are optimal emissions really optimal four critical issues for economists in the greenhouse although the greenhouse effect is by many considered as one of the most serious environmental problems several economic studies of the greenhouse effect most notably nordhaus s dice model suggest that it is optimal to allow the emissions of greenhouse gases ghg to increase by a factor of three over the next century other studies have found that substantial reductions can be justified on economic grounds this paper explores into the reasons for these differences and identifies four partly overlapping crucial issues that have to be dealt with when analysing the economics of the greenhouse effect low probability but catastrophic events cost evaluation methods the choice of discount rate the choice of decision criterion the paper shows that i these aspects are crucial for the policy conclusions drawn from models of the economics of climate change and that ii ethical choices have to be made for each of these issues this fact needs wider recognition since economics is very often perceived as a value neutral tool that can be used to provide policy makers with optimal policies

agricultural competitiveness the case of the united states and major eu countries abstract growth in the agricultural gdp of four major european countries is compared with us agricultural growth for the period 1974 1993 the agricultural sector s relative prices are taken into account along with economy wide factor market adjustments for denmark france germany and the uk the effects of declining real prices and changes in input levels on growth in agricultural gdp are relatively small total factor productivity tfp growth appears to be the major contributor to european agricultural gdp growth in comparison tfp is the major source of growth in us agricultural gdp but its rate of growth is lower than the european countries in contrast the declining real prices for us agriculture had a relatively large effect on its gdp however in recent years the effects of declining real prices and declining rates of growth in tfp on european agriculture are relatively large in the longer run the relative competitiveness of us agriculture is largely dependent on its ability to sustain and increase growth in tfp

does direct democracy reduce public debt evidence from swiss municipalities although some countries have managed toobtain balanced budgets or even budgetsurpluses in recent times public debts ofmany oecd countries remain at high levels since structural reforms of public spendinghave only infrequently taken place in mostcountries fiscal pressure will increaseagain in the future due to society s ageingand the accompanying increases in socialtransfer spending constitutionalrestrictions on debt levels and legal rulesof the budgetary process such as a strongrole of the minister of finance aresupposed to be helping against the debtbias inherent in political decision makingprocedures in addition to such top downbudgetary procedures this paperinvestigates the impact of referendumapproval of budget deficits by the voterson the level of public debt in a crosssection of the 134 largest swissmunicipalities in 1990

global warming irreversibility and learning a number of economists have argued that the literature on the irreversibility effect implies that current abatement of greenhouse gas emissions should be greater when there is the possibility of obtaining better information in the future about the potential damages from global warming than when there is no possibility of obtaining better information in this paper we show that even the simplest model of global warming does not satisfy either of epstein s 1980 sufficient conditions so it is not possible to use epstein s analysis to tell whether the irreversibility effect applies to models of global warming we derive an alternative sufficient condition for the irreversibility effect to hold

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

the induced innovation hypothesis and energy saving technological change we develop a methodology for testing hicks s induced innovation hypothesis by estimating a product characteristics model of energy using consumer durables augmenting the hypothesis to allow for the ine uence of government regulations for the products we explored the evidence suggests that i the rate of overall innovation was independent of energy prices and regulations ii the direction of innovation was responsive to energy price changes for some products but not for others iii energy price changes induced changes in the subset of technically feasible models that were offered for sale iv this responsiveness increased substantially during the period after energy efficiency product labeling was required and v nonetheless a sizable portion of efficiency improvements were autonomous

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

normal markets market imperfections and energy efficiency abstract the conventional distinction between economic and engineering approaches to energy analysis obscures key methodological issues concerning the measurement of the costs and benefits of policies to promote the adoption of energy efficient technologies the engineering approach is in fact based upon firm economic foundations the principle of lifecycle cost minimization that arises directly from the theory of rational investment thus evidence that so called market barriers impede the adoption of cost effective energy efficient technologies implies the existence of market failures as defined in the context of microeconomic theory problems of imperfect information and bounded rationality on the part of consumers for example may lead real world outcomes to deviate from the dictates of efficient resource allocation a widely held contrary view that the engineering view lacks economic justification is based on the fallacy that markets are normally efficient

firm incentives to promote technological change in pollution control reply abstract the process of technological change in pollution control is broken into three basic steps innovation diffusion and optimal agency response firm incentives to promote these steps are then examined under five regulatory regimes direct controls emission subsidies emission taxes free marketable permits and auctioned marketable permits on a relative basis emission taxes and auctioned permits provide the highest firm incentives to promote technological change at times free permits generate lower incentives direct controls which are common regulatory tools usually provide the lowest relative firm incentives to promote technological change

economics and sustainability balancing trade offs and imperatives the concept of sustainability has been increasingly invoked in scholarly and public policy debates discussion has been hampered however by uncertainty and lack of uniformity in the meaning of sustainability this paper seeks to identify some common ground among economists ecologists and environmen tal ethicists two issues seem salient require ments for intergenerational and the defi nition of social capital to be provided to future generations a concept of safe minimum standard which has received at least some recognition in the ecology philosophy and eco nomics literatures may provide the beginnings of a common ground for debate about sus tainability jel q2

uncertainty learning and international environmental policy coordination in this paper we construct a simple model of global warming which captures a number of key features of the global warming problem i environmental damages are related to the stock of greenhouse gases in the atmosphere ii the global commons nature of the problem means that these are strategic interactions between the emissions policies of the governments of individual nation states iii there is uncertainty about the extent of the future damages that will be incurred by each country from any given level of concentration of greenhouse gases but there is the possibility that at a future date better information about the true extent of environmental damages may become available an important aspect of the problem is the extent to which damages in different countries may be correlated in the first part of the paper we consider a simple model with two symmetric countries and show that the value of perfect information is an increasing function of the correlation between damages in the two countries in both the cooperative and non cooperative equilibria however while the value of perfect information is always non negative in the cooperative equilibrium in the non cooperative equilibrium there is a critical value of the correlation coefficient below which the value of perfect information will be negative in the second part of the paper we construct an empirical model of global warming distinguishing between oecd and non oecd countries and show that in the non cooperative equilibrium the value of perfect information for oecd countries is negative when the correlation coefficient between environmental damages for oecd and non oecd countries is negative the implications of these results for international agreements are discussed

effects of carbon taxes in an economy with prior tax distortions an intertemporal general equilibrium analysis abstract this paper analyzes the costs of carbon taxes in a model that recognizes interactions between this tax and pre existing taxes first we examine the extent to which costs of a u s carbon tax are reduced when its revenues finance cuts in income taxes such use of revenues significantly reduces but does not eliminate the overall policy costs the positive overall costs reflect the carbon tax s focus on intermediate inputs and its relatively narrow base in comparison with income taxes we also examine the sensitivity of the carbon tax s costs to the level of pre existing taxes for any given use of revenues welfare costs rise significantly with pre existing tax rates indicating that models disregarding pre existing taxes may substantially understate the costs of new environmental tax initiatives

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

the rate of time preference implications for the greenhouse debate abstract if one adopts a real annual discount rate of 5 or more and there are no significant climate impacts for half a century these impacts have a present value that is virtually negligible within a cost benefit framework it then becomes exceedingly difficult to justify any near term actions other than no regrets policies in the greenhouse debate it is important to draw a clear distinction between prescriptive and descriptive reasoning a philosopher or an economist may counsel a low or a zero rate of time preference but this advice does not provide a good description of the collective outcome of individual choices in particular it implies an unrealistically rapid increase in the rate of savings and investment

uncertain climate change in an intergenerational planning model a three generation planning model incorporating uncertain climate change is developed each generation features a production activity based on capital and an exhaustible resource an irreversible climate change may occur in period two or three reducing the productivity for this and the remaining generation the model is solved by stochastic dynamic programming if the climate impact and climate change probability is constant the optimal period one and two resource extraction is larger than for the reference case of climate stability if however climate impact and climate change probability increases with increased aggregate resource use this result is reversed

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

research frontiers in the economics of climate change academic and policy debates over climate change risks and policies have stimulated economic research in a variety of fields in this article i briefly discuss eight overlapping areas of current research in which further effort is particularly warranted these areas include decision criteria for policy risk assessment and adaptation uncertainty and learning abatement cost and the innovation and diffusion of technology and the credibility of policies and international agreements further analysis in these areas not only will advance academic understanding but also will provide insights of considerable importance to policymakers

dynamic incentives of environmental regulations the effects of alternative policy instruments on technology diffusion abstract we develop a framework for comparing empirically the effects of alternative environmental policy instruments on the diffusion of new technology market based and command and control approaches can he quantitatively compared by estimating the economic penalty that firms through their actions reveal to be associated with violation of standards in the context of concerns about global climate change we empirically examine the likely effects of pigouvian taxes technology adoption subsidies and technology standards we employ state level data on the diffusion of thermal insulation in new home construction comparing the effects of energy prices insulation cost and building codes

learning and stock effects in environmental regulation the case of greenhouse gas emissions abstract this paper concerns the optimal regulation of greenhouse gases that lead to global climate change in particular we focus on uncertainty and learning which over time resolves uncertainty we present an empirical stochastic model of climate economy interactions and present results on the tension between postponing control until more is known vs acting now before irreversible climate change takes place uncertainty in our model is in the damage caused by global warming the results suggest that a temporary carbon tax may dominate a permanent one because a temporary tax may induce increased flexibility

the costs of mitigating carbon emissions a review of methods and findings from european studies abstract conventional wisdom has it that top down studies of mitigation costs are too pessimistic while bottom up studies are too optimistic in examining mitigation cost studies for western europe this paper finds this interpretation to be flawed the paper expands the analytical framework for interpreting mitigation cost studies evaluates the treatment of no regrets options and other input assumptions in the various studies and includes findings from recent integrated top down bottom up modeling assessments not covered in the ipcc report based on these new elements it is found that mitigation costs tend to be overestimated not only in top down studies but also in bottom up studies given this pervasive bias toward pessimism the body of existing mitigation cost assessments for western europe can be read as follows over the next three to four decades a combination of tax shifts market transformation instruments and policies to reform subsidies and internalize non climatic externalities could cut carbon emissions in western europe by 40 50 relative to the base year at no loss or at a gain in gdp averaged over the medium term and including a phase in period an economically optimal rate of implementing western europe s no regrets potentials is found to be in the neighborhood of 2 per year relative to base year levels

mitigating factors assessing the costs of reducing ghg emissions abstract the debate over the costs of ghg emission reduction has become more complex recently as disagreements over the existence of economic and environmental double dividends have been added to discussions over the existence of a negative cost potential we argue that basic assumptions about economic efficiency the sub optimality of the baseline and the rate of technical change are more important than model structure and we underline the importance of the timing of decisions for determining the costs moreover the use of a single baseline no policy scenario and several policy intervention scenarios may be fundamentally misleading in the longer term simply because the very idea of a business as usual scenario is deeply problematic ultimately the debate turns on political judgments about the desirability of alternative development paths

optimal greenhouse gas emissions under various assessments of climate change ambiguity the probabilities associated with global warming damage are likely to be continuously revised in the light of new information such revisions of probability are the defining characteristic of ambiguity as opposed to risk this paper examines how climate change ambiguity may affect optimal greenhouse gas emission strategies via the decision maker s attitude towards anticipated changes of damage probabilities two conceptualizations of ambiguity are distinguished according to the emphasis placed on the ambiguity of priors or on the ambiguity of news respectively it is shown that the way in which ambiguity is viewed and the attitude taken towards it have a substantial influence on the optimal emission trajectory

joint implementation under asymmetric information and strategic behavior joint implementation ji under the framework convention on climate change means that countries could partly offset their national abatement commitments by investing in co2 abatement projects abroad ji is introduced as a mechanism for achieving a certain global abatement target less costly by separating the commitments from the implementation of measures this paper studies the design of a ji contract when the investor has incomplete information about the foreign firm which carries out the ji project the host asymmetric information leads to a decrease in the potential cost savings from ji furthermore private information held by the potential host firm could give the firm a significant positive utility of participating in ji projects the possibility of being a host for a ji project in the future can prevent potential host firms from investing in profitable abatement projects today the paper analyzes the impact on emissions of co2 of strategic behavior among potential hosts for ji projects

fiscal effects of reforming local constitutions recent german experiences most german states amended their local constitutions during the 1990s and now allow for the direct election of mayors initiatives and referendums and vote aggregation as well as vote splitting in this paper it is asked whether these reforms had any effects on local fiscal policies it is shown that the direct election of mayors led to lower government spending whereas the introduction of direct democratic elements led to higher expenditures the empirical results concerning direct democracy are substantially different from findings in relation to both switzerland and the us it is argued that this difference may be due to a lack of fiscal referendums in germany

does restricting choice in referenda enable governments to spend more if school boards represent the preferences of the median voter referendums to approve school expenditures should not constrain school expenditures if school boards would choose expenditures larger than the median voter s preference referendums that restrict voters to approving or disapproving a school board s recommended expenditure level will result in expenditures larger than the median voter would prefer however florida used a unique referendum system which guaranteed the median voter s most preferred outcome using florida education expenditures as a benchmark the evidence suggests that spending was slightly higher in restricted choice referendum states than in florida

pollution taxes and revenue recycling abstract discussions of environmental policy and the tax system have emphasized the value of pollution tax revenues which can be used to reduce other tax distortions in the economy however by raising private marginal production costs environmental taxes also tend to reduce gdp and exacerbate the welfare costs of conventional taxes for environmental taxes in consumption goods industries the net welfare change from these two effects is negative unless this good is a relatively weak substitute for leisure an estimate for the optimal pollution tax with full revenue recycling is 63 to 78 of marginal environmental damages

technologies energy systems and the timing of co2 emissions abatement an overview of economic issues abstract this paper provides an overview of economic issues involved in timing limitations on co2 emissions from energy systems it highlights issues relating to technology availability development and diffusion and the inertia of energy systems as being particularly important the paper sets this in the context of wider uncertainties surrounding the problem and briefly considers other aspects relevant to timing the paper is stimulated by the debate in the usa about optimal abatement paths in particular recent claims that it would be economically preferable to defer such abatement action in favour of measures that support technology development but do not affect emission trends for many years this paper categorizes the various economic issues involved and concludes that for each economic argument that has been advanced to justify deferring emission constraints there are counter vailing economic arguments that could be used in support of rapid near term emissions abatement rational policy lies between these extremes a policy of deferring all emissions abatement exposes economic systems and industries as well as the environment to significantly greater costs and risks than those arising from a more balanced approach furthermore the modelling studies that have been used to justify deferring emissions abatement do so because they embody the economic factors favourable to delay and largely neglect the countervailing issues to the point where their results have little relevance to the overall problem of timing emissions abatement

tests of institutional versus non institutional models of local public expenditure determination are institutional or non institutional factors more important determinants of local public expenditure decisions employing data that allows us to directly identify the entire distribution of voter expenditure demands we estimate models of deviations of actual expenditures from the expenditure demand of defensible benchmarks namely the median voter s expenditure demand and the mean of voters expenditure demands three competing paradigms are employed to specify these models namely a non institutional model the reform government movement s explanation of how institutions affect local government decisions and a transactions cost model of this same phenomenon predictions from these three competing models differ in many respects comparisons of results from estimating models of expenditure deviations are found to be generally more consistent with the non institutional model than with either of the two institutional models these results suggest that a competitive local public service market helps limit the ability of governments to tax and spend in excess of the demands of the median or mean voter

reassessing the government s discount rate policy in light of new theory and data in a world economy with a high degree of capital mobility abstract the paper reexamines the government s discount rate policy in the context of new evidence on international capital mobility the relationship between deficits and interest rates the relationship between consumer interest rates and the consumer s rate of time preference and intergenerational compensation it concludes that the approximate discount rate for government decisions will differ depending on the policy problem and that the government s borrowing rate is appropriate in some cases and in others the private rate should be used for long term policies the benefit cost rationale for discounting breaks down and must be reestablished on principles incorporating intergenerational equity

recycling of carbon energy taxes and the labor market this paper provides a quantitative assessmet of a cost shift from labor to energy by means of a carbon energy tax the analysis utilizes a general equilibrium model for the european community placing the emphasis on the modeling of labor supply the paper highlights the importance of the feedback from an induced increase in labor demand to wage formation it shows that the goals of co2 reduction and improved employment are complementary provided the reduction in labor costs financed by the carbon energy tax is not offset by increased wage claims under this condition reduced co2 is consistent with an increase in gdp

global environmental risks the need to manage climate risks is not a new it has shaped social institutions for many centuries in medieval england a peasant farmer s land was broken into many widely dispersed parcels economic historians interpret this as a way of hedging climate risk see references in bromley 9 land in different locations would be affected differently by droughts floods and frosts by spreading land holdings over different locations as well as by organizing agricultural cooperatives and buying insurance farmers have managed climate risk for many centuries

total factor productivity growth in agriculture a malmquist index analysis of 93 countries 1980 2000 in this paper we examine levels and trends in agricultural output and productivity in 93 developed and developing countries that account for a major portion of the world population and agricultural output we make use of data drawn from the food and agriculture organization of the united nations and our study covers the period 1980 2000 due to the non availability of reliable input price data the study uses data envelopment analysis dea to derive malmquist productivity indexes the study examines trends in agricultural productivity over the period issues of catch up and convergence or in some cases possible divergence in productivity in agriculture are examined within a global framework the paper also derives the shadow prices and value shares that are implicit in the dea based malmquist productivity indices and examines the plausibility of their levels and trends over the study period

the economics of changing course implications of adaptability and inertia for optimal climate policy this paper reviews evidence that energy technologies and systems adapt over time to accommodate external pressures that technical innovation and systemic change in the energy sector is largely induced by need and restrained by potentially large transitional costs a simple integrated model of optimal greenhouse gas abatement over time is presented in which the abatement cost depends on both fixed and transitional elements it is shown that the optimal current response and long run prospects differ radically between the classical economic case in which the cost of a given cutback in emissions is fixed exogenously and the adaptive case in which the response is ultimately adaptive but heavily constrained by inertia ie low fixed but high transitional cost if energy systems are indeed to a large degree adaptive the results demonstrate that as compared with the classical non adaptive case long run stabilization of atmospheric co2 may be optimal even with moderate damages from climate change greater near term abatement efforts are justified and the cost of a given delay in response may be several times higher neglect of the issue of induced technical change and other adaptive responses may invalidate the policy implications drawn from most integrated assessment models developed to date

the choice of municipal government structure and public expenditures numerous empirical studies have attempted to measure the effect of varying government structures on public expenditures i argue that these prior may have produced biased estimates as they are predicated on the assumption that government structures are exogenous

optimal environmental taxation in the presence of other taxes general equilibrium analyses this paper examines the optimal setting of environmental taxes in economies where other distortionary taxes are present we employ analytical and numerical models to explore the degree to which in a second best economy optimal environmental tax rates differ from the rates implied by the pigovian principle according to which the optimal tax rate equals the marginal environmental damages both models indicate contrary to what several analysts have suggested that the optimal tax rate on emissions of a given pollutant is generally less than the rate supported by the pigovian principle moreover the optimal rate is lower the larger are the distortions posed by ordinary taxes numerical results indicate that previous studies may have seriously overstated the size of the optimal carbon tax by disregarding pre existing taxes this abstract was borrowed from another version of this item

is there a slowdown in agricultural productivity growth in south america this article estimates agricultural productivity growth in 10 south american countries in 1969 2009 with the objective of investigating if the slowdown being measured in other countries is present in the region results show that productivity growth accounts for half of the three fold increase in agricultural output during this period and that performance is sensitive to r d investments in the sector the slowdown found for the 1990s to 2000s in the u s and some european economies does not seem to be present yet in south america the region s total factor productivity tfp growth rate increased steadily from 1 07 during the 1970s to 2 29 during the 2000s given lags in adoption and the adaptive nature of innovations in these economies we have yet to see the potential effects in south american agriculture of decreases in r d in advanced economies

technological change in economic models of environmental policy a survey this paper provides an overview of the treatment of technological change in economic models of environmental policy numerous economic modeling studies have confirmed the sensitivity of mid and long run climate change mitigation cost and benefit projections to assumptions about technology costs in general technical progress is considered to be a noneconomic exogenous variable in global climate change modeling however there is overwhelming evidence that technological change is not an exogenous variable but to an important degree endogenous induced by needs and pressures hence some environmenteconomy models treat technological change as endogenous responding to socio economic variables three main elements in models of technological innovation are i corporate investment in research and development ii spillovers from r d and iii technology learning especially learning by doing the incorporation of induced technological change in different types of environmental economic models tends to reduce the costs of environmental policy accelerates abatement and may lead to positive spillover and negative leakage

incentives for advanced pollution abatement technology at the industry level an evaluation of policy alternatives abstract in this research we evaluate the incentive effects of five environmental policy instruments to promote the development and adoption of advanced pollution abatement technology in a heterogenous industry from most to least incentive the policy instruments can be rank ordered as follows i auctioned permits ii emissions taxes and subsidies iii issued marketable permits iv performance standards including performance standards in this list necessitates the assumption that they are differentiated between heterogeneous firms before the technology adoption in a way which replicates the initial emissions control distribution of the efficient incentive based instruments with the starting point normalized in this fashion the instrument rankings are invariant with respect to the size of firms the size of the industry or the industry s abatement cost structure

city level analysis of the effect of political regimes on public good provision this paper uses u s city level data on five public expenditure categories to test empirically whether the form of local government affects the amount of public good provision this also serves as an empirical test of a theory of national politics that predicts higher provision of public good in parliamentary than in presidential regimes the robust results indicate that at the city level the mayor council form of government provides significantly more public good than the council manager form of government for two of the public expenditure categories and at the national level presidential regimes provide more public good than do parliamentary regimes

the determination of local public expenditures and the principal and agent relation a case study the principal and agent relationship is important in the public sector there elected or appointed representatives act on behalf of the citizens of their jurisdictions this paper examines the importance of the budget referendum which allows the principals to approve or disapprove the proposal of a set of agents in the context of local public expenditure decisions we test the null hypothesis that the institution of referendum when compared to a nonreferendum institution does not lead to significantly different expenditure behavior

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

china s regional agricultural productivity growth in 1985 2007 a multilateral comparison1 in this study we estimate total factor productivity tfp growth as well as multilateral tfp index for 25 contiguous china provinces over the 1985 2007 period agricultural output growth for each province was decomposed into tfp growth and input growth where input growth was further disaggregated into contributions from growth of labor capital land and intermediate goods over the study period tfp growth contributed 2 7 percentage points to output growth annually which was slightly higher than the input growth contribution of 2 4 percentage points per annum on average the annual rate of productivity growth peaked during 1996 2000 at 5 1 it slowed in 2000 2005 to a rate of 3 2 per annum and declined in the most recent years 2005 2007 to 3 7 differences in productivity among regions persisted over the entire period the tendency toward faster tfp growth in relatively well off coastal regions may imply a widening of regional inequality

productivity and international competitiveness of agriculture in the european union and the united states this study looks at international competitiveness of agriculture in the european union and the united states the most intuitive concept is that of price competitiveness we calculate relative prices for 11 member states of the european union and the united states for the period 1973 2002 we assume that markets are perfectly competitive and in long run equilibrium so that the observed price always equals average total cost as measured by the cost dual to the production function this assumption is used in our calculation of relative competitiveness and productivity gaps between the european union and the united states and in our decomposition of relative price movements between changes in relative input prices and changes in relative productivity levels

the economics of climate change mitigation in developing countries abstract this paper discusses methodological lessons and empirical results of climate change mitigation assessment for developing countries with a special emphasis on economic studies national study results are discussed in relation to expected general international development trends in greenhouse gas emissions it is concluded that greenhouse gas emissions from developing countries certainly will increase in the future due to economic development needs there is however a large and relatively cheap potential for emission reductions connected to efficiency improvements in industrial production and general energy efficiency improvements in the countries the implementation of greenhouse gas mitigation strategies is interrelated with general national economic development policies the macroeconomic impact of implementing climate change mitigation strategies is assessed on the basis of two case studies for zimbabwe and venezuela and it is concluded that project implementation and economic welfare improvement in some cases can be achieved simultaneously the methodological basis for macroeconomic assessment and for the establishment of baseline scenarios are critically discussed in relation to the specific planning context of developing countries and recommendations are given on research requirements

a model of local demand for education abstract a careful modeling of the spending behavior of local school districts in new jersey is presented the theoretical model relies on the common hypothesis of political competition leading to a median outcome as well as the assumption that school superintendents act as budget maximizers the model is estimated for a sample of 177 school districts under three different aid formulas pooling of the cross sections suggests that the response of school expenditures to changes in variables other than those associated with school aid parameters has remained constant over time the results are discussed in the context of recent theories regarding the effect of intergovernmental aid on the level of public expenditure

the damage costs of climate change toward more comprehensive calculations it is argued that estimating the damage costs of a certain benchmark climate change is not sufficient what is needed are cost functions and confidence intervals although these are contained in the integrated models and their technical manuals this paper brings them into the open in order to stimulate discussion after briefly reviewing the benchmark climate change damage costs region specific cost functions are presented which distinguish tangible from intangible losses and the losses due to a changing climate from those due to a changed climate furthermore cost functions are assumed to be quadratic as an approximation of the unknown but presumably convex functions results from the damage module of the integrated climate economy model fund are presented next uncertainties are incorporated and expected damages are calculated it is shown that because of convex loss functions and right skewed uncertain ties the risk premium is substantial calling for more action than analysis based on best guess estimates the final section explores some needs for further scientific research