ASTRID DANNENBERG, Centre for European Economic Research (ZEW)
Email: dannenberg@zew.de
TIM MENNEL, Centre for European Economic Research (ZEW), University of Bonn
Email: mennel@zew.de
DANIEL OSBERGHAUS, Centre for European Economic Research (ZEW)
Email: osberghaus@zew.de
BODO STURM, HTWK Leipzig
Email: bodo.sturm@wiwi.htwk-leipzig.de

Adaptation to climate change is becoming increasingly important in the political and scientific debate. The reason for this is that climate change impacts are visible already today and will intensify in the next decades. Furthermore, the prospects for an effective international agreement on climate policy with binding emission reduction targets are uncertain. The economic analysis of adaptation, however, is still in its infancy with a few economic studies covering specific aspects of adaptation. Therefore, this paper aims at developing a broad economic framework for adaptation which can provide a foundation and a starting point for future economic research. The economic analysis allows us to distinguish between autonomous adaptation by private agents on the one hand and collective adaptation measures by government entities on the other. Our theoretical economic approach follows the basic economic paradigm of efficient competitive markets where government intervention is justified by market failure only. The most important case of market failure in adaptation is the provision of public goods, such as dykes or weather information systems. Moreover, we discuss further political objectives, namely equity and security of supply, in the context of adaptation to climate change. The approach developed in the theory part is then applied to the case of Germany. Due to its size and geography as well as its relatively diversified sectoral structure Germany is a good example to analyze and develop adaptation measures in climate sensitive sectors in industrialized countries, particularly in Europe. The case study on Germany which is based on the available literature covers sectors that are particularly vulnerable to climate change, namely agriculture, energy, water and coastal protection, and human health. While from an economic perspective adaptation in agriculture and energy should predominantly be autonomous, the government has a role in the sectors water, coastal protection and health. The results indicate that in Germany beside the negative impacts of climate change positive impacts are to be expected in some sectors, such as agriculture. Therefore a differentiated adaptation strategy by consumers, producers, and policy makers requires more research into the climate impacts on different sectors of life and the economy.

ANDREAS ZIEGLER, University of Zurich

This paper empirically examines the effect of the inclusion in one of the most prominent sustainability stock indexes, namely the Dow Jones Sustainability World Index (DJSI World), on corporate financial performance. On the basis of panel data for European firms that were included in the Dow Jones Stoxx 600 Index over time, our micro-econometric analysis confirms the relevance of unobserved firm heterogeneity since the validity of restricted pooled regression models is statistically rejected in favor of random or fixed effects models. As a consequence, the strong positive impacts of the inclusion in the DJSI World on return on assets and Tobin’s Q in pooled regression models become weaker and less robust in the case of return on assets and even insignificant for Tobin’s Q in the flexible panel data models that include unobserved firm heterogeneity. Therefore, we conclude that the application of misspecified panel data approaches, similar to cross-sectional models, can lead to biased parameter estimates and thus to premature conclusions with respect to the impact of corporate sustainability performance on financial performance. Our estimation results can be explained by the high number of confounding financial effects of corporate environmental or social activities. Another explanation for the predominant weak or neutral impacts of the inclusion in the DJSI World could be the composition of this stock index, which is influenced by factors that need not necessarily be directly connected to corporate environmental or social activities.

TESHAGER WORKU DAGNE, University of Dalhousie
Email: ts640468@dal.ca

This article analyses the issue of environmentally motivated unilateral trade measures in the World Trade Organization from the perspective of the developing countries. It is argued that environmentally motivated unilateral trade measures, as applied currently, risk defeating the environmental purpose for which they are sought and threaten the core values embedded in the trading system. The article critically analyses the different approaches tabled in the World Trade Organization for the reconciliation of the conflict between trade and environment and suggests a technique by which the permissible scope of unilateral trade measures may further be clarified.

MST. MEHERUNNAHAR, affiliation not provided to SSRN
Email: meheruna_bd@yahoo.com
D. N. R. PAUL, Atish Dipankar University of Science & Technology (ADUST)
Email: dnrpaul@gmail.com

Brinjal, also known as eggplant and aubergine, is Bangladesh’s third most important vegetable in terms of both yield and area cultivated. It is only surpassed by potatoes and onions. However, the yield of brinjal could be much higher would it not be decimated by the brinjal shoot and fruit borer, which is the most destructive insect pest in South and South East Asia. Genetically modified brinjal (Bt brinjal) has the potential to bump up agricultural productivity in Bangladesh and other countries. This paper provides a brief overview of Bangladesh’s vegetable sector and reviews the key issues of introducing Bt brinjal in Bangladesh. It summarizes the results of recent research undertaken in Bangladesh on the environmental safety of Bt brinjal and concludes that Bt brinjal could make a significant contribution to Bangladesh’s agricultural sector and more broadly, Bangladesh’s economy and living standards.

TILAK K. S., Acharya Nagarjuna University
Email: proftilak@yahoo.com
JAPAMALAI MARY, affiliation not provided to SSRN
Email: mscvja@gmail.com

Among the pollutants, the pesticides have been identified and marked as one of major pollutants of the aquatic ecosystems with deleterious effect of either acute or chronic on the living inhabitants. They have been reported to produce a number of biochemical changes in fish, both at lethal and more often at sub lethal levels. Fish species are sensitive to enzymatic as well as hormone disruption which is caused due to stress and pesticide effect.

SANDRA DERISSEN, University of Kiel - Faculty of Economics and Social Sciences
Email: derissen@economics.uni-kiel.de
MARTIN F. QUAAS, University of Kiel - Faculty of Economics and Social Sciences
Email: quaas@economics.uni-kiel.de
STEFAN BAUMGÄRTNER, Leuphana University of Lueneburg - Dept. of Sustainability Sciences
Email: baumgaertner@uni-lueneburg.de

Resilience as a descriptive concept gives insight into the dynamic properties of a system. Sustainability as a normative concept captures basic ideas of inter- and intragenerational justice. In this paper we specify the relationship between resilience and sustainable development. Based on an ecological-economic model where two natural capital stocks provide ecosystem services that are complements for human well-being, we derive conditions on the dynamics of the ecological-economic system and the sustainability criterion, such that a) resilience of the system in a given regime is both necessary and sufficient for sustainable development, b) resilience of the system in a given regime is sufficient, but not necessary, c) resilience of the system in a given regime is necessary, but not sufficient, and d) resilience of the system in a given regime is neither necessary nor sufficient for sustainable development. We conclude that more criteria than the resilience of the current state of the system have to be taken into account when designing policies for sustainable management of ecological-economic systems.