Table of Contents

A Market Mechanism for Sustainable and Efficient Resource Use Under Uncertainty

Martin F. Quaas, University of Kiel - Faculty of Economics and Social Sciences
Ralph Winkler, University of Bern - Department of Economics, University of Bern - Oeschger Centre for Climate Change Research

Paris after Trump: An Inconvenient Insight

Christoph Böhringer, University of Oldenburg - Economic Policy, Centre for European Economic Research (ZEW)
Thomas F. Rutherford, University of Wisconsin - Madison

Decomposition Analysis of the Greenhouse Gas Emissions in the European Union

Magdaléna Drastichová, Technical University of Ostrava - Faculty of Economics

Corporate Environmental Responsibility for a Sustainable Future

Pankojini Mulia, Indian School of Mines University (ISMU) - Department of Humanities and Social Sciences
Ajit Kumar Behura, Indian School of Mines University (ISMU) - Department of Humanities and Social Sciences
Sarita Kar, Indian School of Mines University (ISMU) - Department of Humanities and Social Sciences

Principles-Based Regulation – Blueprint for A ‘New Approach’ for the Internal Agricultural Market

Kai P. Purnhagen, Wageningen University, Erasmus University of Rotterdam - Rotterdam Institute of Law and Economics
Peter H. Feindt, Wageningen University, Strategic Communication Group

Valuing the Economic Impact of Flood Mitigationin Central Java, Indonesia

Evi Gravitiani, Sebelas Maret University - Faculty of Economics and Business
Suryanto , Sebelas Maret University - Faculty of Economics and Business

Global Energy Subsidies Reform: Inclusive Approaches to Welfare Assessment

Maksym Chepeliev, Purdue University - Center for Global Trade Analysis
Dominique van der Mensbrugghe, World Bank


ENVIRONMENTAL ECONOMICS eJOURNAL

"A Market Mechanism for Sustainable and Efficient Resource Use Under Uncertainty" Free Download
CESifo Working Paper Series No. 6524

MARTIN F. QUAAS, University of Kiel - Faculty of Economics and Social Sciences
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RALPH WINKLER, University of Bern - Department of Economics, University of Bern - Oeschger Centre for Climate Change Research
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Sustainability and efficiency are potentially conflicting social objectives in natural resource management. We propose a market mechanism to allocate use rights over a stochastic resource to private managers. The mechanism endogenously determines the maximal tenure length guaranteeing that the sustainability goal is obeyed for sure over the entire period. In addition, the mechanism achieves efficiency, i.e. it maximizes the expected present value of resource rents that accrue to society. Potential applications include improved fishing agreements between developing countries and distant-water fishing fleets.

"Paris after Trump: An Inconvenient Insight" Free Download
CESifo Working Paper Series No. 6531

CHRISTOPH BÖHRINGER, University of Oldenburg - Economic Policy, Centre for European Economic Research (ZEW)
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THOMAS F. RUTHERFORD, University of Wisconsin - Madison
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With his announcement to pull the US out of the Paris Agreement US President Donald Trump has snubbed the international climate policy community. Key remaining parties to the Agreement such as Europe and China might call for carbon tariffs on US imports as a sanctioning instrument to coerce US compliance. Our analysis, however, reveals an inconvenient insight for advocates of carbon tariffs: given the possibility of retaliatory tariffs across all imported goods, carbon tariffs do not constitute a credible threat for the US. A tariff war with its main trading partners China and Europe might make the US worse off than compliance with the Paris Agreement but China, in particular, should prefer US defection to a tariff war.

"Decomposition Analysis of the Greenhouse Gas Emissions in the European Union" Free Download
Problemy Ekorozwoju/Problems of Sustainable Development, Vol. 12, No 2, p. 27-35, 2017

MAGDALÉNA DRASTICHOV?, Technical University of Ostrava - Faculty of Economics
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Climate change is a significant threat to sustainable development (SD). Using the Log-Mean Divisia Index Method (LMDI) a decomposition of the data on the greenhouse gas (GHG) emissions in the European Union (EU) in 2000-2013 is carried out. To detect if decoupling of the environmental variable represented by the GHG emissions from the economic variable represented by the GDP was taking place in the EU economy, the changes of the GHG emissions were divided into three effects. These factors include the economic activity (scale), the composition or structure of the EU economy with respect to the countries, and GHG intensity of the countries. The aim of the paper is to detect if decoupling of the GHG emissions from the GDP development in the EU took place and to detect the factors of this development. The intensity effect was mainly responsible for the reduction of the GHG emissions in the EU while the scale effect contributed to their increase. The role of the composition effect was only marginal; however, it was positive. As the intensity effect often showed the high negative values, the total effect was often negative as well, which means that decoupling of GHG emissions from GDP took place.

"Corporate Environmental Responsibility for a Sustainable Future" Free Download
Problemy Ekorozwoju/Problems of Sustainable Development, Vol. 12, No. 2, p. 69-77, 2017

PANKOJINI MULIA, Indian School of Mines University (ISMU) - Department of Humanities and Social Sciences
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AJIT KUMAR BEHURA, Indian School of Mines University (ISMU) - Department of Humanities and Social Sciences
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SARITA KAR, Indian School of Mines University (ISMU) - Department of Humanities and Social Sciences
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It is an imperative to find a proper way to maintain a balance between the economic development and natural environment’s carrying capacity, which is needed for the wellbeing and sustenance of human as well as non-human world. Balancing the economic growth and environmental quality has always been a challenge for business. In recent years, business has brought immeasurable wealth and prosperity. However, it has also caused unintended environmental degradation. Economic development is necessary to face the need of growing population but it should not add to a deteriorating environment. There is a need for broader ethical responses for environmental sustainability. The search for a sustainable future requires an integration of economic development with ethical objectives and scientific knowledge. Sustainability is a concept of continuance, relationships, and orientations. The paper deals with three interrelated ethical concepts, (1) corporate moral status, (2) corporate moral status to include human beings, (3) corporate moral status to include natural environment as a path of environmental sustainability.

"Principles-Based Regulation – Blueprint for A ‘New Approach’ for the Internal Agricultural Market" Free Download
Wageningen Working Papers in Law and Governance No. 06/2017

KAI P. PURNHAGEN, Wageningen University, Erasmus University of Rotterdam - Rotterdam Institute of Law and Economics
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PETER H. FEINDT, Wageningen University, Strategic Communication Group
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The European agricultural sectors and the Common Agricultural Policy (CAP) face the triple challenge of productivity increase to meet increasing demands for food, fibre and energy, pressing public policy issues regarding public health and nutrition and the public good components of agricultural land use (emissions, soil protection, landscape, biodiversity, water, climate change), and adaptation to a changing institutional environment with liberalised markets and integrated transnational value chains. The current governance arrangements for the sector are criticised for their complexity, implementation gaps, inefficiency and ineffectiveness. This paper discusses whether a shift towards a different regulatory approach – principles-based regulation (PBR) in the form of the “new approach? – could offer an avenue for fundamental improvements. After reviewing the problems in the current CAP and explaining the broader “new approach? to regulation, we discuss its applicability to the internal agricultural market. We describe how a “new approach? to the internal agricultural market as application of PBR could look like and how PBR could be linked to the farm payments made under the CAP. We finally reflect on the necessary legal competence basis and on the potential of PBR to address the major challenges facing the European agricultural sector and the CAP.

"Valuing the Economic Impact of Flood Mitigationin Central Java, Indonesia" Free Download
Journal of Business and Economics Review (JBER) Vol.2(1) 2017. 49-55

EVI GRAVITIANI, Sebelas Maret University - Faculty of Economics and Business
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SURYANTO , Sebelas Maret University - Faculty of Economics and Business
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Objective - This research aims to map and identify the areas vulnerable to flood in Central Java Province, Indonesia, using Geography Information System (GIS) and value the economic impact on flood mitigation using Contingent Valuation Methods (CVM).

Methodology/Technique - The data regarding geographical, demographical, socio-economic, and topographical condition collected from local governments in Central Java Province, Meteorology and Geophysics Board, the Statistical Bureau, and Planning and Development Boar.

Findings - Spatial analysis with GIS provides evidence that Surakarta, Sragen, and Sukoharjo districts are more vulnerable to flood than other districts in Central Java Province. This evidence points the need to conduct a thorough study on these areas.

Novelty - This research contributes to empirical study, methodology, and policy implications.

"Global Energy Subsidies Reform: Inclusive Approaches to Welfare Assessment" Free Download

MAKSYM CHEPELIEV, Purdue University - Center for Global Trade Analysis
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DOMINIQUE VAN DER MENSBRUGGHE, World Bank
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For several decades energy subsidies remain on the top of international policy agenda, serving as one of the most debated and widely used policy tools. Several major international organizations have attempted to quantify global energy subsidies and provide assessment of their potential reform. This includes studies by Organization for Economic Co-operation and Development (OECD), International Energy Agency (IEA) and International Monetary Fund (IMF). While most of these contributions provide estimates of economy-wide effects, they lack consistent assessment of environmental co-benefits of subsidies elimination, which can have a significant influence on aggregate results and their regional distribution.

In this paper, we apply a multistep framework to analyze two global energy subsidies scenarios, which include elimination of pre-tax consumer and post-tax local pollution subsidies. Computable general equilibrium GTAP-E-Power model is used to implement energy subsidy policies, quantify economic impacts, estimate energy use changes and CO2 emissions. Energy use changes are linked to emission of air pollutants and pollution-mortality impacts are estimated based on the population exposed by pollution and corresponding mortality risks. Finally, welfare benefits related to reduced mortality rates are assessed using country-adjusted willingness-to-pay measure from direct valuation studies.

Results show that inclusion of mortality related benefits has significant impact on net welfare estimates. In case of pre-tax subsidies elimination, such approach turns two regions under consideration from net welfare losers to gainers and triples welfare benefits for China. Much more significant impacts occur in case of pollution subsidies elimination as net world welfare lost (-$400.9 billion) is turned into gain ($606.7 billion) with even more substantial changes on regional level. Considered energy subsidy policies show to substantially reduce air pollution-associated mortality rates – between 20.4 thousand (in case of pre-tax consumption subsidies) and 705.1 thousand (post-tax pollution subsidies) people annually. Global CO2 emission reduces from 2.8% to 28% depending on scenario.

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DON FULLERTON
Professor, University of Illinois at Urbana-Champaign - Department of Finance, National Bureau of Economic Research (NBER), CESifo (Center for Economic Studies and Ifo Institute)

LAWRENCE H. GOULDER
Shuzo Nishihara Professor of Environmental and Resource Economics, Stanford University - Department of Economics, Research Associate, National Bureau of Economic Research (NBER), University Fellow, Resources for the Future

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Sterling Professor of Economics, Yale University - Department of Economics, Sterling Professor of Economics, Cowles Foundation, Yale University, National Bureau of Economic Research (NBER)

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University of Arizona - Eller College of Management

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Mitchell Family Professor of Economics, Emeritus, Colby College - Department of Economics