The price of water was determined from the associated system which provided maximum expected net benefits. The third policy assumed the price-use relationship and the price charged for water during each billing period was a non-linear function of storage which increased as the amount of water in storage at the beginning of the period decreased. It was found that the use of the conservation pricing policies substantially reduced storage requirements while providing demonstrable net benefits to the community and a large average supply. The conservation pricing policies substantially lowered the average price paid for water. The effect of uncertainty in consumer response to changes in price was studied by using a probabilistic price-use relationship. This uncertainty did not significantly reduce the effectiveness of the conservation policy. It was concluded that demand management by the use of a proper pricing policy could significantly increase net water supply benefits to a community.     

Multiple Benefits of Carbon-Friendly Agricultural Practices: Empirical Assessment of Conservation Tillage

This study empirically estimates the multiple benefits of a subsidy policy that would offer payments to farmers in return for the adoption of conservation tillage, and compares the outcomes of alternative targeting designs for such a policy. The least-cost incentive payment policy schemes are simulated for the State of Iowa by using the data for roughly 12,000 National Resource Inventory (NRI) points. We use an economic conservation tillage adoption model to evaluate the costs of adoption and a physical process simulation model (EPIC) to estimate the environmental benefits due to adoption at each of the NRI points.Two targeting options are considered. We assess the costs and environmental consequences of a practice-based policy instrument (which maximizes the acres of land in conservation tillage, regardless of its level of environmental benefits) and contrast it to a performance-based instrument (which yields the highest amount of environmental benefits per dollar spent). Carbon sequestration in agricultural soils, reduction of soil erosion by wind and water, and the reduction in nitrogen runoff are considered as possible targets for the performance-based instruments. We find that the practice-based instrument provides high proportions of the four benefits relative to the policies that target the benefits directly, especially at the higher policy budget levels. Similarly, we estimate that targeting one of the four benefits individually provides high percentages of the other benefits as compared with the amounts of the benefits obtainable if they were targeted directly.     

中国农业温室气体减排潜力及其政策意涵

通过农业温室气体减排GTAP-E模型及其数据库构建,模拟了中国农业温室气体减排潜力及其政策意涵,其结论为：农业温室气体减排5%,我国GDP将降低0.059%,社会福利将提高11.6亿美元;水稻的价格上升22.08%,其他农作物价格上升2.9%;牛羊类的价格上升163.43%,猪禽类的价格上升0.57%,其他畜产品价格下降0.98%。农业温室气体减排5%降低了我国农产品在国际市场上的竞争力,使得农产品的出口大大下降,但是却提高了其他部门的出口,导致我国净出口增加了45.5亿美元,农业征收排放税的税收收入为223.11亿美元。     

Efficient management of marine resources in conflict: An empirical study of marine sand mining, Korea

This article develops a dynamic model of efficient use of exhaustible marine sand resources in the context of marine mining externalities. The classical Hotelling extraction model is applied to sand mining in Ongjin, Korea and extended to include the estimated marginal external costs that mining imposes on marine fisheries. The socially efficient sand extraction plan is compared with the extraction paths suggested by scientific research. If marginal environmental costs are correctly estimated, the developed efficient extraction plan considering the resource rent may increase the social welfare and reduce the conflicts among the marine sand resource users. The empirical results are interpreted with an emphasis on guidelines for coastal resource management policy.     

Value for Money: Protecting Endangered Species on Danish Heathland

Biodiversity policies in the European Union (EU) are mainly implemented through the Birds and Habitats Directives as well as the establishment of Natura 2000, a network of protected areas throughout the EU. Considerable resources must be allocated for fulfilling the Directives and the question of optimal allocation is as important as it is difficult. In general, economic evaluations of conservation targets at most consider the costs and seldom the welfare economic benefits. In the present study, we use welfare economic benefit estimates concerning the willingness-to-pay for preserving endangered species and for the aggregate area of heathland preserved in Denmark. Similarly, we obtain estimates of the welfare economic cost of habitat restoration and maintenance. Combining these welfare economic measures with expected species coverage, we are able to estimate the potential welfare economic contribution of a conservation network. We compare three simple nonprobabilistic strategies likely to be used in day-to-day policy implementation: i) a maximum selected area strategy, ii) a hotspot selection strategy, and iii) a minimizing cost strategy, and two more advanced and informed probabilistic strategies: i) a maximum expected coverage strategy and ii) a strategy for maximum expected welfare economic gain. We show that the welfare economic performance of the strategies differ considerably. The comparison between the expected coverage and expected welfare shows that for the case considered, one may identify an optimal protection level above which additional coverage only comes at increasing welfare economic loss.     

A heuristic approach to stochastic cutoff grade optimization for open pit mining complexes with multiple processing streams

Cutoff grade specifies the available supply of metallic ore from an open pit mine to the multiple processing streams of an open pit mining complex. An optimal cutoff grade strategy maximizes the net present value (NPV) of an open pit mining operation subject to the mining, processing, and marketing/refining capacity constraints. Even though, the quantities of material flowing from the mine to the market are influenced by the expected variation in the available metal content or inherent uncertainty in the supply of ore, the majority of cutoff grade optimization models not only disregard this aspect and may lead to unrealistic cash flows, but also they are limited in application to an open pit mining operation with single processing facility. The model proposed herein determines the optimal cutoff grade policy based on a stochastic framework that accounts for uncertainty in supply of ore to the multiple ore processing streams. An application on a large-scale open pit mining operation develops a unique cutoff grade policy along with a portfolio of mining, processing, and marketing/refining rates. Owing to the geological uncertainty, the approach addresses risk by showing a difference of 14% between the minimum and maximum production rates, cash flows and NPV.     

A review of WTO and environmental issues

Multiple negotiating rounds of the General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO) since 1947 have conferred economic benefits through liberalized international trade. A growing body of evidence also points to linkages between liberalized trade and damage to the global environment, ecology, and natural resource base. Ironically, the increased economic well-being conferred by trade liberalization ultimately provides the basis for improved environmental protection. It is the interim environmental damage due to trade liberalization that is controversial and needing amelioration. The proposition here is to promote further trade liberalization, but only as long as environmental ethics and sustainability issues are satisfactorily addressed. Trade liberalization should not be permitted at the expense of adequate environmental protection and sustainability. Future WTO rounds need to address both development benefits and environmental ethics issues in a net social welfare maximization setting.     

WATER FOR ENERGY: AN APPROACH TO COMPREHENSIVE IMPACT ASSESSMENT1

ABSTRACT: The effects of energy development on the water resources of the Colorado River and Great Basin regions is expected to be substantial. Complex physical, economic and institutional interactions may be expected. Most research on these impacts appears single purpose, fragmented, uncoordinated, and often inaccessible to potential users - particularly those with responsibility for energy/water policy and program decisions. A comprehensive, integrative framework for assessing alternative water allocation decisions is outlined, taking a heuristic decision making model for evaluating impacts on maximization of gross (or net) regional product, and regional social welfare, and for assessing the region's contribution to national objectives. The suggested model provides a structure for application and integration of data of various kinds to a range of situations arising from possible impacts from energy proposals. The focus is on water and energy relationships but the model may provide a framework for comprehensive analysis of a variety of environmental actions and resulting system perturbations and effects.     

“双碳”背景下碳排放的边际外部性成本及最佳碳税的思考

气候变暖与环境恶化已成为人类生存和发展的重大威胁。鉴于碳排放具有负外部性,研究碳排放的边际外部性成本并探究最佳碳税,对于推进实现“双碳”目标具有重要意义。本文通过构建一个无限期的多部门新古典增长模型,探究碳排放的边际外部性成本及其影响因素,并对最优的碳税政策进行思考。研究结果表明：当居民消费效用函数呈对数形式、大气损害与产量成正比、大气中的碳含量存在线性关系和储蓄率不变等假设条件成立时,碳排放的边际外部性成本与产出成正比,且比例只与贴现率、大气损害函数和大气中的碳消散结构有关。因此,在碳税政策的制定上,要坚持经济发展与生态环境保护并重,分阶段动态优化调整碳税税率：在高贴现率时期提高碳税税率,分行业施行碳税政策和补贴政策,同时为了避免经济社会遭受到较大的冲击,起初征收碳税时税率不宜过高;考虑不同体量企业收入差距和负担能力,采用累进碳税征收机制;分地区实施差别税率,统筹区域协调发展。     

Application of Decision Analysis to Forest Road Deactivation in Unstable Terrain

Resource managers require objective methodologies to optimize decisions related to forest road deactivation and other aspects of road management, especially in steep terrain, where road-related slope failures inflict extensive environmental damage. Decision analysis represents a systematic framework that clearly identifies real options and critical decision points. This framework links current decisions with expected future outcomes and provides advantages such as a common currency to systematically explore the liability consequences of limited budget expenditures to road deactivation and other road-related activities. Furthermore, the decision framework prevents the analysis from becoming hopelessly entangled by the vast number of possibilities generated by the alternative occurrences, magnitudes, and consequences of landslide/debris flow events and provides the information required for the first step of an adaptive management process. Here, a structured analysis of potential environmental risks for a road deactivation project in coastal British Columbia, Canada is presented. The application of decision analysis generates a ranking of the expected benefits of proposed deactivation activities on various road sections. The ranking distinguishes between road sections that offer high expected benefit from those that offer moderate to low expected benefit. Seventeen of 171, 100–m road segments accounted for 18% of the cumulative cost and 98% of the cumulative expected net benefits from road deactivation. Furthermore, the cost of deactivating a section of road is related to the expected benefit from such deactivation, thus providing the basis for more effective resource allocation and budgeting decisions.     

Public receptiveness to policies promoting plant-based diets: framing effects and social psychological and structural influences

Governmental and non-governmental organizations, social movements, and academics have called for reductions in meat consumption due to the environmental, animal welfare, and public health consequences of industrial animal agribusiness. An impactful move toward plant-based diets would require changes in public policy. First, we assess if there are different social and structural factors that influence support for policies that promote plant-based diets. We look at four categories of policies (action frames) that will likely reduce meat consumption: environmental, animal welfare, public health, and direct meat reduction. Second, we use a manipulation rhetorical frame to see if support can be altered by providing individuals with information about meat reduction, framing the issue in terms of environmental protection, animal welfare, or public health. Different social and structural factors predict support for different policy groupings, meaning that it matters how policies are enclosed in action frames. However, providing information to individuals about a particular impact (rhetorical frame) has limited influence on policy support.     

Sustainable urban planning and the brownfield development process in the United Kingdom: Lessons from the Thames Gateway

Over recent decades urban and regional development agendas in the United Kingdom have become dominated by the discourses of sustainable development, holistic regeneration and community capacity-building. It is in this context that brownfield development has emerged as a core feature in strategies to regenerate urban areas. Bringing brownfields back into use tends to be, a priori, presented as a 'good thing' that will have broader economic, environmental and social benefits. This paper assesses the role that brownfield development plays in urban and regional policy agendas in the UK. It begins by identifying the rationales for, and concerns associated with, the brownfield development process in the UK, before discussing the trajectories of policy under the New Labour government since 1997. It argues that at present too much is expected from brownfield-led regeneration programmes and that wider benefits will only accrue if these programmes are embedded within a wider and more comprehensive set of development projects and policy agendas.     

THE DETERMINATION OF AN OPTIMAL POLICY FOR PROTECTING GROUND WATER QUALITY1

ABSTRACT: An analytical framework is presented that identifies the tradeoffa that a regional authority desiring to enhance ground water quality is confronted with as it strives to balance the preferences of farmers and households while endeavoring to maximize net regional welfare. The basic rule developed indicates that the regional authority must choose a policy whereby any increase (decrease) in regional income is just equal to the decrease (increase) in net benefits to households.