Optimal Timing to Adopt an Environmental Policy in a Strategic Framework

In this paper, the problem of optimal timing, when to adopt an environmental policy in a strategic framework is considered. Using real options theory and some basic tools of game theory, we show that, under certain assumptions, a country behaving strategically should wait longer before adopting such a policy than if it behaves unstrategically or within a larger entity. Such a postponed decision is sub-optimal as regards to the environment protection.     

Decommissioning of offshore oil and gas facilities: a comparative assessment of different scenarios

A material and energy flow analysis, with corresponding financial flows, was carried out for different decommissioning scenarios for the different elements of an offshore oil and gas structure. A comparative assessment was made of the non-financial (especially environmental) outcomes of the different scenarios, with the reference scenario being to leave all structures in situ, while other scenarios envisaged leaving them on the seabed or removing them to shore for recycling and disposal. The costs of each scenario, when compared with the reference scenario, give an implicit valuation of the non-financial outcomes (e.g. environmental improvements), should that scenario be adopted by society. The paper concludes that it is not clear that the removal of the topsides and jackets of large steel structures to shore, as currently required by regulations, is environmentally justified; that concrete structures should certainly be left in place; and that leaving footings, cuttings and pipelines in place, with subsequent monitoring, would also be justified unless very large values were placed by society on a clear seabed and trawling access.     

Use of toxicity identification evaluation techniques to identify dredged material disposal options: A proposed approach

It is common to use the results of various solid-phase and aqueous-fraction toxicity tests as part of the decision-making process for selecting disposal options for dredged sediments. The mere presence of toxicity, however, does not provide a logical basis for selecting economical, environmentally protective disposal techniques. To achieve this, it is necessary to be able to identify specific compounds responsible for sediment toxicity. Toxicity identification evaluation (TIE) procedures, originally developed for complex effluents, represent a useful approach for identifying acutely toxic compounds in dredged materials. Herein we present a conceptual overview for TIE use in part of the decision-making framework for selecting dredged material disposal options; included are discussions concerning appropriate test fractions and species for TIE analyses, and specific TIE manipulations useful for ascertaining whether toxicity is due to any of a number of common sediment contaminants including ammonia, hydrogen sulfide, metals, or nonpolar organics.     

Acid rain in Asia

Acid rain has been an issue of great concern in North America and Europe during the past several decades. However, due to the passage of a number of recent regulations, most notably the Clean Air Act in the United States in 1990, there is an emerging perception that the problem in these Western nations is nearing solution. The situation in the developing world, particularly in Asia, is much bleaker. Given the policies of many Asian nations to achieve levels of development comparable with the industrialized world—which necessitate a significant expansion of energy consumption (most derived from indigenous coal reserves)—the potential for the formation of, and damage from, acid deposition in these developing countries is very high. This article delineates and assesses the emissions patterns, meteorology, physical geology, and biological and cultural resources present in various Asian nations. Based on this analysis and the risk factors to acidification, it is concluded that a number of areas in Asia are currently vulnerable to acid rain. These regions include Japan, North and South Korea, southern China, and the mountainous portions of Southeast Asia and southwestern India. Furthermore, with accelerated development (and its attendant increase in energy use and production of emissions of acid deposition precursors) in many nations of Asia, it is likely that other regions will also be affected by acidification in the near future. Based on the results of this overview, it is clear that acid deposition has significant potential to impact the Asian region. However, empirical evidence is urgently needed to confirm this and to provide early warning of increases in the magnitude and spread of acid deposition and its effects throughout this part of the world.     

MUNICIPAL WATER CONSERVATION ALTERNATIVES1

ABSTRACT: The municipal water conservation options available to meet the goals of a national water conservation policy are evaluated. Water conservation with water conservation devices is shown to offer many significant advantages over education and pricing and metering as a method of accomplishing water conservation goals. Current constraints on the use of water conservation devices are outlined, and their elimination is suggested if the nation's water conservation goals are to be met.     

Hazardous waste indicators for national decision makers

Indicators and indices are important tools that assist decision makers to formulate and implement plans for management at local, national and international levels. Four indicators for hazardous waste management are described that have recently been adopted within the United Nations framework of Indicators of Sustainable Development. Although these four indicators will be useful tools, the need for a broader range of policy-relevant qualitative and quantitative indicators, proxy indicators and indices is outlined. The argument is advanced that in order for all nations to better manage the range of hazardous waste issues, including waste generation, export/import and disposal, a set of innovative indicators and indices is required. Useful indicators and indices are described that could be used to link and quantify likely environmental, ecosystem and health impacts and risks especially from hazardous waste disposal. Indicators are also suggested that could be used to illustrate the shift in industrial strategy away from end-of-pipe processes towards waste recycling, cleaner production and integrated life-cycle analysis. It was concluded that until the lack of reliable and harmonized data on hazardous waste is addressed, indicator development and use by national and international decision makers cannot readily be implemented.     

废纸造纸行业的清洁生产措施与实践

在废纸造纸行业的发展及污染现状的基础上 ,提出实施清洁生产是废纸造纸行业治理污染 ,实现可持续发展的有效途径 ,分析总结了实现节能、降耗、减污、增效的行业清洁生产典型方案 ,并以山东省某板纸厂实施清洁生产的实践情况为例 ,论述了废纸造纸行业中存在的清洁生产机会及潜力。     

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.     

Bioactivity as an Options Value of Sea Cucumbers in the Egyptian Red Sea

Abstract:  The utility of a species can be divided into its direct, indirect, and options values. In the marine environment, direct consumptive values predominate and often lead to overexploitation at the expense of significant options values derived through bioprospecting for natural products. We surveyed the waters of the Egyptian Red Sea coast (Gulf of Aqaba [north] and the Red Sea [south]) for species of sea cucumbers and analyzed extracts from species for a range of bioactivities with potential biomedical applications. All habitat types were surveyed within these regions. We found 22 species of sea cucumber of which two, Holothuria fuscogilva and Holothuria flavomaculata , were recorded in Egypt for the first time. Although none of the species identified were unique to the Gulf of Aqaba, 10 species were only found in the Red Sea sector. Bioassay results showed that although no species had antibacterial activity, most extracts exhibited activity against Candida and Leishmania but were most active against a LoVo mammalian carcinoma cell line. Our most significant finding was the intraspecific variation in bioactivity in individuals collected from different habitat types and sectors of the coast. This variation may reflect the effect of environment on secondary metabolite production or may indicate significant genetic diversity between populations within a species. Our results indicate a potentially significant options value to sea cucumbers through bioprospecting. Given the importance of economic development in countries such as Egypt and the perceived low conservation value of invertebrates such as sea cucumbers, the linking of these factors to conservation is vital for the maintenance and sustainable exploitation of these animals .     

A practical real option methodology for the evaluation of farm-in/out joint venture agreements in mineral exploration

Although the “real option valuation” (ROV) methodology offers extremely valuable insights in optimising investment decisions in the face of uncertainty, its practical acceptance in the mining industry has until recently been slow because of its perceived computational complexity. Recent conceptual advances in the use of binomial lattices and software developments in the areas of decision trees and dynamic programming, have significantly simplified ROV analysis and made it of practical application in day-to-day financial evaluations and decisions involving uncertainty. This paper provides general background on the ROV methodology and an example of how a typical farm-in/out agreement, as a preliminary to the establishment of a joint venture (JV), can be valued as a series of sequential and compound real options. For illustrative and quality assurance purposes, a simple farm-in/out agreement is valued from the point of view of the party acquiring equity in the project (the farm-inee) using two distinct methods, i.e. (a) a binomial lattice and (b) a decision tree in combination with binomial stochastic processes, in both cases neutralising risk using the user-friendly “risk-neutral probability”. The fact that exactly the same ROV is obtained by both methods provides confidence in the modified decision tree approach, which opens up the capacity to value the more complex sequential/compound real options inherent in real-life farm-in/out agreements. The model is then modified to incorporate a number of realistic contractual conditions often encountered in typical exploration and mining farm-in/out deals. The paper demonstrates how the increased complexity of the model can be relatively easily addressed using a decision tree with dynamic programming capability.