environmental regulation and u s economic growth in this article we quantify the costs of pollution controls by reporting the results of simulations of the growth of the u s economy with and without regulation for this purpose we have constructed a detailed model of the economy that includes the determinants of long term growth we have also analyzed the interaction between industries in order to capture the full repercussions of environmental regulations however we have not attempted to assess the benefits resulting from a cleaner environment we find that pollution abatement has emerged as a major claimant on the resources of the u s economy the cost of emission controls is more than 10 of the total cost of government purchases of goods and services

ecological economic viability as a criterion of strong sustainability under uncertainty strong sustainability according to the common definition requires that different natural and economic capital stocks be maintained as physical quantities separately yet in a world of uncertainty this cannot be guaranteed to therefore define strong sustainability under uncertainty in an operational manner we propose to use the concept of viability viability means that the different components and functions of a dynamic stochastic system at any time remain in a domain where the future existence of these components and functions is guaranteed with sufficiently high probability we develop a unifying and general ecological economic concept of viability that encompasses the traditional ecological and economic notions of viability as special cases it provides an operational criterion of strong sustainability under a mild form of uncertainty and for medium spatial and temporal scales we illustrate this concept and demonstrate its usefulness by applying it to livestock grazing management in semi arid rangelands publication ecological economic viability as a criterion of strong sustainability under uncertainty available from https www researchgate net publication 46490456 ecological economic viability as a criterion of strong sustainability under uncertainty accessed apr 3 2017

uncertainty and sustainability in the management of rangelands abstract we analyze a dynamic and stochastic ecological economic model of grazing management in semi arid rangelands the ecosystem is driven by stochastic precipitation a risk averse farmer chooses a grazing management strategy under uncertainty such as to maximize expected utility from farming income grazing management strategies are rules about which share of the rangeland is given rest depending on the actual rainfall in that year in a first step we determine a myopic farmer s optimal grazing management strategy and show that a risk averse farmer chooses a strategy such as to obtain insurance from the ecosystem the optimal strategy reduces income variability but yields less mean income than possible in a second step we analyze the long run ecological and economic impact of different strategies we conclude that a myopic farmer if he is sufficiently risk averse will choose a sustainable grazing management strategy even if he does not take into account long term ecological and economic benefits of conservative strategies

natural capital and the theory of economic growth abstract during the past half century theorizing about economic growth has forced economists to reconsider and revise the capital concept a number of times this paper explores the analytical relationship between capital accumulation and economic growth on the one hand and the natural world on the other section 1 sketches modern growth theory with an emphasis on whether or not the economy is seen as facing biophysical limits to growth section 2 argues that analysis of the role that natural capital plays in the production process must occur before one can assess the prospects for economic growth section 3 inserts natural capital into a simple growth model and discusses the implications that 1 depletion of natural capital 2 complementarity in production of natural and social forms of capital and 3 accumulation of technical knowledge have for the growth process

beyond the stern review lessons from a risky venture at the limits of the cost benefit analysis this paper argues that debates amongst economists triggered by the stern review are partly relevant focusing on key parameters translating real ethical issues and partly misplaced in that they do not consider enough other determinants of climate change damages i the specifications of the utility function used for the assessments preference for the environment preference for smooth growth paths ii the interplay between uncertainty and the sequentiality of the decision and iii whether the growth engines behind the integrated assessment models can account for transient disequilibrium and sub optimality we derive some suggestions for any future research agenda in integrated assessment modelling whatever the position of the analysts about the relevance of the intertemporal optimisation framework and the bayesian approach to uncertainty in the climate affair

benefits and ancillary costs of natural infrastructure evidence from the new jersey coast abstract this paper empirically estimates the economic impacts of a large scale public investment in natural infrastructure aimed at adapting to climate change and increasing coastal resilience i utilize temporal and spatial variation in investment in dunes to provide a hedonic property value estimate of the economic benefits i identify the net effect of treatment utilizing the doubly robust oaxaca blinder estimator and show that coastal housing price increases attributable to constructed dunes are approximately 3 6 a decomposition of the average impact suggests that the policy intervention generates ancillary costs related to impaired ocean views and privacy concerns that partially offset large protection benefits

the cost of environmental protection reported expenditures for environmental protection are often cited as an assessment of the burden of current regulatory efforts however the potential for both incidental savings and uncounted costs means that the actual burden could be either higher or lower than these reported values using a production cost model that considers the possible interaction between environmental and non environmental expenditures we directly estimate the dollar for dollar incidental savings uncounted costs arising from a one dollar increase in reported environmental expenditures although recent literature supports the idea that reported expenditures probably understate the actual burden we find no such evidence in the manufacturing sector based on a large panel of plant level data in one industry we find statistically significant overstatement in three others we find no significant deviation in either direction we conclude that although cost estimates are not overstated on average variation and uncertainty exist

impact of uncertainty in the quality of returns on the profitability of a single period refurbishing operation this paper investigates how the profitability of reuse activities is affected by uncertainty regarding the quality of returned products specifically we examine a reverse supply chain consisting of two collection sites and a refurbishing site which faces stochastic demand for refurbished products in a single period setting the quality of returns refurbishing yield becomes known only after the transportation of the products to the refurbishing site we prove that the expected profit function has a unique optimal solution procurement and production quantities and we derive the conditions under which it is optimal to use only one of the collection sites the analysis is supported by numerical results which provide insights regarding the effect of the uncertain yields at the two collection sites and their correlation on optimal decisions and system profitability

adjustment costs from environmental change abstract the paper is concerned with the case whereby the distribution of a firm s productivity shocks changes without the knowledge of the firm over time the firm learns about the nature and extent of the change in the distribution of the shock and adjusts incurring adjustment costs in the process the long run loss in profits due to the shift in the distribution we term the equilibrium response the transitory loss in profits incurred while the firm is learning about the distribution shift is termed the adjustment cost the theory is then applied to the problem of measuring adjustment costs in the face of imperfectly observed climate change in agriculture the empirical part of the paper involves estimating a restricted profit function for agricultural land in a five state region of the midwest us as a function of prices land characteristics actual weather realizations and expected weather we then simulate the effect of an unobserved climate shock where learning about the climate shock is by observing the weather and updating prior knowledge using bayes rule we find adjustment costs to climate change are 1 4 of annual land rents

the inherent dangers of using computable general equilibrium models as a single integrated modelling framework for sustainability impact assessment a critical note on bohringer and loschel 2006 the search for methods of assessment that best evaluate and integrate the trade offs and interactions between the economic environmental and social components of development has been receiving a new impetus due to the requirement that sustainability concerns be incorporated into the policy formulation process a paper forthcoming in ecological economics bohringer c loschel a in press computable general equilibrium models for sustainability impact assessment status quo and prospects ecological economics claims that computable general equilibrium cge models may potentially represent the much needed back bone tool to carry out reliable integrated quantitative sustainability impact assessments sias while acknowledging the usefulness of cge models for some dimensions of sia this commentary questions the legitimacy of employing this particular economic modelling tool as a single integrating modelling framework for a comprehensive evaluation of the multi dimensional dynamic and complex interactions between policy and sustainability it discusses several inherent dangers associated with the advocated prospects for the cge modelling approach to contribute to comprehensive and reliable sustainability impact assessments the paper warns that this reductionist viewpoint may seriously infringe upon the basic values underpinning the sia process namely a transparent heterogeneous balanced inter disciplinary consultative and participatory take to policy evaluation and building of the evidence base

optimal acquisition and remanufacturing policies for multi product remanufacturing systems abstract this paper studies an acquisition and remanufacturing problem in a market driven multi product remanufacturing system where the remanufacturer acquires multiple used products cores of highly variable quality under independently uncertain demand and carbon emissions regulation in order to balance between the environmental and economic benefit the problem is formulated as a nonlinear programming model in presence of the quality variability of cores and carbon tax scheme subject to budget and risk constraints since the average cost of the remanufactured products is independent of the remanufacturing quantity the model is then decomposed into two separated sub problems namely the remanufacturing problem and the acquisition problem in the remanufacturing problem the optimal remanufacturing policies including the optimal remanufacturing cost thresholds and the optimal remanufacturing rate are derived in the acquisition problem the optimal policies of core portfolio acquisition quantities and remanufacturing quantities can be derived the acquisition problem viewed as an extended multi product newsvendor problem mpnp is a convex optimization problem furthermore a two tier bisection method with polynomial computational complexity can be developed to obtain the optimal policies based on the karush kuhn tucker kkt conditions finally numerical experiments are provided to show the application of the model and the effect of the quality variability

social cost of environmental quality regulations a general equilibrium analysis the use of cost benefit analysis by federal regulatory agencies has expanded greatly in scope and sophistication unfortunately agencies continue to employ private cost rather than social cost to evaluate environmental quality regulations furthermore general equilibrium impacts and intertemporal effects of regulations are typically not included in the evaluation in this paper we estimate the social cost of environmental quality regulations mandated by the clean air and clean water acts we construct an econometric general equilibrium model of the united states to demonstrate that social cost estimates diverge sharply from private cost estimates we also demonstrate that general equilibrium impacts are significant and pervasive and that intertemporal effects of the regulations heretofore ignored are significant

stocks flows and complementarity formalizing a basic insight of ecological economics abstract in this paper we focus on expressing in mathematical form the following statement of ecological economics a vital role of nature in production is yielding resource flows that are transformed by the fund of man made capital the flow of resources and the fund of man made capital are fundamentally complements see e g an introduction to ecological economics 1997 100 or beyond growth the economics of sistainable development 1996 22 we formulate a simple economic growth model expressing that statement and contrast it with a model that makes production depend on the total fund of natural capital while both models lead to an a priori limit to total output of man made capital their dynamics at the point where the natural resource constraint becomes binding differ greatly assuming production to depend on the total fund of natural capital leads to an early and relatively smooth decline in production while in our model the resource scarcity only makes itself felt when the resources are virtually exhausted with catastrophic results starting from the standard formulation using the minimum function we proceed to explore more flexible ways of expressing complementarity mathematically we describe what conditions a production function must fulfill if it is to exhibit fundamental complementarity combined with some substitutability at the margin and point out a class of algebraically simple functions that do so we then extend the discussion of complementarity between man made and natural capital from production to utility one of the consequences of such complementarity turns out to be that uneconomic growth is possible even at very low initial income levels

distributional preferences and the incidence of costs and benefits in climate change policy we explore the relationship between willingness to pay wtp for climate change mitigation and distributional preferences by which we mean individuals opinions about who should be responsible for climate change prevention and whether the share of climate change impacts borne by the poor is a cause for concern we use 1 770 responses to an online stated preference survey the domestic costs in our survey s policy choice scenarios are expressed as a set of randomized shares across four different payment vehicles and the international cost shares are randomized across four groups of countries we also elicit respondents perceptions of the likely regressivity of climate change impacts under a policy of business as usual wtp is higher when larger cost shares are borne by parties deemed to bear a greater responsibility for mitigation and when respondents believe and care that the impacts of climate change may be borne disproportionately by the world s poor that wtp for an environmental policy depends on the distributional consequences of the policy is an unsettling result efficiency assessments are typically assumed to be separate from equity considerations in most benefit cost analyses

cowboys cornucopians and long run sustainability abstract in the 1970s there was a lively debate on the relationship between natural resource availability and long run economic growth one side has been characterized as neo malthusian it emphasized the limited global stockpile of critical natural resources from cobalt to petroleum and the need to curb population and economic growth the other side of the debate has been characterized as cornucopian it emphasized the creative powers of technology and free markets to find substitutes for any and all scarce resources this paper argues that the original dichotomy was false it did not adequately represent either the real positions of most conservative business and political leaders today nor did it reflect the currently emerging consensus among environmentalists the former do not concern themselves with long run issues at all nor do they take a global view of the problems of mankind rather they argue from the standpoint of short run national and corporate interest environmentalists on the other hand do not fit the neo malthusian world view which emphasizes the role of natural resources and land as factors of production and points to the limited supply of renewable resources and the inevitable exhaustion of non renewables the most important scarcities in the emergent environmentalist world view are largely outside the market domain soil fertility clean fresh water clean fresh air unspoiled landscapes climatic stability biological diversity biological nutrient recycling and environmental waste assimilative capacity there are no plausible technological substitutes for these the irreversible loss of species and ecosystems and the buildup of greenhouse gases in the atmosphere and of toxic metals and chemicals in the topsoil groundwater and in the silt of lake bottoms and estuaries are not reversible by any plausible technology that could appear in the next few decades finally the great nutrient cycles of the natural world carbon oxygen nitrogen sulfur and phosphorus require that constant stocks in each environmental compartment and balanced inflows and outflows these conditions have already been violated by large scale and unsustainable human intervention

a forward looking ricardian approach do land markets capitalize climate change forecasts abstract the hedonic pricing method is one of the main approaches used to estimate the economic value of attributes that affect the market price of an asset this method is routinely used in environmental economics to derive the economic valuation of environmental attributes such as air pollution and water quality for example the ricardian approach is based on a hedonic regression of land values on historical climate variables forecasts of future climate can then be employed to estimate the future costs of climate change we show that this approach is only valid if current land markets ignore climate forecasts while this assumption was defensible decades ago when this literature first emerged it is reasonable to hypothesize that information on climate change is so pervasive today that markets may already price in expectations of future climate change indeed we show empirically that agricultural land markets in the united states now capitalize expectations about future climate change we derive a straightforward empirical correction to the standard ricardian approach called the forward looking ricardian approach that can be implemented with readily available data accounting for market beliefs decreases the estimated magnitude of climate change damages by 50 62

product quality and return policy in a supply chain under risk aversion of a supplier abstract this study aims to identify the relationship between return policy and product quality decisions in a decentralized system we consider a supply chain situation as in a retail or oem supply chain system where a buyer decides a return policy for consumers and delegates the product quality decision to a supplier we consider the supplier s different risk attitudes whether risk averse or risk neutral a penalty contract is introduced to control the supplier s hidden action conveying external failures due to returns to the supplier we show the conditions for supply chain coordination and demonstrate that product quality enhancement needs to precede a generous return policy setting in view of the prevalent business environment and current supply chain management practices moreover we indicate the optimal conditions for a generous return policy setting without quality enhancement

indicators for complex innovation systems performance indicators such as national wealth gdp per capita r d intensity gerd gdp and scientific impact citations paper are used to compare innovation systems these indicators are derived from the ratio of primary measures such as population gdp gerd and papers frequently they are used to rank members of an innovation system and to inform decision makers this is illustrated by the european research area s t indicators scoreboard used to compare the performance of member states a formal study of complex systems has evolved over the past few decades from common observations made by researchers from many fields complex systems are dynamic and many of their properties emerge from the interactions among the entities in them they also have a propensity to exhibit power law or scaling correlations between primary measures used to characterize them katz katz j s 2000 scale independent indicators and research assessment science and public policy 27 2336 showed that scientific impact citations paper scales with the size of the group papers in this paper it will be shown that two other common measures r d intensity and national wealth scale with the sizes of european countries and canadian provinces some of these scaling correlations are predictable these findings illustrate that a performance indicator derived from the ratio of two measures may not be properly normalized for size this paper argues that innovation systems are complex systems hence scaling correlations are expected to exist between the primary measures used to characterize them these scaling correlations can be used to construct scale independent scale adjusted indicators and models that are truly normalized for size scale independent indicators can more accurately inform decision makers how groups of different sizes contribute to an innovation system the ranks of member groups of an innovation system by scaleindependent indicators can be subtly and profoundly different than the ranks given by conventional indicators the differences can result in a shift in perspective about the performance of members of an innovation system that has public policy implications

commensuration and theories of value in ecological economics abstract without a theory of value price in ecological economics the valuation of ecosystem and economic resources cannot be rigorously defended at the crux of the matter is the valuation or mixed units problem of commensurating biophysical inputs outputs which are different this paper critically reviews candidate theories of value which have emerged in the ecological economics literature for dealing with this problem first of all the neo ricardian approach using sraffa type systems is discussed in particular judson s assertion that the sraffa system is suitable for ecological economics is questioned as it is based on circular flow generation of a surplus and exchange values none of these ideas are consistent with a biophysical characterisation of an economic system which is paramount in ecological economics a more fruitful avenue for establishing a biophysical theory of value based on ecological and thermodynamic principles is to extend patterson s quality equivalent methodology qem to explicitly include mass flows in addition to energy at this point a model close to costanza and hannon s biosphere model of price determination emerges the extended qem model however has a number of important advantages over the costanza hannon model because it has a more generalised formulation and is not reliant on necessarily using solar energy as the numeraire the paper concludes with a discussion of some outstanding issues that need to be resolved before a biophysical theory of value can be properly established in ecological economics

climate change and index insurance demand evidence from a framed field experiment in tanzania abstract index insurance has been touted as part of an adaptation strategy to mitigate climate risks among smallholder farmers however in the face of increasing drought probabilities demand for index insurance may decrease compared to a scenario with no climate change if farmers learn slowly or place considerable weight on prior beliefs using data from a framed field experiment in tanzania we estimate a structural learning model based on a bayesian change point inference method and separately identify the effect of learning expectations recency bias and ambiguity on insurance demand furthermore by simulating the supply side of the insurance market under a set of plausible assumptions we show that climate change results in reduced uptake rates in most cases although demand may increase if the severity of climate change is sufficiently low overall our results provide an alternative explanation for the puzzle of low index insurance demand

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

the value of adaption climate change and timberland management abstract adaptation to exogenous change occurs on both intensive and extensive margins whether and how one accounts for human adaptation directly affects estimates of the economic consequences of environmental change estimates that are both critical in informing policy decisions and notoriously difficult to value this paper introduces and applies an analytical framework for placing an economic value on adaptation we explore the issue first in a stylized model that facilitates making concrete generalizations about the kinds of adaptations that generate high or low economic value we then test the soundness of our insights by incorporating learning and adaptive decision making into a structural dynamic forestry model where climate change is imposed exogenously and agents respond optimally using downscaled climate projections integrated with site and species specific timber productivity data we estimate the economic value of adaptation to climate change within the california timber industry we find on the intensive margin changing the rotation intervals will yield a low value of adaptation but on the extensive margin replanting more suitable tree species can yield significant value

the effect of ambiguous risk and coordination on farmers adaptation to climate change a framed field experiment the risk of losses of income and productive means due to adverse weather can differ significantly among farmers sharing a productive landscape and is of course hard to estimate or even guesstimate empirically moreover the costs associated with investments in reduced vulnerability to climatic events are likely to exhibit economies of scope we explore the implications of these characteristics on farmer s decisions to adapt to climate change using a framed field experiment applied to coffee farmers in costa rica as expected we find high levels of risk aversion but even using that as a baseline we further find that farmers behave even more cautiously when the setting is characterized by unknown or ambiguous risk i e poor or non reliable risk information secondly we find that farmers to a large extent coordinated their decisions to secure a lower adaptation cost and that communication among farmers strongly facilitated coordination

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

externalities in an endogenous growth model with social and natural capital abstract models of economic growth are typically based on the use of one or more stocks of productive assets to create goods for utility generating consumption the roles played by man made capital natural capital and human capital have been explored in the literature and more recently the notion of social capital has been brought to the fore this paper provides an attempt to construct an inclusive model of growth analyzing externalities and distortions due to market failures linked with social capital and environmental problems

tightening environmental standards the benefit cost or the no cost paradigm ms ff ichael porter and claas van der linde have written a paper that is interesting and to us at least somewhat astonishing it is a defense of environmental regulation indeed an invitation to more stringent regulation that makes essentially no reference to the social benefits of such regulation this approach contrasts starkly with the methods that economists and other policy analysts have traditionally used when assessing environmental or other regulatory programs the traditional approach consists of comparing the beneficial effects of regulation with the costs that must be borne to secure these benefits for environmental regulation the social benefits include the reductions in morbidity or premature mortality that can accompany cleaner air the enhanced recreational opportunities that can result from water quality improvements the increased land values that might attend the cleanup of a hazardous waste site the enhanced vitality of aquatic ecosystems that might follow reductions in agricultural pesticide use or any of the other potentially significant benefits associated with tighter standards from this benefit cost approach emerges the standard tradeoff discussed in virtually every economics textbook porter and van der linde deny the validity of this approach to the analysis of environmental regulation claiming it to be an artifact of what they see as a static mindset in their view economists have failed to appreciate the capacity of

climate change mitigation and adaptation with uncertainty and learning one of the major issues in climate change policy is how to deal with the considerable uncertainty that surrounds many of the elements some of these uncertainties will be resolved through the process of further research this process of learning raises a crucial timing question should society delay taking action in anticipation of obtaining better information or should it accelerate action because we might learn that climate change is much more serious than expected much of the analysis to date has focussed on the case where the actions available to society are just the mitigation of emissions and where there is little or no role for learning we extend the analysis to allow for both mitigation and adaptation we show that including adaptation weakens the effect of the irreversibility constraint and so for this model makes it more likely that the prospect of future learning should lead to less action now to deal with climate change we review the empirical literature on climate change policy with uncertainty learning and irreversibility and show that to date the effects on current policy are rather small though this may reflect the particular choice of models employed

the economic insurance value of ecosystem resilience abstract ecosystem resilience i e an ecosystem s ability to maintain its basic functions and controls under disturbances is often interpreted as insurance by decreasing the probability of future drops in the provision of ecosystem services resilience insures risk averse ecosystem users against potential welfare losses using a general and stringent definition of insurance and a simple ecological economic model we derive the marginal economic insurance value of ecosystem resilience and study how it depends on ecosystem properties economic context and the ecosystem user s risk preferences we show that i the insurance value of resilience is negative positive for low high levels of resilience ii it increases with the level of resilience and iii it is one additive component of the overall always positive economic value of resilience

toward a new conception of the environment competitiveness relationship accepting a fixed trade off between environmental regulation and competitiveness unnecessarily raises costs and slows down environmental progress studies finding high environmental compliance costs have traditionally focused on static cost impacts ignoring any offsetting productivity benefits from innovation they typically overestimated compliance costs neglected innovation offsets and disregarded the affected industry s initial competitiveness rather than simply adding to cost properly crafted environmental standards can trigger innovation offsets allowing companies to improve their resource productivity shifting the debate from pollution control to pollution prevention was a step forward it is now necessary to make the next step and focus on resource productivity

differences and similarities between ecological and economic models for biodiversity conservation abstract in this paper we investigate an important obstacle which substantially complicates co operation between ecologists and economists but which has received little attention so far differences between the modelling approaches in economics and ecology to understand these differences 60 models addressing issues relevant to biodiversity conservation have been selected randomly from eight international economic and ecological journals the models have been compared according to a number of criteria including the models level of generality the mathematical techniques employed for formulation and solution of the models the level of complexity and the way time space and uncertainty are taken into account the economic models sampled are formulated and analysed analytically tend to be relatively simple and are mostly used to investigate general questions furthermore they often ignore space dynamics and uncertainty although some ecological models have similar properties there is also a substantial number of another type of ecological models that are relatively complex and analysed by simulation these models tend to be rather specific and often explicitly consider dynamics space and uncertainty the integrated ecological economic models are observed to lie in the middle between ecological and economic models an unexpected result is that they are not more complex than ecological and economic models as one could have expected from a simple merger of models from both disciplines but have an intermediate complexity

rules of thumb for social learning this paper studies agents who consider the experiences of their neighbors in deciding which of two technologies to use we analyze two learning environments one in which the same technology is optimal for all players and another in which each technology is better for some of them in both environments players use exogenously specified rules of thumb that ignore historical data but may incorporate a tendency to use the more popular technology in some cases these naive rules can lead to fairly efficient decisions in the long run but adjustment can be slow when a superior technology is first introduced

the impact of global warming on agriculture a ricardian analysis reply we measure the economic impact of climate on land prices using cross sectional data on climate farmland prices and other economic and geophysical data for almost 3 000 counties in the united states we find that higher temperatures in all seasons except autumn reduce average farm values while more precipitation outside of autumn increases farm values applying the model to a global warming scenario shows a significantly lower estimated impact of global warming on u s agriculture than the traditional production function approach and in one case suggests that even without co sub 2 fertilization global warming may have economic benefits for agriculture 16 refs 5 figs 5 tabs

weather shocks agricultural production and migration evidence from tanzania abstractwe analyse whether tanzanian rural households engage in internal migration as a response to weather related shocks we hypothesise that when exposed to such shocks and a consecutive crop yield reduction rural households use migration as a risk management strategy our findings confirm that for an average household a 1 per cent reduction in agricultural income induced by weather shock increases the probability of migration by 13 percentage points on average within the following year however this effect is significant only for households in the middle of wealth distribution suggesting that the choice of migration as an adaptation strategy depends on initial endowment what is more the proposed mechanism applies to households whose income is highly dependent on agriculture but is not important for diversified livelihoods

the convergence of neo ricardian and embodied energy theories of value and price abstract the concepts of embodied energy entropy and the like have made limited inroads into orthodox economic thought ecological economists however have been developing a coherent theoretical perspective to be considered with and or against orthodox economics this paper focuses on the classical economic implications of the embodied energy theory of value it is argued that the embodied energy theory of value is very similar to neo ricardian economics after examining the issues separating classical and neoclassical economics the paper makes a beginning theoretical integration between these two theories finally several suggestions for theoretical development of embodied energy theory and for the empirical testing of the theory are made

diversification under yield randomness in inventory models abstract in this paper we consider the case of random yield and diversification in two different inventory models it is assumed that two sources suppliers exist who ship an amount which is a random function of the amount requisitioned since they may charge different prices and their reliability in terms of the variance of the yield random variable may be different diversification may be more desirable than using a single supplier we analyze this problem for both the eoq model and the newsboy model analytic results for the optimal order quantities and the minimum cost are obtained for the eoq model convexity of the objective function is also discussed we develop the necessary conditions for the newsboy model and propose an approximate solution technique the concavity of the expected profit function is shown numerical examples are provided for both models

price and service co opetiton under uncertain demand and condition of used items in a remanufacturing system abstract this paper studies price and service co opetition among the two remanufacturing firms considering uncertain demand and condition of the acquired items both the firms are competing on price and service to sell their substitutable products through a common retailer and provide service directly to the end customers mathematical models are developed here for four different remanufacturing configurations and derive the equilibrium decision and profit under each of the configurations further identify the situation under which the manufacturers can select direct system and integrated system compared to the global system one of the key findings is that when demand variation increases direct system provides a better result in terms of channel profit compared to other channel configurations quantity discount with return contract mechanism is developed to coordinate the decentralized system the model is demonstrated though a numerical study an extensive sensitivity analysis is performed to examine the impact of different parameters on the model output to draw managerial insights

ecological pricing and transformity a solution method for systems rarely at general equilibrium abstract this paper outlines a new method for determining ecological prices transformities in complicated ecological economic systems where non equilibrium prices are likely to be prevalent that is an eigenvalue eigenvector mathematical solution method for solving an overdetermined homogeneous system of simultaneous linear equations is proposed and tested previous mathematical approaches to the problem of ecological pricing are reviewed before proceeding with an explanation of the new solution method for the determination of ecological prices the proposed method seeks to avoid the need to make a number of untenable assumptions used in previous methods e g the assumption that there necessarily needs to be an equal number of processes and quantities in the ecological economic system the paper also provides practical advice and an algorithm for solving the ecological pricing problem for example advice on how to overcome the problem of ill conditioned matrices which are sometimes encountered

are overhead costs strictly proportional to activity evidence from hospital departments abstract using cross sectional data from hospitals in washington state we test whether overhead costs are proportional to overhead activities this assumption is at the heart of nearly all cost accounting systems which implicitly assume that marginal cost is equal to average cost empirically the proportionality hypothesis can be rejected for most of the overhead accounts on average across the accounts the average cost per unit of activity overstates marginal costs by about 40 and in some departments by over 100 thus the average cost per activity should be used with a great deal of caution in decisions

the effect of remanufacturing on procurement decisions for resellers in secondary markets the role of remanufacturing as a competitive tool for firms has been reflected in a number of studies to show that remanufacturing can reduce the unit cost of production by reusing components however the fact that remanufacturing can be used as a strategic tool for serving secondary markets as well has not been acknowledged in the literature in this paper we study the use of remanufacturing as a tool to serve secondary markets specifically we model the case of a reseller who procures used products based on an older generation of technology from an advanced market and then uses one of two options a she can either resell a small fraction of these used products in a developing market where the technology is acceptable or b she can invest in the remanufacturing of these products and then sell them in the developing market at a higher price the main result of the paper is that using remanufacturing to serve secondary markets reduces the number of units procured from the advanced market for the reseller in addition we show based on certain cost structures that the reseller is always better off if she uses remanufacturing to a certain extent

systems valuing of natural capital and investment in extensive pastoral systems lessons from the patagonian case abstract in patagonian argentina wool production systems historical performance records observed landscape changes and long term demographic modeling of sheep flocks indicate that non sustainable ecological and economic dynamics have developed during recent decades in order to elucidate possible causes of these trends a dynamic model of the wool production system including basic ecological and economic feedback mechanisms was applied to the analysis of alternative investment policies the values of the various components ewes forage soil of natural capital nc involved in the production systems were estimated in this study through a systemic approach and their losses during wool production cycles were incorporated in their financial analysis our results indicate that external investment in increasing the ewe stocks a common practice in these systems is not sustainable in time unless a simultaneous external investment in forage nc is performed more specifically external investment to increase in 20 the ewe stocks would be expected to generate positive net cash flows during 6 8 years if due account is taken from the losses of nc produced successive investments of the same sort would generate increasingly shorter periods of positive cash flows or even negative results after 15 25 years re investment of a fraction of the net revenues obtained through wool sales in the reposition of forage resources also proves to be a non sustainable policy external investment on forage resources at about a 10 1 ratio with respect to investments in the ewe stock would produce positive net cash flows sustainable in time it is concluded that sustainable investment policies in extensive range systems of patagonia should consider the ecological economic relations and feedbacks existing between forage consumption by ewes and ewe natality soil erosion controls exerted by forage and market behavior the structure of analysis of investment policies on extensive pastoral systems of the patagonian monte here proposed seems valuable to be extended to other regions with similar ecological economic characteristics

between ostrom and nordhaus the research landscape of sustainability economics abstract we survey the emerging research area of sustainability economics through a quantitative full text analysis of peer reviewed journal publications from 1987 to 2013 to identify relevant contributions we draw on existing definitions of sustainability economics for a keyword based identification strategy a combined focus on a the human nature relationship b the long term uncertain future c normative orientation towards sustainability and d economic analysis our analysis of a random subsample of 343 relevant papers reveals that i sustainability economics is a rapidly developing research area ii while theoretical contributions shaped the area in earlier years applied work now constitutes the largest share of contributions iii the research landscape can be clustered into eleven research clusters these range from participatory governance of social ecological systems associated with the work of elinor ostrom to questions of intertemporal allocation and distribution applied to climate economics associated with the work of william nordhaus iv the research area is broad in scope and heterogeneous and there is relatively little interaction between important clusters v relevant contributions are published in more than 100 journals ten journals publish half of all contributions led by ecological economics and 40 appear in non economics journals underscoring the importance of interdisciplinary dialogue

environmental and economic consequences of the overexploitation of natural capital and ecosystem services in xilinguole league china abstract the evaluation of natural capital and environmental services has always been an important step in the implementation of sustainable development concepts and policies the results presented in this study address the demand for environmental support of the economy of xilinguole league in the inner mongolia autonomous region as well as the value of its natural and human made capital the results show that the reliance of the economy of xilinguole league on local and imported non renewable resources coal and minerals decreases both the environmental and economic sustainability of the area emergy based performance indicators of the xilinguole league economy show a low sustainability index esi 0 79 though it is higher than for the chinese economy as a whole esi 0 47 as well as a low percentage of renewable resources being used ren 0 16 though this is higher than for all of china 0 09 in contrast the grassland based livestock sector shows a higher renewability index ren 0 67 and sustainability esi 9 61 the emergy exchange ratios exported emergy imported emergy are calculated to be 4 38 for the livestock system and 4 28 for the xilinguole economy which is much higher than the value of 1 74 for the overall chinese economy indicating uncompensated overexploitation of local systems meat and coal respectively intensified coal exploitation and intensive cattle grazing are discussed to support the decision making process for setting local energy policy and ecological compensation it is proposed that conservation of coal resources avoiding misuse and moderating excess extraction and trade and protection of natural grassland capital are more advantageous in emergy terms than the blind pursuit of accelerated economic growth

ordering and production decisions with supply quality and demand uncertainty in this paper we solve a production planning problem that has a direct bearing on the cost to a facility of vendor quality and reliability this solution is also an important first step in solving the multi plant coordination problem we consider a manufacturing facility with one critical raw material and one or more products whose demand needs to be met it is assumed that demand for finished goods and the arrival process for raw material are stochastic we calculate simultaneously the optimal production level and the raw material order quantity which minimize the total expected cost subject to capacity and release level constraints the results obtained by our model the integrated model show that the production level should be no larger than the production level obtained by solving the traditional nonintegrated models and that major savings are obtained by solving the integrated model we are also able to characterize and evaluate the cost of reliable supplies of raw material in addition we solve the above problem in the presence of capacity constraints a procedure which allocates capacity to different products is presented

the capital energy substitutability debate a new look over the last twenty years many studies have been made of the elasticity of substitution between capital and labor the reported estimates are highly variable and reveal an apparent dichotomy between cross sectional and time series studies the former suggest that capital and energy are substitutes while the latter suggest the converse all these studies reported allen partial elasticities of substitution we suggest that the morishima elasticity may be a more useful measure for the issues of concern to capital energy substitution we calculate the morishima elasticities from parameters estimated in a selection of earlier studies and find no excessive variability nor any evidence of the time series cross section dichotomy capital and energy are morishima substitutes copyright 1995 by mit press

sustainability and growth when manufactured capital and natural capital are not substitutable abstract a two sector neoclassical growth model of manufactured capital and natural capital is used in examining the importance of factor substitution to the issues of sustainability and economic growth analytical conclusions are established on the sustainability of the stocks of natural capital and manufactured capital as well as on the importance of factor substitution to the issues of technical progress and recycling policy and welfare implications of the analysis are also discussed

managing new and differentiated remanufactured products we study a firm that makes new products in the first period and uses returned cores to make remanufactured products along with new products in future periods the remanufactured product is differentiated from the new product so the firm needs to choose differentiated prices we analyze the monopoly environment in two period multi period three four and five and infinite planning horizons and characterize the optimal remanufacturing and pricing strategy for the firm in the process we identify remanufacturing savings thresholds that determine the production and pricing strategy for the firm among other results we find counter to intuition that in a finite horizon multi period setting the optimal policy is not necessarily monotone in remanufacturing savings

stochastic trend weather and us corn yield variability regional corn yield models incorporating stochastic trends prices and weather variables are estimated hypothesis tests suggest yield variability has increased because of an increase in error variance and an increase in weather related effects decomposition of the error variance shows much of its increase is due to an increased correlaion between regional yields

climate change costs more than we think because people adapt less than we assume abstract human behaviour is commonly optimised in economic models of adaptation to climate change these models assume that people work to maximise profit subject to financial and technological limitations in effect these models simulate adaptive potential in reality adaptation falls short of this potential this shortfall is conceptualised as the adaptation deficit and it has been causing increasing concern this study demonstrates the impacts of the ways by which people s real world adaptive behaviours depart from those assumed under pure optimisation these departures known as adaptation constraints are formalised as numerical preference functions based on an empirical case study in new zealand and they are used to constrain an agent based model of climate change adaptation we show that these empirically specified adaptation constraints reduce profits relative to an optimised specification by roughly one third this demonstrates that unconstrained economic models are likely to significantly underestimate the costs of adaptation to climate change the benefits of reducing greenhouse gas emissions and the residual loss and damage that climate change will cause

the cost of regulation osha epa and the productivity slowdown the slowdown in productivity growth in the u s economy during the 1970 s has been a matter of great concern to policymakers associated as it is with inflation unemployment and declining real wage growth this paper examines the impact on productivity growth of government regulation specifically worker health and safety regulation by the occupational safety and health administration osha and environmental regulation by the environmental protection agency epa looking at data for 450 manufacturing industries between 1958 and 1978 the study finds a large negative relationship between such regulation and productivity growth using these results about 30 percent of the decline in productivity growth in manufacturing during the 1970 s may be attributed to such regulation several previous studies have looked at the contribution of regulation to the productivity slowdown many of these have inferred that the contribution must be small on the basis of the relatively small amount spent on complying with such regulations edward denison 1979 estimates that only about 16 percent of the productivity slowdown in the 1972 75 period was due to regulation 35 percentage points out of a slowdown of 2 17 percentage points paul portney 1981 notes that little of gnp is spent on pollution control under 2 percent concluding that therefore pollution regulations could have little effect on productivity growth norsworthy et al 1979 also find a small impact of pollution abatement capital expenditures on productivity growth studies based on econometric estimation of the regulation productivity relationship have found a wide range of results gregory christainsen and robert haveman 1981 find regulation reduced labor productivity growth by 27 percentage points using time series data and measures of total federal regulation robert crandall 1981 finds a strong relationship between pollution abatement capital and productivity growth but this relationship disappears when a measure of energy intensity is included robin siegel 1979 observes a significant contribution 5 percentage points from pollution control expenditures to the productivity slowdown for 1965 73 but not for later years finally frank gollop and mark roberts 1983 examine data for a set of electric utilities and find that regulation of emissions had a large impact on total factor productivity growth lowering it for regulated firms by 59 percentage points many other factors might help to explain the productivity slowdown including the rise in energy prices the long and severe recession and declines in research and development expenditures there have been a variety of studies examining the contributions of each factor to the slowdown they generally conclude that many factors contributed to the slowdown but that a sizable fraction of the slowdown remains unexplained by the estimated contributions of all the factors considered

distal order effects in stated preference surveys abstract stated preference researchers have previously demonstrated that a good s placement among a sequence of goods in a set of valuation questions i e proximal order effects can have a substantial impact on people s valuations of these different goods however the economic consequences of potential order effects stemming from other questions in a survey prior to the valuation tasks have received surprisingly little attention using an online climate change survey we identify order effects created by prior attitude elicitation questions and we assess the potential impact of these distal order effects on willingness to pay wtp estimates for stylized climate change policies we find that the order used in prior questions may change people s opinions toward various attributes of the good to be valued and thereby change wtp by a substantial amount this paper emphasizes the significance of order effects stemming from preliminary survey questions and supports a call for diligence in the random ordering of all potentially influential preliminary information in stated preference surveys to minimize inadvertent effects from any single arbitrary ordering

bioeconomics of spatial exploitation in a patchy environment abstract this paper presents a model of renewable resource exploitation that incorporates both intertemporal dynamics and spatial movement the model combines the h s gordon vernon smith hypothesis of a rent dissipation process with ricardian notions that resources are exploited across space in a pattern dependent upon relative profitabilities the population structure is characterized in a manner consistent with modern biological ideas that stress patchiness heterogeneity and interconnections among and between patches generally we find the equilibrium patterns of biomass and effort across the system to be dependent upon bioeconomic conditions within each patch and the nature of the biological dispersal mechanism between patches we use simple examples to illustrate how the distribution of effort throughout the system reflects the heterogeneity and the spatial biological linkages

conservation in the optimal use of rangelands abstract in previous papers we have considered the optimal mix of biodiversity in semi arid rangelands focusing on the steady state this paper addresses the question of conservation in the optimal use of rangelands where conservation is understood to mean maintenance of the system in a natural state we consider a rangeland that may exist in one of two states in the natural state its dynamics are regulated by fire in the managed state its dynamics are regulated by grazing pressure by livestock we show that the optimal use of rangelands may include its maintenance in both states at different points in time depending on initial conditions and the set of relative prices

dynamic adjustment in us agriculture under climate change we construct a stochastic dynamic dual model to investigate the structural adjustment of two aggregate output and three aggregate input categories in us agriculture under stochastic climatic change more than a century of national annual data 1910 2011 is used in the empirical analysis no constraints on asset fixity are imposed results indicate that with rational expectations both output categories as well as all input categories exhibit quasi fixity in response to market change and stochastic climate change crops adjust more than twice as fast as livestock 49 versus 20 of the way toward their long run equilibrium in one year fertilizer adjusts most rapidly toward equilibrium levels 88 in one year and capital adjusts most slowly 5 in one year labor oscillates rather than converging smoothly toward equilibrium its distance from equilibrium is the same as if it adjusted 59 of the way toward its optimal level in one year failing to anticipate climate change dramatically slows the estimated rate of adjustment for two netputs and modestly speeds the rate for two others thus likely increasing overall adjustment costs failing to account for uncertainty in anticipated climate change has little impact on adjustment rates

value from a complex dynamic system s perspective abstract this paper examines critically the concept of value which emerged within modern economic theory and which is still the main basis for value theories in environmental and most strands of ecological economics building upon modern complex dynamic systems theory the author highlights the relational and emergent characteristics of value stressing that the economic and ecological value of a given good has to be assessed within its particular spatiotemporal context this analysis presents some of the inherent weaknesses of conventional value theories and the problems which arise from free market based regulation of economic processes these problems it is suggested may be overcome by what is termed post normal value theory introduced at the end of the article

cost functions under production uncertainty we characterize the cost functions which would be consistent with expected utility maximization when production is uncertain it is not generally possible assuming risk aversion to use only expected output as the constraint in a cost minimization problem in some leading cases cost functions consistent with expected utility maximization are particularly useful because they are devoid of risk preferences

adjusting to climate change implications of increased variability and asymmetric adjustment costs for investment in water reserves abstract in this paper we study the determination of optimal water storage capacity in a region taking into account that the supply of the resource the flow into the reserve is uncertain that a measure of the uncertainty the variance is likely to increase with climate change that building capacity is costly and that the development of water resources may entail alsoenvironmental costs we find that water storage capacity in the long run ispositivelyrelated to increases in uncertainty if the marginal benefit of water withdrawal isconvexand that for the case of costly reversibility of investment a range of inaction for investment appears and the stability of water storage capacity with respect to changes in variance increases

ecological production based pricing of biosphere processes abstract ecological pricing theory and method is reviewed and then applied to the valuation of biosphere processes and services ecological pricing values biosphere processes on the basis of biophysical interdependencies between all parts of the ecosystem not just those that have direct or obvious value to humans the application of the ecological pricing method to the biosphere for 1994 indicates that the total value of primary ecological inputs services to be nearly us 25 trillion this compares with us 33 trillion obtained in the costanza et al 1997 study our analysis also indicated a good correspondence between the shadow ecological price and the observed market price for all marketable goods except fossil fuel which was undervalued by the market

making long term economic growth more sustainable evaluating the costs and benefits currently traditional development issues such as economic stagnation poverty hunger and illness as well as newer challenges like environmental degradation and globalisation demand attention sustainable development including its economic environmental and social elements is a key goal of decisionmakers optimal economic growth has also been a crucial goal of both development theorists and practitioners this paper examines the conditions under which optimal growth might be sustainable by assessing the costs and benefits of growth key environmental and social aspects are considered the ecol opt growth 1 model analyses economic ecological interactions including resource depletion pollution irreversibility other environmental effects and uncertainty it addresses some important issues including savings investment technical progress substitutability of productive factors intergenerational efficiency equity and policies to make economic growth more sustainable a basic element of the sustainomics framework the empirical results support growing concerns that costs of growth may outweigh its benefits resulting in unsustainability basically in a wide range of circumstances long term economic growth is unsustainable due to increasing environmental damage nevertheless the model has many options that can be explored by policy makers to make the development path more sustainable as advocated by sustainomics one example suggests that government supported abatement programs are needed to move towards sustainable development since the model runs without abatement were infeasible the optimal rate of abatement increases over time abatement of pollution is necessary to improve ecosystem viability and increase sustainability further research is necessary to seek conditions under which alternative economic growth paths are likely to become sustainable

energy tax changes and competitiveness the role of adaptive capacity this paper estimates the effect of energy tax and price changes on total factor productivity tfp and net trade at the industry level using a panel of industries from european countries covering the period 1990 2003 we investigate the hypothesis that industries with high adaptive capacity measured by their relative level of labor compensation are able to mitigate the adverse effects of energy tax rises better than others we identify the pro adaptation effect by interacting wage levels a proxy for human capital with energy taxes we find that the negative marginal effect of higher energy taxes on tfp and net trade is significantly reduced for industries with stronger human capital and even turns to an overall positive effect in at least two cases up to three low wage sectors display an overall negative effect this suggests that human capital is key to adaptation to higher energy costs and climate policy in some cases making it a win win

integrated value theory for natural areas abstract value assessment is a necessary component of any rational decision making process concerning the use or management of natural areas this paper describes an integrated value theory for identifying measuring and aggregating human values for natural areas to ensure philosophical coherence the framework makes a commitment to a specific theory of end values three related levels of end value are identified which give meaning to the values expressed by humans the theory addresses the three rational modes of human value expression weakly comparable noncompensatory and exchange exchange value expressions are consistent with neoclassical economic notions of value the other types of value expression are not current techniques for aggregating values include multicriteria analysis and benefit cost analysis multicriteria analysis can encompass the three modes of value expression but does not readily discriminate between them and so fails to take advantage of the full information content of noncompensatory and exchange preferences benefit cost analysis on the other hand assumes a particular structure of values which means it should be limited to assessment of exchange preferences the framework outlined in this paper provides an advance on both of these methods in that it combines the specificity of benefit cost analysis with the breadth of multicriteria analysis

differential environmental regulation effects on electric utility capital turnover and emissions this paper tests the hypothesis that differential regulations reduced the rate of capital turnover in the electric utility industry resulting in increased emissions of sulfur dioxide based on a sample of forty four privately owned electric utilities operating over the period 1969 83 the authors results indicate that 1 regulation increased the age of capital by an average of 3 29 years 24 6 percent 2 increases in the age of capital have no statistically significant impact on emissions and 3 in the absence of regulation emissions would have increased by 3 79 tons per million kwhs 34 6 percent copyright 1993 by mit press

limits to the growth paradigm abstract this paper is a synthesis of several current controversies it makes four broad claims 1 that economic growth as conventionally measured is not and never has been the most important contributor to increasing human welfare 2 that technological progress has always been the primary source of both growth and welfare considered separately 3 that trade was at best a minor contributor to growth in the past and is probably now contributing negatively to both national wealth and equity hence to welfare in western europe and north america and 4 that both growth of gdp and trade are increasingly incompatible with environmental protection in fact while increasing prosperity breeds environmental sensitivity many of the processes by which it is achieved are environmentally destructive the paper assembles and presents some of the key arguments and evidence

a metapopulation model with private property and a common pool abstract a metapopulation illustrated by barnacles has a spatial distribution and a two stage life cycle in the model developed here space limits expansion introducing a profitable harvest activity of adults leads to harvest at only one site a solution driven by biological increasing returns the model is of interdisciplinary interest because the natural resource has common property characteristics in its larval stage but a private property character in its adult stage the model permits economic valuation of lost habitat

bayesian learning growth and pollution abstract environmental problems such as climate change have great uncertainties current expectations are that uncertainties about climate change will be resolved quickly we examine this hypothesis theoretically and computationally we consider bayesian learning about the relationship between greenhouse gas levels and global mean temperature changes a key uncertainty learning is non trivial because of a stochastic shock to the realized temperature we find theoretically the expected learning time which is related to the variance of the shock and the emissions policy implying a tradeoff between the benefits of controlling emissions and information we imbed the learning model into an optimal growth model with a climate sector and solve the resulting dynamic program we find computationally that learning takes on average over 90 yr far longer than currently believed

assessing the economic cost of greenhouse induced sea level rise methods and application in support of a national survey the potential cost of sea level rise has dominated many of the recent estimates of the economic damage that greenhouse warming might inflict on the united states over the course of the next century the cost of coastal protection and abandonment accounted for more than 80 of the early nordhaus estimate of likely damages part of a review of the then existing evidence which suggested that an effective doubling of atmospheric carbon concentrations might cost 0 26 of annual gdp the proportion of total cost attributed to sea level rise was a much smaller 11 in cline but the sea level rise costs that he quoted were among the most broadly accepted of his longer list of damages the relative importance of sea level rise in assessing the potential cost of greenhouse warming and thus in evaluating the potential benefit of any mitigating strategy has brought the original damage estimates under closer scrutiny a series of integrated assessments of aggregate damages has begun each has noted that the titus estimates were based on the assumptions that all developed property would be protected and that all undeveloped property including wetlands would be abandoned these assumptions were supported by comparisons of the economic vulnerability estimatesmore produced by yohe and protection cost estimates produced by weggel but they are clearly too simplistic some of each type of property will be abandoned though in which case the true future economic cost of sacrificed property must also be added to the damage calculus across an equally diverse collection of coastal sites moreover the decision of when whether and for how long to protect any piece of property will involve accurately weighing the tradeoff between the cost of its protection and the economic cost of its abandonment a balancing calculation which must be conducted on a site by site basis the key is to consider the world as it is likely to be and not necessarily as it is now 26 refs 1 fig 7 tabs less

valuing the impact of large scale ecological change in a market the effect of climate change this paper establishes a methodology for valuing the impact of large scale ecological changes in a market given the large capital stocks inherent in most ecological systems the dynamic nature of most ecological change and the dynamic response of markets it is critical to build dynamic models to capture the resulting effects this paper demonstrates how to construct such a model using the impacts of climate change on u s timber markets as an example across a wide range of scenarios and models warming is predicted to expand timber supplies and thus benefit u s timber markets copyright 1998 by american economic association

policy experimentation political competition and heterogeneous beliefs abstract we consider a two period model in which an incumbent political party chooses the level of a current policy variable unilaterally but faces competition from a political opponent in the future both parties care about voters payoffs but they have different beliefs about how policy choices will map into future economic outcomes we show that when the incumbent party can endogenously influence whether learning occurs through its policy choices policy experimentation future political competition gives it a new incentive to distort its policies it manipulates them so as to reduce uncertainty and disagreement in the future thus avoiding facing competitive elections with an opponent very different from itself the model thus demonstrates that all incumbents can find it optimal to over experiment relative to a counterfactual in which they are sure to be in power in both periods we thus identify an incentive for strategic policy manipulation that does not depend on parties having conflicting objectives but rather stems from their differing beliefs about the consequences of their actions

constraints on dematerialisation and allocation of natural capital along a sustainable growth path abstract to study societal and biophysical constraints on sustainability we present an extension of the neoclassical growth model with two new concepts allocation of natural capital and dematerialisation we consider that anthropogenic environmental impact is correlated with the material throughput of the economy materialisation and that due to composition change and innovation this throughput can be reduced the process of dematerialisation we also consider that the allocation of natural capital to production negatively affects the endogenous dynamics of ecosystems reducing the total amount of environmental services ecosystems provide according to our model it is possible to achieve unbounded economic growth by keeping the natural system in steady state balanced growth however is only possible for special parameter values

integrating the valuation of ecosystem services into the input output economics of an alpine region traditional economic accounting mostly ignores the benefits provided by nature and thus falls short in giving incentives for improving the way the economy uses natural resources in this study we develop a general framework for integrating the value of ecosystem services into an input output table in particular we integrate regionally valued ecosystem services on the supply side of an input output table to quantify what natural resources offer to economic development using several different indicators we show the benefits of the ecosystem services under the status quo and a scenario for regional development our results suggest that economic activities should be encouraged to use the ecosystem services more intensively while landscape development should aim at providing the required services we conclude that such an approach can provide a platform for decision makers to learn quantitatively about the dependency of the regional economy on natural services

ecological pricing and economic efficiency abstract there is a need to accurately account for the contributions of environmental assets to the overall economy such accounting would permit policies that allow protection of important natural resources and aid the analytic process to determine an accurate basis for a sustainable economy the aim is to develop an accounting framework for ecology that is sufficiently consistent with the economic framework that the two can be fruitfully combined with appropriate definitions of the flows the two systems can be connected into a common framework no single measure of the system productivity and efficiency can be given for the combined system however until the ecosystem metabolism can be converted into economic terms this could be done with a series of economic valuation techniques ecological prices could then be estimated and a single measure of ecological economic output could be given with the net combined system input and output now in common terms a technical system efficiency measure can logically be proposed because human activity inevitably involves dissipation such emissions would now have a monetary price because such emissions are irrecoverable the total output of the combined system is greater than it is under the current definition giving rise to a technical system wide efficiency measure

the climate change learning curve abstract the purpose of this paper is to confront economic models of climate change with the reality that limited information exists with which to form expectations about the evolution of the climate a key element in the tension between those who believe we should impose aggressive climate change mitigation policies and those who do not is the question of if we are merely in a long period of shock induced above average temperatures or if observed increases in temperature are a result of carbon emissions this paper characterizes learning dynamics resulting from the use of observations of temperature to update beliefs about two key characteristics of global climate the persistence of natural trends and the sensitivity of temperature to atmospheric carbon levels this paper shows that contrary to predictions in the literature that uncertainty may be resolved very quickly the time to learn the true processes may be in the order of thousands of years further this paper shows the effects of uncertainty on the likelihood that observations from the statistical record lead to important estimate and policy errors

is an integrated farm more resilient against climate change a micro econometric analysis of portfolio diversification in african agriculture abstract this paper examines whether an integrated farm that owns both crops and livestock is more resilient under global warming than a specialized farm in crops using around 9000 farm surveys across africa we explore how farmers choose one of the farm types and how the net revenue of each type varies across the range of climate in africa the results indicate that an integrated farm increases in number while a specialized farm decreases across africa under climate predictions for 2060 the relative profitability of each system against each other also changes an integrated farm becomes relatively more profitable over specialized farms half a century from now the impacts of climate change on integrated farms range from 9 loss to 27 gain depending on climate scenarios behavioral models can capture portfolio diversification benefits that agro economic models cannot measure

limits to the value of external costs based on recent insights from the field of risk analysis this paper examines some of the difficulties encountered in attempts to characterise the environmental effects of energy options as monetary externalities more than 20 different dimensions of environmental appraisal are identified and discussed in relation to the historic literature on risk assessment and a number of recent influential environmental valuation studies a survey is conducted of the results obtained over more than a decade for the external environmental costs of electricity supply options theoretical and methodological criticisms are lent support by the finding that environmental valuation results vary over a very wide range of values yielding a variety of rank orderings for the different generating options in addition the values derived for energy externalities are found to be vulnerable to the possible influence of a price imperative the paper concludes by pointing to approaches to the social appraisal of generating technologies which offer greater transparency rigour and accessibility in addressing plural and intrinsically subjective value judgements concerning the different forms and dimensions of environmental effects

differentiated regulation the case of auto emissions standards this paper presents an analysis of automotive emissions regulation that explicitly considers the link between regulation and the composition of the vehicle stock the adoption of more stringent emissions standards for new vehicles is shown to prolong the retention of old high emission rate vehicles in the fleet for this reason tighter new source standards actually increase aggregate emissions in the short run this result is of general as well as specific interest given the widespread use of differentiated regulatory tools incorporating a bias against new sources in many regulatory programs 3 references 1 table

the impact of environmental regulations on industry productivity direct and indirect effects abstract the paper develops an approach to measuring the impact of environmental regulations on total factor productivity growth which is less restrictive than a simple growth accounting approach environmental regulations have a direct impact on productivity growth due to the diversion of resources toward required abatement capital there can be a further indirect effect however as conventional inputs and production processes are changed in response to requirements to purchase abatement capital we estimate this indirect effect using a flexible functional form cost function total factor productivity and the direct and indirect productivity effects of environmental regulations are presented for five polluting industries we find that the indirect effect can be either positive or negative and in all industries is energy using the net impact of environmental regulations on total factor productivity growth is fairly small given that these are the most polluting industries they account for about 10 30 of the productivity decline of the 1970s in these industries