the price of pollution a dual approach to valuing so2 allowances under the 1990 clean air act amendments a market based scheme to reduce u s sulfur dioxide emissions takes effect in 1995 indications are that participation in the market will be light and allowance prices will be lower than was once expected using an output distance function approach for wisconsin coal burning utility plants we estimate the shadow price of so2abatement which should approximate the allowance price the estimated average shadow price is above the prices at which the few observed allowance trades have occurred wisconsin s stringent state so2legislation may explain a portion of this divergence

decoupling china s carbon emissions increase from economic growth an economic analysis and policy implications as the world s second largest carbon emitter china has long been criticized as a free rider benefiting from other countries efforts to reduce greenhouse gas emissions but not taking responsibility for its own emissions china has been singled out as one of the major targets at the subsequent negotiations after the kyoto meeting bq analyzing the historical contributions of interfuel switching energy conservation economic growth and population expansion to china s co2 emissions during 1980 97 this article clearly demonstrates that the above criticism is unjustified moreover given the fact that the role of china is an issue of perennial concern at the international climate change negotiations the article envisions some efforts and commitments that could be expected from china until its per capita income catches lip with the level of middle developed countries by emphasizing the it win win strategies these efforts and commitments are unlikely to jeopardize china s economic development and at the same time would give the country more leverage at the international climate change negotiations subsequent to the buenos sires meeting c 2000 elsevier science ltd all rights reserved

the low carbon technology characteristics of china s ferrous metal industry abstract the ferrous metal industry is the largest energy consuming industrial sector in china this paper examines the low carbon production characteristics of this industry during the period 1980 2013 we employ the duality theory of the weighted russell directional distance function to propose a general procedure for modeling production characteristics with carbon emissions being considered the undesirable output using the weighted russell directional distance function model we measure the carbon adjusted technical efficiency and environmental regulatory costs for this industry to investigate policy effects we test the porter hypothesis using the granger causality between regulatory cost and technical efficiency by using the dual model of weighted russell directional distance function we estimate the carbon shadow pricing and inter factor substitution possibilities results show that the carbon adjusted technical efficiency and environmental regulation costs of the chinese ferrous metal industry have significantly increased in recent decades however the latter does not significantly cause the improvement of former the indirect morishima elasticities of substitution reflect that the increase of fixed assets will effectively improve the carbon emissions performance of the chinese ferrous metal industry finally some policy implications are suggested

the effect of urbanization on energy use in india and china in the ipets model abstract urbanization is one of the major demographic and economic trends occurring in developing countries with important consequences for development energy use and well being yet it is only beginning to be explicitly incorporated in long term scenario analyses of energy and emissions we assess the implications of a plausible range of urbanization pathways for energy use and carbon emissions in india and china using the integrated population economy technology science ipets model a computable general equilibrium cge model of the global economy that captures heterogeneity in household types within world regions and into which we have introduced income effects on household consumption preferences we find that changes in urbanization have a somewhat less than proportional effect on aggregate emissions and energy use a decomposition analysis demonstrates that this effect is due primarily to an economic growth effect driven by the increased labor supply associated with faster urbanization the influence of income on household consumption is strong and indicates a potentially rapid transition away from traditional fuel use and toward modern fuels such as electricity and natural gas results also indicate important directions for future work including the implications of alternative types and driving forces of urbanization over time a better understanding of possible changes in consumption preferences associated with income growth and the urbanization process and modeling strategies that can produce disaggregated household consumption outcomes within a cge framework

plant vintage technology and environmental regulation abstract we use data on productivity and pollution abatement costs at individual pulp and paper mills to test whether the impact of environmental regulation on productivity differs by plant vintage and technology plants with higher pollution abatement costs have significantly lower productivity levels this relationship differs greatly based on a plant s technology with productivity at integrated mills being greatly affected by abatement costs while the impact at non integrated mills is negligible plant vintage does not seem to matter with older and newer plants showing similar impacts reported abatement costs appear to substantially understate the true costs of abatement accounting for the impact of technology differences makes some difference in the estimated overall impact of environmental regulation

substitutability among undesirable outputs in recent years economists have started to move beyond calculating regulatory effects on a pollutant by pollutant basis since their interaction is important in this study we take up this issue to allow for joint production of multiple pollutants and marketable output we specify our technology using a directional distance function this allows us to treat pollutants as joint outputs yet accounts for their undesirability we estimate the distance function for a sample of coal fired electric power plants from 1985 to 1998 which includes the first 4 years of phase i of the clean air act amendments of 1990 we focus on the interaction between so2 and no x as they became more highly regulated and estimate shadow prices of the pollutants and the morishima elasticity of transformation between two pollutants no x and so2 as well as with respect to the desirable output kilowatt hours of electricity as expected we find that power plants increase no x emissions as they decrease so2 i e they are subs

marginal abatement costs of co2 emissions in the thermal power sector a regional empirical analysis from china abstract quantifying marginal abatement costs of co2 emissions are beneficial to estimate mitigation potentials and costs of china s regional thermal power sector based on the panel data of 30 provinces from 2004 to 2013 this study estimates the technical efficiency reduction potential and marginal abatement costs of co2 emissions from the thermal power sector in china using a parametric quadratic directional output distance function a regression analysis is undertaken to identify the factors that drive marginal abatement costs the main results are 1 the mean value of directional output distance function in china s thermal power sector is 0 0449 indicating that inefficient production of chinese thermal power sector accounts for 4 49 co2 emissions could be mitigated by accumulated 1 22 billion ton in the past ten year which is approximate 4 49 of total co2 emissions 2 the national weighted average marginal abatement costs of co2 emissions are 316 51 yuan ton which is far higher than carbon price in the current ets emission trading system pilots in china implying that carbon price does not inflect supply and demand of carbon allowance 3 the regression results show that the marginal abatement costs positively connect with regional power scale namely a 1 increase in power scale will result in a 13 8 increase technology level coal supply and power structure are negatively correlated with marginal abatement costs namely a 1 increase in technology level coal supply and power structure will result respectively in a 30 41 4 38 and 77 7 decrease

what are the effects of different tax policies on china s coal fired power generation industry an empirical research from a network slacks based measure perspective abstract data envelopment analysis dea has been widely applied to evaluate performance in the power generation industry nevertheless most studies view the production system as a black box few studies attempt to deal with the case of china s thermal power generation industry in the framework of network dea separating the overall power generation process into two internal stages the production stage and the pollutant abatement stage with the pollutant emissions as intermediate products this paper employs a network slacks based measure sbm model to research the production efficiency and environmental efficiency of china s coal fired power generation industry from 2006 to 2010 under two different tax policies these two tax policies are the pollution tax policy to negatively penalize for emissions of pollutants and the tax deductions or exemptions policy to positively encourage environmental protection the empirical results show that the effect of compulsory measures was better than that of self motivation measures for china s environmental protection in this observation period another important finding is that the year 2008 was a turning point in the five years statistical analysis shows that the effects of the two different policies were statistically independent

electricity consumption real gdp causality nexus evidence from a bootstrapped causality test for 30 oecd countries the goal of this paper is to examine any causal effects between electricity consumption and real gdp for 30 oecd countries we use a bootstrapped causality testing approach and unravel evidence in favour of electricity consumption causing real gdp in australia iceland italy the slovak republic the czech republic korea portugal and the uk the implication is that electricity conservation policies will negatively impact real gdp in these countries however for the rest of the 22 countries our findings suggest that electricity conversation policies will not affect real gdp

estimating the marginal abatement cost curve of co2 emissions in china provincial panel data analysis abstract this paper estimates the marginal abatement cost curve macc of co2 emissions in china based on a provincial panel for the period of 2001 2010 the provincial marginal abatement cost mac of co2 emissions is estimated using a parameterized directional output distance function four types of model specifications are applied to fit the mac carbon intensity pairs the optimal specification controlling for various covariates is identified econometrically a scenario simulation of china s 40 45 carbon intensity reduction based on our macc is illustrated our simulation results show that china would incur a 559 623 yuan t roughly 51 57 increase in marginal abatement cost to achieve a corresponding 40 45 reduction in carbon intensity compared to its 2005 level

multilateral productivity comparisons with undesirable outputs in a recent paper in this journal caves christensen and diewert i982 hereafter ccd derive what they term multilateral superlative indexes for use in the comparison of output input and productivity across economic entities the indexes derived are distinguished both by transitivity and by a high degree of characteristicity a term introduced by dreschler i 973 to refer to the degree to which the weights used in a comparison are specific to the observations being compared though the indexes are presented with the application to multicountry comparisons of output input and productivity foremost in mind the authors note that they may be useful in a number of other contexts as well i e firms and industries time series and pooled time series and cross section all of the applications mentioned or implied however have this in common they involve the comparison of productive entities all of whose outputs are sold for positive prices this is not surprising of course since most products with which economists are concerned possess this characteristic however it does render incomplete or potentially misleading the comparison of productive entities which produce significant amounts of undesirable outputs such as water and air pollution since the list of such entities is rather long and includes industries critical to many national and regional economies e g chemicals paper petroleum refining copper and steel the omission of this factor from consideration may be a matter of some importance 2 consider for example a comparison of the productivity of the steel industries

electricity consumption and economic growth exploring panel specific differences abstract in this paper we examine the long and short run dynamics between electricity consumption and economic activities using panel data of per capita electricity consumption and per capita gdp of 160 countries for the period of 1980 2010 accounting for the degree of electricity dependence and the level of urbanization furthermore in order to capture the differences in this relationship the full sample is divided into various subsamples based on countries income levels regional locations and oecd memberships this framework is argued and found to be appropriate since the causal links and inferences arising therefrom differ considerably among the subsamples which led us to conclude that the electricity growth nexus is highly sensitive to regional differences countries income levels urbanization rates and supply risks

are financial development and trade openness complements or substitutes this article studies the long and short run relationships between financial development and trade openness using the pooled mean group estimator of pesaran shin and smith 1999 for unbalanced panel data for 87 countries over the 1960 2005 period our empirical results indicate that long run complementarity between financial development and trade openness coexists with short run substitutionarity between the two policy variables but when splitting the data into oecd and non oecd country groups this finding can be observed only in non oecd countries for oecd countries financial development has negligible effects on trade in addition we find nonlinearity in the relationship in that long run responses of trade decrease with financial development the article further finds coexistence of negative trade effects of financial fragility and positive trade impacts of financial depth

the market for tradable ghg permits under the kyoto protocol a survey of model studies abstract this paper gathers results from 25 models of the market for tradable greenhouse gas ghg emission permits under the kyoto protocol due to diverging projections of emissions growth and different modeling approaches the model results differ substantially the average market volume is approximately 17 and 33 billion usd under global trading and annex b trading respectively including non carbon ghg lowers compliance costs and permit prices in the absence of the us permit demand roughly equals hot air from the former soviet union these countries can increase their revenues from selling permits by restricting supply which raises the permit price

an empirical analysis of the co2 shadow price in chinese thermal power enterprises abstract this paper estimates the shadow price of co2 and explores its determinants for thermal power enterprises in china using a parametric quadratic directional distance function we evaluate the inefficiency and shadow price of co2 for 124 power enterprises in 2004 applying deterministic and econometric methods a regression analysis is undertaken to examine the factors that drive shadow prices our results indicate that there are large inefficiencies in terms of electricity production and co2 emissions the shadow price is a negative function of firm size age and coal share and is positively correlated with the technology level this correlation between shadow prices and its determinants is not sensitive to changing assumptions regarding directional vectors although such changes do alter the distribution of shadow prices the large variation witnessed in shadow prices across power enterprises argues in favor of market based regulation such as an emissions trading system as opposed to the command and control regulation currently used in china to minimize overall abatement cost

a new approach to measuring shadow price reconciling engineering and economic perspectives abstract shadow price is one of the most important pieces of information in environmental decision making two different approaches namely economic and engineering have been applied to obtain the shadow price of undesirable outputs while using different methodological backgrounds and perspectives the current study proposes a new conceptual framework and an economic estimation model to reconcile the shadow price estimates derived via the two approaches we also suggest a new mapping rule that incorporates the concept of abatement level which is a basic element in the engineering approach as a result the proposed model generates continuously changing estimates i e comprising a shadow price curve based on the abatement level we further investigate the determinant factors of shadow price by using second step regression the suggested methodology is used to investigate the shadow price of carbon emissions in south korean electricity generating plants thus yielding relevant policy implications

resistance to reform status quo bias in the presence of individual specific uncertainty comment why do governments so often fail to adopt policies which economists consider to be efficiency enhancing our answer to this question relies on uncertainty regarding the distribution of gains and losses from reform we show that there is a bias towards the status quo and hence against efficiency enhancing reforms whenever some of the individual gainers and losers from reform cannot be identified beforehand there are reforms which once adopted will receive adequate political support but would have failed to carry the day ex ante the argument does not rely on risk aversion irrationality or hysteresis due to sunk costs jel d72 f13 why do governments so often fail to adopt policies that economists consider to be efficiency enhancing this is one of the fundamental questions of political economy the answer usually relies on what may be

valuation of marginal co2 abatement options for electric power plants in korea the electricity generation sector in korea is under pressure to mitigate greenhouse gases as directed by the kyoto protocol the principal compliance options for power companies under the cap and trade include the application of direct co2 emission abatement and the procurement of emission allowances the objective of this paper is to provide an analytical framework for assessing the cost effectiveness of these options we attempt to derive the marginal abatement cost for co2 using the output distance function and analyze the relative advantages of emission allowance procurement option as compared to direct abatement option real option approach is adopted to incorporate emission allowance price uncertainty empirical result shows the marginal abatement cost with an average of 14 04 ton co2 for fossil fueled power plants and confirms the existence of substantial cost heterogeneity among plants which is sufficient to achieve trading gains in allowance market the comparison of two options enables us to identify the optimal position of the compliance for each plant sensitivity analyses are also presented with regard to several key parameters including the initial allowance prices and interest rate the result of this paper may help korean power plants to prepare for upcoming regulations targeted toward the reduction of domestic greenhouse gases

the political economy of international trade essays in honour of robert e baldwin part 1 theory of trade policy with imperfect information avinash dixit strategic trade policy and the new international economics a critical analysis gottfried haverlay the role of services in production and international trade a theoretical framework ronald w jones and henry kierzkowski the coefficient of trade utilization back to the baldwin envelope james e anderson and j peter neary part 2 trade policy issues reflections on uniform taxation arnold c harberger intellectual property rights and north south trade judith c chin and gene m grossman optimal tariff retaliation rules david f burgess international trade in capital and capital goods rachel mcculloch and j david richardson part 3 political economy of trade policy asymmetries in policy between exportables and import competing goods anne d krueger trade policy development and the new political economy gerald m meier does 1992 come before or after 1990 on regional versus multilateral integration andre sapir part 4 empirical studies of trade issues the structure and effects of tariff and non tariff barriers in 1983 edward leamer a computational analysis of alternative safe guards of policy scenarios in international trade alan v deardorff and robert m stern direct foreign investments and trade in east and southeast asia seiji naya

energy caps alternative climate policy instruments for china abstract decoupling fossil energy demand from economic growth is crucial for china s sustainable development especially for addressing severe local air pollution and global climate change an absolute cap on coal or fossil fuel consumption has been proposed as a means to support the country s energy and climate policy objectives we evaluate potential energy cap designs that differ in terms of target fuel point of control and national versus regional allowance trading using a global numerical general equilibrium model that separately represents 30 provinces in china first we simulate a coal cap and find that relative to a cap on all fossil fuels it is significantly more costly and results in high localized welfare losses second we compare fossil energy cap designs and find that a national cap on downstream fossil energy use with allowance trading across provinces is the most cost effective third we find that a national fossil energy cap with trading is nearly as cost effective as a national co2 emissions trading system that penalizes energy use based on carbon content as a fossil energy cap builds on existing institutions in china it offers a viable intermediate step toward a full fledged co2 emissions trading system

estimating the environmental efficiency productivity and shadow price of carbon dioxide emissions for the belt and road initiative countries abstract this study investigates the environmental efficiency productivity and shadow price of carbon dioxide co2 emissions of 52 belt and road initiative bri countries for 2005 2016 we consider the case of three inputs energy labor and capital one desirable output gdp and one undesirable output co2 emissions the contribution of this paper is that we use the endogenous directional distance function ddf to construct environmental efficiency and sequential productivity indicators the benefit of this approach is that we can both avoid the influence of arbitrary mapping rules and capture the progressive nature of the technology the results show that the technical efficiency of eastern asia increased continuously during the sample period while those of the other regions did not show a significant trend indicating that eastern asia was catching up with the frontier faster than the rest of the regions the average shadow prices of co2 emissions for all the bri countries increased steadily over the sample period but the shadow prices of eastern europe and central asia are much higher than those of the other regions the average productivity of the bri countries improved for most periods mainly because of technological progress moreover the technical changes for the six regions during the sample period are all positive meaning that technology progress is universal for the bri countries especially for those in eastern asia the results of this study have important policy implications for carbon reduction in the bri countries

marginal abatement costs of carbon dioxide emissions in china a parametric analysis this paper investigates the technical inefficiency shadow price and substitution elasticity of hbox co 2 emissions of china based on a provincial panel for 2001 2010 using linear programming to calculate a quadratic parameterized directional output distance function we show that china s technical inefficiency increases over the period implying further scope for hbox co 2 emissions reduction in the medium and longer term at best by 4 5 and 4 9 respectively our results notwithstanding regional differences highlight increases in the shadow price of hbox co 2 abatement 1 000 yuan ton in 2001 to 2 100 yuan ton in 2010 additionally increasingly steep substitution elasticity highlights the difficult reality of reducing china s hbox co 2 emissions

electricity consumption and economic growth a time series experience for 17 african countries abstract while the availability of electricity by itself is not a panacea for the economic and social problems facing africa the supply of electricity is nevertheless believed to be a necessary requirement for africa s economic and social development this paper tests the long run and causal relationship between electricity consumption per capita and real gross domestic product gdp per capita for 17 african countries for the period 1971 2001 using a newly developed cointegration test proposed by pesaran et al 2001 and using a modified version of the granger causality test due to toda and yamamoto 1995 the advantage of using these two approaches is that they both avoid the pre testing bias associated with conventional unit root and cointegration tests the empirical evidence shows that there was a long run relationship between electricity consumption per capita and real gdp per capita for only 9 countries and granger causality for only 12 countries for 6 countries there was a positive uni directional causality running from real gdp per capita to electricity consumption per capita an opposite causality for 3 countries and bi directional causality for the remaining 3 countries the result should however be interpreted with care as electricity consumption accounts for less than 4 of total energy consumption in africa and only grid supplied electricity is taken into account

the calculation of shadow prices for industrial wastes using distance functions an analysis for spanish ceramic pavements firms abstract this paper deals with the calculation of shadow prices for two industrial wastes generated on their production processes by 18 firms belonging to the spanish ceramic pavements industry these prices are then used to calculate an extended productivity index which takes into consideration wastes going with the production of marketable goods we follow the methodological approach first proposed by fare et al the review of economics and statistics 75 1993 a negative correlation is found between absolute shadow prices and wastes production intensity reflecting a greater marginal cost of eliminating wastes for those firms using less contaminant production processes differences between a conventional labour productivity index and an extended productivity index are also statistically related to firms characteristics such as size previous investments in cleaner technologies and affiliation to a technological institute

multivariate granger causality between electricity consumption exports and gdp evidence from a panel of middle eastern countries this paper examines the causal relationship between electricity consumption exports and gross domestic product gdp for a panel of middle eastern countries we find that for the panel as a whole there are statistically significant feedback effects between these variables a 1 per cent increase in electricity consumption increases gdp by 0 04 per cent a 1 per cent increase in exports increases gdp by 0 17 per cent and a 1 per cent increase in gdp generates a 0 95 per cent increase in electricity consumption the policy implications are that for the panel as a whole these countries should invest in electricity infrastructure and step up electricity conservation policies to avoid a reduction in electricity consumption adversely affecting economic growth further policy implications are that for the panel as a whole promoting exports particularly non oil exports is a means to promote economic growth and that expansion of exports can be realized without having adverse effects on energy conservation policies

do more open economies have bigger governments another look abstract we reconsider the evidence of a positive relationship between openness and the size of government recently established by rodrik rodrik d 1998 why do more open economies have bigger governments journal of political economy 106 997 1032 and others while the existing literature focuses on expenditure based measures of government we consider non budgetary measures such as government ownership of enterprises price controls asset expropriation each of these may have little impact on government expenditures yet can make the role of government sizable we demonstrate that the scope of government is much larger in less open economies when considering non budgetary measures additionally we show that higher levels of non budgetary government are positively correlated with trade barriers finally we provide further evidence on the hypothesis that larger governments provide social insurance in open economies subject to terms of trade shocks although we find that greater terms of trade risk is weakly associated with larger government in all forms these interventions include price controls and greater risk of asset expropriation which are hard to reconcile with a pure insurance motive

market power and hot air in international emissions trading the impacts of us withdrawal from the kyoto protocol ten years after the initial climate change convention from rio in 1992 the industrialized world is finally likely to ratify the kyoto protocol which will impose legally binding greenhouse gas emission reductions on the developed world however the kyoto protocol will enter into force without the usa which withdrew under president bush in march 2001 accounting for hot air and market power of the former soviet union on emission permit markets it is shown that us withdrawal has important consequences on environmental effectiveness compliance costs and excess costs of market power under the kyoto protocol non compliance of the usa implies a dramatic decrease in environmental effectiveness as well as compliance costs of oecd countries whereas the former soviet union and transitional economies in eastern europe suffer from a huge decline in permit sales revenues excess costs of market power in permit trade increase in relative terms but decline substantially in absolute terms due to us withdrawal pol

markets for risk and openness to trade how are they related if protectionist trade policies aim to insure domestic industries against swings in world market prices the development of financial markets could lead to trade liberalization likewise trade lib

trade liberalization through asset markets abstract political economy expositions of trade policy have traditionally described asset or factor ownership as not subject to change asset markets however allow individuals to change the composition of income sources we consider an economy with stochastic productivity to show how the equilibrium composition of asset portfolios influences individual attitudes toward free trade the model links financial market completeness and trade liberalization in the second half of the 20th century and provides a contributing answer to why governments in poorer countries without well developed financial markets have failed to liberalize trade

marginal abatement costs of carbon dioxide emissions and its influencing factors a global perspective abstract reducing co 2 emissions has become a major and urgent environmental goal worldwide in this paper we sample the data of 41 regions including 165 countries from 2000 to 2014 and adopt a gravity model to obtain an overview of the global flows of co 2 emissions energy consumption the global economy and capital stock since the beginning of the 21st century we then investigate global technical efficiency reduction potential shadow prices and factors influencing the marginal abatement costs of co 2 emissions based on a quadratic directional output distance function the empirical results show the following 1 the global centres of gravity for co 2 emissions energy consumption and capital stock have accelerated their shift to the asian inland in the 21st century but the global centre of gravity for the economy did not show the same trend 2 global technical inefficiency demonstrates a u shape with a turning point in 2007 average annual total global co 2 emissions could be reduced by 4482 28 mt and the global marginal abatement costs of co 2 emissions are approximately 673 74 697 73 usd t 3 the relationship between economic development and marginal abatement costs is represented by a u shaped curve the world is currently in the climbing phase of this curve implying that controlling co 2 emissions is becoming more costly moreover energy structure industrial structure and co 2 emissions are negatively correlated with marginal abatement costs finally the financial crisis has had a significant effect on marginal abatement costs

asset markets tariffs and political risk abstract this paper examines a simple model in which exogenous political risk creates uncertainty about tariffs the model predicts a relation between consumption and tariffs that differs radically from that implied by models without asset markets or political risk given the probability distribution of tariffs domestic consumption and utility ex post are lower in states of the world with a domestic tariff and no foreign tariff than with a foreign tariff and no domestic tariff this conclusion emerges despite the fact that the opposite would be obtained in the absence of asset markets so economists should not be surprised if observed relations between consumption and tariffs differ from the predictions of static theory in either time series or cross sections

pollution abatement activities and traditional productivity abstract this study models the joint production of good and bad output production and calculates traditional productivity when bad output production is regulated and when it is unregulated we apply this model to data for u s coal fired electric power plants for 1985 1995 and compare rates of productivity and technical change to gain an understanding of the association between pollution abatement activities and traditional rates of productivity and technical change while traditional productivity and technical change associated with abatement activities decline we conclude they are not statistically significant

energy efficiency and marginal carbon dioxide emission abatement cost in urban china abstract energy efficiency improvement and carbon emission reduction are two important ways to mitigate energy consumptions and global warming this paper aims to examine energy efficiency and carbon dioxide co2 emissions abatement costs of city urban areas in china to this end an improved slacks based measure approach is introduced which considers the linkage between desirable and undesirable outputs then measures of energy efficiency co2 emission abatement cost and comprehensive state index of co2 emissions abatement cost and co2 emissions reduction potential are defined the proposed model is then applied to the dataset of 285 cities in china during 2008 2012 the results show that most city urban areas in china have relatively low energy efficiencies surprisingly there are gradually narrowing gaps regarding mean energy efficiencies between areas during 2008 2012 nevertheless there are great disparities in energy efficiencies between cities within a typical area and even a provincial region it is found that co2 emissions abatement cost in urban china exhibits an increasing trend during the study period also significantly geographic disparities in abatement costs between areas regions and cites are found specifically energy efficiency has significantly positive correlation with the comprehensive state index in china some important findings and useful policy implications are achieved

international equity and differentiation in global warming policy ne of the major obstacles to reaching a comprehensive agreement on global warming is the setting of greenhouse gas emission reduction targets for individual countries long standing tensions between industrialized and developing countries have raised the issue of equity in burden sharing moreover individual industrialized nations have pleaded special circumstances and have sought differentiation in their obligations this paper analyzes alternative rules for distributing tradable carbon dioxide emissions permits a non linear programming model which distinguishes between allocation based and outcome based rules is used to analyze the relative welfare outcomes the model is applied to the world body of nations and yields several important policy implications

carbon sensitive meta productivity growth and technological gap an empirical analysis of indian thermal power sector abstract this paper measures carbon sensitive efficiency and productivity growth in technologically heterogeneous coal fired thermal power plants in india for the period of 2000 to 2013 it uses a unique data set of 56 plants obtained petitioning the right to information act 2005 we apply within mle fixed effects stochastic frontier model to get consistent estimates of meta directional output distance function the thermal power plants are grouped into two categories central sector and state sector we find that the state sector plants have higher potential to simultaneously increase electricity generation and reduce carbon emissions than the central sector plants if all the state and central sectors plants were made to operate on the meta frontier reduction of 98 million tonnes of co2 could have been achieved carbon sensitive productivity growth in the central sector plants is higher than the plants in state sector though in both the sectors productivity growth is governed by carbon sensitive innovation effect commercialisation or autonomy in electricity generation also induces carbon sensitive productivity growth and reduces carbon sensitive productivity growth gap

determinants of pollution abatement in developing countries evidence from south and southeast asia abstract developing countries pa ticularly those in asia are fast adopting industrial pollution control standards similar to those in developed countries formal regulation has been greatly hampered however by the absence of clear and legally binding regulations limited institutional capacity lack of appropriate equipment and trained personnel and inadequate information on emissions one would predict highly pollution intensive production under such conditions our research however has uncovered strongly contradictory evidence despite weak or nonexistent formal regulation there are many clean plants in the developing countries of south and southeast asia of course there are also many plants which are among the world s most serious polluters what explains such extreme interplant variation this paper reviews evidence drawn from three empirical studies of plant level abatement practices conducted 1992 1994 the analyses test the importance of plant characteristics economic considerations and external pressure in determining environmental performance the results consistently show that pollution intensity is negatively associated with scale productive efficiency and the use of new process technology it is strongly and positively associated with public ownership but foreign ownership has no significant effect once other plant characteristics are taken into account among external sources of pressure community action or informal regulation emerges as a clear source of interplant differences in all three studies the results suggest that local income and education are powerful predictors of the effectiveness of informal regulation they also show that existing formal regulation has measurably beneficial effects even when it is quite weakly developed

intertemporal quota arbitrage in multispecies fisheries abstract in the management of natural resources regulation often induces behavioral responses by resource users that ultimately undermine stated policy objectives examples of these unintended consequences have been associated with regulations ranging from the endangered species act to laws governing clean air in this paper we investigate an unintended behavioral response that can be triggered by conservation measures in multispecies fishery management which leads to increased targeting of the species the conservation measures are meant to protect harvest is subject to stochastic variation with output partially determined by the probability of encountering species of interest either due to targeting or avoidance given the right conditions an intertemporal arbitrage opportunity arises due to the fact that by targeting a stock in the current period the probability of encountering that stock in the next period when announced conservation measures are implemented decreases we present an empirical case study that supports the findings of the theoretical model the results indicate that by targeting so called weak stocks some new england fishermen are willing to trade off increased costs today for increased expected profits in the future to prevent the potentially harmful effects of this behavioral response a manager may adopt precautionary provisions at the time a quota reduction is announced or alternatively allow the industry to bank part of its current season s quota in order to alleviate the consequences of the reduction in the ensuing period these results highlight the challenge of developing effective conservation strategies

water pollution abatement by chinese industry cost estimates and policy implications using factory level data provided by china s national environmental protection agency and the tianjin environmental protection bureau the authors of this report estimate the costs of water pollution abatement for chinese industry using their econometric results they analyze the cost effectiveness of current pollution control policy in china and make the conclusions that follow 1 for each pollutant marginal abatement costs exhibit great differences by sector scale and degree of abatement 2 the benefits of stricter discharge standards should be weighed carefully against the costs 3 emissions charges as low as 1 per ton would be sufficient to induce 80 percent abatement of suspended solids chemical oxygen demand and biological oxygen demand respectively 4 the current regulatory system provides an economic incentive to abate by charging a levy on pollution that exceeds the standard the results of this analysis suggest however that changing to a full emissions charge system would greatly reduce overall abatement costs the approach the authors recommend for measuring the costs of abatement is to use joint abatement cost functions that relate total costs to treatment volume and the simultaneous effect of reductions in suspended solids chemical oxygen demand biological oxygen demand and other pollutants tests of alternative functional forms suggest that a simple constant elasticity model fits the data as well as a complex translog model does permitting sophisticated policy experiments with relatively simple calculations

a deterministic parametric metafrontier luenberger indicator for measuring environmentally sensitive productivity growth a korean fossil fuel power case abstract this paper contributes to the current literature by proposing an alternative parametric metafrontier productivity approach called the deterministic parametric metafrontier luenberger productivity indicator dpmlpi for measuring environmentally sensitive productivity growth incorporating technological heterogeneities the luenberger productivity indicator is constructed based on a quadratic output directional distance function with undesirable outputs and then combined with the deterministic metafrontier to develop dpmlpi the dpmlpi can be decomposed into efficiency change technological change and productivity growth gap the productivity growth gap can be further divided into efficiency change gap and technological change gap the parametric linear programming technique is used to estimate parameters and construct the metafrontier an empirical study for the korean fossil fuel power industry at the plant level is conducted for the 2003 2011 period the results show a 0 15 increase in environmentally sensitive productivity growth which is mainly driven by environmental technological change the oil fired power plants show higher levels than the coal fired ones of environmentally sensitive productivity growth and technological change performance some related policy implications are also proposed for the korean fossil fuel power sector

the causal relationship between electricity consumption and economic growth in the asean countries abstract this paper investigates the causal relationship between electricity consumption and economic growth among the association of south east asian nations asean 4 members namely indonesia malaysia singapore and thailand using modern time series techniques for the period 1971 2002 the results indicate that there is a bi directional causality between electricity consumption and economic growth in malaysia and singapore this means that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption in the two countries however uni directional causality runs from economic growth to electricity consumption in indonesia and thailand without any feedback effect thus electricity conservation policies can be initiated without deteriorating economic side effects in the two countries

heat tariff and subsidy in china based on heat cost analysis abstract this paper addresses an important issue surrounding heating supply system reform and seeks to evaluate china s heat tariff and heating subsidy from the perspective of the heating cost in the thermoelectric industry in various provinces in china we present an algorithm for estimating environmental externality included heat tariff based on the analysis of heat cost in total thermoelectric cost the results show that during 1999 2014 the average proportion of heating cost in total thermoelectric cost in the north is higher than in the south which is 26 3 and 24 1 respectively generally subsidies hidden in the existing heat tariffs subsidize heat consumers specifically hidden subsidies subsidize residential consumer more than non residential consumer in china

panel estimation for co2 emissions energy consumption economic growth trade openness and urbanization of newly industrialized countries abstract this paper empirically examines the dynamic causal relationships between carbon dioxide emissions energy consumption economic growth trade openness and urbanization for the panel of newly industrialized countries nic using the time series data for the period 1971 2007 using four different panel unit root tests it is found that all panel variables are integrated of order 1 from the johansen fisher panel cointegration test it is found that there is a cointegration vector among the variables the granger causality test results support that there is no evidence of long run causal relationship but there is unidirectional short run causal relationship from economic growth and trade openness to carbon dioxide emissions from economic growth to energy consumption from trade openness to economic growth from urbanization to economic growth and from trade openness to urbanization it is found that the long run elasticity of carbon dioxide emissions with respect to energy consumption 1 2189 is higher than short run elasticity of 0 5984 this indicates that over time higher energy consumption in the newly industrialized countries gives rise to more carbon dioxide emissions as a result our environment will be polluted more but in respect of economic growth trade openness and urbanization the environmental quality is found to be normal good in the long run

shadow prices of environmental outputs and production efficiency of household level paper recycling units in vietnam abstract the production efficiency and shadow prices of three environmental outputs bod cod and ss of 63 household level paper recycling units from a recycling craft village in vietnam are assessed a two stage procedure linear programming and stochastic estimation is used to estimate output distance function social capital as a production factor and environmental outputs are included in the output distance function results indicate that production efficiencies could potentially be improved by 28 there is a substantial variation in the shadow prices of environmental outputs among the production units of different types of paper products furthermore the average shadow prices of the three environmental outputs are all positive this indicates a potential for improving environmental quality though introducing pollution prevention methods to paper recycling production processes in vietnam e g recirculation of wastewater and suggests that it may be inappropriate to restrict the shadow prices of environmental outputs to be non positive for the analysis of some production processes

the shadow prices of co2 and so2 for chinese coal fired power plants a partial frontier approach abstract shadow prices are widely employed in guiding environmental policies this paper contributes to the literature by developing a novel partial frontier approach for estimating shadow prices the proposed method is advanced in handling outliers and provides a precise estimation of the marginal rate of substitution along the production frontier to cope with the different disposability characteristics of undesirable emissions so2 is treated as an environmental input that is strongly disposable because most different undesirable outputs are jointly reduced this study is the first to use directional derivatives instead of partial derivatives and proposes a new separation method that separates individual directional shadow price from the cost of joint reduction of multiple undesirable outputs we apply the proposed method to a sample of 93 coal fired power plants covering six years the estimated average shadow prices of co2 and so2 are 69 tonne and 2525 tonne under the newly developed partial frontiers when assuming some undesirable output to be strongly disposable both shadow prices fall 20 32 tonne and 1018 23 tonne the present paper suggests the estimated shadow prices will be much different across different levels of disposability the cost of joint reduction is calculated as 91 05 unit given the current production level which leads to a directional shadow price for the two undesirable outputs of 91 32 tonne and 1250 06 tonne the estimated shadow prices for both undesirable outputs dispersed widely under the partial frontiers spatial distribution of estimated shadow prices shows that coastal provinces and municipalities have higher co2 shadow prices but lower so2 shadow prices whereas the northeast provinces are the opposite the co2 shadow price is comparatively stable over the study period while the so2 shadow price fluctuates policy implications are discussed

electricity consumption from renewable and non renewable sources and economic growth evidence from latin american countries abstract this study explores the effect of renewable and non renewable electricity consumption on economic growth in 18 latin american countries to achieve the goal of this study a panel gross domestic product gdp model was constructed taking the period 1980 2010 into account from the pedroni cointegration test results it was found that renewable electricity consumption non renewable electricity consumption labor gross fixed capital formation and total trade are cointegrated moreover the panel dynamic ordinary least squares dols test results revealed that all above the mentioned variables have a long run positive effect on gdp growth in the investigated countries the vector error correction vec granger causality model results revealed the existence of feedback causality between the variables the results of the study indicated that renewable electricity consumption is more significant than non renewable electricity consumption in promoting economic growth in the investigated countries in the long run and the short run based on the results of this study it is recommended that the investigated countries should increase their investment on renewable energy projects to increase the role of electricity consumption from renewable sources in addition it is essential that these countries should reduce their non renewable electricity consumption by increasing their energy efficiency and implementing energy saving projects by applying these recommendations these countries would be able to mitigate global warming and reduce their dependency on fossil fuel to increase their energy security

goods and asset market interdependence in a risky world this paper explores the link between international asset markets and international trade in goods to determine whether trade along these dimensions tends to be complementary or plays the role of substitutes international financial markets permit agents in different countries to pool away the idiosyncratic portion of risk while in the absence of international financial markets countries will pursue other means to insure against unanticipated disturbances the author shows that the endogeny of resource allocations to market completeness leads to a relationship of complementarity between trade in goods and trade in assets copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

shadow prices and pollution costs in u s agriculture abstract we use the directional output distance function to derive estimates of production inefficiency shadow prices for polluting outputs and the associated pollution costs using a quadratic functional form for the directional output distance function and data for the u s agricultural sector during 1960 1996 we find that the pollution costs the shadow values from the runoff and leaching of pesticides are 6 of crop and animal revenues and are highest in the midwest and lowest in the western states if states were to reduce technical inefficiency and operate on the production frontier pollution costs could be reduced by 7

abatement costs of emissions from burning maize straw in major maize regions of china balancing food security with the environment abstract this paper estimates the shadow price of co2 from burning maize straw in the chinese agricultural sector and explores the related policy implications for decision makers using a quadratic directional distance function we evaluate the production inefficiency and shadow prices of co2 reduction for the seven major maize producing provinces in china for 1996 2014 in general the efficiency improves over time shandong province ranked as the top one with full efficiency considering both economic and environmental impacts as of 2014 the mean shadow price for the co2 emission was 0 45 yuan kg us 75 t whereas the province specific shadow prices varied within the interval bounded by 0 and 0 913 yuan ha us 152 t the marginal abatement cost curve was downward sloped and indicated the need for curbing co2 emission in areas exhibiting the highest pollution rates given the marginal abatement cost patterns the transaction costs associated with implementation of the conservation practices tillage should not exceed 335 yuan ha in order to ensure the welfare gains this government provided payment would compensate farmers for yield reductions in favor of implementing conservation practices that would substantially reduce co2 emissions

electricity use and economic development abstract a study of the relationship between electricity use and economic development in over one hundred countries constituting over 99 of the global economy has been undertaken correlations between electricity consumption capita and gdp capita have been analysed and compared with those between total primary energy supply capita and gdp capita a supporting analysis has correlated the proportion of energy used in the form electricity the e e ratio with gdp capita the general conclusions of this research are that wealthy countries have a stronger correlation between electricity use and wealth creation than do poor countries and that for the global economy as a whole there is a stronger correlation between electricity use and wealth creation than there is between total energy use and wealth the study also shows that in wealthy countries the increase in wealth over time correlates with an increase in the e e ratio the results imply that the energy ratio toe should be replaced by the electricity ratio kwh as a development indicator and more precisely by the e e ratio kwh toe

endogenous trade policy and the gains from international financial markets abstract this paper examines the interaction between international financial markets and trade policy when trade policy is endogenous there is a secondary gain from opening up financial markets in addition to the direct risk sharing benefits by breaking the direct link between the terms of trade and welfare international portfolio diversification can allow for a lower level of trade protection in a tariff game between governments we apply the model to an estimation of the welfare gains from international financial markets our results show that these indirect trade gains from financial markets are likely to be much larger than the direct risk sharing gains in the tariff game with financial markets however there are multiple equilibria while one equilibrium allows for complete diversification and complete free trade there are other equilibria in which there is limited diversification and a high level of average protection

measuring environmental efficiency of industry a case study of thermal power generation in india technical and environmental efficiency of some coal fired thermal power plants in india is estimated using a methodology that accounts for firm s efforts to increase the production of good output and reduce pollution with the given resources and technology the methodology used is directional output distance function estimates of firm specific shadow prices of pollutants bad outputs and elasticity of substitution between good and bad outputs are also obtained the technical and environmental inefficiency of a representative firm is estimated as 0 06 implying that the thermal power generating industry in andhra pradesh state of india could increase production of electricity by 6 while decreasing generation of pollution by 6 this result shows that there are incentives or win win opportunities for the firms to voluntarily comply with the environmental regulation it is found that there is a significant variation in marginal cost of pollution abatement or shadow prices of bad outputs across the firms and an increasing marginal cost of pollution abatement with respect to pollution reduction by the firms this result calls for the use of economic instruments like pollution taxes instead of command and control regulation used currently in india to reduce air pollution

weak disposability in nonparametric production analysis with undesirable outputs environmental economics and natural resources group at wageningen university in the netherlands weak disposability of outputs means that firms can abate harmful emissions by decreasing the activity level modeling weak disposability in nonparametric production analysis has caused some confusion this article identifies a dilemma in these approaches conventional formulations implicitly and unintentionally assume all firms apply uniform abatement factors however it is usually cost effective to abate emissions in those firms where the marginal abatement costs are lowest this article presents a simple formulation of weak disposability that allows for non uniform abatement factors and preserves the linear structure of the model

simulating power integration in latin america to assess challenges opportunities and threats abstract integration of electricity markets started to spread under the world wide trend to economic liberalization while some regions are managing better than others lessons both political and technical highlight challenges ahead that need to be overcome since the early 2000s panama colombia ecuador and peru have decided to integrate their electricity markets eventually creating an enormous latin american electricity exchange ranging from mexico to chile this poses opportunities and threats to the region as it involves cooperation trust and the will to overcome difficulties that may arise in this direction we developed a system dynamics model linked to an iterative algorithm to assess the likely effects of integration on both system expansion and security of supply the model helps us understand the logic of the long term system behavior under different policies assuming market coupling as the dispatch mechanism based on theoretical grounds and after analyzing simulation results under different scenarios we conclude that the integration of electricity markets may render important opportunities regarding security of supply and efficiency and consequently energy might be supplied at lower prices using cleaner technologies however benefits largely depend on policy regulation and technical issues

regionalism in a multilateral world recent regional initiatives have been addressed from a vinerian perspective of trade creation and trade diversion this is true of both policy oriented economists who tend to be critical of the initiatives and theorists who have added dynamic and gametheoretic elements to the vinerian structure this paper describes the stylized facts of much recent regional integration and develops an alternative model the analysis suggests that regional integration far from threatening multilateral liberalism may in fact be a direct consequence of the success of past multilateralism and an added guarantee for its survival

estimation and allocation of cost savings from collaborative co2 abatement in china abstract as an increasingly accepted way of relieving global warming collaborative carbon dioxide co2 abatement could improve not only emission performance but also cost effectiveness of abatement in this study we analyze the cost savings and benefits of collaborative abatement in the context of china by using data envelopment analysis dea approach specifically we establish 63 collaborative abatement scenarios by dividing the mainland china into six main regions and then estimate the costs savings in each collaboration abatement scenario through investigating the gains for each region in various scenarios the best collaborative partners for each region are suggested from perspectives of benefit maximization furthermore the contribution of each region to collaborative abatement cost saving is also differentiated with the shapley value approach

environmentally sensitive productivity analysis of the canadian pulp and paper industry 1959 1994 an input distance function approach abstract this study employs a parametric input distance function that incorporates both desirable and undesirable outputs to provide a more complete representation of the production technology from which environmentally sensitive productivity and efficiency measures can be generated this framework also generates pollution abatement cost estimates that are useful for policy making an input based malmquist index of productivity growth that appropriately credits the producer not only for increases in marketable or desirable outputs but also for the production of improved environmental quality through pollution abatement activities is derived from the input distance function the method was applied to time series data from the canadian pulp and paper industry our shadow price estimates indicate that the marginal cost to producers of pollution control has been rising the main conclusion of this study is that productivity improvement from the social viewpoint has been stronger than conventional measures would suggest

a critical review of distance function based economic research on china s marginal abatement cost of carbon dioxide emissions abstract the last few years have witnessed a rapidly emerging literature estimating the marginal abatement cost or the shadow price of carbon dioxide co2 emissions in china using parametric or non parametric distance function approaches this is largely driven by the fact that china has become the world s largest carbon emitter and thus faced mounting domestic and international pressure to mitigate emissions there is an urgent policy need to model and predict the cost burdens of various mitigation scenarios consistent information about the marginal abatement cost of co2 emissions plays a crucial role in addressing this need however the existing literature has suffered from various issues that have severely weakened the scientific support that these studies could potentially provide for sound policy making this paper provides a thorough and critical review of this rapidly emerging literature and identifies important research directions that need the most attention from scholars

estimating the environmental efficiency and marginal co2 abatement cost of coal fired power plants in china abstract we estimate the environmental efficiency reduction potential and marginal abatement cost of carbon dioxide co2 emissions from coal fired power plants in china using a novel plant level dataset derived from the first and second waves of the national economic survey which were implemented in 2004 and 2008 respectively the results indicate that there are large opportunities for co2 emissions reduction in china s coal fired power plants given that all power plants operate fully efficiently china s co2 emissions in 2004 and 2008 could have been reduced by 52 and 70 respectively accompanied by an expansion in electricity output in other words the opportunities for double dividend exist in 2004 the average marginal abatement cost of co2 emissions for china s power plants was approximately 955 yuan ton whereas in 2008 the cost increased to 1142 yuan ton the empirical analyses show that subsidies from the government can reduce environmental inefficiency but the subsidies significantly increase the shadow price of the power plants older and larger power plants have a lower environmental efficiency and marginal co2 abatement cost the ratio of coal consumption negatively affects the environmental efficiencies of power plants

privatization and the political economy of strategic trade policy this article considers the interdependence between international financial markets privatization and strategic trade policies we describe an economy where portfolio allocations are chosen by risk averse agents who rationally forecast future trade policies assuming a government responsive to the policy preferences of voters we show that ownership structure affects trade policy through the incentives for lobbying by private agents portfolios and trade policy are thus jointly determined in political economic equilibrium privatization of state owned industry exerts an important influence over the trade policies chosen by domestic and foreign governments by expanding the scope for individual diversification

market value for thermal energy of cogeneration using shadow price estimation applied to cogeneration systems in korea abstract this study empirically analyzes the appropriateness of the current tariffs for district heating in korea for this purpose we adopt the duality concept applied to the output distance function and estimate the shadow price of heat produced from cogeneration in addition the analytical model takes account for the inputs of labor and capital as well as fuel as input outlays of cogeneration the empirical results show that the current heat tariff determined by the public energy policy might be undervalued by about 15 53 this implies that the retail price of district heating in korea might be distorted at least in the sense of economics

marginal abatement cost air pollution and economic growth evidence from chinese cities abstract the directional distance function ddf with multiple bad outputs allows estimation of conditional marginal abatement cost mac that would be more informative than the unconditional mac estimated with a single pollutant applying a multi pollutant parametric output ddf approach we estimate the macs of co2 so2 and nox emissions for 105 chinese cities in 2006 2014 it is found that the period medians of the macs for the three emissions all increase over time while the medians of the macs for different cities tend to vary significantly a goodness of fit criterion is developed and used to evaluate the fit of alternative models which demonstrates the superiority of the multi pollutant model we have also shown that there exists a positive relationship between mac and economic growth finally several policy implications are suggested for reducing the overall emission abatement costs of china

will regional economic integration influence carbon dioxide marginal abatement costs evidence from chinese panel data with frequent trade and technology diffusion the barriers between regions are gradually weakening and regions have become more integrated over recent years regional economic integration not only stimulates labour mobility but also achieve scale economy both of which may also influence carbon dioxide co2 marginal abatement costs through affecting energy consumption co2 emissions productivity growth and technical progress nevertheless to the best of our knowledge none of the studies has currently concerned the influence of regional economic integration on co2 marginal abatement costs to fill this research gap this study first theoretically clarifies the influence mechanism of regional economic integration on co2 marginal abatement cost and then empirically attempts to investigate their relationship in the context of china with panel data models to serve this purpose the provincial co2 marginal abatement cost and regional economic integration are estimated by parametric directional distance function and price based approach respectively the results show that china s regional economic integration level indeed gradually improved over 2002 2011 except in 2003 04 and 2006 09 due to the spread of severe acute respiratory syndrome sars and the sub prime loan crisis moreover evolution of regional economic integration indeed contributes to the increase of co2 marginal abatement cost at 5 significance level using robust tests it can be found that the results are also reliable and robust to sub samples

tariffs as insurance optimal commercial policy when domestic markets are incomplete free trade is not optimal for a small country that faces uncertain terms of trade if some factors are immobile ex post and markets for contingent claims are incomplete the government can improve social welfare by using commercial policy that serves as a partial substitute for missing insurance markets using a combination of analytical and simulation techniques we demonstrate that optimal policy for this purpose will often have an anti trade bias we also show that the usual preference by economists for factor or product taxes and subsidies over tariffs and export subsidies may not be justified in this context this abstract was borrowed from another version of this item