Internalisation of externalities: Who bears the cost of pollution control?

Summary The impact of environmental regulations on the welfare of Malaysian palm oil growers, producers, and refiners are evaluated in an open-economy model. The estimated incremental effects of effluent standards and changes have been specifically rather small, with the exception of those upon the growers, but the cumulative effects have been considerable.Dr Khalid Abdul Rahim is a member of staff in the Department of Natural Resource Economics at the Universiti Pertanian Malaysia. This article is based on part of the work undertaken for his PhD dissertation at the University of Illinois, USA.     

Biomass as the Renewable Energy Sources in Malaysia: An Overview

Past and current economic growths of Malaysia have been primarily energized by fossil fuels. Malaysia has very substantial potential for biomass energy utilization given its equatorial climate that is ideal for dense tropical forest growth and agricultural vegetation. There are five major sectors contributing wastes to biomass energy in Malaysia: forestry (wood products), rubber cultivation, cocoa cultivation, sugar cane cultivation and oil palm cultivation. Biomass in Malaysia contributes about 14% of the approximately 340 million barrel of oil equivalent (boe) of energy used every year. This paper provides an overview on the types of biomass being used, the research works on biomass conversion into energy and the present biomass energy projects in Malaysia.     

Pollution control technologies for the treatment of palm oil mill effluent (POME) through end-of-pipe processes

Palm oil production is one of the major industries in Malaysia and this country ranks one of the largest productions in the world. In Malaysia, the total production of crude palm oil in 2008 was 17,734,441 tonnes. However, the production of this amount of crude palm oil results in even larger amounts of palm oil mill effluent (POME). In the year 2008 alone, at least 44 million tonnes of POME was generated in Malaysia. Currently, the ponding system is the most common treatment method for POME but other processes such as aerobic and anaerobic digestion, physicochemical treatment and membrane filtration may also provide the palm oil industries with possible insights into the improvement of POME treatment processes. Generally, open ponding offers low capital and operating costs but this conventional method is becoming less attractive because the methane produced is wasted to the atmosphere and the system can not be certified for Carbon Emission Reduction trading. On the other hand, anaerobic digestion of POME provides the fastest payback of investment because the treatment enables biogas recovery for heat generation and treated effluent for land application. Lastly, it is proposed herewith that wastewater management based on the promotion of cleaner production and environmentally sound biotechnologies should be prioritized and included as a part of the POME management in Malaysia for attaining sustainable development. This paper thus discusses and compares state-of-the-art POME treatment methods as well as their individual performances.     

Land application of biomass residue generated from palm oil processing: its potential benefits and threats

Man’s increased demand for food and better living conditions has led to over exploitation of resources and the consequent generation of enormous amounts of liquid and solid waste materials. This is one of the global challenges for mankind. In Malaysia, palm oil mill waste (POMW) contributes the highest proportion of industrial solid wastes produced yearly. Wastes from the mills include palm oil mill effluent, decanter cake, empty fruit bunches, seed shells and the fibre from the mesocarp. Direct application of POMW into agricultural soil has resulted in a number of problems such as water pollution, leaching. However, with application rates specific for targeted plant species, land application can be employed as a permanent solution to the problem of waste from palm oil mills. This review examines the characteristics of each of the palm oil wastes and their potential for use as a future fertilizer supplement.     

From Forest Landscape to Agricultural Landscape in the Developing Tropical Country of Malaysia: Pattern,Process, and Their Significance on Policy

Agricultural expansion and deforestation are spatial processes of land transformation that impact on landscape pattern. In peninsular Malaysia, the conversion of forested areas into two major cash crops—rubber and oil palm plantations—has been identified as driving significant environmental change. To date, there has been insufficient literature studying the link between changes in landscape patterns and land-related development policies. Therefore, this paper examines: (i) the links between development policies and changes in land use/land cover and landscape pattern and (ii) the significance and implications of these links for future development policies. The objective is to generate insights on the changing process of land use/land cover and landscape pattern as a functional response to development policies and their consequences for environmental conditions. Over the last century, the development of cash crops has changed the country from one dominated by natural landscapes to one dominated by agricultural landscapes. But the last decade of the century saw urbanization beginning to impact significantly. This process aligned with the establishment of various development policies, from land development for agriculture between the mid 1950s and the 1970s to an emphasis on manufacturing from the 1980s onward. Based on a case study in Selangor, peninsular Malaysia, a model of landscape pattern change is presented. It contains three stages according to the relative importance of rubber (first stage: 1900–1950s), oil palm (second stage: 1960s–1970s), and urban (third stage: 1980s–1990s) development that influenced landscape fragmentation and heterogeneity. The environmental consequences of this change have been depicted through loss of biodiversity, geohazard incidences, and the spread of vector-borne diseases. The spatial ecological information can be useful to development policy formulation, allowing diagnosis of the country’s “health” and sustainability. The final section outlines the usefulness of landscape analysis in the policy-making process to prevent further fragmentation of the landscape and forest loss in Malaysia in the face of rapid economic development.

Management of biomass residues generated from palm oil mill: Vermicomposting a sustainable option

Solid waste management is one of the challenging problems worldwide and it is becoming more complex by the increase in population and subsequently the waste generated. In Malaysia, among industrial solid waste palm oil mill waste (POMW) contributes the highest share. Wastes from the oil palm mill includes palm oil mill effluent (POME), decanter cake, empty fruit bunches, seed shells and the fibre from mesocarp. Generally most of the waste generated is either disposed of via open dumping or used as fertilizers as such or as animal feed. Land application of POMW and POME is very common practice as it contains numbers of plant nutrients. Direct application of POMW into agricultural soil can result in a number of problems such as water pollution, leaching etc. To deal with these problems, vermicomposting of palm oil mill waste may be a sustainable waste management option.There are number of researches going on management of biomass residues from palm oil mill, but very few works are going on vermicomposting of these agro-industrial waste. Vermicomposting of POMW can be a good practice as it will also be helpful in recycling the useful plant nutrients and it is better than that of composting process. Present review deals with the various aspects of vermicomposting of POMW and its importance. Review also put forward the effect of potential application of vermicompost on plant growth. On the whole it looks for the possibility of vermicomposting of waste from palm oil mill as a sustainable waste management alternative.     

Why pollution standards are preferred by industries: pragmatism and rent-seeking behaviour

Regulatory instruments in environmental policy have strongraison d'etre. They still dominate the instruments selected by policy makers. Even with the growing interest in the use of economic instruments, in theory, empirical studies and policy, industries tend to prefer command-and-control as a practical instrument in pollution control. Polluters often assume they have more influence on regulation than on setting effluent charge levels. The industry can be better off under the regulatory standard than an imposed effluent charge when the total cost of abatement to the industry is considered. The higher costs to the industry make effluent charges less attractive. In practice, generally a mixed environmental policy is used in which regulations dominate. This choice has been based on effectiveness, economic efficiency and political acceptability. By simulating the abatement cost function, it was found that marketable permits offer an attractive system of pollution control when the scope of variation in abatement levels is evident. Unfortunately, at higher levels of abatement, the benefits of this system are small and insufficient to justify any regulatory reform. Thus, with a pragmatic approach coupled with a rent-seeking behaviour of the polluters, a shift to the use of economic instruments is neither likely nor desirable even when administrative and transactions costs are not considered.Dr Khalid Abdul Rahim is currently a lecturer in the Faculty of Economics and Management at the Universiti Pertanian Malaysia. He is also a visiting Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia, in Kuala Lumpur, and the Thematic Network Coordinator in the UNEP Network for Environmental Training at tertiary Level in Asia and the Pacific (NET-TLAP).     

Environmental regulation of trades by fixed standards: The Danish experience

Summary In 1986, the Danish Environmental Protection Agency established a new regulatory system aimed at small-scale polluting activities. Contrary to the dominant regulatory system based on individual standards for each polluting activity, the new regulatory system established uniform and fixed environmental standards for all activities within a trade. The fixed standards concern location, design and daily operation. Thus far, the new regulatory system has been implemented in the trades of fur farms and auto-repair shops.This study shows that fixed environmental standards reduce the total administrative costs, intensify local monitoring and enforcement of the standards, and improve the environmental state. It is proposed that the following criteria should be considered if the regulatory system is to be implemented in other trades. The trade should consist of many units and be characterised by a moderate pace of technological development, it should posses well-defined and well-known environmental problems, and have a cooperative trade association. In Denmark several trades have been identified as obvious objects for future regulation by fixed environmental standards.Bente Kjærgård is a Research Associate in the Department of Environment, Technology and Social Studies at Roskilde University. Correspondence should be addressed to this author. The other authors are Associate Professors in the same Department. Each author possesses a research degree as follows: Per Homann Jespersen in Chemical Engineering, Henning Schroll in Biology, Jesper Holm in Technological Planning, and Bente Kjærgård in Environmental Planning.     

Current Status and Problems in Certification of Sustainable Forest Management in China

Forest certification is a mechanism involving the regulation of trade of forest products in order to protect forest resources and improve forest management. Although China had a late start in adopting this process, the country has made good progress in recent years. As of July 31, 2009, 17 forest management enterprises and more than one million hectares of forests in China have been certified by the Forest Stewardship Council (FSC). Several major factors affect forest certification in China. The first set is institutional in nature. Forest management in China is based on centralized national plans and therefore lacks flexibility. A second factor is public awareness. The importance and value of forest certification are not widely understood and thus consumers do not make informed choices regarding certified forest products. The third major factor is the cost of certification. Together these factors have constrained the development of China’s forest certification efforts. However, the process does have great potential. According to preliminary calculations, if 50% of China’s commercial forests were certified, the economic cost of forest certification would range from US$0.66–86.63 million while the economic benefits for the forestry business sector could exceed US$0.66–86.63 million while the economic benefits for the forestry business sector could exceed US150 million. With continuing progress in forest management practices and the development of international trade in forest products, it becomes important to improve the forest certification process in China. This can be achieved by improving the forest management system, constructing and perfecting market access mechanisms for certificated forest products, and increasing public awareness of environmental protection, forest certification, and their interrelationship.     

International trade and air pollution: estimating the economic costs of air emissions from waterborne commerce vessels in the United States

Although there is a burgeoning literature on the effects of international trade on the environment, relatively little work has been done on where trade most directly effects the environment: the transportation sector. This article shows how international trade is affecting air pollution emissions in the United States' shipping sector. Recent work has shown that cargo ships have been long overlooked regarding their contribution to air pollution. Indeed, ship emissions have recently been deemed "the last unregulated source of traditional air pollutants". Air pollution from ships has a number of significant local, national, and global environmental effects. Building on past studies, we examine the economic costs of this increasing and unregulated form of environmental damage. We find that total emissions from ships are largely increasing due to the increase in foreign commerce (or international trade). The economic costs of SO2 pollution range from dollars 697 million to dollars 3.9 billion during the period examined, or dollars 77 to dollars 435 million on an annual basis. The bulk of the cost is from foreign commerce, where the annual costs average to dollars 42 to dollars 241 million. For NOx emissions the costs are dollars 3.7 billion over the entire period or dollars 412 million per year. Because foreign trade is driving the growth in US shipping, we also estimate the effect of the Uruguay Round on emissions. Separating out the effects of global trade agreements reveals that the trade agreement-led emissions amounted to dollars 96 to dollars 542 million for SO2 between 1993 and 2001, or dollars 10 to dollars 60 million per year. For NOx they were dollars 745 million for the whole period or dollars 82 million per year. Without adequate policy responses, we predict that these trends and costs will continue into the future.     

OIL EXPLORATION STRATEGIES FOR DEVELOPING COUNTRIES

This paper focuses on the roles of governments of developing countries in the oil exploration area; roles ranging from passive tax collectors to production sharers to full State ownership and control. The historical failure of governments to take full control of this key area is seen as partially due to myths: that only the big international oil companies have the necessary technology and capital and can afford the risk of oil exploration and development. Three case studies showing the large benefits to a developing country from full State control are examined: Mexico, India and Vietnam. It is concluded that only full State control can ensure that the riches of oil can be harnessed for a developing country, and governments are urged to develop greater knowledge both about the international oil industry and their country's potential resources.     

Environmental policy expansion in the EU: the intriguing case of bioinvasion regulation

ABSTRACT

While bioinvasion was an issue of low political salience in Europe, a new regulation addressing it was adopted in 2014 with strong support. This article analyzes the making of the regulation as an intriguing case of policy expansion amid economic crisis. Based on theoretical literature on drivers of EU policy integration and policy dismantling, alternative plausible explanations are explored. Our main finding is that development of economic policy consensus among member states on trade-environment nexus was crucial for progress towards regulatory action. Policy consensus has been driven by a confluence of three domestic factors: trade liberalization, market disintegration, and changing ideas about the desirability of EU-level law, with the European Commission as policy entrepreneur. Low political salience has also had an important effect. It has increased the influence of transnational conservation alliances, which have played a significant catalytic role in building consensus by shifting consciousness to economic reward of policy action vs inaction, and bringing international models for legislative reform to the EU jurisdiction.     

Development strategy for Malaysian natural resources

Malaysia, with its wealth of natural resources, is one of the fastest growing economies in the ASEAN region. The country provides 41% of world supplies of natural rubber, 39% of hardwoods, 37% of palm oil and 32% of tin. In 1971, the government developed a New Economic Policy (NEP) which, it was hoped, would bring about a sound and wide base for economic growth. This report aims to describe the basis of NEP and to analyse the development potential of the Malaysian economy.     

新型自贸协定的环保议题谈判及我国的对策简

自由贸易协定中纳入环境保护规定是提高自由贸易中的正环境效应,同时避免或减轻负面环境影响的保障,已经逐渐成为新型国际自由贸易谈判中的重要内容。以跨太平洋战略经济伙伴关系协定为代表的新型自由贸易谈判,试图在协定中丰富环境条款,例如环保原则、国际环境公约、环境标准、争端解决机制、环境产业和服务、环境合作和能力建设等。我国也开始在自贸谈判中纳入环保要求,基于最新的政策要求,我国应积极赶上国际自由贸易谈判中环境保护的新要求,推动贸易与环保政策的深度融合。     

Green supply chain initiatives among certified companies in Malaysia and environmental sustainability: Investigating the outcomes

The relationship between green supply chain initiatives and performance outcomes has been subject to numerous studies but the results are not conclusive. This study tries to assess the actual environmental, economic and intangible outcomes resulting from the adoption of green supply chain initiatives. This study used a structured questionnaire derived from the literature and employing a mail survey to collect responses form a group of 569 ISO 14001 certified firms in Malaysia. The results of testing the hypotheses that predicted that green supply chain initiatives have positive effect on the outcomes showed that eco-design have significant positive effect on the four types of outcomes (environmental outcomes, economic outcomes, cost reductions, and intangible outcomes). Reverse logistics was found to have significant positive effect on cost reductions only. However, green purchasing was not found to have significant effect on any of the four types of outcome. Through designing environmentally friendly products and taking back products and packaging, business organizations can generate benefits to the environment, in the form of reduced waste and better resource utilization, in addition to economic benefits and cost reductions to the organizations.     

Magnetic composite prepared from palm shell-based carbon and application for recovery of residual oil from POME

Magnetic separation combined with adsorption by activated carbon has been found to be a useful method for removing pollutants. In this paper, the use of palm shell as a source of activated carbon for the removal and recovery of oil from palm oil mill effluent (POME) is studied. In the first part of the study, the properties of samples of activated carbon prepared from palm shell under a variety of different conditions were characterized for their hydrophobicity, surface areas and pore size distribution. The most effective of the activated carbon samples was prepared by impregnation with ZnCl(2) followed by combined physical/chemical activation under carbon dioxide flow at 800 °C. Four grams of these samples adsorbed 90% of the oil from 50 mL POME. In the second part, the palm shell-based carbon samples were given magnetic properties by the technique of iron oxide deposition. Ninety-four percent of the activated carbon/iron oxide composite containing the adsorbed oil could be extracted from the POME by a magnetic bar of 0.15 T. Four grams of the composite can remove 85% of oil from 50 mL POME and a total of 67% of the initial oil can then be recovered by hexane extraction. Powder X-ray diffractometry showed the presence of magnetite and maghemite in the activated carbon/iron oxide composite.     

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.     

碳边境调节机制：欧盟应对气候变化的新选择与中国因应

近年来,欧盟考虑在气候变化立法中引入碳边境调节机制,旨在消除境外企业由于碳排放成本不对称而获得的价格优势。这一机制对于欧盟对冲减排压力、助力工业回流、增强气候领导力以及推动绿色转型大有裨益。作为一种碳关税政策,该机制确有贸易壁垒之嫌,在国际法上存在较大合法性争议。但未来欧盟可通过制度设计使其符合《关税与贸易总协定》（GATT）第20条,进而获得实施可能性。对我国而言,该机制实施必将会在诸多领域对我国产生不利影响,但某种程度上也可倒逼我国出口结构和贸易方式的调整升级。基于此,今后我国应自上而下完善碳市场建设,适时推动“碳交易+碳税”复合政策双轮驱动;积极开展气候外交;促进我国承接国际产业转移和出口的可持续发展。在法律对策上,积极参与国际谈判与规则制定;完善气候治理体系;促进低碳外贸发展;健全可再生能源激励制度。     

Trade in fisheries services under the WTO and GATS framework

This paper studies how fisheries services are classified in the World Trade Organization (WTO) framework for trade in services and discusses the potential impact of unclear classifications. The WTO plays a key role in regulation and assessment in the area of trade in services, mainly due to the General Agreement on Trade in Services (GATS), which contains the only set of multilateral rules managing such trade internationally. The purpose of GATS is to create a credible and reliable system of international trade rules that ensures fair treatment of all participants. Through negotiations, individual countries establish commitments to provide market access and limiting national treatment in various service sectors. During such negotiations, the classification of services is a prerequisite to ensure unambiguous and comparable commitments. However, the classification list used by the WTO, namely the W/120, is based on, and corresponds to, old versions of other classification lists, leading to unclear classifications. This lack of clarity in sectoral classifications makes policy analysis unnecessarily difficult and creates a risk that trade agreements may be interpreted differently by different parties.     

Trade–finance complementarity and carbon emission intensity: panel evidence from middle-income countries

This paper examines the complementarity/substitutability of international trade and financial development in the mitigation of carbon emissions for a panel sample of 62 middle-income countries from 1991 to 2010. Applying the bias-corrected LSDV estimator, the paper yields interesting results. For the full sample, international trade and financial development play an interactive and complementary role in reducing CO₂ intensity of energy use. That is, the environmental benefit of international trade is materialized only if a country has a well-developed financial market. Likewise, financial development is beneficial to the environment only in a highly open economy. Having stated these, the analysis also uncovers evidence that these results may be different across levels of income or across regions. The results bear important policy implications for the abatement of the environmental problem in the middle-income countries.