carbon tax and opec s rents under a ceiling constraint we study the markov perfect nash equilibrium mpne of a game between oil importing countries who seek to maintain the atmospheric carbon concentration under a given ceiling and oil exporting countries the oil importing countries set a carbon tax and the oil exporting countries control the producer price we obtain implicit feedback rules and explicit non linear time paths of extraction carbon tax and producer price consumers are always able to reap some share of the scarcity and monopoly rents whereas producers partially pre empt the carbon tax only if the marginal damage under the ceiling is small we compare the mpne to the efficient open loop and cartel without tax equilibria

cooperative management of groundwater resources in the presence of environmental externalities this paper investigates how cooperation among users can achieve a better management of groundwater in the presence of environmental externalities cooperation allows users to internalize the damages caused by their activities and reduce extractions the paper develops a game theoretical framework to assess the value of cooperation in an aquifer that is divided into three sub aquifers that are being overly exploited two types of externalities are modeled first water extractions in each sub aquifer impact water levels in neighboring sub aquifers extraction externality second the three sub aquifers are also connected to an ecosystem and thus decisions in each sub aquifer affect the health of the ecosystem environmental externality a cooperative game theory model is applied the model empirically shows how the uncontrolled extractions in each sub aquifer affects neighboring groundwater users but also cause severe impacts to the linked ecosystem the model is tested empirically in one of the most important aquifers in spain the eastern la mancha aquifer the results illustrate how both extraction and environmental externalities interact in affecting the likelihood of cooperation among the users the paper estimates the value of cooperation and its stability with and without the environmental externality

valuing option existence and bequest demands for wilderness to assess the relative importance of current costs and future benefits of nuclear waste storage we develop a simple model of bequest value the basic model of nonparternalistic altruism is extended to account for the uncertain nature of the externality

monopoly extraction of a nonrenewable resource facing capacity constrained renewable competition abstract this paper studies monopoly extraction of a nonrenewable resource with the presence of a competitively supplied capacity constrained renewable substitute the monopolist staves off the renewable supply when the latter becomes competitive and then lets the resource price jump up

commensurability and sustainability triple impact assessments of a tourism event abstract in this study a model for measuring impacts of a tourist event from sustainability perspectives and in a common monetary metric is developed the aim is to achieve commensurability the proposed model is tested on a three day music festival and the results demonstrate a possibility to produce a sustainability impact analysis in a uniform metric measured in monetary terms socio cultural impacts carry weight just as economic impacts do whereas environmental impacts have little importance for the total assessment this illustrates how the low market value of emission rights make environmental concerns negligible from an economic perspective finally issues related to scope of the assessment commensurability and opportunity cost are discussed and possibilities for future studies are suggested

on the optimal order of natural resource use when the capacity of the inexhaustible substitute is limited consider a general equilibrium framework where the marginal cost of extraction from several deposits of an exhaustible resource is constant in terms of an inexhaustible perfect substitute and differs between deposits the instantaneous rate of production form the inexhaustible resource is subject to a capacity constraint

the evaluation of river water quality improvements by the contingent valuation method the results of an application of the contingent valuation method cvm to the estimation of the recreational benefits which would result from improvements in river water quality are described this

wilderness development decisions and the krutilla fisher model the case of scotland s flow country this paper reports some results from an empirical study of wilderness management in the flow country of northern scotland the flow country is an area of extensive blanket bog characterized by extensive populations of internationally rare breeding birds and by a very distinctive landscape the principle threat to the area at present comes from large scale afforestation this activity is subsidized by the state through the forestry commission and yet seems likely to create irreversible external cost flows the economic efficiency of continued planting in the area is tested for using the krutilla fisher model preservation benefits accruing to both users and non users are estimated using contingent valuation

valuing non market wildlife commodities an evaluation and comparison of benefits and costs this paper compares the benefits and costs of nature conversation at three sites of special scientific interest benefits are estimated by contigent valuation expressed preferences and also the travel cost method revealed preferences oppurtunity costs are assessed from a financial cost viewpoint and also in terms of shadow prices or social costs results indicate that the valuation of wildlife and nature conservation largely depends upon the frame of reference adopted that social costs are considerably less than financial costs due to the effect of the common agricultural policy that user benefits are considerably less than financial costs and non user benefits must be included to cover even the social costs of nature conservation

signals or noise explaining the variation in recreation benefit estimates this paper uses meta analysis to summarize the benefit estimates derived from travel cost recreation demand models after reviewing approximately 200 published and unpublished studies prepared from 1970 to 1986 77 were found to report either consumer surplus estimates or sufficient information to derive them using these estimates of the consumer surplus per unit of use from each study it was possible to evaluate the influence of variables describing the site characteristics the activities undertaken at each site the behavioral assumptions and the specification decisions the findings provide clear support for using econometric methods to summarize results from diverse empirical studies they highlight the important research issues in model development and offer a consistency check to the procedures used in benefit transfer analyses for policy evaluations

validation of empirical measures of welfare change a comparison of nonmarket techniques since the passing of the flood control act of 1936 the attention of many resource economists has been directed towards measuring the benefits and costs of alternative uses of natural resources increasingly it has been recognized that the value of some of these uses is not explicitly determined through market transactions this has led to the focus of much attention upon the development of nonmarket methods to estimate the value of these uses in the 1940s the groundwork for the travel cost method was established by hotelling prewitt 1949 following this in the 1960s davis initiated the basic foundation for bidding methods davis 1963 which were later to be subsumed under the heading of contingent valuation methods brookshire randall and stoll 1980 schulze d arge and brookshire 1981 thayer 1981 both of these methods will be further discussed below in addition to these two methods a third approach the unit day value method has been recognized as acceptable but not preferred for the valuation of recreational uses of water and related land resources dwyer kelley and bowes 1977 u s water resources council 1979 given the existence of alternative methods of estimating the value of resource uses several obvious questions arise one of the first of these is under what circumstances is each method most appropriate existing literature has focussed sufficiently on this question and pointed out limitations of each especially the travel cost method and unit day value methods brookshire ives and schulze 1976 dwyer kelly and bowes 1977 freeman 1979 mcconnell 1975 randall ives and eastman 1977 schulze d arge and brook

the grey paradox how fossil fuel owners can benefit from carbon taxation abstract this paper considers the distributional impact of optimal carbon taxation on fossil fuel owners a carbon emitting exhaustible resource competes with a dirtier abundant resource and a clean backstop a time dependent carbon tax is set to optimally use these resources under a cap constraint over co 2 atmospheric concentration as the cap is tightened the dirtier resource becomes less competitive compared to the exhaustible resource the competition effect but the timing and duration of extraction of the exhaustible resource is modified the timing effect we provide analytical expressions of these effects and determine conditions over size of reserves pollution contents extraction costs and demand elasticity such that the exhaustible resource owners profits increase as the ceiling is tightened calibrations for the transport and power sectors suggest that the profits of conventional oil and natural gas owners increase compared to a baseline without regulation for plausible carbon ceiling values

international coordination on climate policies given the current trend in global emissions the latest round of climate change negotiations at the durban meeting of december 2011 for the adoption of a comprehensive global treaty on climate change mitigation as soon as possible and no later than 2015 and to come into force in 2020 has hardly shown the results one would have hoped for even for the most optimistic it remains unclear whether one can expect a successful negotiating outcome by 2015 there are inherent difficulties associated with climate change negotiations ranging from which countries should bear most responsibility for a given emission reduction target to the assessment of a globally efficient time path for pricing harmful greenhouse gas emissions ghgs these difficulties become even more complex and challenging under the pervasive uncertainty of climate science and the uncertainty about the feedback loop between climate change damages and economic growth during the past decades the environmental economics literature has provided important insights regarding the design of environmental fiscal policies and treaties but there is a host of issues that remain relatively unexplored for instance we know little about the cooperative solution for carbon and trade policies when climate change affects the productive possibilities of countries in this context it is also not obvious whether observed policies could be improved upon in such a way that all countries gain in welfare it remains also unclear what the carbon extraction path should be in the absence of a comprehensive treaty such as for example if environmental policy is unilaterally chosen subject to an agreed ceiling in global temperature though carbon pricing instruments like carbon taxes cap and trade and hybrids have been well studied not much is known about their properties in the presence of offset schemes such as the clean development mechanism more work is also required to understand the strategic implications of the uncertainty surrounding climate change and how this affects for example the choice of climate change strategy precautionary or wait and see how uncertainty impacts the propensity of countries to sign a climate treaty and the extent to which the possibility of a climate catastrophe fosters or hinders cooperation understanding political economy issues is also vital in tackling climate change because efficient climate policies stand little chance of being successfully negotiated and implemented if they do not receive the support of the electorate the papers in the special issue of the journal of environmental economics and management are precisely devoted to this broad research agenda

beyond the rhetoric of sustainable tourism abstract recent years have witnessed an upsurge of interest in the concept of sustainable tourism for the most part attention has focused on defining the concept authors have reasoned that in order to achieve sustainable tourism a sound understanding must first be gained of what the concept means this article does not take issue with this general approach but nevertheless argues that the time has now come to move on from defining sustainable tourism to begin to consider how it may best be implemented in practice an approach based on the methodology of environmental economics is suggested as a possible way forward

optimal investment in clean production capacity for the mitigation of long term pollution threats one must consider that both the process of environmental degradation and the switchover to new and cleaner technologies are dynamic we develop a model of a uniform good that can be produced by either a polluting technology or a clean one the latter is more expensive and requires investment in capacity we derive the socially optimal pollution stock accumulation and creation of nonpolluting production capacity weighing the tradeoffs among consumption investment and djustment costs and environmental damages we consider the effects of changes in the pollution decay rate the capacity depreciation rate and the initial state of the environment on both the steady state and the transition period the optimal transition path looks quite different with a clean or dirty initial environment with the former investment is slow and the price of pollution may overshoot the long run optimum before converging with the latter capacity may overshoot

unilateral climate policy with production based and consumption based carbon emission taxes this paper characterizes a sub global climate coalition s unilateral policy of reaching a given climate damage reduction goal at minimum costs following eichner and pethig j environ econ manag 2013 we set up a two country two period model in which one of the countries represents a climate coalition that implements a binding ceiling on the world s first period emissions the other country is the rest of the world and refrains from taking action the coalition can make use of production based carbon emission taxes in both periods as in eichner and pethig j environ econ manag 2013 but here we consider consumption based carbon emission taxes as an additional instrument the central question is whether and how the coalition employs the consumption based taxes along with the production based taxes in its unilateral cost effective ceiling policy all cost effective policies identified analytically and numerically consist of a mix of both types of taxes implying that there is a tax mix which is less expensive for the coalition than stand alone consumption based or stand alone production based taxes with full cooperation both taxes are perfect substitutes in our model but in case of unilateral action they are imperfect substitutes because coalition s total welfare loss from two different but moderate distortions is smaller than that from a single but severe distortion

estimating the use and preservation values of national parks tourism resources using a contingent valuation method abstract the korean national parks authority has questioned whether natural resources have enough economic value to justify an increase in admission fee in the case of inadequate assistance from the government alternatively they also question whether the national parks have sufficient value to contribute to citizens welfare in order to receive continuing support from the government hence the purpose of this research is to estimate the use and preservation values of natural and or cultural resources in five distinctive national parks using a dichotomous choice contingent valuation method the empirical results show that natural and or cultural resources of the sample national parks possessed considerable use and preservation values outweighing current admission fees and maintenance costs per visitor thus these values provide enough justification for the national park authority to increase admission fees to maintain the quality of natural environment and avoid degrading natural resources in the event of no assistance by the government the findings may provide guidance to national park managers and practitioners who establish pricing policies the results also show that values of natural and or cultural resources were different across five distinctive national parks indicating the possibility of employing differential admission fees according to park characteristics

optimal pricing of environmental and natural resource use with stock externalities abstract underlying some of the most pressing environmental problems are the interlinked resource and environmental stock externalities with threshold effects using a simple dynamic model it is shown how in the face of such externalities the static market based policy instruments such as pigouvian taxes should be modified it is shown that even if for an initial period there is going to be no pollution stock damage the optimal policy still requires that abatement begins immediately and at increasing rates simulation of the model for the case of fossil fuel burning and the consequent global warming shows that the optimal carbon tax and therefore the optimal control strategy is particularly sensitive to changes in the marginal abatement cost and the level of fossil fuel demand policy simulations contrast the optimal control policy with and estimate the welfare losses from alternative policies deriving from arbitrary tax paths the latter include i a no tax policy ii a constant carbon tax rate iii the european community s proposed carbon tax path and iv a delayed optimal tax path

validity of open ended and payment scale approaches to eliciting willingness to pay the open ended and payment scale approaches to eliciting willingness to pay wtp valuations are compared use of the payment scale led to a higher response rate a higher rate of completion of the wtp question higher mean and median wtp values a stronger association between wtp and ability to pay and a higher r2 in regression analysis of wtp on several independent variables taking these results in combination it can be inferred that the payment scale technique leads to more valid wtp values than use of the open ended approach

willingness to pay and willingness to accept how much can they differ comment i agree with the point made by edoh y amiran and daniel a hagen 2003 that there can be a substantial or even infinite divergence between the wta and wtp for a public good even where there is a nonzero elasticity of substitution between market goods and the public good provided that the indifference curves are asymptotically bounded with respect to market goods in the manner they describe this is an important point they are also correct to point out that the elasticity of substitution is a local concept whereas their asymptotic boundedness condition applies also for discrete changes my 1991 paper used a local analysis because it was following the structure of the analysis in robert d willig 1976 and alan randall and john r stoll 1980 i wanted to show that while randall and stoll appeared to extend willig s local result on wta versus wtp from price changes to changes in the quantity of a public good the relevant elasticity was in fact different and involved the substitution elasticity as well as the income elasticity i view these points by amiran and hagen as not two separate results but essentially the same result their asymptotic boundedness condition generalizes my zero elasticity of substitution condition to discrete changes the asymptotic boundedness condition can be expressed as follows assuming a bivariate utility function u x q and given a reference point x q associated with a reference utility level u u x q there exists some q q such that for all q q there exists no x such that u x q u in other words no amount of x can substitute for the reduction in public good from q to q q in the case of a zero elasticity of substitution q q but as amiran and hagen show in their theorem 1 this is unnecessarily restrictive when dealing with a discrete reduction in q furthermore their theorem 2 can be viewed as a special case of their theorem 1 in which q 0 which makes q an essential commodity it is well known in consumer theory that the wta to avoid the loss of an essential market good is infinite their theorem 2 extends this result to the case of an essential nonmarket good but as their theorem 1 shows essentialness is not necessary for an infinite wta the boundedness condition is the key and this implies a fundamental lack of substitutability between money market goods and the public good

cost benefit analysis and environmental policy the use of cost benefit analysis cba in british environmental policy has gone through several stages early applications of cba tended to ignore environmental impacts altogether leave them for a subsidiary impact analysis or provide only a partial monetization of impacts currently cba is the subject of renewed interest in government departments in the environment agency and among other agencies providing guidance and advice to government while the amount of cba being undertaken has increased its influence on policy making is open to question obstacles remain much cba is expensive and this means that benefits transfer is widely regarded as essential currently however the validity of much benefits transfer is questionable other problems arise from misunderstandings about the nature of economic values and the links to individuals self interest and from concerns that cba results will crowd out flexibility in decision making especially the likely context of multiple political objectives over and above economic efficiency none the less cba has begun to have influence in the setting of environmental taxes and alternative decision rules appear to suffer as many if not more shortcomings as those faced by cba copyright 1998 by oxford university press

fossil fuels stock externalities and backstop technology the hotelling exhaustible resource model is extended to include stock pollution and nonpolluting backstop technology it is shown that an optimal energy consumption strategy typically includes a regime in which the two energy sources are consumed simultaneously along this regime fossil fuel consumption decreases and backstop consumption increases together fossil fuel and backstop consumption may form eleven optimal regime combinations a decrease in the backstop price decreases the initial level of optimal emission tax

the role of economics in climate change policy many policy problems have frustratingly long histories of inefficient regulation that can be difficult or impossible to reverse even where large efficiency gains might be had from doing so climate change is an exception however because little real action has been undertaken to date it presents an unusual opportunity for an efficient economic policy to be employed right from the beginning however the opportunity could easily be lost ongoing negotiations conducted under the auspices of the united nations framework convention on climate change have so far produced the kyoto protocol a deeply flawed agreement that manages to be both economically inefficient and politically impractical in this article we examine the key economic characteristics of climate change and argue that economic theory provides good guidance on the design of an efficient and politically realistic policy because climate change involves vast uncertainties and has potentially enormous distributional effects neither of the standard market based environmental policy instruments is a viable approach a tradable permit system would be inefficient and an emissions tax would be politically unrealistic however a hybrid policy combining the best features of the two would be an efficient and practical approach we then compare our hybrid proposal to the kyoto protocol and argue that it overcomes the protocol s shortcomings

contingent valuation of ecotourism in annapurna conservation area nepal implications for sustainable park finance and local development abstract to determine willingness to pay wtp for candidate entry fees contingent valuation surveys were administered to 315 foreign visitors to the annapurna conservation area nepal during april and may of 2006 the results of logit regression showed that the bid amount family size visitors satisfaction the use of a guide and group size were the most significant predictors of wtp results suggest that most visitors would be willing to pay an entry fee considerably higher than the current fee of 27 u s dollars usd the mean and median wtp were 69 2 and 74 3 usd respectively the most common explanation for wtp by respondents was a desire to better protect the environment the most common explanation for unwillingness to pay was that the bid was simply too expensive two models were developed based upon different predictions of visitor numbers an optimistic case and pessimistic case to calculate the expected revenue production and likely gross local economic impact of candidate entry fees based on this analysis we recommend an increase in the entry fee to usd 50 in the optimistic scenario this higher entry fee leaves a budget surplus in the pessimistic scenario it would reduce current budget deficits

a comparison of user benefits and costs of nature conservation at three nature reserves willis k g and benson j f 1988 a comparison of user benefits and costs of nature conservation at three nature reserves reg studies 22 417 228 benefits from conserving wildlife at three sites of special scientific interest are estimated using a travel cost method recording demand in terms of actual site visits these benefits are compared to the costs of nature conservation both the financial cost which is or could be incurred under the wildlife and countryside act 1981 and also the social costs of the agricultural output forgone after protective tariffs and subsidies of the common agricultural policy have been removed willis k g et benson j f 1988 une comparaison des avantages et des couts de la defense de l environnement aux usagers a trois reserves naturelles reg studies 22 417 228 on estime les avantages de la protection de la faune a trois sites d inter t scientifique special a partir d une methode qui calcule les frais de trajet enregistrant la demande en fonction des visi

consistency between contingent valuation estimates a comparison of two studies of uk national parks bateman i willis k and garrod g 1994 consistency between contingent valuation estimates a comparison of two studies of uk national parks reg studies 28 457 474 recent years have seen a significant increase in the application of the contingent valuation method to the evaluation of environmental preferences in the uk recent theoretical and methodological developments suggest that this increase is likely to be sustained for the foreseeable future this paper examines the issue of consistency across studies carried out to date in the uk attention is initially focused upon two major studies which allow the comparison of a number of findings analysis is then extended to a large number of smaller studies these comparisons suggest that the results obtained to date are both consistent and logically ordered with reference to the environmental good and the change in provision under consideration across studies bateman i willis k et garrod g 1994 la coherence des estimations contingentes une

a hotelling model with a ceiling on the stock of pollution abstract environmental agreements such as the kyoto protocol aim to stabilize the amount of carbon in the atmosphere which is mainly caused by the burning of nonrenewable resources such as coal we characterize the solution to the textbook hotelling model when there is a ceiling on the stock of emissions we consider both increasing and decreasing demand for energy we show that when the ceiling is binding both the low cost nonrenewable resource and the high cost renewable resource may be used jointly a key implication is that if energy demand were to decline in the long run we may supplement energy supply through clean renewables to meet the environmental standard but then revert back to using only dirty fossil fuels in the future when the ceiling has become non binding that is the much heralded societal transition to clean energy resources may be short lived

a regional dynamic general equilibrium model of alternative climate change strategies outcomes and noncooperative equilibria this study finds that cooperative policies show much higher levels of emissions reductions than do noncooperative strategies that there are substantial differences in the levels of controls in both the cooperative and the noncooperative policies among different countries and that high income countries may be the major losers from cooperation jel h41 q4 q2 q20