A NOTE ON THE USE OF ECONOMIC INCENTIVES IN WATER POLLUTION ABATEMENT1

ABSTRACT The firms decision to invest in wastewater treatment facilities is influenced by the economic incentives provided. It is shown that the timing of investments in pollution control may be described by an extended version of the first year benefit criterion. The criterion developed may help to provide a better insight into the complex interaction of the various economic incentives used in pollution abatement.     

Carbon values,reforestation, and `perverse' incentives under the Kyoto protocol: An empirical analysis

Economic incentives for sequestering atmospheric carbon dioxide (CO₂) in forests may be an effective way to meet greenhouse gas (GHG) reduction commitments under the Kyoto Protocol (KP). But concerns have been raised that the KP may create unintended incentives to excessively harvest existing forests if regenerated forests qualify for carbon (C) credits under the reforestation provision of Article 3.3. This paper combines an analytical model of the optimal forest rotation with both timber and C as priced outputs with data on timber and C growth and yield to different forest settings in the U.S. C prices of $50 per megagram (Mg) – the highest price evaluated– can considerably lengthen forest rotations (40 years or more), raise forest land values (as much as $1,900 per hectare), and sequester more C in the long run (up to 60 percent per acre), relative to the base case of no C compensation. However, if C payments are made for the regenerated stand only, in some situations, it is optimal to immediately harvest an otherwise premature stand at C prices as low as $20/Mg. The strength of perverse incentives to accelerate harvesting of existing forest varies by forest type, region, C price level, and institutional factors relevant to the compensation system. If C compensation were extended to existing stands, as may be possible under Article 3.4 of the KP, the perverse incentives for prematurely harvesting existing stands would not exist.     

Evaluating the Potential for Conservation Development: Biophysical, Economic, and Institutional Perspectives

Abstract:  The widespread conversion of rural land to low-density residential development poses an immediate threat to biodiversity and to the provision of ecosystem services. Given that development will continue and environmental stakes are high, analyzing alternative growth strategies is critical. Conservation development is one such strategy that has the potential to benefit ecosystems and diverse stakeholders including developers, homebuyers, governments, and society as a whole. Conservation development clusters homes on one part of a property to manage the most ecologically important land for the conservation of biodiversity and ecosystem services. We draw on lessons learned from landscape ecology, open-space development, and regional planning to weigh the biophysical, economic, and institutional evidence for and against conservation development. Conservation development offers many potential environmental and economic advantages: relatively high home values and appreciation rates, lower development costs, and social and ecological benefits to society including landscape connectivity, protection and active stewardship of important ecological assets, and the maintenance of ecosystem services. But this approach also has shortcomings: it may require enlightened institutional regulations and regional planning (and/or ecologically aware developers), it is not always more profitable than conventional development and thus may require subsidies or incentives, and additional research is required to fully understand its benefits and drawbacks. With more information on the effects of clustering, the development of flexible zoning laws, and effective regional planning, conservation development could be a viable strategy for sustaining biodiversity and ecosystem services in changing landscapes.     

Incentives for wetland creation

When information about soil quality is complete, wetland creation with a take-it-or-leave-it contract, which specifies wetland size and transfer, yields higher social benefits than if a uniform contract, which offers a payment proportional to the wetland size, had been used. This result points to a paradox because uniform contracts have been used a lot in practice.This article concentrates on the presence of asymmetric information about soil quality as a possible explanation for this paradox. It shows that the choice of instrument for wetland creation has welfare implications. Different contracts typically yield quite different social welfare surpluses and distribution between interest groups. It is not obvious, which of four contracts studied dominates when a farm characteristic affecting costs is unknown to the social planner. The probability distribution of the characteristic, the size of the excess burden, the elasticity of costs and benefits to wetland size and the cost of acquiring missing information influence the outcome.     

Graduated stringency within collective incentives for group environmental compliance: Building coordination in field-lab experiments with artisanal gold miners in Colombia

Small-scale gold mining is important to rural livelihoods in the developing world but also a source of environmental externalities. Incentives for individual producers are the classic policy response for a socially efficient balance between livelihoods and the environment. Yet monitoring individual miners is ineffective, or it is very costly, especially on frontiers with scattered small-scale miners. We ask whether monitoring at a group level effectively incentivizes cleaner artisanal mining by combining lower-cost external monitoring with local collective action. We employ a mining-framed, threshold-public-goods experiment in Colombia's Pacific region, with 640 participants from frontier mining communities. To study compliance with collective environmental targets, we vary the target stringency, including to compare increases over time in the stringency versus decreases. We find that collective incentives can induce efficient equilibria, with group compliance – and even inefficient overcompliance – despite the existence of equilibria with zero contributions. Yet, for demanding targets in which the reward for compliance barely outweighs the cost, compliance can collapse. Those outcomes improve with past successes for easier targets, however, so our results suggest gain from building coordination via graduated stringency.     

Energy consumption and conservation psychology: A review and conceptual analysis

The burgeoning literature devoted to the psychology of energy consumption is categorized by specific methodological approach, is critically reviewed, and is conceptually analyzed. Three main categories of energy research are discerned, these categories corresponding to the traditional methodological typology of the survey study, the field experiment, and the laboratory investigation. For each of these major approaches, several subcategories and special topic areas are noted and discussed. The intention of these conceptual analyses is to stimulate research interest and to provide directions for future research activities. The review concludes with the encouraging observation that several directions can be generalized from the literature. More importantly, these generalizations are corroborated across experiments conducted within each major methodological approach. The importance of behavioral approaches to energy issues and the necessity for additional governmental support for these activities is also emphasized.     

Reduction of Urban Runoff Through Economic Incentives: Boulder,Colorado1

ABSTRACT: The problems of increased surface runoff which follow in step with urbanization can be conceptualized in terms of environmental economics. The private transformation of land from a permeable to an impermeable surface imposes the externality of increased surface runoff upon society as a whole and especially on those downstream. The city of Boulder, Colorado, has enacted an ordinance which attempts to internalize some of these external costs and at the same time decrease surface runoff from the urban environment.     

政府与排污企业间的动态激励监控关系研究

科学的监督和有效的管理是实现环境可持续发展的必由之路,政府与排污企业的博弈是一个值得关注的重要问题。基于声誉理论,论文建立了政府与排污企业问的静态与动态激励监控模型,结论认为在动态激励监督下政府的总效用实现了帕累托改善,研究表明考虑以往业绩的两阶段最优契约对排污企业具有明显的声誉激励效应,同时表明监控机制和激励契约具有互补性,最后对机制设计中的控制参数的灵敏度以及模型的鲁棒性进行了探讨,可为政府制定合理的激励监督措施提供理论参考依据。     

Economic Incentives to Conserve Wildlife on Private Lands: Analysis and Policy

Some believe that provision of private property rights in wildlife on private land provides a powerful economic incentive for nature conservation because it enables property owners to market such wildlife or its attributes. If such marketing is profitable, private landholders will conserve the wildlife concerned and its required habitat. But land is not always most profitably used for exploitation of wildlife, and many economic values of wildlife (such as non-use economic values) cannot be marketed. The mobility of some wildlife adds to the limitations of the private-property approach. While some species may be conserved by this approach, it is suboptimal as a single policy approach to nature conservation. Nevertheless, it is being experimented with, in the Northern Territory of Australia where landholders had a possibility of harvesting on their properties a quota of eggs and chicks of red-tailed black cockatoos for commercial sale. This scheme was expected to provide an incentive to private landholders to retain hollow trees essential for the nesting of these birds but failed. This case and others are analysed. Despite private-property failures, the long-term survival of some wildlife species depends on their ability to use private lands without severe harassment, either for their migration or to supplement their available resources, for example, the Asian elephant. Nature conservation on private land is often a useful, if not essential, supplement to conservation on public lands. Community and public incentives for such conservation are outlined.