An economic analysis of environmental protection and management: An example from the Philippines

Summary The island of Palawan covers some 12000 km² and is located in the southwest of the Philippines archipelago. It is a beautiful and as yet relatively unspoilt island but in recent years the social and economic pressures on its natural resources and environment have begun to mount. If present trends continue, severe environmental damage will result. In recognition of this danger, the Philippines government and the European Economic Community have commissioned the preparation of an Integrated Environmental Program (IEP) for the island, as part of an overall economic development program. Phase one of the IEP study comprised an assessment of the island's resources and present situation and the formulation of a plan for the future protection of its environment, taking due account of the need for continuing economic development.An analysis was made of the likely economic returns from the proposed environmental protection program, using conventional benefit-cost analysis methodology. Due to the inadequate data base and the wide-ranging assumptions which had to be made, this was inevitably very approximate in nature. It was carried out in terms of the three main types of conservation activity proposed, namely land-based conservation, mangrove conservation and inshore marine conservation, and the program as a whole. The main benefits and costs were identified and, where appropriate, quantified for inclusion in the analysis.Choice of discount rate and length of analysis period are critical factors affecting the economics of environmental protection, which essentially involves the pursuit of long-term rather than short-term gains, output in the immediate future being restricted to the level of long-term sustained yield for the benefit of future generations. Use of the high discount rates customarily applied for project analysis in countries such as the Philippines (typically, 10–15 percent) places a heavy premium on short-term gains and attributes little or no value to benefits and costs further in the future. To take account of this problem the present values of costs and benefits were calculated using low discount rates of zero and 5 percent. Though this was a necessarily crude and arbitrary method of adjustment it was considered to be a better alternative than that of following normal convention and applying the high rates of discount customarily used in the Philippines.The analysis indicated that the various conservation activities could be expected to produce acceptable, though not spectacular, levels of economic return. Mangrove conservation would be particularly beneficial and the irrigation benefits from preserving river base flows and preventing an increase in peak floods, by means of catchment protection, would be high. The unquantifiable ecological and social benefits would also be substantial.Christopher Finney is Chief Economist of Hunting Technical Services Limited, UK, a major consulting firm involved in planning and implementation of agricultural development overseas, and has been with the firm since 1962. He is an agricultural economist with particular interest and experience in the fields of irrigation, livestock, farm mechanisation, general agriculture and conservation. He has worked on a wide variety of projects in numerous countries in Africa, Asia and Latin America. Mr Stanley Western is a senior soil scientist and land use planner with the same company. Since joining the firm in 1960 he has undertaken a very wide range of resource assessment and planning assignments in Asia, Africa and Latin America. He was Team Leader on the Palawan Integrated Environmental Program planning study.     

Comparative risk analysis for metropolitan solid waste management systems

Conventional solid waste management planning usually focuses on economic optimization, in which the related environmental impacts or risks are rarely considered. The purpose of this paper is to illustrate the methodology of how optimization concepts and techniques can be applied to structure and solve risk management problems such that the impacts of air pollution, leachate, traffic congestion, and noise increments can be regulated in the long-term planning of metropolitan solid waste management systems. Management alternatives are sequentially evaluated by adding several environmental risk control constraints stepwise in an attempt to improve the management strategies and reduce the risk impacts in the long run. Statistics associated with those risk control mechanisms are presented as well. Siting, routing, and financial decision making in such solid waste management systems can also be achieved with respect to various resource limitations and disposal requirements.     

Uncertainty in exhaustible natural resource economics: The irreversible sunk costs of Hotelling

According to Pindyck (2007) there are three important aspects of uncertainly in environmental economics: (1) the benefits and costs of environmental policy tend to be highly non-linear, (2) environmental policy tends to involve important irreversibilities, where investment in pollution abatement can impose an irreversible, sunk cost on society, and where certain pollutants can stay in the environment forever and build up to cause even more future harm in which case investment in abatement can cause an irreversible, sunk benefit to society, and (3) environmental policy involves long time horizons and yet the discount rate society should use is uncertain for determining the net present value of costs and benefits of pollution abatement. These same uncertainties also affect non-renewable, exhaustible, natural resource economics and in particular the use of the Hotelling rule: (1) the costs, benefits and transversality conditions of using the Hotelling rule can be highly non-linear, (2) the Hotelling rule involves important sunk cost irreversibilities, which will be explained here, and (3) the Hotelling rule can involve long time horizons with uncertain discount rates. All three of these problem make it extremely difficult for a market to use in any way the Hotelling rule, yet by the sheer number of articles in non-renewable natural resource economics, one would believe that it is the basis of all resource markets. In this article, we concentrate on the sunk cost irreversibilities of using the Hotelling rule. The idea of the Hotelling rule is to optimally store a non-renewable resource, but the optimization is highly dependent on the actual reserves that are available to extract. However, reserves of underground exhaustible resources are often unobservable at the beginning stages of extraction which makes using the Hotelling Rule difficult.     

苏州地区农村生活污水治理工程绩效审计评价体系的研究

现阶段我国的环境审计处于探索阶段,在审计对象上,以环境保护资金为主,在审计类型上,以财务收支审计为主,不能综合考虑环保工程的环境效益、经济效益和社会效益。为此,根据苏州地区农村生活污水治理工程的实际情况,通过大量的调研和长期的监测,并听取了经济、审计、环保专家的意见,建立了农村生活污水治理工程绩效审计评价体系,提出了科学、合理、可行的农村生活污水治理工程绩效审计评价方法。     

Time preference,the environment and the interests of future generations

The behavior of individuals currently living will generally have long-term consequences that affect the well-being of those who will come to live in the future. Intergenerational interdependencies of this nature raise difficult moral issues because only the current generation is in a position to decide on actions that will determine the nature of the world in which future generations will live. Although most are willing to attach some weight to the interests of future generations, many would argue that it is not necessary to treat these interests as equivalent to those of the current generation. A common approach in this context is to use a system of discounting to evaluate future benefits and harms. This paper assesses the logic of discounting drawing on the writings of economists and philosophers. Much of the economic literature concerns the choice of an appropriate social discount rate. The social discount rate can be taken to reflect beliefs about the rights of future generations, a subject that has been extensively debated in the phioosophic literature. The writings of both economists and philosophers concerned with the weight to attach to the interests of future generations are reviewed and evaluated in this paper and the implications for environmental policy are discussed.     

Environmental preference and restoration: (How) are they related?

Does the widely documented tendency to prefer natural over built environments owe to the perception of greater restorative potential in natural environments? In the present experimental study we tested the mediating role of restoration in environmental preferences. Participants viewed a frightening movie, and then were shown a video of either a natural or a built environment. We used two examples of each type of environment. Participants’ mood ratings were assessed before and after they viewed the frightening movie, and again after viewing the environmental video. Participants also rated the beauty of the environment shown (to indicate preference) and performed a test of concentration after viewing the environmental video. The results indicate that participants perceived the natural environments as more beautiful than the built environments. In addition, viewing natural environments elicited greater improvement in mood and marginally better concentration than viewing built environments. Mediational analyses revealed that affective restoration accounted for a substantial proportion of the preference for the natural over the built environments. Together, these results help substantiate the adaptive function of people's environmental preferences.     

Agricultural Sustainability from a Societal View: An Analysis of Southern Spanish Citizens

Sustainable agriculture refers to farming systems with economic, social, and environmental viability that must respond to citizens’ interests and concerns. However, European citizens are not satisfied with the Common Agricultural Policy (CAP) due to misinterpretation of their preferences. Because of this, the European agricultural model’s long-term viability is being questioned, especially after the European Commission’s CAP proposals in 2011. This paper examines European agriculture’s potential sustainability with regard to citizens’ preferences. First, focus groups and the Analytic Hierarchy Process are used to identify and quantify southern Spanish citizens’ preferences for farming. Second, socio-demographic features and opinions that determine preferences towards agriculture are studied by a multinomial logit model and a cluster analysis. A comparison is made between citizens’ preferences and the CAP aims because the CAP aims address all European farming. The main results indicate that agricultural economic, environmental, and social functions are equally important to the respondents in our study, even though the CAP prioritizes the economic ones. However, some citizen groups agree with the agricultural model designed by the CAP.     

Corporate environmental management study shows shift from compliance to strategy

The Abt study of forty-one mostly Fortune 200 nonservice firms forms a new picture of environmental management. We present data indicating that environmental management is becoming central to corporate strategy and is being managed as an arena of competition rather than as a compliance-driven function. We look at environmental management's new role through four lenses: its relationship to strategic planning; its evolving management structures that show environment increasingly integrated into the main functions of the business; innovation in corporate environmental investments reflecting new drivers beyond compliance; and new management systems and measures of firm-wide performance that demonstrate that environment is being seen increasingly as an arena of competitive concern. We argue that much of the change is driven by three realities. First, as customers integrate environmental values into their conceptions of product quality, they are buying more products with identifiably environmental attributes. This change translates environmental management, historically a cost center, into a potential source of sales revenue, a change which cannot be underestimated. Second, recent life-threatening damage to the global ecosystem and atmosphere reframes environmental management. This moves firms toward a systemic and global approach matched to the globalization of competitive and market concerns, and it places environmental management in the strategic sphere. And third, pollution prevention in its cross-fertilization with total quality management is driving firms to focus on managing environment as an integral part of product management, and is helping them to reassess environmental performance as a contributor to productivity and innovation.     

Considering Conservation Value in Economic Appraisals of Coastal Resources

Measuring the economic value of environmental quality is useful to evaluate policies that affect the use of natural resources. This paper presents the findings of a contingent valuation (CV) survey designed to measure non-use values for the natural coastal environment.This was attempted through evaluating public and scientific values of conservation quality. The results suggest that public perceptions of conservation quality are multidimensional,and that it may be difficult for some individuals to express their preferences for the conservation value of natural resources in monetary terms. Additionally, public and scientific judgments differ concerning some of the physical attributes imparting conservation value. These findings have important implications on efforts to consider environmental quality in land and coastal use decisions.     

The practice of valuing the environment in cost-benefit analyses in transport and spatial projects

Scientific debates on environmental impacts in cost-benefit analysis (CBA) focus on methodological questions. The literature, however, contains very little information on the influence of these debates on CBAs made in spatial planning practice. In this paper, this gap is filled by a qualitative analysis of 67 CBAs made in the Netherlands between 2000 and 2011. From the literature on environmental valuation, we derive criteria to evaluate the quality of CBA practice, such as completeness and the inclusion of uncertainties. The analysis shows that in many cases relevant environmental effects are omitted or not monetised. Moreover, non-monetised effects are often not included in CBA conclusions. If impacts are monetised, the methods used are frequently not very sophisticated. The consequences of assumptions are often not communicated, for example, where high discount rates make long-term effects seem unimportant. In this research we identify four main points for good practice.     

PROTECTING BEIJLNG'S MUNICIPAL WATER SUPPLY THROUGH WATERSHED MANAGEMEN AN ECONOMIC ASSESSMENT1

ABSTRACT: Watersheds above the Miyun reservoir, a principal source of surface water for Beijing, are designated to be managed for water production, but under the principle of multiple use. Because of the scarcity of arable land, these watersheds cannot be managed only for drinking water. Efforts are under way to reduce sediment delivery, improve the quality of water entering Miyun reservoir, and improve the welfare of watershed inhabitants. An economic appraisal of a watershed management project for the 3,298‐ha Shixia watershed above the Miyun reservoir, indicates a 24 percent economic rate of return on the investment made in the project. The net present value (NPV) of the project, calculated at a discount rate of 10 percent, is approximately US$3.49 million. Sensitivity analyses indicate that a doubling of labor costs lowers the NPV to US$2.07 million and a 10 percent decrease in benefits lowered the NPV to US$2.87. It is concluded that the implementation of conservation practices on the Shixia Demonstration Watershed represent an economically efficient use of resources.     

Bivariate cointegration between poverty and environment: a case study of Pakistan (1980–2009)

The objective of this paper is to empirically investigate a two-way statistical relationship between the agriculture environment and rural poverty. To recognise the relationship between the two variables, a time series, co-integration and Granger causality tests have been employed. Secondary data pertaining to Pakistan from 1980–2009 on rural poverty and environmental factors (such as commercial energy consumption, water availability and total cropped area) have been used for the analysis. The empirical results only moderately support the conventional view that rural poverty has a significant long-term casual effect on environmental proxies in Pakistan. The present study finds evidence of uni-directional causality between poverty and the environment in the context of the agriculture sector in Pakistan.     

Where to recover from attentional fatigue: An expectancy-value analysis of environmental preference

Preferences for natural and urban environments can be framed in terms of (1) beliefs about the likelihood of psychological restoration during a walk in each type of environment and (2) the evaluation of restoration given differing restoration needs. We conducted an experiment to test hypotheses about restoration as a basis for environmental preferences. Imagining themselves as attentionally fatigued or fully refreshed, participants (N=101) evaluated recovery, reflection, and social stimulation outcomes. Next, they viewed slides simulating a walk through a forest or an urban center, then rated the likelihood of recovery, reflection, and social stimulation outcomes following such a walk. This procedure was repeated with the second environment. Preference for the forest over the city was twice as strong given attentional fatigue. The greater likelihood of restoration in the natural environment in conjunction with more positive evaluation of recovery when fatigued appears to explain this pattern. The results have implications for environmental preference conceptualizations and our understanding of the relationship between preference and restoration.     

Environment friendly alternatives to halogenated refrigerants—A review

In developing country like India, most of the vapor compression based refrigeration, air conditioning and heat pump systems continue to run on halogenated refrigerants due to its excellent thermodynamic and thermo-physical properties apart from the low cost. However, the halogenated refrigerants have adverse environmental impacts such as ozone depletion potential (ODP) and global warming potential (GWP). Hence, it is necessary to look for alternative refrigerants to full fill the objectives of the international protocols (Montreal and Kyoto) and to satisfy the growing worldwide demand. This paper reviews the various experimental and theoretical studies carried out around the globe with environment friendly alternatives such as hydrocarbons (HC), hydroflurocarbons (HFC) and their mixtures, which are going to be the promising long-term alternatives. In addition, the technical difficulties of mixed refrigerants and future challenges of the alternatives are discussed. The problems pertaining to the usage of environment friendly refrigerants are also analyzed.     

Business-oriented environmental performance metrics: Building consensus for environmental management systems

Today, environmental managers are learning new ways of adding value to their organizations. Before, the environmental department was an overhead expense—an indirect support group required for complying with burdensome regulations. Now, such departments add insights and value during strategic planning sessions, identify efficiency improvement opportunities, provide a superior return on investment, and—bottom line—improve profits. The primary approach to meeting the challenge is a new environmental management system (EMS) that identifies, measures, and manages a diverse set of internal and external customer needs. These needs include environmental cleanups, regulatory compliance, pollution prevention, and design for the environment—and each represents a potential improvement opportunity. Unfortunately, most organizations have so many such needs that all cannot be addressed at once, given the resource constraints of a competitive business climate. Thus, priority is a key concept of an effective EMS. This article describes an innovative application of consensus-building tools that quickly identify and set priorities for diverse environmental programs. The article also shows how appropriate performance measures will align these programs with corporate goals and objectives.     

A fuzzy multi criteria approach for evaluating green supplier's performance in green supply chain with linguistic preferences

Today's international business environment has forced many firms to focus on supply chain management to gain a competitive advantage. During recent years, supplier selection process in the supply chain has become a key strategic consideration. With the growing worldwide awareness of environmental protection and the corresponding increase in legislation and regulations, green purchasing has become an important issue for companies to gain environmental sustainability. Traditionally, companies consider criteria such as price, quality and lead time, when evaluating supplier performance and do not give enough attention to environmental criteria as a means to evaluate suppliers. Now, many companies have begun to implement green supply chain management (GSCM) and to consider environmental issues and the measurement of their suppliers’ environmental performance. This paper examines GSCM to propose a fuzzy multi criteria approach for green suppliers’ evaluation. We apply fuzzy set theory to translate the subjective human perceptions into a solid crisp value. These linguistic preferences are combined through fuzzy TOPSIS to generate an overall performance score for each supplier. A numerical example is presented to demonstrate the effectiveness of the proposed approach.     

环境保护税对企业绩效的影响研究：基于税额标准的提高

2018年中国正式开征环境保护税,这是我国首个以环境保护为直接政策目标的税种。环境保护税由排污费改革而来,有一半以上省份直接平移排污费收费标准,其他省份提高了税额标准。本文以2016—2019年中国上市公司季度数据为研究样本,利用PSM-DID方法评估了环境保护税税额标准提高对企业绩效的短期经济影响。实证结果表明,在短期内环境保护税税额标准提高并不会对企业绩效产生显著的影响,这一结论在进行三重差分、更换指标和数据等稳健性检验之后仍然成立。此外,本文发现在制度环境较好的东部地区,环境保护税对企业绩效的短期抑制作用更为显著,税额标准提高降低了企业的净资产收益率和总资产报酬率,显示出制度环境对环境保护税具有加强效应,从而促使企业有更好的环境表现。对此,本文提出应持续优化环境保护税制度,提高征管能力和水平,调高部分地区环境保护税税额标准,改进中西部地区制度环境等建议。     

On measuring wealth: a case study on the state of Queensland

In order for policy makers to plan effectively for sustainable development, there is a need for measures of welfare that consider changes in the natural capital stock. Current measures based on conventional national accounting are flawed because they are based solely on flow measures and do not account for environmental effects. In this paper, we use an expanded measure of wealth to estimate the value of natural capital for Queensland. The state's stock of natural capital is valued at A dollar 355.6 billion, of which non-timber forest resources account for 45.3%, ecosystem services 20.0%, and mineral resources 17.6%. This figure is a conservative estimate of the true value since some significant components such as the ecological and life-support functions of the environment are excluded. The estimates highlight the relative importance of different forms of natural capital and can be used to draw the attention of policymakers to the need to give adequate weight to the value of such services in decision-making processes.     

The rise of the eco-preneur and the messy world of environmental innovation

Media and academic debates about the environment have increasingly made reference to the so-called 'eco-preneur' ('green entrepreneur' or 'environmental entrepreneur'). These discussions encourage us to see the potential of such figures to act as drivers of environmental innovation. Their combination of entrepreneurial zeal and green motivations is seen as providing them with the ability to transcend the usual tensions between business and the environment. In academic circles a new literature is beginning to emerge around this perspective, 'eco-preneurship'. In this paper we investigate the usefulness of eco-preneurship for understanding environmental innovation. In particular we ask where this literature, supported by popular images in the media, fixes our gaze when we think about environmental innovation in society. And, crucially, what might we be missing by concentrating our attention on these eco-preneurs? The paper concludes by suggesting that environmental innovation is better understood as an inherently messy and complex institutional process, which cannot be reduced to the psychology of entrepreneurial personalities.