Intertemporal and intergenerational Pareto efficiency: A reconsideration of recent extensions

The purpose of this paper is to respond to criticism of the previous representations of Sandler and Smith of the numeraire in an intertemporal analysis of Pareto efficiency conditions. This reexamination suggests that the role of the numeraire is shown to be less clear-cut than Cabe implies. Moreover, the analysis indicates that the earlier conclusions are not crucially dependent on the numeraire assumption.     

Intertemporal and intergenerational pareto efficiency revisited

This paper demonstrates that Bishop's formulation deviates in a fundamental way from our model and, in so doing, Bishop has assumed the problem away. Bishop utilizes a utility function that is too general to discriminate the time pattern of consumption from that of production. Hence, the intertemporal nature of the goods that we analyzed cannot be captured by Bishop's representation. Furthermore, we show that current benefit cost methods that discount the benefit stream of a public asset are Pareto intertemporally inefficient.     

Intertemporal and intergenerational pareto efficiency: A comment

In a recent issue of this Journal, Sandler and Smith developed an analysis from which they concluded that discounting is Pareto inefficient in an intertemporal context. This comment questions the validity of that conclusion and demonstrates the essential role played by the discount rate in achieving intertemporal Pareto efficiency within a market economy.     

Intertemporal and intergenerational pareto efficiency: An extended theorem

In 1976 Sandler and Smith developed a concept of intertemporal Pareto efficiency and derived optimality conditions for a variety of specifications of the intertemporal characteristics of both public and private goods. This analysis led to the conclusion that any discounting of the benefits of a good that is public across generations (or time) as well as individuals would be Pareto inefficient. In this paper it is argued that such a conclusion is warranted only under an unlikely specification of the intertemporal transformation function.     

Intertemporal quota arbitrage in multispecies fisheries

In the management of natural resources, regulation often induces behavioral responses by resource users that ultimately undermine stated policy objectives. Examples of these unintended consequences have been associated with regulations ranging from the Endangered Species Act to laws governing clean air. In this paper we investigate an unintended behavioral response that can be triggered by conservation measures in multispecies fishery management, which leads to increased targeting of the species the conservation measures are meant to protect. Harvest is subject to stochastic variation, with output partially determined by the probability of encountering species of interest, either due to targeting or avoidance. Given the right conditions, an intertemporal arbitrage opportunity arises due to the fact that by targeting a stock in the current period, the probability of encountering that stock in the next period, when announced conservation measures are implemented, decreases. We present an empirical case study that supports the findings of the theoretical model. The results indicate that, by targeting so called weak stocks, some New England fishermen are willing to trade off increased costs today for increased expected profits in the future. To prevent the potentially harmful effects of this behavioral response, a manager may adopt precautionary provisions at the time a quota reduction is announced, or alternatively allow the industry to bank part of its current season's quota in order to alleviate the consequences of the reduction in the ensuing period. These results highlight the challenge of developing effective conservation strategies.     

Intertemporal environmental management with a storable pollutant

A model is developed which allows decisions on generation and emission of an environmental pollutant to be separated in time. After deducing and discussing the necessary conditions for the socially optimal time pattern of generation and emission the possibility of using pollution taxation to motivate this optimal solution is investigated. The principle finding is that there exists no time pattern of fixed per-unit pollution taxes that will result in optimality. In particular, this demonstrates the failure of that pattern of fixed per-unit taxes which reflects the optimal marginal social cost of emission at each point in time.     

Intertemporal production externalities,technical change,and public expenditure analysis

This paper discusses the implications of relative price change for public expenditure analysis involving natural environments. It develops a model which identifies those demand and supply factors which must be considered in the evaluation of the time stream of benefits associated with the amenity services provided by natural environments in their preserved status.     

A Model of Intertemporal Emission Trading, Banking, and Borrowing

This paper provides a general treatment of emission trading, banking, and borrowing in an intertemporal, continuous-time model. Using optimal-control theory, the decentralized behavior of firms is shown to lead to the least-cost solution attainable under joint-cost minimization. Explicit solutions for the time paths of emissions and permit prices are derived when firms are allowed to both bank and borrow and when firms are only allowed to bank emission permits. The policy implications of emission banking and borrowing are discussed.     

Pollution perception: A challenge for intergenerational equity

In this article we extend the recent literature on overlapping generations and pollution by allowing generations to perceive the level of pollution differently than the actual level of pollution. We call this pollution perception. Pollution perception can visualize itself as either a concern for the flow of pollution only, or for the stock, or a combination of both. We derive this extension based on empirical evidence from recent advances in behavioural economics.Pollution perception has not only significant consequences for the steady state levels of pollution and capital, but we also find a qualitative change in the dynamics from similar models without pollution perception [A. John, R. Pecchenino, An overlapping generations model of growth and the environment, Econ. J. 104 (1994) 1393–1410]. Specifically, we derive optimal non-linear dynamics through complex eigenvalues and Hopf or Flip bifurcations for a large set of parameters. This leads to violations of two standard criteria of sustainability, suggesting that pollution perception can be another source of intergenerational inequity.     

Lifetime and intergenerational fitness consequences of harmful male interactions for female lizards

Male mating behaviors harmful to females have been described in a wide range of species. However, the direct and indirect fitness consequences of harmful male behaviors have been rarely quantified for females and their offspring, especially for long-lived organisms under natural conditions. Here, lifetime and intergenerational consequences of harmful male interactions were investigated in female common lizards (Lacerta vivipara) using field experiments. We exposed females to male harm by changing the population sex ratio from a normal female-biased to an experimental male-biased sex ratio during the first experimental year. Thereafter, females and their first generation of offspring were monitored during two additional years in a common garden with a female-biased sex ratio. We found strong immediate fitness costs and lower lifetime reproductive success in females subjected to increased male exposure. The immediate fitness costs were partly mitigated by direct compensatory responses after exposure to male excess, but not by indirect benefits through offspring growth, offspring survival, or mating success of offspring. These results support recent empirical findings showing that the direct costs of mating are not outweighed by indirect benefits.     

A mixed Bentham–Rawls criterion for intergenerational equity: Theory and implications

This paper proposes a welfare criterion that balances the need for development and the concern for the least advantaged generations, and explores its implications. This criterion, called the mixed Bentham–Rawls criterion, moderates the effect of discounting, yet permits some degree of intertemporal trade-off. It is a weighted average of two terms: (a) the sum of discounted utilities and (b) the utility level of the least advantaged generation. We derive necessary conditions to characterize growth paths that satisfy our criterion, and show that in some models with familiar dynamic specifications, an optimal path exists and displays appealing characteristics.     

Some efficient closed-form estimators of the parameters of the generalized Pareto distribution

Environmental and Ecological Statistics - In this paper, we consider several families of closed-form estimators of the two parameters of the Generalized Pareto Distribution (GPD). These estimators...     

Prospect theory and energy efficiency

Investments in energy efficiency entail uncertainty, and when faced with uncertainty consumers have been shown to behave according to prospect theory: preferences are reference-dependent and exhibit loss aversion, and probabilities are subjectively weighted. Using data from a choice experiment eliciting prospect theory parameters, I provide evidence that loss-averse people are less likely to invest in energy efficiency. Then, I consider policy design under prospect theory when there are also externalities from energy use. A higher degree of loss aversion implies a higher subsidy to energy efficiency. Numerical simulations suggest that the impact of prospect theory on policy may be substantial.     

Effects of Carbon Taxes in an Economy with Prior Tax Distortions: An Intertemporal General Equilibrium Analysis

This paper analyzes the costs of carbon taxes in a model that recognizes interactions between this tax and pre-existing taxes. First we examine the extent to which costs of a U.S. carbon tax are reduced when its revenues finance cuts in income taxes. Such use of revenues significantly reduces, but does not eliminate, the overall policy costs. The positive overall costs reflect the carbon tax′s focus on intermediate inputs and its relatively narrow base in comparison with income taxes. We also examine the sensitivity of the carbon tax′s costs to the level of pre-existing taxes. For any given use of revenues, welfare costs rise significantly with pre-existing tax rates, indicating that models disregarding pre-existing taxes may substantially understate the costs of new environmental tax initiatives.     

Diurnal photosynthesis, water use efficiency and light use efficiency of wheat under Mediterranean field conditions

Photosynthesis and transpiration rates of wheat leaves (Triticum aestivum L.) were measured at 30 min intervals under Mediterranean field conditions, using Photosynthesis Monitor system (PM-48M). The dynamics of net photosynthetic rate (P(N)), transpiration rate (E(T)), water use efficiency (WUE), light use efficiency (LUE), stomatal conductance (g(s)), photosynthetically active radiation (PAR), air temperature (T), relative humidity (RH), and atmospheric CO2 concentration (Catm) were quantified at five rainfed wheat sites with the same stages of development (midflowering) along south-to-north and east-to-west transects for eight days in April. Diurnal P(N) (3.6 to 6.6 micromol m(-2) s(-1)), PAR (392 to 564 micromol m2 sec(-1)), LUE (0.006 to 0.015) and WUE (0.0001 to 0.011) did not vary significantly across all five wheat sites (p > 0.05). P(N) and E(T) were strongly coupled and highly correlated with PAR (p < 0.001). Best multiple linear regression (MLR) models accounted for 92% of variations in P(N) as a function of PAR and E(T), and 90% in E(T) as a function of PAR and RH (p < 0.001). P(N) exhibited a peak at mid-morning, and a photosynthetic midday depression under the limiting effects of high evaporative demand. Diurnal variations in WUE and LUE showed a bimodal behavior with the maximum values in early morning and late afternoon. As the impacts of global climate change become increasingly felt, continuous measurements of climate-crop-soil-managementinteractions under natural conditions play a pivotal role not only in exploring changes in ecophysiological properties of strategic crops for food security such as wheat but also in devising preventive and mitigative management practices to ensure sustained agricultural productivity.     

Maximum power and efficiency: A rebutttal

In a recent paper, Silvert (1982) criticizes our 1955 formulation of the relation of efficiency to power (Odum and Pinkerton, 1955) and our times speed regulator principle that selection of systems for maximum power regulates the efficiency at a value that is neither as large nor as small as loadings could operate a system. The energy that must be degraded to maximize power in a restorage process we called entropy tax.Since there are other relevant literature, including our later discussions of power, efficiency and the maximum power principle, this note is supplied to correct and complement the discussion.     

Conservation and economic efficiency Alberta oil proration

Since 1950, Alberta oil production has been governed by production quotas, called proration. The nature and degree of the impact of proration on production efficiency is evaluated by applying a reservoir investment model and by comparing realized with minimum output costs. The main finding is that proration encouraged excessive investment in reservoirs of certain characteristics. The resulting substantial surplus investment would have been greater in the absence of other government regulations. The form of proration is important: earlier introduction of later measures would have produced significant savings.     

Measuring and decomposing changes in agricultural productivity, nitrogen use efficiency and cumulative exergy efficiency: Application to OECD agriculture

This paper uses an aggregate quantity space to decompose the temporal changes in nitrogen use efficiency and cumulative exergy use efficiency into changes of Moorsteen-Bjurek (MB) Total Factor Productivity (TFP) changes and changes in the aggregate nitrogen and cumulative exergy contents. Changes in productivity can be broken into technical change and changes in various efficiency measures such as technical efficiency, scale efficiency and residual mix efficiency. Changes in the aggregate nitrogen and cumulative exergy contents can be driven by changes in the quality of inputs and outputs and changes in the mixes of inputs and outputs. Also with cumulative exergy content analysis, changes in the efficiency in input production can increase or decrease the cumulative exergy transformity of agricultural production. The empirical study in 30 member countries of the Organisation for Economic Co-operation Development from 1990 to 2003 yielded some important findings. The production technology progressed but there were reductions in technical efficiency, scale efficiency and residual mix efficiency levels. This result suggests that the production frontier had shifted up but there existed lags in the responses of member countries to the technological change. Given TFP growth, improvements in nutrient use efficiency and cumulative exergy use efficiency were counteracted by reductions in the changes of the aggregate nitrogen contents ratio and aggregate cumulative exergy contents ratio. The empirical results also confirmed that different combinations of inputs and outputs as well as the quality of inputs and outputs could have more influence on the growth of nutrient and cumulative exergy use efficiency than factors that had driven productivity change.     

The theory of power and efficiency in ecology

Some previous work on the theory of power and optimal efficiency in ecology is shown to be either incorrect or of limited applicability. The standard analysis based on Atwood's machine is not valid, and the optimal efficiency for maximum power production depends on the characteristics of the individual system. For optimally foraging aquatic organisms the theoretical efficiency is less than 50% when the hydrodynamic flow is laminar, but under turbulent conditions the optimal efficiency can rise as high as 67%. Despite these restrictions it still appears plausible that ecological efficiency should be the same for broad classes of living organisms.