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.     

Development of environmental policy,objectives, and targets

This paper describes a process to develop and establish an environmental policy and its associated environmental targets, objectives, and management programmes. The environmental policy is defined in a statement which addresses the company expectations for programmes that are important to assure adequate environmental protection and define its future commitment towards preventing pollution and continuously improving the effectiveness of its environmental protection programmes. A set of environmental objectives, derived from the policy, define the overall goals which will ensure that the company's environmental performance will remain consistent with the commitment identified in its policy when its environmental management system (EMS) is implemented, Environmental targets reflect the requirements and standards that the company must strive to achieve each objective and minimize any harmful environmental impacts from its production and manufacturing processes or other activities. In addition to defining specific targets, environmental management programmes are also used to guide EMS implementation. These programmes, however, must provide the company with the necessary flexibility to select the most appropriate technologies to enhance its own processes and prudently allocate its available financial resources in areas that return the greatest overall environmental benefit.Though they are expected to allow some discretion in the allocation of resources targeted towards environmental protection, EMS programmes must also provide assurance that the corporation environmental policy, objectives, targets, and management programmes do not result in a facility failure to adhere to all of its certification requirements. The principle and factors described in this article should be considered to the extent that they are necessary and practical.     

Trade liberalization, corruption, and environmental policy formation: theory and evidence

This study explores the linkages between trade policy, corruption, and environmental policy. We begin by presenting a theoretical model that produces several testable predictions, including: (i) the effect of trade liberalization on the stringency of environmental policy depends on the level of corruption; and (ii) corruption reduces environmental policy stringency. Using panel data from a mix of developed and developing countries from 1982 to 1992, we find evidence that supports these conjectures. We view these results as representing an attempt at understanding the myriad of complex relationships that exist in an open economy.     

Pollution,welfare, and environmental policy in the theory of Comparative Advantage

Within a simple two-sector general equilibrium model it is shown how some well-known propositions of the neoclassical trade theory can be applied to countries with pollution-generating industries. Results are obtained not only under the assumption that the countries do not enforce any environmental policy but also for the case that one or each country implements an environmental price and standard system. In particular, several versions of the Theorem of Comparative Advantage with respect to environmental scarcity are derived, a theorem on welfare losses from trade, and an emission charge equalization theorem.     

Analysis of the current situation of environmental policy of China and establishment of distributed environmental policy framework

In this study, China’s current macro-environmental policies as well as their implementation and management tools are analyzed. By using the basic economic methodology, detailed studies are conducted focusing on the implementation effect of contemporary China’s typical environmental policy of the total pollutant discharge quantity control type, and also the two types of environmental management tools are compared from the perspective of implementation costs and policy uncertainty. By introduction of distributed management tools into the implementation of environmental policies, market-oriented means and the methods of economic analysis are introduced into environmental policy decision-making mechanisms, which could afford a new method for changing the current relatively low efficiency of environmental policy, solving the problem of “government failure” in environmental policy implementation, and providing a new way to make environmental policy system more flexible and more efficient. It is of great practical significance to solve China's current structural, complex and accumulative environmental problems.     

Modeling plant competition along an environmental gradient

The effect of an environmental gradient on inter-specific plant competitive interactions is modeled in a simple empirical model with biologically interpretable parameters. The model allows testing of hypotheses on the effect of the gradient on plant competitive interactions, as well as making ecological predictions from simple competition experiments using standard statistical procedures. The model, which is general and can be applied to different abiotic and biotic environmental gradients, is applied to a specific case of two competing Arabidopsis thaliana genotypes along a gradient of the general fungal pathogen Peronospora parasitica. One of the A. thaliana genotype is susceptible to the fungal pathogen P. parasitica and the other genotype is resistant. The Bayesian posterior distribution of the probability that the resistant genotype outcompetes the susceptible genotype is calculated as a function of the pathogen level. The design of the studied A. thaliana competition experiments is the minimum required experimental design needed to apply the model.     

Relating environmental modeling to policy issues and decisions

This paper describes a linear program-based computer model which has been developed to identify the most effective spending patterns for environmental cleanup based on public preferences and spending limitations. The inputs to the model include the costs of removing each residual studied from its various sources. The objective function is the total “value of removal”. The factor added for each residual consists of a value for the residual multiplied by the quantity or fraction removed.Results of the analysis relate to and support current and projected policy decisions by the U.S. Environmental Protection Agency (EPA) for air and water programs. In addition, the results of the analysis suggest that EPA undertake a redirection of the Nation's resources among residual control programs.     

Implementing second-best environmental policy under adverse selection

A key obstacle to practical application of mechanism design theory to regulation is the difficulty of obtaining consistent beliefs regarding information that theoretical models assume to be commonly held. This article presents a solution to this problem by developing an easily implemented empirical methodology with which the government can use available data to develop beliefs regarding the technology and distribution of types in a regulated sector characterized by hidden information. Results are used to calibrate a second-best land conservation mechanism and evaluate its cost relative to simpler alternatives.     

Wilderness forms and their implications for global environmental policy and conservation

With the intention of securing industry-free land and seascapes, protecting wilderness entered international policy as a formal target for the first time in the zero draft of the Post-2020 Global Biodiversity Framework under the Convention on Biological Diversity. Given this increased prominence in international policy, it is timely to consider the extent to which the construct of wilderness supports global conservation objectives. We evaluated the construct by overlaying recently updated cumulative human pressure maps that offer a global-scale delineation of industry-free land as wilderness with maps of carbon stock, species richness, and ground travel time from urban centers. Wilderness areas took variable forms in relation to carbon stock, species richness, and proximity to urban centers, where 10% of wilderness areas represented high carbon and species richness, 20% low carbon and species richness, and 3% high levels of remoteness (>48 h), carbon, and species richness. Approximately 35% of all remaining wilderness in 2013 was accessible in <24 h of travel time from urban centers. Although the construct of wilderness can be used to secure benefits in specific contexts, its application in conservation must account for contextual and social implications. The diverse characterization of wilderness under a global environmental conservation lens shows that a nuanced framing and application of the construct is needed to improve understanding, communication, and retention of its variable forms as industry-free places.     

Cost-effective environmental policy: implications of induced technological change

Cost-effective environmental policy generally requires that all emission sources are faced with the same tax. In this paper I discuss how the existence of induced technological change may alter this result, if at least some of the effect is external to the firm. Focusing on Learning by doing (LBD) effects in abatement activities, it is shown that emission sources with external learning effects should be faced with a higher tax than emission sources with only autonomous technological change. By using simple numerical simulations, it is further investigated to what degree a cost-effective climate policy differs from a free quota market, under various assumptions about learning effects, diffusion of technology and environmental targets. The results indicate that optimal taxes may be significantly higher in the industrial world than in the developing world. Moreover, the industrial world's share of global abatement may be much higher in a cost-effective solution than in a free quota market. The global cost savings of a fully flexible implementation of the Kyoto Protocol are further questioned, as potential spillover effects of technological growth in the industrial world are not internalised in the market.     

Strategic environmental policy; eco-dumping or a green strategy?

The Porter hypothesis claims that a strong environmental policy best serves the interests of a nation's export industry. While this hypothesis seems to be based on some form of bounded rationality, this paper argues that governments may have good reasons for setting an especially strong environmental policy even though firms are fully rational. If the available abatement technology turns the environment into an “inferior input”, competitiveness is spurred by a strong environmental policy. The government should take advantage of this, and set an especially strict emission quota or an especially high emission tax. The findings in the paper also has consequences for the desirability of international cooperation with respect to national environmental policy. If a strict environmental policy spurs competitiveness, the environment is better protected without cooperation.     

The roles of competition and environmental heterogeneity in the maintenance of behavioral variation and covariation

Many models of selection predict that populations will lose variation in traits that affect fitness. Nonetheless, phenotypic variation is commonly observed in natural populations. We tested the influences of competition and spatial heterogeneity on behavioral variation within and among populations of Merriam's kangaroo rats (Dipodomys merriami) and tested for the differential expression of trait correlations. We found that populations of D. merriami exhibited more aggression at sites with more competition. Contrary to theoretical predictions and empirical results in other systems, the sites with the greatest spatial heterogeneity and highest levels of competition did not exhibit the most behavioral variation among individuals. However, the greatest within-individual behavioral variability in boldness (response to cues of predator presence) was exhibited where spatial heterogeneity was highest. Aggression and boldness of D. merriami were highly repeatable, that is, individuals behaved in a consistent manner over time, and the two behaviors were also highly correlated. Interestingly, the strength of this correlation was greatest where the competitive community was least diverse. These findings add to increasing evidence that natural populations of animals exhibit patterns of behavioral covariance, or personality structure, and suggest that competitive variation may act to erode personality structure.     

Corruption and forest concessions

We examine how corruption impacts a central government's application of concession policy instruments consisting of royalty rates, concession size, environmentally sensitive logging levels, and enforcement. Harvesters have incentives to illegally log by taking more volume than is allowed, high grading through removal of only the highest valued and best formed trees, and shirking environmentally sensitive logging requirements, all of which reduce public goods produced from native tropical forests. Corruption is introduced through logging inspectors who can be bribed by harvesters to avoid fines associated with illegal logging. Both the theory and a simulation are used to compare policy design under corruption and no corruption.     

Within-group spatial position in ring-tailed coatis: balancing predation, feeding competition, and social competition

A variety of factors can influence an individual’s choice of within-group spatial position. For terrestrial social animals, predation, feeding success, and social competition are thought to be three of the most important variables. The relative importance of these three factors was investigated in groups of ring-tailed coatis (Nasua nasua) in Iguazú, Argentina. Different age/sex classes responded differently to these three variables. Coatis were found in close proximity to their own age/sex class more often than random, and three out of four age/sex classes were found to exhibit within-group spatial position preferences which differed from random. Juveniles were located more often at the front edge and were rarely found at the back of the group. Juveniles appeared to choose spatial locations based on feeding success and not predation avoidance. Since juveniles are the most susceptible to predation and presumably have less prior knowledge of food source location, these results have important implications in relation to predator-sensitive foraging and models of democratic group leadership. Subadults were subordinate to adult females, and their relationships were characterized by high levels of aggression. This aggression was especially common during the first half of the coati year (Nov–April), and subadults were more peripheralized during this time period. Subadults likely chose spatial positions to avoid aggression and were actively excluded from the center of the group by adult females. In the Iguazú coati groups, it appeared that food acquisition and social agonism were the major determinants driving spatial choice, while predation played little or no role. This paper demonstrates that within-group spatial structure can be a complex process shaped by differences in body size and nutritional requirements, food patch size and depletion rate, and social dominance status. How and why these factors interact is important to understanding the costs and benefits of sociality and emergent properties of animal group formation.     

Optimal environmental policy for waste disposal and recycling when firms are not compliant

We investigate a model that considers disposal and recycling activities after the consumption of products. In the field, the deposit–refund (D–R) policy has been considered as an ideal policy for internalizing disposal costs, which can result in the realization of the first-best policy. However, the possibility of firms' illegal disposal has been neglected. We introduce a monitoring cost to prevent firms from disposing of collected residuals illegally and induce the second-best D–R policy. We find that the relation between the monitoring problem for firms and the price of the recycling market brings about a variation in the optimal level of the refunds (which is typically smaller than the first-best level). Further, we investigate an alternative policy that requires producers to take-back residuals and show how this policy works equivalently to the second-best D–R policy by applying the theory of the tradable rights market.     

Best policy response to environmental shocks: Applying a stochastic framework

The paper develops a general framework for the analysis of environmental shocks in growing economies. Endogenous capital investments allow identifying the dual role of capital as a buffer against shocks and a source of pollution. We study the effects of recurring natural disasters on optimal growth and efficient environmental policies. Emissions may cause continuous fluctuations, entail discrete and recurring jumps, or trigger so-called “tipping points” with large costs to the economy. Closed-form solutions are provided for all the model variants. We discuss possible applications in environmental economics and identify current research gaps.     

Pollution Haven and Corruption Paradise

In this paper, we present a simple theoretical extension from the Economic Geography literature to characterize the main features of pollution havens (lax environmental regulation, good market access to high-income countries and corruption opportunities). Using structural and reduced-form estimations, we find that pollution havens are not a “popular myth” for European firms, laxer environmental standards significantly explain the location choice of polluting affiliates. We analyze in depth the role of trade costs (using various bilateral and multilateral measures), a 1% increase in access to the European market from a pollution haven fosters relocation there by 0.1%. We also find that corruption lowers environmental standards, which strongly attract polluting firms: a 1% increase of corruption fuels relocation by 0.28%. We test the economic significance of these empirical findings via simulations. The protection of the European market (e.g., a carbon tax on imports) to stop relocations to pollution havens must be high (a decrease of the European market for Morocco and Tunisia equivalent to 13%) not to say prohibitive (31% for China).     

Two-goal environmental policy: An integration of micro and micro ad hoc decision rules

A method of predicting and comparing the immediate impact of different environmental policies and of selecting the optimal policy is suggested in this paper. The degradation of water quality by a polluting industry is used to demonstrate this approach. Aggregation over this industry consists of firms with “putty clay” properties in production, and credit constraints in the capital market generate the macrorelations. The macrorelations which depend on the level of the policy variables are expressed in terms of probabilities and moments of the distribution of the microrelations and are used for different planning purposes.     

Transient dynamics of invasive competition: barred owls, spotted owls, habitat, and the demons of competition present

The recent range expansion of Barred Owls (Strix varia) into the Pacific Northwest, where the species now co-occurs with the endemic Northern Spotted Owl (Strix occidentalis caurina), resulted in a unique opportunity to investigate potential competition between two congeneric, previously allopatric species. The primary criticism of early competition research was the use of current species' distribution patterns to infer past processes; however, the recent expansion of the Barred Owl and the ability to model the processes that result in site occupancy (i.e., colonization and extinction) allowed us to address the competitive process directly rather than inferring past processes through current patterns. The purpose of our study was to determine whether Barred Owls had any negative effects on occupancy dynamics of nesting territories by Northern Spotted Owls and how these effects were influenced by habitat characteristics of Spotted Owl territories. We used single-species, multi-season occupancy models and covariates quantifying Barred Owl detections and habitat characteristics to model extinction and colonization rates of Spotted Owl pairs in southern Oregon, USA. We observed a strong, negative association between Barred Owl detections and colonization rates and a strong positive effect of Barred Owl detections on extinction rates of Spotted Owls. We observed increased extinction rates in response to decreased amounts of old forest at the territory core and higher colonization rates when old-forest habitat was less fragmented. Annual site occupancy for pairs reflected the strong effects of Barred Owls on occupancy dynamics with much lower occupancy rates predicted for territories where Barred Owls were detected. The strong Barred Owl and habitat effects on occupancy dynamics of Spotted Owls provided evidence of interference competition between the species. These effects increase the importance of conserving large amounts of contiguous, old-forest habitat to maintain Northern Spotted Owls in the landscape.