A note on the allocation of investment

It is shown by example that the results obtained by Gruver [11 concerning specialization of investment in either directly productive or pollution control capital arise because of an implicit linearity assumption on the underlying technology. Utilizing a strictly concave “eighth sphere” technology, results are obtained which imply joint investment in the two types of capital except in “rare” instances. The results indicate the need for incorporating more general technologies into the analysis of such problems.     

Plant vintages, grandfathering, and environmental policy

Environmental regulations that grandfather existing plants, by not holding them to the same strict standards as new plants, may have the unintended consequence of retarding new investment. If new plants are cleaner, then this effect may increase pollution in the short run. I develop a dynamic model of a facility’s decisions over scrapping and abatement, which depend on capital depreciation, profitability shocks, and environmental policy. Using data from fossil fuel fired boilers at electric power plants, I estimate the structural parameters of the model and assess the impact of grandfathering in the Clean Air Act on sulfur dioxide emissions. Counterfactual policy simulations show that an increase in the stringency of performance standards would have led to a decrease in investment in new boilers. However, this does not lead to increased emissions, since there is less investment in dirtier coal boilers as compared to relatively cleaner oil or natural gas boilers.     

Environmental policy and human capital inequality: A matter of life and death

This paper analyzes the economic implications of an environmental policy when we account for the life expectancy of heterogeneous agents. In a framework in which everyone suffers from pollution but health status also depends on individual human capital, we find that the economy may be stuck in a trap in which inequality rises steadily, especially when the initial pollution intensity of production is too high. We emphasize that such inequality is in the long run costly for the economy in terms of health and growth. Therefore, we study whether a tax on pollution associated with an investment in pollution abatement can be used to address this situation. We show that a stricter environmental policy may allow the economy to escape from the inequality trap while enhancing the long-term growth rate when the initial inequality in human capital is not too large.     

Strategic pollution control and capital tax competition

In an analytical model of symmetric countries with mobile capital and local or transboundary pollution we investigate whether competition in emissions taxes (or emissions caps) and capital taxes leads to efficient outcomes when governments act strategically. When they have capital taxes and emissions caps at their disposal, they refrain from taxing capital and set their caps inefficiently lax [efficient] for transboundary [local] pollution. When they have the option to tax capital and emissions, capital is subsidized [untaxed] and emissions taxes are inefficiently low [efficient] for transboundary [local] pollution. In case of transboundary pollution emissions caps are Pareto-superior to emissions taxes. That holds regardless of whether the environmental policy is applied as stand-alone policy or combined with capital tax competition.     

Pollution and Capital Markets in Developing Countries

It is said that firms in developing countries do not have incentives to invest in pollution control because of weak implementation of environmental regulations. This argument assumes that the regulator is the only agent that can create incentives for pollution control, and ignores that capital markets, if properly informed, may provide the appropriate financial and reputational incentives. We show that capital markets in Argentina, Chile, Mexico, and the Philippines do react to announcements of environmental events, such as those of superior environmental performance or citizens' complaints. A policy implication is that environmental regulators in developing countries may explicitly harness those market forces by introducing structured programs of information release pertaining to firms' environmental performance: public disclosure mechanisms in developing countries may be a useful model to consider given limited government enforcement resources.     

Cross-Hauling of Polluting Factors

This paper analyzes the investment/environment overlap using a two stage model of two jurisdictions. Capital exports are modeled as choice variables for capital owners who weigh income considerations against the effects of capital exports on the quality of their local environments and on environmental policy. This framework reveals that capital owners have an incentive to cross-haul polluting factors across jurisdictions when direct controls are used to regulate emissions and that this cross-hauling induces policymakers to ratchet up environmental policies in both locations. The importance of instrument type and commitment on environmental policy is also analyzed.     

Economic growth and environmental pollution under the max-min principle

This paper first analyzes the interactions between capital accumulation and environmental pollution under the program of sustained constant utility, which depends on per capita consumption and pollution, over all generations. Then the optimal program of economic growth is discussed. The implications of the constant-utility criterion (or the max-min principle) are compared with those of the utilitarian criterion which has been widely adopted in environmental pollution literature. Subsequently, the analysis incorporates pollution-abatement investment and exhaustible resources. We conclude that the max-min principle works fairly satisfactorily in this world.     

Welfare cost of pollution control

A model of joint-production of a conventional output and of pollutants is presented, within which continuous substitution between polluting fuels and nonpolluting inputs on the one hand and pollution control inputs on the other is allowed for. Using the steel industry as a case study, the welfare cost under an efficient policy to reduce particulate emissions is evaluated and compared with that under alternative inefficient policies. The results suggest that substantial cost savings can be made by following the “optimal” policy.     

A Bayesian hierarchical model for assessing the impact of human activity on nitrogen dioxide concentrations in Europe

Ambient concentrations of many pollutants are associated with emissions due to human activity, such as road transport and other combustion sources. In this paper we consider air pollution as a multi-level phenomenon on a continental scale within a Bayesian hierarchical model. We examine different scales of variation in pollution concentrations ranging from large scale transboundary effects to more localised effects which are directly related to human activity. Specifically, in the first stage of the model, we isolate underlying patterns in pollution concentrations due to global factors such as underlying climate and topography, which are modelled together with spatial structure. At this stage measurements from monitoring sites located within rural areas are used which, as far as possible, are chosen to reflect background concentrations. Having isolated these global effects, in the second stage we assess the effects of human activity on pollution in urban areas. The proposed model was applied to concentrations of nitrogen dioxide measured throughout the EU for which significant increases are found to be associated with human activity in urban areas. The approach proposed here provides valuable information that could be used in performing health impact assessments and to inform policy.     

Environmental policies and productivity growth: Evidence across industries and firms

This paper investigates the impact of changes in environmental policy stringency on industry- and firm-level productivity growth in a panel of OECD countries. To test the strong version of the Porter Hypothesis (PH), we extend a neo-Schumpeterian productivity model to allow for effects of environmental policies. We use a new environmental policy stringency (EPS) index and let the effect of countries׳ environmental policies vary with the pollution intensity of the industry and with the countries’ and firms’ technological advancement. A tightening of environmental policy is associated with a short-term increase in industry-level productivity growth in the most technologically-advanced countries. This effect diminishes with the distance to the global productivity frontier, eventually becoming insignificant. For the average firm, no evidence of PH is found. However, the most productive firms see a temporary boost in productivity growth, while the less productive ones experience a productivity slowdown.     

我国水污染防治的战略与政策的探讨

我国大部分城市污水的95%未经处理排放入水体,城市地区的水质有继续恶化的趋势,甚至许多城镇的下水管网尚不完善.随着城市化和工业化的发展,城市污水将继续增加.我国在污水处理中投资不足和水污染规模大这一不相适应的矛盾将会在相当长的一个时期内存在.解决我国水污染的根本原则是供求最大的费用—有效性.未来水污染防治的政策要点是:1.集中力量于源头削减污染产生量;2.建立按总量控制的流域级水污染防治的方法和示范工程;3.在投资和管理体制上建立以城市污水集中处理的市场经济刺激机制.     

Optimal investment policies with exhaustible resources: An information-based model

An information-based model of the “optimal control” type is developed using concepts from information theory to explore the dynamics of fossil resource exhaustion and the phenomenon of substitution by other forms of capital and technological knowledge. All exhaustible resources stocks and forms of capital (and knowledge) are taken to be equivalent to forms of information in the physical sense. It is shown that, with optimal policies, the planning period, or cycle, has several distinct phases, with different optimal investment patterns. The model has two important qualitative implications: (1) economic growth rates are inherently discontinuous and (2) the model predicts an evolutionary structural change, viz., the creation of a new sector in response to the progressive exhaustion (or obsolescence) of previously essential resources or capital stocks. A multiperiod extension is suggested, leading to a tentative explanation for the Kondratieff long-wave phenomenon.     

我国城市污水处理的有效措施

我国水环境污染和水资源短缺,促进了污水处理厂的建设,而污水处理工艺在很大程度上决定了污水处理厂的投资、基建费用、用地和运行管理费用。文章介绍了我国有污水处理厂的工艺、投资和运行费用。结合我国的基本国情,提出了建立经济有效的处理工艺的措施。     

小流域面源污染减控措施优化管理

以长春市重要饮用水源地石头口门水库的莫家沟小流域为研究区,选择横垄耕作、修建梯田、退耕还林、化肥减施和人工湿地5种措施进行磷素削减处理,共计21个措施组合方案;以实施措施的费用最小为目标函数,以水库水质TP浓度和采用不同措施的土地面积为约束条件,建立小流域出口水质优化管理模型。模拟计算3个阶段的可行性最优方案分别为:2011—2020年,选取措施为施肥量不变,现状梯田面积不变,坡度≤5°的耕地采取横垄耕作,其他退耕还林;2021—2030年,在第一阶段实施方案的基础上,新建人工湿地0.03 km2;2031—2050年,全部农田原位退耕还林,保持人工湿地面积不变,最终实现入库水质ρ(TP)≤0.01 mg.L-1的目标。化肥减施和梯田建设面积是影响方案选择的主要因素。     

Optimal monitoring and control under state uncertainty: Application to lionfish management

State variables in many renewable resource management problems, such as the abundance of a fish stock, are imperfectly observed over time. In systems characterized by state uncertainty, decision makers often invest in monitoring to learn about the level of a stock. We develop a stochastic bioeconomic model of marine invasive species management under state uncertainty. The decision maker in our model simultaneously evaluates optimal investment in monitoring and population control. Using a recently-devised method for solving continuous-state Partially Observable Markov Decision Processes (POMDPs), we find that the ability to learn through monitoring can alter the role of population control in the optimal policy function, for example by reducing control intensity in favor of monitoring. Optimal monitoring depends on the management context, including in our application lionfish population structure. The rich transient dynamics of our model depend critically on the relationship between the initial conditions for information and invader abundance.     

Cost-sharing approach for air quality control implementation A case study

The objective of the study was to investigate and develop new alternative approaches to effectively meeting the federal SOx and particulate ambient air quality standards at cost savings. Since air pollution control costs would very likely be passed along to the consumer, it is in the best interests of the consumer and industry to find the least-cost alternative policies. Cost-sharing possesses advantages not shared by other control schemes, such as emissions taxes, auctioning of “pollution certificates,” or other methods. The results of this paper indicate that the cost-sharing approach is useful for particulates control in order to minimize the burden of plants already performing substantial control who may require significant added capital investment beyond their initial amount. For SO_ξ emissions control the cost-sharing analysis calculations show significant savings in nearly all situations, whether or not stack gas treatment methods were assumed available. Furthermore, the cost-sharing approach may allow further savings when the particular cost requirements of an individual firm differ substantially from the average engineering cost estimates. A cost-sharing option should thus be included in implementation plans as an option to be used by industries at their own initiative. The spatial characteristics of emissions resulting from a particular application of the cost-sharing approach are considered. A spatial airshed emissions allocation model is discussed as a useful method of evaluating cost sharing.     

Household incidence of pollution control policies: A robust welfare analysis using general equilibrium effects

This study assesses the incidence of pollution control policies on households. In contrast to previous studies, we employ an integrated framework combining a multisector general equilibrium model with a stochastic dominance analysis using household-level data. We consider three policy instruments in a domestic emission trading system: (i) an output-based allocation (OBA) of permits; (ii) the use of the proceeds of permit sales to reduce payroll taxes (RPT); (iii) and the use of these proceeds to reduce consumption taxes instead (UCS). The general equilibrium results suggest that the return to capital is more negatively affected than the wage rate in all simulations, since polluting industries are capital intensive. Abstracting from pollution externalities, the dominance analysis suggests that all three policies have a normatively robust negative (positive) impact on welfare (poverty). Formal dominance tests indicate that RPT first-order welfare dominates OBA over all values of household incomes. UCS also first-order poverty dominates RPT for any choice of poverty line below $CAN 18,600, and poverty dominates for any poverty line (and thus welfare dominates) at the second order. Finally, while the three pollution control policies do not have a numerically large impact on inequality (in comparison to the base run), statistical tests indicate that inequality increases significantly more with OBA and RPT than with UCS.     

North–South Investment Flows and Optimal Environmental Policies

In the context of a simple North–South model that focuses on the international movement of capital, we show how neglect of pollution-generating effects of foreign investment may lead to distorted and misleading policy recommendations. Such a neglect has recently received emphasis in the empirical literature on East Asian economies, as in Bello and Rosenfeld (1990, “Dragons in Distress: Asia's Miracle Economics in Crisis,” Food First, San Francisco), and was shown to overlook resulting tendencies in these economies toward specialization, away from agriculture and toward manufacturing. Our simple model formalizes this observation and allows us to show that even for an unspecialized capital-poor, resource-rich South, such pollution-generating effects provide incentives for the North to encourage, rather than to discourage, foreign investment abroad and strengthen Southern incentives to restrict foreign investment more sharply than is conventionally assumed. In a nutshell, it brings out the implications of Northern capital “creating its own demand” as a consequence of its adverse impact on the Southern resource base. Despite its simplicity, the model thus sheds light on three interrelated aspects of international trading relations: production asymmetry, incomplete markets, and monopolistic advantage.     

Municipal wastewater treatment cost

The cost of control for conventional pollutants at municipal wastewater treatment plants is examined. Empirical estimates of the effect of performance measures as well as the flow size of the waste stream are obtained for both the capital and the operation and maintenance components of total facility cost. These estimates are used to calculate the marginal cost per pound of pollution control over the range of effluent concentration beyond secondary treatment. The implications of the results for current environmental policy issues are outlined.     

Control theory applied to natural and environmental resources an exposition

Four control theory models of natural and environmental resource use, drawn from the existing literature, are developed in a manner to emphasize their technical and decentralized interpretive similarity. Renewable, nonrenewable, and amenity resource use are treated as closely related problems of optimal (biological, earth material, ecological, or environmental) capital allocation over time. Thus nonrenewable resources, and the problem of exhaustion, are just limiting (zero growth) cases of renewable resources, and the problem of species extinction. Just as exhaustion can be optimal, extinction can be optimal. Waste recycling is treated as part of the problem of optimal regeneration of “sclean” environmental capital; wilderness use as a problem of managing the regeneration of ecological capital.