The principal–agent model with multilateral externalities: An application to climate agreements

We consider contracting of a principal with an agent if multilateral externalities are present. The motivating example is that of an international climate agreement given private information about the willingness-to-pay (WTP) for emissions abatement. Due to multilateral externalities the principal uses her own emissions besides subsidies to incentivize the agent and to assure his participation. Optimal contracts equalize marginal abatement costs and, thus, can be implemented by a system of competitive permit trading. Moreover, optimal contracts can include a boundary part (i.e., the endogenous, type dependent participation constraint is binding), which is not a copy of the outside option of no contract. Compared to this outside option, a contract can increase emissions of the principal for types with a low WTP, and reduce her payoff for high types. Subsidies can be constant or even decreasing in emission reductions, and turn negative so that the agent reduces emissions and pays the principal.     

Uncertainties in a risk management context in early phases of offshore petroleum field development

The current risk management approach for the Norwegian offshore petroleum industry came into effect in 2001 and has been stable with minor changes for 15 years. Relatively few new installations were slated for development until quite recently, and several new projects have been started in the last few years. The paper considers the risk management approach in the pre-FEED phase and builds on two case studies selected from the most recent cases. These case studies have been evaluated with respect to how uncertainties are considered in the early phase, based on the submission of the Plan for Development and Operation, their evaluations by authorities and the supporting documents. Both case studies involve new concepts for which there is no experience from similar environments and/or water depths. In spite of what could have been expected, the case studies conclude that uncertainties have not been in focus at all during concept development. This appears to be definitely the case for the licensees, but also to be the case for the authorities. Some suggestions are presented for what could have been considered by the licensees and authorities.     

Environmental consequence analysis for resource depletion

Resource depletion is of concern to both present and future generations in terms of access to resources. It is a prominent impact category within life cycle assessment (LCA) and sustainability assessment. This paper examines existing resource depletion approaches and indicators in the context of natural gas depletion, and their limitations in modelling the wider environmental consequences of resource consumption. Some existing models assume substitution of scarce fossil fuels with an alternative fossil fuel or mix, but do not consider all of the subsequent change in impacts. An additional methodology is proposed to measure the impact changes when fossil fuel substitution occurs as a result of scarcity. The methodology will demonstrate the effect of resource scarcity for individual processes but also multiple processes which operate at different levels of resource consumption with varying degrees of impacts. The methodology is applied to a scarcity situation of natural gas in Australia, where black coal is substituted for gas. It is first applied to natural gas consumed for electricity generation only. In the second case, the methodology is applied to the substitution of natural gas for both electricity generation and hydrogen production. The varying impacts on emissions to air and water, together with solid waste generation and water depletion, as a result of the substitution are used to reflect the consequences of fossil fuel depletion. The indicators also provide information on the impacts of substitution in each product, thus enabling users to prioritise products based on the impacts produced during natural gas allocation.     

Detection and quantitation of trace levels of low molecular weight halocarbons (LMHs) associated with commercial sodium humate

Examination of vapor above commercial sodium humate and above 10wt% aqueous humate solution by gas chromatography (GC) revealed the presence of chloroform and trichloroethylene. Further examination of the aqueous humate by the purge and trap procedure confirmed the association of chloroform and trichloroethylene with the humate. GC/mass spectrometry analyses of methylene chloride extract of the humate established the association of LMHs with the humate. Improved headspace capillary GC technique showed that the humate contained not only chloroform, trichloroethylene but several other LMHs in the range 190 to 4000ng·kg^‐1.     

Toxic substances: Measures and measurements†

The formulation of a sound policy for environmental protection and toxic substances control requires knowledge of the presence and concentration of environmental contaminants. For this reason monitoring programs have been set up in the Netherlands for water, drinking water, and air pollution. The Netherlands system for air pollution, monitoring of the substances SO2, NOχ, CO, O₃ is now fully automated. Some examples will be given to show the acquisition and management and interpretation of air pollution measurements.

Various smaller projects, supported by the Department of Health and Environmental Protection include measurement of indoor air‐contaminants, contaminants in soil and hazardous waste sites, and contaminants in biotic samples such as for instance PCB's in eels and seals and mussels. Moreover a Coordinating Committee regularly collects measurements from various sources in the Netherlands regarding pesticide residues and contaminants in food.

For cost‐effective monitoring the accuracy of the measurements must be chosen with regard to the biological effect concentration of the pollutant. The necessity of proper control measurements to establish background levels and the necessity of ring‐tests to increase interlaboratory reproducibility is discussed. In cost‐effective monitoring the minimum number of measurements, which are necessary to check the effect of environmental protection measures, must be defined through proper sampling.     

Human resilience and environmental degradation: The eco-cultural link in the Sahel

The relationship between human resilience and environmental degradation was studied in the Sahel. The strongest predictors of human resilience were rate of environmental degradation, avoidance, problem solving and locus of control. Compared to pastoralists, agriculturalists were more stressed and marginalized. Women in all groups scored higher on marginalization and stress than men.     

Prices vs quantities with multiple pollutants

We examine the choice of policy instruments (price, quantity or a mix of the two) when two pollutants are regulated and firms' abatement costs are private information. Whether abatement efforts are complements or substitutes is key determining the choice of policies. When pollutants are complements, a mixed policy instrument with a tax on one pollutant and a quota on another is sometimes preferable even if the pollutants are identical in terms of benefits and costs of abatement. Yet, if they are substitutes, the mixed policy is dominated by taxes or quotas.     

Intergenerational aspects of ecotax reforms – An application to Germany

In a model of overlapping generations and majority voting, we analyze an ecotax reform consisting of the tax rate and the budgetary rule. Revenue can be recycled through a lump-sum transfer or a reduction in pension contributions. Our theoretical results as well as the calibration of our model to the German economy show that the median voter's preferred tax rate may exceed the efficient rate. This holds whenever income of the decisive voter is sufficiently high compared to the average income, as rich individuals benefit more from a reduction in pension contributions than they are harmed by an increase in ecotaxes. The calibration confirms that the median voter prefers the earmarking of tax revenue for reductions in pension contributions to the alternative lump-sum transfer. This is quite an accurate prediction of the situation in Germany. Aging of society as expected for Germany lowers the ecotax in the political equilibrium below its optimal level.     

Economics of additionality for environmental services from agriculture

We present a model of additionality for offsets sold from agriculture to industrial sector sources regulated by cap-and-trade. We consider a potential policy where agricultural sources would not be covered by cap-and-trade requirements but would be eligible to receive offsets whenever their emissions fall below a policy-specified baseline, and would not be penalized for emissions above their baseline. Major results are: (1) The optimal baseline should be set above the average counterfactual emissions of participating farms, an unexpected result that has been missing from the literature. (2) The optimal trading ratio should be greater than one (a ton of offsets counts for less than a ton of covered emissions) even under emissions certainty. Previous research has justified such trading ratios by emissions uncertainty. (3) Emissions uncertainty does not justify a change in the baseline if the accompanying emissions model is unbiased. (4) An optimal combination of policies is to subsidize offsets and tighten the baseline relative to the no-subsidy case.     

Relationships between nutrients and macroalgal biomass in a brazilian coastal lagoon: the impact of a lock construction

The Piratininga Lagoon is a coastal, choked, and brackish ecosystem in SE Brazil, where uncontrolled discharge of domestic sewage led to eutrophication, increasing massive proliferation of benthic macroalgae, and decrease of the lagoon mean depth. In 1992, a dam was constructed by the local Municipality at its tidal channel aiming at stabilising its water level. Main physico-chemical parameters, together with macroalgae biomass, nutrient concentrations in the water column, particulate organic carbon, and chlorophyll a were recorded monthly at 4 sampling stations within the Piratininga lagoon from April 1994 to April 1995. The data, compared with “before-lock” existing studies, show that nutrients and chlorophyll a concentrations significantly increased after the lock construction. Based on the functioning of the ecosystem, we propose to harvest the algal mats before their decomposition period in order to partly remove the nutrient stocks from the lagoon and the future ecosystem modelling to predict the impact of natural and anthropogenic eutrophication.