the greenhouse effect damages costs and abatement the buildup of so called greenhouse gases in the atmosphere co2 in particular appears to be having an adverse impact on the global climate this paper briefly reviews current expectations with regard to physical and biological effects their potential costs to society and likely costs of abatement for a worst case scenario it is impossible to assess in economic terms the full range of possible non linear synergistic effects in the most favorable although not necessarily likely case of slow paced climate change however it seems likely that the impacts are within the affordable range at least in the industrialized countries of the world in the third world the notion of affordability is of doubtful relevance making the problem of quantitative evaluation almost impossible we tentatively assess the lower limit of quantifiable climate induced damages at 30 to 35 per ton of co2 equivalent worldwide with the major damages being concentrated in regions most adversely affected by sea level rise the non quantifiable environmental damages are also significant and should by no means be disregarded the costs and benefits of 1 reducing cfc use and 2 reducing fossil fuel consumption as a means of abatement are considered in some detail this strategy has remarkably high indirect benefits in terms of reduced air pollution damage and even direct cost savings to consumers the indirect benefits of reduced air pollution and its associated health and environmental effects from fossil fuel combustion in the industrialized countries range from 20 to 60 per ton of co2 eliminated in addition there is good evidence that modest e g 25 reductions in co2 emissions may be achievable by the u s and by implication for other countries by a combination of increased energy efficiency and restructuring that would permit simultaneous direct economic benefits savings to energy consumers of the order of 50 per ton of co2 saved a higher level of overall emissions reduction possibly approaching 50 could probably be achieved at little or not net cost by taking advantage of these savings we suggest the use of taxes on fossil fuel extraction or a carbon tax as a reasonable way of inducing the structural changes that would be required to achieve significant reduction in energy use and co2 emissions to minimize the economic burden and create a political constituency in support of the approach we suggest the substitution of resource based taxes in general for other types of taxes on labor income real estate or trade that are now the main sources of government revenue while it is conceded that it would be difficult to calculate the optimal tax on extractive resources we do not think this is a necessary prerequisite to policy making in fact we note that the existing tax system has never been optimized according to theoretical principles and is far from optimal by any reasonable criteria

analysis of policies to reduce oil consumption and greenhouse gas emissions from the us transportation sector abstract even as the us debates an economy wide co 2 cap and trade policy the transportation sector remains a significant oil security and climate change concern transportation alone consumes the majority of the us s imported oil and produces a third of total us greenhouse gas ghg emissions this study examines different sector specific policy scenarios for reducing ghg emissions and oil consumption in the us transportation sector under economy wide co 2 prices the 2009 version of the energy information administration s eia national energy modeling system nems a general equilibrium model of us energy markets enables quantitative estimates of the impact of economy wide co 2 prices and various transportation specific policy options we analyze fuel taxes continued increases in fuel economy standards and purchase tax credits for new vehicle purchases as well as the impacts of combining these policies all policy scenarios modeled fail to meet the obama administration s goal of reducing ghg emissions 14 below 2005 levels by 2020 purchase tax credits are expensive and ineffective at reducing emissions while the largest reductions in ghg emissions result from increasing the cost of driving thereby damping growth in vehicle miles traveled

cost benefit assessment of energy efficiency investments accounting for future resources savings and risks in the australian residential sector this article focuses on the impact of the discount rate on cost benefit assessment of investment options for residential building efficiency an integrated thermal modeling life cycle costing approach is applied to an extensive sample of dominant house designs for australian conditions the relative significance of predicted thermal performance and the applied discount rate on the present value of energy savings from alternative investment scenarios is investigated costs and benefits are also evaluated at the economy wide scale including carbon pricing considerations and for a test case household faced with alternative investment options at the point of construction the influence of the applied discount rate on produced cost benefit calculations is investigated as is the interaction between critical cost benefit input parameters findings support that the discounting framework is the primary driver of difference in estimates about costs and benefits of higher standards of efficiency in the residential sector results demonstrate that agreement on a low discount rate based on sustainability principals would prioritise those projects with significant environmental benefits

financial deregulation and productivity growth in banking sector empirical evidence from bangladesh this article examines the effects of regulatory reform on productivity growth in the bangladesh banking industry we use a unique balanced panel dataset comprising bank level annual data from the e

energy efficiency in the japanese transport sector abstract we examine energy efficiency in the japanese transportation sector since the 1970s comparisons with the united states and other developed economies illustrate that japan primarily stands out due to low activity levels and modal structure rather than modal energy intensity on road automobile energy intensity has shown little improvement albeit from a low base over the past four decades we also consider policy measures undertaken by the japanese government political arrangements in japan after world war ii made it attractive for politicians to pursue energy conservation by making transportation particularly by automobile expensive for the average japanese citizen the revenues raised from various fees and taxes on automobile transportation were redistributed to core supporters of the ruling liberal democratic party these political arrangements have come under fire in recent years calling into question japan s traditional approach towards transportation sector energy efficiency

ramsey discounting of ecosystem services most ecosystem services which are essential for human well being are globally declining while the production of consumption goods measured by gdp is still growing to adequately account for this opposite development in public cost benefit analyses it has been proposed based on a two goods extension of the ramsey growth model to apply good specific discount rates for manufactured consumption goods and for ecosystem services using empirical data for ten ecosystem services across five countries and the world at large we estimated the difference between the discount rates for ecosystem services and for manufactured consumption goods in a conservative estimate we found that ecosystem services in all countries should be discounted at rates that are significantly lower than the ones for manufactured consumption goods on global average ecosystem services should be discounted at a rate that is 0 9 pm 0 3 points lower than the one for manufactured consumption goods the difference is larger in less developed countries and smaller in more developed countries this result supports and substantiates the suggestion that public cost benefit analyses should use country specific dual discount rates one for manufactured consumption goods and one for ecosystem services

reconciling sustainability and discounting in cost benefit analysis a methodological proposal abstract the incorporation of the intergenerational equity objective has rendered the traditional cost benefit analysis cba approach obsolete for the evaluation of projects presenting an important number of environmental externalities and for those whose impacts extend throughout a long period of time based on the assumption that applying a discount rate rewards current consumption and therefore that it is only possible to introduce a certain intergenerational equity in a cost benefit analysis in this work we propose an approach to discounting based on a different rationale for tangible and intangible effects we designed two indicators of environmental profitability a the intergenerational transfer amount ita which quantifies in monetary units what the current generation is willing to pass on future generations when an environmental restoration project is carried out and b the critical environmental rate cer measures the implicit environmental profitability these concepts were tested through an empirical case study pertaining to the assessment of an erosion control project in the southeast of spain the results yield traditional profitability indicators that are higher and probably closer to the real values set by the contemporary society the information provided by the environmental profitability indicators proposed renders more transparency to the quantification of the levels of intergenerational equity applied thereby facilitating the difficult reconciliation of the cba technique with the objective of sustainability

double co2 and beyond benefits costs and compensation abstract economic decisions over what action if any to take concerning the greenhouse effect tend to revolve around the social discount rate implicitly the debate concerns how to attribute intertemporal weights to welfare and implies a moral stance that is rarely given explicit recognition refocusing on the outcomes of current actions emphasises the role of compensation a conflict is apparent between the view that the current generation need be unconcerned over the loss or injury caused to future generations because they will benefit from advances in technology investments in both man made and natural capital and direct bequests and the requirement to avoid harming the innocent changes in units of welfare cannot be viewed as equivalent regardless of their direction in general doing harm is not cancelled out by doing good the result is a rejection of the potential compensation principle which underlies the current economic stance and a reconsideration of the acceptability of compensation altogether the concept of human rights and a non utilitarian perspective are used to show how cost benefit analysis denies the existence of inalienable rights and economics limits the moral considerability of harm

discounting in integrated assessments of climate change one of the key decisions that economists working on integrated studies of climate change face is the selection of the method of accounting for damages resulting from possible climate change across a long temporal scale and the method for the intertemporal comparison of the costs associated with possible greenhouse gas abatement strategies sensitivity tests show that the method applied and the resulting discount rate has a major impact on the optimal climate strategy the paper is intended to provide a short review of the various techniques that have been proposed and applied in various integrated models of climate change the underlying problem is as follows we can attempt to be consistent with the economic theory and empirical observations but in this case the derived discount rate will be on the order of 5 to 8 as a result even possibly significant damages from climate change turn out to be negligible when considered at their present value the artificially low discount rate based on ethical reasoning on the other hand makes our climate related decisions and resource allocations inconsistent with the majority of other public policy decisions

sustainability limited substitutability and non constant social discount rates abstract the paper shows how limited substitutability in consumption between different classes of goods affects the magnitude and time development of social discount rates it decomposes the discount rates into an absolute growth and a relative growth or substitutability effect the paper relates between good and intertemporal substitutability to the notions of weak and strong sustainability it analyzes under which circumstances low as opposed to high between good substitutability increases the weights given to long run environmental services

measuring the existence value of wildlife what do cvm estimates really show two research programs are brought together to contribute to the growing body of work on alternatives to standard welfare based approaches to environmental valuation and policy the first is the theoretical literature undermining the new welfare

the damage costs of climate change a note on tangibles and intangibles applied to dice economic cost benefit analysis of the costs of greenhouse gas emission abatement and climate change often points towards limited abatement this note elucidates one reason why this result is obtained the way in which the intangible damages are treated and the utility function is specified on the basis of the dice model it is shown that by putting the intangible damages directly into the utility function and by assuming them to grow with per capita income the optimal reduction increases and in the second case more than triples compared to nordhaus s original results

equity effects of alternative assignments of global environmental rights abstract through a thought experiment in which members of different generations trade with each other in a virtual market we examine the effects of alternative assignments of global environmental rights on prices interest rates and the global distribution of income the model is semi calibrated to current and projected levels of the output of produced goods and to present and future quantities of global environmental goods income classes in each country are disaggregated to the quintile level multiple equilibria are possible for some rights assignments with implications for intergenerational equity the model projects bounds on the degree of future economic inequality depending on how the environmental rights are assigned a policy that assigns the environmental rights in such a way as to leave the present day distribution of income unchanged while moving in the direction of equal per capita endowments of environmental rights can result in future inequality comparable to today s average within country inequality

how to decide when experts disagree uncertainty based choice rules in environmental policy environmental economists have traditionally addressed the issue of choice under uncertainty by applying the expected utility hypothesis when policymakers face a panel of experts with widely divergent beliefs the problem may more accurately be described as a case of choice under pure uncertainty arrow and hurwicz 1972 demonstrate that rational choice criteria under pure uncertainty will focus on the extremes of the state space not the midpoint as is typically assumed using nordhaus s dice model uncertainty based choices about global warming policies are evaluated linkages to the safe minimum standard and the precautionary principle are also discussed

the economic impacts of climate change evidence from agricultural output and random fluctuations in weather fisher et al 2012 hereafter fhrs have uncovered coding and data errors in our paper deschenes and greenstone 2007 hereafter dg we acknowledge and are embarrassed by these mistakes we are grateful to fhrs for uncovering them we hope that this reply will also contribute to advancing the literature on the vital question of the impact of climate change on the us agricultural sector fhrs main critiques of dg are as follows i there are errors in the weather data and climate change projections used by dg ii the climate change projections are based on the hadley 2 model and scenarios rather than the more recent hadley 3 model and scenarios iii standard errors are biased due to spatial correlation iv the inclusion of state by year fixed effects does not leave enough weather variation to obtain meaningful estimates of the relationship between agriculture profits and weather v storage and inventory adjustment in response to yield shocks invalidate the use of annual profit data and vi fhrs argue that a better specified hedonic model produces robust estimates unlike the results reported in dg four of these critiques have little basis and we respond to them here in the introduction specifically with respect to ii the more recent daily climate predictions were not available when we wrote dg nevertheless the most important issue is providing the reliable estimates of climate change and in this note we report estimates based on the climate model we used in dg and a more recent one that we gained access to in the meantime iii in the primary table on agricultural profits dg reports two sets of standard errors with the first clustered at the county level and the second based on a variance covariance matrix that accounts for spatial correlation using the method proposed in conley 1999 thus the claim of fhrs 2012 seems overblown nevertheless to ease comparisons of papers in this literature this note will adopt the fhrs convention of reporting estimated standard errors clustered at the county and state levels we find that inference is largely unaffected by the choice between these different assumptions about the variance covariance matrix

social ecology sustainability and economics article i nfo what mode of analysis might be employed that captures the confluent action of material and social systems acting together the framework of social ecology which first emerged as a rejoinder to the chicago school of human ecology of the early 1900s evolved over subsequent decades as an attempt at such integration we revisit social ecology s historical origins and foundational assumptions we propose that the social ecological framework can offer useful conceptual grounding to scholars of ecological economics we illustrate how this analytical lens affords a deeper understanding of unsustainable systems and valuation problems

global warming discounting is not the issue but substitutability is the cost benefit study of nordhaus 1994 is representative for the neoclassical approach towards global warming nordhaus found that no substantial emission cuts are warranted most of his critics have concentrated on the issue of discounting and demanded that a lower discount rate should be applied these criticisms first miss the point and second lead to ethically dubious inconsistent conclusions and inefficient policy choices they miss the point because the real problem of nordhaus s methodology is his implicit underlying assumption of perfect substitutability between natural and other forms of capital given the validity of this assumption lowering the rate of discount is inconsistent with current savings behaviour is ethically dubious because future generations will be much richer than the current one anyway and is inefficient because scarce financial resources are channelled into emissions abatement that exhibits rates of return far inferior to alternative public investments any call for aggressive emission abatement must therefore directly attack the perfect substitutability assumption of neoclassical economics the real disagreement is about whether consumption growth can compensate for environmental degradation caused by global warming discounting is not the issue but substitutability is

nonhomothetic growth models for the environmental kuznets curve we show the role of the elasticity of substitution between general consumption and the environment in environmental degradation specifically our numerical experiments demonstrate for a wide range of models exponential utility generates the environmental kuznets curve without adding any special assumptions with exponential utility the elasticity of substitution and hence the substitution effect between consumption and the environment are both decreasing in income hence when income is low society the government readily gives up environmental quality in return for more consumption but it does not want to substitute consumption for the environment anymore once it becomes wealthy enough

will u s agriculture really benefit from global warming accounting for irrigation in the hedonic approach will u s agriculture really benefit from global warming accounting for irrigation in the hedonic approach wolfram schlenker w michael hanemann and anthony c fisher there has been a lively debate about the potential impact of global climate change on u s agriculture most of the early agro economic studies predict large damages see for example richard m adams 1989 harry m kaiser et al 1993 and adams et al 1995 in an innovative paper robert mendelsohn william d nordhaus and daigee shaw 1994 hereafter mns propose a new approach using the variation in temperature and precipitation across u s counties to estimate a reduced form hedonic equation with the value of farmland as the dependent variable a change in temperature and or precipitation is then associated with a change in farmland value which can be interpreted as the impact of climate change adams et al 1998 characterize the hedonic approach as a spatial analogue approach and acknowledge that the strength of the spatial analogue approach is that structural changes and farm responses are implicit in the analysis freeing the analyst from the burden of estimating the e ects of climate change on particular region speci c crops and farmer responses on the other hand one of the potential disadvantages of the hedonic approach is that it is a partial equilibrium analysis i e agricultural prices are assumed to remain constant 1 while year to year uctuations in annual weather conditions certainly have the potential to impact current commodity prices especially for crops produced only in a relatively localized area such as citrus fruits which are grown mainly in california and florida changes in long run weather patterns i e changes in climate might have a smaller e ect on commodity prices because of the greater potential for economic adaptation particularly shifts in growing regions 2 the hedonic approach as implemented by mns predicts that existing agricultural land on average might be more productive and hence result in bene ts for u s farmers 3 the hedonic approach has received considerable attention in our judgment in part because the conclusions are at variance with those of some other studies

discounting and distributional considerations in the context of global warming the economics of global warming is reviewed with special emphasis on how the cost depends on the discount rate and on how costs in poor and rich regions are aggregated into a global cost estimate both of these factors depend on the assumptions made concerning the underlying utility and welfare functions it is common to aggregate welfare gains and losses across generations and countries as if the utility of money were constant but it is not if we assume that a e co2 equivalent dlubling implies costs equal to 1 5 of the income in both high and low income countries a pure rate of time preference equal to zero and a utility function which is logarithmic in income then the marginal cost of co2 emissions is estimated at 260 590 usd ton c for a time horizon in the range 300 1000 years an estimate which is large enough to justify significant reductions of co2 emissions on purely economic grounds the estimate is approximately 50 100 times larger than the estimate made by nordhaus in his dice model and the difference is almost completely due to the choice of discount rate and the weight given to the costs in the developing world as well as a more accurate model of the carbon cycle finally the sensitivity of the marginal cost estimate with respect to several parameters is analyzed

foreign direct investment spillovers and productivity growth in indonesian garment and electronics manufacturing inflows of foreign direct investment generate externalities that spill over to domestic firms and raise their productivity this article examines the extent of spillover effects of foreign direct investment for firms in the highly disaggregated garment isic 3221 and electronics industries isic 3832 in indonesia both are export intensive industries but differ greatly in technological sophistication and labour intensity changes in both the productivity level and rate of growth in each industry are decomposed into the effects of technological change technical efficiency change and scale efficiency change and then the impacts of spillovers on each component and on total productivity are estimated the findings suggest that foreign direct investment generates a positive effect on total productivity change technical efficiency change technological change and scale efficiency change in the garment industry in contrast foreign direct investment contributes significantly negatively to total productivity technological change and scale efficiency change but has no significant effect on technical efficiency change in the electronics industry

monetary valuation of the social cost of co2 emissions a critical survey an expanding branch of research has estimated the potential costs of climate change which are often expressed as the social cost of carbon scc or the costs of an additional ton of co2 emissions estimates of the scc can be used by policy makers to evaluate climate change policies and greenhouse gas emission reduction projects by means of cost benefit analyses cbas such analyses are complicated by the wide range of scc values that have been reported in the literature and the large uncertainties involved in estimating the potential economic impacts and related costs of climate change this study presents a critical review of the reported scc estimates by examining some neglected consequences of climate change uncertain and extreme scenarios of climate change the discounting of future climate change effects the treatment of individual risk aversion and assumptions about social welfare in view of the many uncertainties and omissions in conventional cost benefit analyses of climate impacts and the scc alternative approaches to decision making should be considered for climate policy

natural capital in integrated assessment models of climate change in integrated assessment models iams economic activity leads to global warming which causes future economic costs however typical iams do not explicitly represent the role of natural capital in this paper the dice model by nordhaus 2008 is expanded with a natural capital variable that is affected both by climate change and by depletive effects of economic activity due to a synergy between the two effects the optimal policy of the expanded model features more and earlier abatement of co2 emissions than dice interestingly the policy implications are different from what follows if one tries to capture the depletive effects on natural capital by simply reducing factor productivity growth in dice acknowledging considerable uncertainty simulations show that climate and savings rate policies from the expanded model are more robust in the long term than policies that do not consider non climatic depletion effects on natural capital

climate change costs recent advancements in the economic assessment climate change is unique among the consequences of fossil fuel burning in its far reaching impact both spatially and temporally earlier studies estimate the aggregated monetized damage due to climate change at 1 5 to 2 0 of world gdp for 2 co2 the oecd would lose 1 0 to 1 5 of gdp the developing countries 2 0 to 9 0 according to these estimates these figures are not comprehensive and highly uncertain newer studies increasingly emphasize adaptation variability extreme events other non climate change stress factors and the need for integrated assessment of damages as a result differences in impacts between regions and sectors have increased the market impacts in developed countries tended to fall and non market impacts have become increasingly important marginal damages are more interesting from a policy point of view earlier estimates range from about us 5 to us 125 per tonne of carbon with most estimates at the lower end of this range these figures are based on polynomial functions in the level of climate change but the rate of change may be equally important as are the speed of adaptation restoration and value adjustment furthermore future vulnerability to climate change will be different from current vulnerability on the whole the market impacts fall relatively with economic growth while the non market impacts rise relatively with growth

zero discounting can compensate future generations for climate damage abstract in cost benefit analysis of climate policy there are two main approaches to discounting each with implications conflicting with our moral intuitions thus discounted utilitarianism implies that we hardly need to protect future generations against climate change while classical utilitarianism implies that we should reduce our consumption across the board to benefit future generations the insolubility of the debate derives from the fact that both classical and discounted utilitarianism permit only a single discount rate for all consequences occurring in the same future year while our intuitions clearly do distinguish between consequences depending on whether we cause adverse effects on other people s interests and violate their rights most people share the moral intuition that we ought to refrain from harming others and ought to compensate them if we were unable to prevent harm to regain a reflective equilibrium between such deontological intuitions and economic theory there is a need to accept different discount rates for different situations a zero consumption discount rate in the case of cost benefit analysis of measures to prevent wrongful harm to future generations and standard discounting in all other cases applying a zero consumption discount rate means that future generations are automatically largely compensated for climate damage that remains unmitigated

output and productivity in banking concepts in banking output and the empirical literature on bank productivity which employs output concepts are critically surveyed for output the national accounts production and intermediation approaches are compared as regards productivity both partial and total factor productivity measures and the dea and parametric approaches to the latter are assessed among the most striking results is the prevalence of technical inefficiency in banking but it is also suggested that measurement techniques have often outpaced the theory of what is to be measured notably in fields such as joint production risk and competition alternative approaches to address these issues are suggested

reconciling sustainability systems theory and discounting abstract most definitions of sustainability imply that a system is to be maintained at a certain level held within certain limits into the indefinite future sustainability denies run away growth but it also avoids any decline or destruction this sustainability path is hard to reconcile with the renewal cycle that can be observed in many natural systems developing according to their intrinsic mechanisms and in social systems responding to internal and external pressures systems are parts of hierarchies where systems of higher levels are made up of subsystems from lower levels renewal in components is an important factor of adaptation and evolution if a system is sustained for too long it borrows from the sustainability of a supersystem and rests upon lack of sustainability in subsystems therefore by sustaining certain systems beyond their renewal cycle we decrease the sustainability of larger higher level systems for example schumpeter s theory of creative destruction posits that in a capitalist economy the collapse and renewal of firms and industries is necessary to sustain the vitality of the larger economic system however if the capitalist economic system relies on endless growth then sustaining it for too long will inevitably borrow from the sustainability of the global ecosystem this could prove catastrophic for humans and other species to reconcile sustainability with hierarchy theory we must decide which hierarchical level in a system we want to sustain indefinitely and accept that lower level subsystems must have shorter life spans in economic analysis inter temporal discount rates essentially tell us how long we should care about sustaining any given system economists distinguish between discount rates for individuals based on personal time preference lower discount rates for firms based on the opportunity cost of capital and even lower discount rates for society for issues affecting even higher level systems such as global climate change many economists question the suitability of discounting future values at all we argue that to reconcile sustainability with inter temporal discounting discount rates should be determined by the hierarchical level of the system being analyzed

the lmdi approach to decomposition analysis a practical guide in a recent study ang energy policy 32 2004 compared various index decomposition analysis methods and concluded that the logarithmic mean divisia index method is the preferred method since the literature on the method tends to be either too technical or specific for most potential users this paper provides a practical guide that includes the general formulation process summary tables for easy reference and examples

discounting of long term costs what would future generations prefer us to do decisions with intergenerational consequences may leave future generations worse off i e not be pareto optimal if costs and benefits are not discounted correctly we point out that this happens if the conventional social discount rate is applied to intergenerational costs with that rate the justification of intergenerational costs benefits of a project are invested and the proceeds can cover future costs leads to an inconsistency over the long term eventually the supposed benefits of any project become larger than the entire gnp the conventional approach commits an error by treating the time preference component of the discount rate as if it represented creation of wealth while it really involves only redistribution the time horizon of the redistribution is limited by the duration of market transactions especially loans thus we recommend a two step discounting procedure with the conventional social discount rate for the short term about 30 years and the growth rate of the economy for the long term data for gnp per capita growth in the us the uk france germany japan and the soviet union since the industrial revolution combined with data for net economic welfare per capita suggest an intergenerational discount rate in the range of 1 to 2 for practical application the rate at which costs and benefits will grow over time is just as important as the discount rate only the difference between these two rates matters for many environmental costs these rates may be close to each other during the next few generations this implies that some of the uncertainty in the prediction of rates cancels and one can treat the problem as if the effective rate were close to zero the consequence for costs such as global warming or nuclear power can be very significant the valuation can increase by more than an order of magnitude compared to values based on conventional discounting

climate change irrigation and israeli agriculture will warming be harmful the authors use a ricardian model to test the relationship between annual net revenues and climate across israeli farms they find that it is important to include the amount of irrigation water available to each farm in order to measure the response of farms to climate with irrigation water omitted the model predicts that climate change is strictly beneficial but with water included the model predicts that only modest climate changes are beneficial while drastic climate change in the long run will be harmful using the atmospheric oceanic global circulation models scenarios the authors show that farm net revenue is expected to increase by 16 percent in 2020 while in 2100 farm net revenue is expected to drop by 60 390 percent varying between the different scenarios although israel has a relatively warm climate a mild increase in temperature is beneficial due to the ability to supply international markets with farm products early in the season the findings lead to the conclusion that securing water rights to the farmers and international trade agreements can be important policy measures to help farmers adapt to climate change

bank competition financial reform and institutions the importance of being developed abstract in this paper i estimate the degree of market power at the bank level for 84 banking systems worldwide subsequently i analyze the sources of bank competition placing emphasis on the impact of financial reform and the quality of institutions i find that financial liberalization policies reduce the market power of banks in developed countries with advanced institutions in contrast banking competition does not improve at the same pace in countries with weaker institutions and a lower level of institutional development the results hold across a wide array of identification tests and estimation methods the main policy implication to be drawn is that a certain level of institutional development is a precondition for the success of reforms aimed at enhancing the competition and efficiency of banking markets

productivity and efficiency of vietnamese banking system new evidence using fare primont index analysis this article aims to provide a clearer view on the recent evolutions of the vietnamese banking system that can be useful to public authority when taking restructuring decisions this article focuses on the evolution of productivity of vietnamese banks over the period 2008 to 2012 and on the evolution of the different components of this productivity technical change pure technical efficiency and mix and scale efficiency the methodology draws from very recent developments in index theory in the design of multiplicative complete economically ideal indexes using fare primont productivity indexes to measure productivity this methodology is applied to a balanced panel of vietnamese banks the results complement observations usually made on the recent development of the vietnamese banking system they show that the state bank of vietnam s restructuring policy cannot focus only on either the insufficient size of banks or a better management of these banks in terms of the mix of outputs both must be conside

an analysis of irrigated agricultural outcomes under the prior appropriation doctrine hypotheses and applications this article measures irrigated agricultural outcomes under the prior appropriation doctrine by developing a model of farmers land allocations in response to water supply change the modelling approach considers the institutional factors of water rights and permits the inclusive determination of water and land allocations we utilize farm level data of irrigated agriculture in water district 1 in idaho to examine the predictions from our theoretical model the water rights priority date is consolidated at the farm level and used to differentiate farmers responses we test a set of hypotheses that relate to water supply and crop revenue our results suggest that the water rights priority has a profound impact on agricultural outcomes indicating strong institutional effects and weak influence of market based approaches farmers respond to both long term and seasonal water supply change and variation and they respond to seasonal water supply forecasts in varied ways depending on their water rights portf

efficiency sustainability and global warming abstract economic analyses of global warming have typically been grounded in the theory of economic efficiency such analyses may be inappropriate because many of the underlying concerns about climate change are rooted not in efficiency but in the intergenerational allocation of economic endowments a simple economic model is developed which demonstrates that an efficient economy is not necessarily a sustainable economy this result leads directly to questions about the policy relevance of several economic studies of the issue we then consider policy alternatives to address global warming in the context of economies with the dual objectives of efficiency and sustainability with particular attention to carbon based taxes

a dynamic analysis of human welfare in a warming planet anthropogenic greenhouse gas ghg emissions have caused atmospheric concentrations with no precedents in the last half a million years inducing serious uncertainties about future climates and their effects on human welfare recent climate science supports the view that the climate stabilization will require very low ghg emissions in the future we ask is a path of low emissions compatible with sustainable levels of human welfare with steady growth in human quality of life addressing these questions requires both defining welfare criteria and empirically estimating the possible paths of the economy we specify and calibrate a dynamic model with four intertemporal links education physical capital knowledge and the environment in line with nordhaus 2008a and with the stern review 2007 we assume that ghg emissions allow increased production while a higher stock of atmospheric carbon decreases production our index of human welfare which we call quality of life quol emphasizes education knowledge and the environment affected by greenhouse gas emissions in addition to consumption and leisure thus we avoid a consumptionist fallacy that welfare depends only on commodity consumption and perhaps leisure we reject discounted utilitarianism as a normative criterion and consider two alternatives the first is an intergenerational maximin criterion which maximizes the quality of life of the first generation subject to maintaining at least that level for all successive generations the second is human development optimization that seeks the maximization of the quol of the first generation subject to achieving a given constant rate of growth in all subsequent generations hence our analysis focuses on a human notion of sustainability as opposed to the conventional green sustainability limited to keeping the quality of the environment constant because our dynamic optimization programs defy explicit analytical solutions our approach has been computational as a benchmark we consider a simple model with physical and human capital for which we prove a turnpike theorem we then devise a computational algorithm inspired by the turnpike property to construct feasible although not necessarily optimal paths in the more complex and realistic model our analysis indicates that with ghg emission paths entailing very low emissions in the future positive rates of growth in quol are possible while the first generation experiences a quol higher than the historical reference level we also observe a tradeoff between the quality of life of the first generation and the rate of growth in the quality of life yet generation 1 s sacrifice for the sake of a higher growth rate appears to be small the paths that we compute involve investments in knowledge at noticeably higher levels than in the past

regional energy efficiency evaluation in china a super efficiency slack based measure model with undesirable outputs abstract with the rapid development of global economy the demand for energy has increased significantly therefore energy efficiency improvement is essential for global energy and economic transformation in the chinese context study on the energy efficiency of various provinces can contribute to better understand china s energy utilization status and provide policy implications for improving china s energy utilization efficiency in this study based on the super efficiency slack based measure model with undesirable outputs the energy efficiency of china s 30 provinces in 2013 and 2014 was investigated then the energy efficiency of the eastern central and western china was compared and further discussed finally according to the results the relevant policy implications were put forward the results showed that china s overall energy efficiency had decreased while taking the undesirable outputs into consideration in addition eastern china had the highest energy efficiency and the energy efficiency of western china was relatively low the energy efficiency gap among china s provinces was still large therefore it was necessary to improve china s overall energy efficiency by developing targeted policies considering regional conditions

economists value judgments and climate change a view from feminist economics abstract a number of recent discussions about ethical issues in climate change as engaged in by economists have focused on the value of the parameter representing the rate of time preference within models of optimal growth this essay examines many economists antipathy to serious discussion of ethical matters and suggests that the avoidance of questions of intergenerational equity is related to another set of value judgments concerning the quality and objectivity of economic practice using insights from feminist philosophy of science and research on high reliability organizations this essay argues that a more ethically transparent real world oriented and flexible economic practice would lead to more reliable and useful knowledge

revocability and reversibility in societal decision making abstract reversibility and irreversibility are poorly defined in the decision making literature defining reversibility as the ability to maintain and to restore the functional performance of a system is consistent with thermodynamics specification of its crucial terms is case dependent reversibility is coming in degrees from flexibility over rigidity to preclusion with irreversibility as an absolute end further substantiating reversibility considers three variables duration of impacts revoking costs and substitutability substitutability depends on weights assigned to the strict identity or to the functional performance of something valued for given degrees of substitutability revocability of an action is measurable in time dependent revoking costs together with future time and doubt reversibility sets a three dimensional context for societal decision making revealing domes of expanding complexity cost benefit analysis is a useful decision tool at lower complexity but falters at high complexity because there prevail non monetary trade offs a revival and proper use of the concept reversibility are recommended for improved dialog on major societal issues with climate change outstanding as the case where reversibility could turn into absolute irreversibility also shown is the correspondence between reversibility and ecological concepts like resilience lock in tipping points and others

cost efficiency in bangladesh banking does financial reform matter abstractthis article estimates the cost efficiency of the commercial banks of bangladesh in the context of financial reform employing the single stage stochastic frontier analysis sfa model the study uses a unique balanced panel data set comprising bank level annual data from the dominant commercial banks in bangladesh for the period 1983 2012 the results show that bank cost has fallen due to financial deregulation our results from the data envelopment analysis do not vary significantly that we obtained from the sfa in addition the presence of politically linked directors on the bank board has an adverse effect on efficiency these findings suggest that further reforms aiming at removing all sorts of political influence should continue to ensure competitive environment in order to achieve cost efficiency in the financial sector of the country

adapting natural resource enterprises under global warming in south america a mixed logit analysis this paper develops an integrated model of adapting natural resource intensive enterprises in latin america to future climate changes based on about 2 000 rural household surveys we model six specialized and diversified resource enterprises across seventeen land covers we estimate random coefficients of climatic parameters with a mixed logit model by 2020 under a hotter and drier ccc scenario crops only and cropforests enterprises are predicted to fall by 6 2 and 0 6 respectively offsetting these losses livestock only enterprise increases by 5 5 and crops livestock forests enterprise increases by 0 7 these changes magnify over time through 2060 by which time the crops livestock enterprise increases by more than 5 adaptation measures should be designed in a manner that captures the unique characteristics of latin american ecosystems

the impact of the economic crisis and policy actions on ghg emissions from road transport in spain abstract road traffic is the greatest contributor to the carbon footprint of the transport sector and reducing it has become one of the main targets of sustainable transport policies an analysis of the main factors influencing greenhouse gas ghg emissions is essential for designing new energy and environmentally efficient strategies for the road transport this paper addresses this need by i identifying factors which influence the carbon footprint including traffic activity fuel economy and socioeconomic development and ii proposing a methodological framework which uses modified laspeyres index decomposition to analyze the effect of important drivers on the changes in emissions of road transport in spain during the period from 1990 to 2010 the results demonstrate that the country s economic growth has been closely linked to the rise in ghg emissions the innovative contribution of this paper is the special analysis of the changes in mobility patterns and ghg emissions during the economic crisis when for the first time spanish road traffic emissions decreased the reduction of road transport and improved energy efficiency has been powerful contributors to this decrease demonstrating the effectiveness of energy saving measures on the basis of this analysis several tailored policy recommendations have been suggested for future implementation

technical progress inefficiency and productivity change in u s banking 1984 1993 studies often find that on average u s commercial banks are quite inefficient and the authors find that banks became more technically inefficient between 1984 and 1993 from a new decomposition of the malmquist productivity index into changes in pure technical and scale efficiency as well as both pure technical changes and changes in scale of technology they find that much of the inefficiency increase can be attributed to the general failure of banks to adopt technological improvements made by a few banks that advanced the efficient frontier small banks experienced especially large decreases in both efficiency and productivity

natural resources national accounting and economic depreciation abstract the current value hamiltonian in an aggregate optimal growth problem with heterogeneous capital stocks including exhaustible renewable and environmental stocks is the nnp function routine substitutions reveal that the using up of natural resource stocks is representable as easy to interpret economic depreciation magnitudes we obtain true nnp inclusive of natural resource stock diminution implications for actual national accounting practices are also discussed

specifications of social welfare in economic studies of climate policy overview of criteria and related policy insights an important assumption in economic studies of climate policy is the social welfare function this paper shows that applying distinct decision or social welfare criteria can result in different optimal policies of climate control notably if climate change impacts are uncertain first decision criteria in current climate economic studies are reviewed next the most important alternatives are discussed including their mathematical formalization and incorporation in economy climate models most of these alternative criteria suggest more stringent climate policies to be optimal than the standard discounted utilitarianism approach however several important welfare criteria have not or hardly seen any application in the economic analysis of climate policy we conclude that there is clear need for systematic research on this theme for which the current review provides a solid basis

environmental efficiency of land transportation in china a parallel slack based measure for regional and temporal analysis abstract as the second largest economic entity in the world china plays an important role in controlling global carbon dioxide co 2 emissions the land transportation sector including railway transportation and road transportation has been the most important source of emissions in china and the average co 2 emissions of land transportation were 529 31 million tons during the period 2009 2012 in this study a parallel slack based measure data envelopment analysis model is proposed which is used for evaluating the overall efficiency of the land transportation sector and individual efficiencies of the railway transportation and highway transportation subsectors at the same time considering co 2 emissions the empirical results lead to three conclusions a only anhui province is efficient each year during 2009 2012 b the environmental efficiency of the eastern area in china is the best followed by the central area with the western area being the worst c the performance of railway transportation is better than that of highway transportation these three conclusions lead to policy suggestions to promote highway transportation technological innovation and narrow the regional imbalances in land transportation this paper makes two main contributions the model advances improvements to methods used in the data envelopment analysis technique and also provides governments with a practical and yet easy to adopt perspective to implement land transportation performance measurement that aids in decision making

intergenerational equity discounting and the role of cost benefit analysis in evaluating global climate policy when public policies with impacts far into the future are being debated the question inevitably is raised whether cost benefit analysis which discounts future costs and benefits is not biased against future generations and whether if such discounting is appropriate at all a lower rate should be used to avoid such bias the debate on global climate change is no exception this paper sketches and analyses the welfare foundations of cost benefit analysis and from this perspective analyses the role of cost benefit analysis in the climate policy debate particularly with reference to intergenerational effects the paper concludes that the cost benefit criterion cannot provide a definitive basis for deciding whether we should commit to a longer term programme to moderate climate change the issues of intergenerational equity are not that global climate change will significantly lower the gnp of future generations but relate to the possibility of science fiction like changes in the planet that will produce catastrophic effects in the future and the typical way in which the cost benefit problem is posed obscures the basic choices that we should be evaluating

the impact of global warming on agriculture reply in our paper with daigee shaw mendelsohn et al 1994 henceforth mns we developed a new approach to measuring the impact of global warming on agriculture we call this approach ricardian because it relies upon standard rent theory as a way of identifying the impact of changes on net economic welfare we compared the ricardian approach with the traditional production function approach which uses agricultural production functions but has great difficulty identifying all the other adjustments that farmers make in response to changing external conditions the ricardian approach is particularly well suited to a tremendously heterogeneous sector because it can rely upon reduced form estimation and does not require the impossible task of constructing structural models of hundreds of crops in thousands of locations estimating the model using cross sectional data on climate farm land prices and other economic and geophysical data for almost 3 000 counties in the united states the ricardian approach shows a significantly lower estimated impact of global warming than the traditional productionfunction approach indeed our preferred statistical approach showed modest benefits of climate change in his comment on mns in this issue of the review william r cline 1996 raises three concerns first he notes that the analysis assumes that output prices remain constant second he asserts that the analysis assumes that the supply of water for irrigation is perfectly elastic third he calls for testing the results of the model on alternative climate scenarios from general circulation models gcm s his first and third points are useful additions while the second is incorrect our ricardian approach assumes that the existing pattern of agricultural land rents and land prices reflects the long run equilibrium economic effect of climate and other geophysical and economic variables standard economic reasoning shows that by calculating the estimated effects of perturbing the climatic variables we can project the impact of climate change on economic welfare we do so in a partial equilibrium approach which assumes that output prices are invariant to the climate and cline is correct to point out that this might lead to biased estimates because the partialequilibrium estimates tend to underestimate damages and overestimate benefits in fact the bias is small given standard parameters for agricultural demand and supply functions we illustrate this point using linear supply and demand functions for agricultural crops let demand be given by qd ao a1p while supply is q po pi p where q and p are output and price and ai and i are parameters in equilibrium at the old climate market outcomes are qo and po now suppose that global warming contracts supply so that

long term substitutability between environmental and man made goods abstract substitutability between environmental and man made goods plays a major role in the sustainability debate the notion of substitutability covers a continuous spectrum with perfect substitutability at one end and poor substitutability at the other in this paper it is shown that if economic growth sustains a sharp distinction emerges between perfect and poor substitutability without any intermediate interpretation of substitutability if poor substitutability prevails environmental resources will eventually constitute the major part of total consumption value we relate our results to baumol s disease and assess the implications of this phenomenon for the compensation of environmental losses

a component based approach to discounting for natural resource damage assessment abstract the paper proposes a component based approach to guide the choice of the social discount rate in natural resources damage assessment where time and discounting are key features it is a multi rate discounting scheme which draws on concepts from dual rate and time declining approaches each damage component is discounted at a component specific constant rate related to its time trajectory assuming a normatively defined declining schedule of rates as a starting reference components with longer time profiles generally represented by welfare losses are discounted at lower rates than short term damage components mainly remedial costs the rationale behind this choice is that the longer the duration of the damage component the higher the related nonincident specific uncertainty on the resource values and the more relevant the equity issues when estimating the total damage the resulting implicit average discount rate depends on the duration of each component and its relative relevance in the total damage in each moment from an operational point of view anchoring the rates to government prescriptions would support the robustness of the damage estimates in a court of law whereas the dual based environmental discount rate is based on ad hoc assumptions that are more difficult to justify

financial deregulation and total factor productivity change an empirical study of turkish commercial banks abstract in january 1980 a new liberal economic policy was adopted in turkey to promote financial market development and increase the efficiency and productivity of the financial sector by fostering competition among banks as a result of this policy the turkish banking system witnessed a series of legal structural and institutional changes throughout the 1980s to enhance their competitive viability turkish banks responded by streamlining their operations and investing in new technology utilizing a dea type malmquist total factor productivity change index we examine productivity growth efficiency change and technical progress in turkish commercial banks during the deregulation of financial markets in turkey we found that all forms of turkish banks although in different magnitudes have recorded significant productivity gains driven mostly by efficiency increases rather than technical progress efficiency increases however were mostly owing to improved resource management practices rather than improved scales our results also indicate that private banks began to close their performance gap with public banks in the new environment

a ricardian model of climate change in canada a comparative static ricardian model is used to establish relationships between climate and agricultural land value in canada from these relationships agricultural costs of climate change scenarios are estimated this study is motivated partly by evidence of potential agricultural benefits of climate change from a similar analysis of the united states by mendelsohn nordhaus and shaw and partly by the void of canadian studies furthermore it extends the analysis to non uniform climate change scenarios its finding of a slightly positive upper bound on the agricultural benefits from climate change within a wide margin of error is motivation for further analysis un modele ricardien de changement climatique au canada l auteur utilise un modele statique ricardien classique pour etablir des relations entre le climat et la valeur des terres agricoles au canada a partir de ces relations on calibre les couts agricoles de divers scenarios de changement climatique cette etude a pris forme en partie en reaction aux resultats d une analyse similaire de mendelsohn nordhaus et shaw aux etats unis et en partie en reponse a un manque d etudes de ce genre au canada cet article etend les analyses aux scenarios de changements climatiques non uniformes les resultats suggerent qu il existe une sorte de borne positive superieure aux avantages agricoles du changement climatique a l interieur d une marge d erreur assez vaste voila qui encourage a poursuivre les analyses

discounting for personal and social payments patience for others impatience for ourselves the market rate of return on private investment is often used as the discount rate when conducting cost benefit analysis cba of public projects i argue that the decision to invest pits current consumption against future consumption both of which accumulate to the private decision maker public projects on the other hand provide benefits that accrue to society in general to examine the appropriateness of discount rates based on returns to private investment this paper considers lab experiments designed to test whether individuals discount personal and social benefits at different rates personal benefits are captured through personal monetary payments while social benefits are captured through anonymous donations to charitable organizations i jointly elicit time and risk preferences and find that subjects discount charitable contributions at significantly lower rates than personal payments

energy efficiency fallacies revisited abstract a number of governments including that of the uk subscribe to the belief that a national program devoted to raising energy efficiency throughout the economy provides a costless indeed profitable route to meeting international environmental obligations this is a seductive policy it constitutes the proverbial free lunch not only avoiding politically unpopular measures like outlawing taxing or rationing offending fuels or expanding non carboniferous sources of energy like nuclear power but doing so with economic benefit the author of this contribution came to doubt the validity of this solution when it was offered as a way of mitigating the effect of the opec price hikes of the 1970 maintaining that economically justified improvement in energy efficiency led to higher levels of energy consumption at the economy wide level than in the absence of any efficiency response more fundamentally he argues that there is no case for preferentially singling out energy from among all the resources available to us for efficiency maximization the least damaging policy is to determine targets enact the restrictive measures needed to curb consumption and then leave it to consumers intermediate and final to reallocate all the resources available to them to best effect subject to the new enacted constraints and any others they might be experiencing there is no reason to suppose that it is right for all the economic adjustment following a new resource constraint to take the form of improvements in the productivity of that resource alone as many others have argued any action to impose resource constraint entails an inevitable economic cost in the shape of a reduction in production and consumption possibilities there would be no free lunch in the last few years debate about the validity of these contentions has blossomed especially under the influence of writers on the western side of the atlantic in this contribution the author outlines the original arguments for questioning whether raised efficiency leads to lower consumption reports more recent developments and offers some insights as food for further thought