The resistibility and shiftability of depletable externalities

In their recently revised book Baumol and Oates (“The Theory of Environmental Policy,” 2nd ed., Cambridge Univ. Press, Cambridge, UK 1988) accept Bird's argument on the optimal taxation policy when externalities are shiftable and depletable. Their conclusion is that the standard Pigouvian tax which is placed upon the generator of a negative externality can be extended to tax the victims who shift the externality to others or extended to compensate recipients in order to achieve Pareto optimality. It is shown in this paper that their conclusion is not free from error, because the possibility of resisting a shifted externality and conjectural variations by recipients is not recognized. Whether an externality is shiftable depends not only on the shifting activity of the original victim but also the resisting activity of his neighbors and their conjectures about each other's action. As such, the shifters should be taxed and the recipients should be compensated at the same rate per unit of externality shifted if the tax base is the output of the shifting and resisting activities. On the other hand, if the tax base is the input which produced the shifting of the externality, then both the shifters and the recipients should be subject to a tax (or subsidy) per unit of input that they have engaged in. Whether it is a tax or a subsidy depends on the direction and magnitude of the conjectural variation. The model and its policy implication can be generalized to cover the omnipresent and wasteful rent seeking activities.     

The efficiency of paying compensation in the Pigovian solution to externality problems

This note examines the efficiency of giving the victim of an externality the revenue raised by a tax on the injurer when the injurer and victim bargain with each other and act strategically. If the government has full information about the externality problem, then compensation is compatible with, but is not required for, the attainment of efficiency. If the government has limited information, then the desirability of compensation depends on the parties' behavior. In general, there is not an a priori case against compensation.     

Optimal Pricing of Depletable, Replaceable Resources: The Case of Landfill Tipping Fees

We develop a general model for pricing a depletable, replaceable asset, and discuss its application in determining optimal tipping fees for a sanitary landfill. We show that the optimal fee includes a component that grows at the real interest rate as space in the landfill is depleted, and then drops when a new landfill is built. Because the scarcity cost of landfill space increases as the landfill is filled, it may be optimal to delay a waste reduction program (such as recycling, composting, or incineration) until the landfill is partially full.     

生态补偿的理论基础:一个分析性框架

总结分析了生态补偿的理论基础框架和基本理论依据。认为,自然资源环境利用的不可逆性是生态补偿的自然要求和生态学基础;环境资源产权权利界定是生态补偿的法理基础和制度经济学基础;公共物品属性是生态补偿政策途径选择的公共经济学基础;外部性的内部化是生态补偿的核心问题和环境经济学基础;自然资源环境资本论是生态补偿的价值基础和确定补偿标准的理论依据。     

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.     

对我国生态补偿的立法构想

分析了以往生态补偿的定义,并从法律的角度给出了生态补偿应有的涵义,即是指为了恢复、维持和增强生态系统的生态功能,国家对导致生态功能减损的自然资源开发或利用者收费(税)以及国家或生态受益者对为改善、维持或增强生态服务功能为目的而作出特别牺牲者给予经济和非经济形式的补偿。回顾了我国有关生态补偿的政策与法律的规定,并探讨了其缺陷:我国有关生态补偿的政策与法律虽然较多,规定得较早,但这些规定很不规范和系统,而且过于原则、缺乏可操作性,对负外部性行为的生态补偿存在政策与法律的缺位,即使是对正外部性行为也并非真正意义上的补偿,而只是一种补助或补贴。对我国生态补偿的立法构建提出了初步设想:一要补偿政策应当法律化,使生态补偿成为一项名副其实的法律制度;二要要构建合理的生态补偿法律体系。     

Strategic implications of counter-geoengineering: Clash or cooperation?

Solar geoengineering has received increasing attention as an option to temporarily stabilize global temperatures. A key concern is that heterogeneous preferences over the optimal amount of cooling combined with low deployment costs may allow the country with the strongest incentive for cooling, the so-called free-driver, to impose a substantial externality on the rest of the world. We analyze whether the threat of counter-geoengineering technologies capable of negating the climatic effects of solar geoengineering can overcome the free-driver problem and tilt the game in favour of international cooperation. Our game-theoretical model of countries with asymmetric preferences allows for a rigorous analysis of the strategic interaction surrounding solar geoengineering and counter-geoengineering. We find that counter-geoengineering prevents the free-driver outcome, but not always with benign effects. The presence of counter-geoengineering leads to either a climate clash where countries engage in a non-cooperative escalation of opposing climate interventions (negative welfare effect), a moratorium treaty where countries commit to abstain from either type of climate intervention (indeterminate welfare effect), or cooperative deployment of solar geoengineering (positive welfare effect). We show that the outcome depends crucially on the degree of asymmetry in temperature preferences between countries.     

Positive framing does not solve the tragedy of the commons

We investigate whether positive framing increases cooperation in three social dilemmas with slightly different properties: a linear public goods (PG) game, a non-linear PG game, and a common pool resource (CPR) game. Results from our laboratory experiments show that contributions to a linear PG are higher if the externality is framed positively, rather than negatively, corroborating earlier findings by Andreoni (1995). By contrast, we find no such framing effects in the non-linear PG game or the CPR game. In these games, the best response in the material payoffs is to contribute less if others contribute more, counteracting effects of pro-social preferences. Positive framing therefore does not help to solve the tragedy of the commons.     

The transition from dirty to clean industries: optimal fiscal policy and the environmental Kuznets curve

This paper investigates privately and socially optimal patterns of economic development in a two-sector endogenous growth model with clean and dirty goods. We consider a second-best fiscal policy framework in which distortionary taxes jointly influence economic growth and environmental quality. In this policy setting, three conditions produce an Environmental Kuznets Curve (EKC): (i) dirty output is bounded; (ii) clean output grows endogenously; and (iii) growth in the dirty sector reduces growth in the clean sector. These conditions do not arise with a consumption externality, but can emerge with a production externality. Endogenous labor supply implications are also investigated. Although not necessary for producing an EKC, endogenous labor supply provides additional linkages that produce an EKC under circumstances in which it would otherwise not appear.     

Green clubs

This paper treats programs in which firms voluntarily agree to meet environmental standards as “green clubs”: clubs, because they provide non-rival but excludable reputation benefits to participating firms; green, because they also generate environmental public goods. The model illuminates a central tension between the congestion externality familiar from conventional club theory and the free-riding externality familiar from the theory on private provision of public goods. We compare three common program sponsors—governments, industry, and environmental groups. We find that if monitoring of the club standard is perfect, a government constrained from regulating club size may prefer to leave sponsorship to industry if public-good benefits are sufficiently low, or to environmentalists if public-good benefits are sufficiently high. If monitoring is imperfect, an important question is whether consumers can infer that a club is too large for its standard to be credible. If they can then the government may deliberately choose an imperfect monitoring mechanism as a way of regulating club size indirectly. If they cannot then this reinforces the government's preference for delegating sponsorship.     

Those outsiders: How downstream externalities affect public good provision

Some policy problems pit one group?s interests against another?s. One group may determine provision of a project (such as a dam) that benefits group members but hurts others. We introduce a model of such projects. In-group members may contribute to a common fund that benefits them as a public good. Benefits from the project may vary within the group. Provision has negative downstream externalities: contributions hurt agents outside the in-group (“Outsiders”), rendering them anti-social. Many models of social preferences predict that such externalities should reduce provision, although conditional cooperation or a preference for in-group members may counteract this. We test this model with a lab experiment using Outsiders with whom the in-group members have more and less contact. With homogeneous in-group benefits, the presence of negative downstream externalities reduces contributions by half when they have closer contact with Outsiders but not at all when they have had no contact. We introduce a rotating high-return position that allows subjects to trade favors. In this setting, contributions of non-privileged members diminish slightly when faced with the negative externality given closer contact with Outsiders, and not at all with less contact. Reciprocal giving occurs whether or not Outsiders are present.     

The Normative Dimension and Legal Meaning of Endangered and Recovery in the U.S. Endangered Species Act

Abstract:  The ethical, legal, and social significance of the U.S. Endangered Species Act of 1973 (ESA) is widely appreciated. Much of the significance of the act arises from the legal definitions that the act provides for the terms threatened species and endangered species. The meanings of these terms are important because they give legal meaning to the concept of a recovered species. Unfortunately, the meanings of these terms are often misapprehended and rarely subjected to formal analysis. We analyzed the legal meaning of recovered species and illustrate key points with details from "recovery" efforts for the gray wolf ( Canis lupus ). We focused on interpreting the phrase "significant portion of its range," which is part of the legal definition of endangered species. We argue that recovery and endangerment entail a fundamentally normative dimension (i.e., specifying conditions of endangerment) and a fundamentally scientific dimension (i.e., determining whether a species meets the conditions of endangerment). Specifying conditions for endangerment is largely normative because it judges risks of extinction to be either acceptable or unacceptable. Like many other laws that specify what is unacceptable, the ESA largely specifies the conditions that constitute unacceptable extinction risk. The ESA specifies unacceptable risks of extinction by defining endangered species in terms of the portion of a species' range over which a species is "in danger of extinction." Our analysis indicated that (1) legal recovery entails much more than the scientific notion of population viability, (2) most efforts to recover endangered species are grossly inadequate, and (3) many unlisted species meet the legal definition of an endangered or threatened species.     

Green clubs

This paper treats programs in which firms voluntarily agree to meet environmental standards as “green clubs”: clubs, because they provide non-rival but excludable reputation benefits to participating firms; green, because they also generate environmental public goods. The model illuminates a central tension between the congestion externality familiar from conventional club theory and the free-riding externality familiar from the theory on private provision of public goods. We compare three common program sponsors—governments, industry, and environmental groups. We find that if monitoring of the club standard is perfect, a government constrained from regulating club size may prefer to leave sponsorship to industry if public-good benefits are sufficiently low, or to environmentalists if public-good benefits are sufficiently high. If monitoring is imperfect, an important question is whether consumers can infer that a club is too large for its standard to be credible. If they can then the government may deliberately choose an imperfect monitoring mechanism as a way of regulating club size indirectly. If they cannot then this reinforces the government's preference for delegating sponsorship.     

The ecological insurance trap

Common pool resources often insure individual livelihoods against the collapse of private endeavors. When endeavors based on private and common pool resources are interconnected, investment in one can put the other at risk. We model Senegalese pastoralists who choose whether to grow crops, a private activity, or raise livestock on common pool pastureland. Livestock can increase the likelihood of locust outbreaks via ecological processes related to grassland degradation. Locust outbreaks damage crops, but not livestock, which are used for savings and insurance. We show the incentive to self-protect (reduce grazing pressure) or self-insure (increase livestock levels) changes with various property rights schemes and levels of ecological detail. If the common pool nature of insurance exacerbates the ecological externality even fully-informed individuals may make risk management decisions that increase the probability of catastrophe, creating an “insurance trap.”     

Paying for Tolerance: Rural Citizens' Attitudes toward Wolf Depredation and Compensation

Abstract:   As wolf ( Canis lupus ) populations recover in Wisconsin (U.S.A.), their depredations on livestock, pets, and hunting dogs have increased. We used a mail-back survey to assess the tolerance of 535 rural citizens of wolves and their preferences regarding the management of "problem" wolves. Specifically, we tested whether people who had lost domestic animals to wolves or other predators were less tolerant of wolves than neighboring residents who had not and whether compensation payments improved tolerance of wolves. We assessed tolerance via proxy measures related to an individual's preferred wolf population size for Wisconsin and the likelihood she or he would shoot a wolf. We also measured individuals' approval of lethal control and other wolf-management tactics under five conflict scenarios. Multivariate analysis revealed that the strongest predictor of tolerance was social group. Bear ( Ursus americanus ) hunters were concerned about losing valuable hounds to wolves and were more likely to approve of lethal control and reducing the wolf population than were livestock producers, who were more concerned than general residents. To a lesser degree, education level, experience of loss, and gender were also significant. Livestock producers and bear hunters who had been compensated for their losses to wolves were not more tolerant than their counterparts who alleged a loss but received no compensation. Yet all respondents approved of compensation payments as a management strategy. Our results indicate that deep-rooted social identity and occupation are more powerful predictors of tolerance of wolves than individual encounters with these large carnivores.     

Recognition that causal processes change during plant invasion helps explain conflicts in evidence

Despite intensive research, we still have no general understanding of why plant invasions occur. Many different mechanisms of plant invasions have been proposed, but studies designed to investigate them often produce inconsistent results. It remains unclear whether this unsatisfying state of affairs reflects the complexity of the real world (in which every invasion is unique) or the failure to identify the key processes driving most plant invasions. Here we argue that greater generalization is possible, but only if we recognize that the ecological and evolutionary processes enabling a species to advance into a new area change during the course of an invasion. In our view, an invasion can often usefully be subdivided into a primary phase, in which the abundance of an often preadapted species increases rapidly (typically in resource-rich, disturbed habitats), and a secondary phase, in which further spread is contingent upon plastic responses or genetic adaptation to new ecological circumstances. We present various examples to show how this partitioning of the invasion phase sensu stricto produces new hypotheses about the processes underlying plant invasions. Some of these hypotheses can be conveniently tested by investigating plant invasions along strong environmental gradients such as those that occur in mountainous regions.     

Inconclusiveness of Chytridiomycosis as the Agent in Widespread Frog Declines

Abstract:  Although there is considerable evidence to support the hypothesis that the chytrid fungus Batrachochytrium dendrobatidis is the primary agent responsible for widespread declines in amphibian populations, particularly rainforest frog populations in Australia and Central America, I argue the case has not yet been made conclusively. Few specimens were collected at the time of population declines, so it may never be possible to conclusively determine their cause. It remains unclear whether the pathogen is novel where declines have occurred. Although it is not necessary that the infection be novel for it to be implicated in declines, if a preexisting pathogen has only recently caused extinctions, cofactors must be important. Whether the pattern of outbreaks represents a "wave" of extinctions is unclear, but if it does, the rate of spread in Australia is implausibly high for a waterborne pathogen, given the most likely estimates of epidemiological parameters. Although B. dendrobatidis is an amphibian pathogen according to Koch's postulates, the postulates are neither necessary nor sufficient criteria to identify a pathogen. The following key pieces of information are necessary to better understand the impact of this fungus on frog communities: better knowledge of the means and rate of transmission under field conditions, prevalence of infection among frog populations, as distinct from morbid individuals, and the effect of the fungus on frogs in the wild. It is crucial to determine whether there are strains of the fungus with differing pathogenicity to particular frog species and whether host-pathogen coevolution has occurred or is occurring. Recently developed diagnostic tools bring into reach the possibility of addressing these questions and thus developing appropriate strategies to manage frog communities that may be affected by this fungus.     

Accepting market failure: Cultural worldviews and the opposition to corrective environmental policies

To explore whether and why people sometimes reject environmental policies that improve individual and collective outcomes, we create an experimental market in which transactions generate a negative externality. Market participants endogenously determine whether to implement corrective policies. We consider three policy instruments (Pigouvian taxes and subsidies, and quantity regulation) and two levels of policy efficiency (full and half). We then explore how individual cultural worldviews might contribute to the rejection of policies that correct the market failure. Our results indicate that people often oppose policies that improve their material outcomes, and we find that such opposition is significantly explained by cultural worldviews. Interesting connections emerge between individual worldviews and specific policy instruments.     

Will unit‐pricing enhance recycling?

Unit pricing is a program in solid waste management that integrates market instruments to encourage households to reduce waste generation and increase recycling. Many studies have shown that unit pricing is effective, especially when the evaluation is based on comparing outcomes before and after implementation. In this paper, we use the so-called difference-in-differences approach to evaluate unit pricing. This approach can provide a less-biased estimation, and can help to examine whether a unit pricing program generates less waste and higher recycling or results in illegal dumping in neighboring regions. Using the fee-per-bag program implemented in Taipei City, Taiwan, as a case study, we found that unit pricing does reduce the amount of garbage but its impact on recycling is not as significant as the current literature suggests. Moreover, the program causes a serious negative externality: more than 60%?of the garbage reduction in the city is due to increased dumping of waste in neighboring regions. As the impact of unit‐pricing on recycling is limited, policy-makers cannot rely solely on this program to enhance recycling in the management of municipal solid waste.     

Effects of male sexual harassment on female time budgets,feeding behavior,and metabolic rates in a tropical livebearing fish (<Emphasis Type="Italic">Poecilia mexicana</Emphasis>)

Sexual harassment by males has the potential to affect almost any aspect of female behavior and life history. Using Atlantic mollies (Poecilia mexicana) as a model—a species in which males do not court but almost constantly try to forcefully mate with females—we asked whether and how male harassment influences (a) females’ time budgets and (b) feeding rates (e.g., through frequent flight from male approaches), and (c) whether metabolic rates are increased as a response to stress. Field observations in a natural P. mexicana population revealed that males (average feeding rate 15%) spent far less time feeding than females (60%), and clearly traded off frequent pursuit of females with foraging. Most importantly, females’ feeding times were dramatically reduced when being pursued by a harassing male. Also in standardized lab experiments, females spent significantly less time feeding when accompanied by a male as compared to being in the presence of another female. This effect was also observed when partner fish (male or female) were presented only visually, but could not interact physically with the focal female. It seems, therefore, that females increase vigilance when a harassing male is around, which keeps them from feeding even before males actually approach them. Based on the latter result, we asked whether a stress-induced increase in metabolic rates would be discernible. We measured oxygen consumption and gill ventilation frequencies (opercular rates) of females in different social contexts (alone, with another female, or a male). The predicted, strong body mass dependency of both physiological parameters was uncovered, but no evidence for an effect of social context was detected. We argue that male harassment represents such a constant (but non-lethal) stressor for poeciliid females that their metabolic stress responses have adapted to this through habituation.