Table of Contents

Modelling of Distributional Impacts of Energy Subsidy Reforms: An Illustration with Indonesia

Olivier Durand-Lasserve, Catholic University of Louvain (UCL)
Lorenza Campagnolo, Fondazione Eni Enrico Mattei
Jean Chateau, Organization for Economic Co-Operation and Development (OECD)
Rob Dellink, Wageningen University and Research Center (WUR) - Environmental Economics and Natural Resources Group, Organization for Economic Co-Operation and Development (OECD)

The Impact of Changing Rainfall Variability on Resource-Dependent Wealth Dynamics

Christopher B. Barrett, Cornell University - Charles H. Dyson School of Applied Economics & Management
Paulo Santos, Cornell University

Estimating and Measuring of the Value of Pelagic Tourism System - Preliminary Mapping and A Literature and Secondary Reviews

Luky Adrianto, CCMRS-IPB
Yudi Wahyudin, Center for Coastal and Marine Resources Studies, Bogor Agricultural University (CCMRS-IPB), Tropical Marine Resources Economics, Bogor Agricultural University

The Market for Sulfur Dioxide Allowances: What Have We Learned from the Grand Policy Experiment?

H. Ron Chan, University of Manchester - School of Social Sciences
B. Andrew Chupp, Georgia Institute of Technology
Maureen Cropper, University of Maryland - Department of Economics, Resources for the Future
Nicholas Z. Muller, Middlebury College - Department of Economics

Trade Interference or Good Environmental Stewardship: The Case of Gibson Guitar and the Lacey Act

Charles A. Rarick, Purdue University Calumet

Understanding Environmentally Sensitive Consumer Behaviour: An Integrative Research Perspective

Naz Onel, Montclair State University
Avinandan Mukherjee, Clayton State University - University System of Georgia, Montclair State University - School of Business, Rutgers Business School


ENVIRONMENTAL ECONOMICS eJOURNAL

"Modelling of Distributional Impacts of Energy Subsidy Reforms: An Illustration with Indonesia" Free Download
FEEM Working Paper No. 068.2015

OLIVIER DURAND-LASSERVE, Catholic University of Louvain (UCL)
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LORENZA CAMPAGNOLO, Fondazione Eni Enrico Mattei
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JEAN CHATEAU, Organization for Economic Co-Operation and Development (OECD)
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ROB DELLINK, Wageningen University and Research Center (WUR) - Environmental Economics and Natural Resources Group, Organization for Economic Co-Operation and Development (OECD)
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This report develops an analytical framework that assesses the macroeconomic, environmental and distributional consequences of energy subsidy reforms. The framework is applied to the case of Indonesia to study the consequences in this country of a gradual phase out of all energy consumption subsidies between 2012 and 2020. The energy subsidy estimates used as inputs to this modelling analysis are those calculated by the International Energy Agency, using a synthetic indicator known as “price gaps?. The analysis relies on simulations made with an extended version of the OECD’s ENV-Linkages model. The phase out of energy consumption subsidies was simulated under three stylised redistribution schemes: direct payment on a per household basis, support to labour incomes, and subsidies on food products. The modelling results in this report indicate that if Indonesia were to remove its fossil fuel and electricity consumption subsidies, it would record real GDP gains of 0.4% to 0.7% in 2020, according to the redistribution scheme envisaged. The redistribution through direct payment on a per household basis performs best in terms of GDP gains. The aggregate gains for consumers in terms of welfare are higher, ranging from 0.8% to 1.6% in 2020. Both GDP and welfare gains arise from a more efficient allocation of resources across sectors resulting from phasing out energy subsidies. Meanwhile, a redistribution scheme through food subsidies tends to create other inefficiencies. The simulations show that the redistribution scheme ultimately matters in determining the overall distributional performance of the reform. Cash transfers, and to a lesser extent food subsidies, can make the reform more attractive for poorer households and reduce poverty. Mechanisms that compensate households via payments proportional to labour income are, on the contrary, more beneficial to higher income households and increase poverty. This is because households with informal labour earnings, which are not eligible for these payments, are more represented among the poor. The analysis also shows that phasing out energy subsidies is projected to reduce Indonesian CO2 emissions from fuel combustion by 10.8% to 12.6% and GHG emissions by 7.9% to 8.3%, in 2020 in the various scenarios, with respect to the baseline. These emission reductions exclude emissions from deforestation, which are large but highly uncertain and for which the model cannot make reliable projections.

"The Impact of Changing Rainfall Variability on Resource-Dependent Wealth Dynamics" Free Download
Ecological Economics 105 (2014) 48–54

CHRISTOPHER B. BARRETT, Cornell University - Charles H. Dyson School of Applied Economics & Management
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PAULO SANTOS, Cornell University
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Climate change is widely expected to lead to changing rainfall variability and thus to changing frequency of drought. In places where drought is a major driver of agroecosystem dynamics, as in the extensive livestock grazing systems that dominate Africa's sprawling arid and semi-arid lands, changing rainfall variability can fundamentally alter human wealth dynamics. We use subjective livestock herd growth expectations data elicited from Boran pastoralists in southern Ethiopia to generate estimates of herd dynamics conditional on rainfall state. The climate state-conditional estimates permit simulation of herd dynamics under different rainfall patterns. The multiple herd size equilibria observed in multiple pastoralist household data sets from the region appear sensitive to climate regimes. Reduced rainfall variability that significantly reduces drought frequency would eliminate, in expectation, the poverty trap equilibrium that presently exists only for households with herd sizes beneath a threshold level. Conversely, if the drought frequency more than doubles relative to recent patterns, then the whole system becomes a poverty trap, in expectation.

"Estimating and Measuring of the Value of Pelagic Tourism System - Preliminary Mapping and A Literature and Secondary Reviews" Free Download

LUKY ADRIANTO, CCMRS-IPB
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YUDI WAHYUDIN, Center for Coastal and Marine Resources Studies, Bogor Agricultural University (CCMRS-IPB), Tropical Marine Resources Economics, Bogor Agricultural University
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This article proposed selected tourism services of the pelagic system in the Lesser Sunda Ecoregion that will be mapped, measured, and valued in the content of mapping ocean wealth of the Lesser Sunda Ecoregion of Indonesian Pelagic System. This article also reviewed view of the applied methodology for valuing ecosystem services (type of cultural services - tourism activities) and overview the existing value of cultural services (tourism activities) based on a view of literature survey. At the end, this article also proposed the method to value tourism services of the pelagic system in the Lesser Sunda Ecoregion.

"The Market for Sulfur Dioxide Allowances: What Have We Learned from the Grand Policy Experiment?" Fee Download
NBER Working Paper No. w21383

H. RON CHAN, University of Manchester - School of Social Sciences
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B. ANDREW CHUPP, Georgia Institute of Technology
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MAUREEN CROPPER, University of Maryland - Department of Economics, Resources for the Future
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NICHOLAS Z. MULLER, Middlebury College - Department of Economics
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We quantify the cost savings from the Acid Rain Program (ARP) by comparing compliance costs for non-NSPS coal-fired generating units under the ARP with compliance costs under a uniform performance standard that achieves the same aggregate emissions. In 2002 we find cost savings of approximately $250 million (1995$). We also compare health damages associated with observed SO2 emissions from all ARP units with damages from a no-trade counterfactual. Damages under the no-trade scenario are $2.4 billion (2000$) lower than under the ARP, reflecting allowance transfers from units in the western to units in the eastern US with higher exposed populations.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

"Trade Interference or Good Environmental Stewardship: The Case of Gibson Guitar and the Lacey Act" Fee Download
American Journal of Trade and Policy, Vol. 2, No. 1, pp. 7-10, 2015

CHARLES A. RARICK, Purdue University Calumet
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The Gibson Guitar Corporation based in Tennessee was raided by federal agents twice for importing prohibited wood products. The raids, especially the second, attracted much public attention and had even led for calls from some members of Congress for a change. The case examines the Lacey Act, the allegations of wrong doing, and the question of trade and domestic job creation at the expense of environmental stewardship.

"Understanding Environmentally Sensitive Consumer Behaviour: An Integrative Research Perspective" 

NAZ ONEL, Montclair State University
Email:
AVINANDAN MUKHERJEE, Clayton State University - University System of Georgia, Montclair State University - School of Business, Rutgers Business School
Email:

Purpose – The potential underlying causal factors of environmental behaviours have been examined from various theoretical angles by mostly focusing on individual motivations in the literature. The purpose of this paper is to develop a conceptual model based on an integrative approach to better understand eco-sensitive consumer behaviours and their predictors.

Design/methodology/approach – The paper reviews distinct theoretical approaches and, based on the integrative perspective, develops a model using the framework of the goal framing theory (GFT).

Findings – On the basis of the GFT, the authors propose that 12 variables influence the pro-environmental behaviours of consumers: biospheric values, egoistic values, altruistic values, environmental concern, awareness of consequences, ascription of responsibility, subjective norms, attitudes towards behaviour, perceived behavioural control, personal norms, affect, and behavioural intention. Furthermore, the authors categorize environmental behaviours based on three different stages of the consumption process of consumers: purchase, usage, and post-use.

Originality/value – The proposed model will offer future studies a holistic understanding of the factors that predict environmentally sensitive behaviours of consumers and the extent to which such behaviours depend on moral considerations, feelings, or self-interest motives.

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