socioeconomic effects of aviation biofuel production in brazil a scenarios based input output analysis derived from renewable feedstocks aviation biofuel is generally perceived as inherently sustainable however its production involves a wide range of sectors and interacts with different actors in society it is therefore important to understand and evaluate not only the environmental impacts of that process but also its socioeconomic effects at present empirical studies assessing socioeconomic aspects of aviation biofuel are rare in scientific literature the aim of this study therefore is to assess key effects of aviation biofuel production on employment gdp and trade balance a scenarios based input output io analysis was used to evaluate these socioeconomic effects taking brazilian aviation biofuel production to 2050 as an example to address the uncertainty of io analysis we have proposed a stochastic simulation approach for the technical coefficients in the io model four distinct scenarios were developed in each three potential combinations of technologies and feedstocks for producing aviation biofuel were evaluated sugarcane via alcohol to jet atj macauba via hydro processed esters and fatty acids hefa and eucalyptus via fischer tropsch ft among other things we found that the production of aviation biofuel would create around 12 000 65 000 jobs while contributing us 200 1100 million to brazil s gdp under different scenarios with different supply chains the socioeconomic effects calculated deterministically were generally higher than the stochastic outcomes which can be explained by factors such as technological learning and economic growth aviation biofuel production showed large positive net socioeconomic effects on employment and gdp although some of the fossil sectors would be negatively affected overall the macauba hefa chain with the highest effects on employment and gdp and the lowest effects on imports seemed to be the most favorable of the scenarios studied despite the relatively high level of uncertainty associated with it

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

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

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

characterising deindustrialisation an analysis of changes in manufacturing employment and output internationally deindustrialisation is typically conceptualised as a decline in manufacturing as a share of total employment from a kaldorian perspective deindustrialisation could have negative implications for long run growth given the special growth pulling properties of manufacturing however defining deindustrialisation purely in terms of employment share is conceptually limiting given that some of the kaldorian processes operate primarily through output rather than employment as well as blunting empirical analysis by not focussing enough on changes in manufacturing share of gross domestic product gdp this study develops a new method using decomposition techniques to analyse changes in manufacturing employment levels and shares in 48 countries over periods of deindustrialisation the analysis separates out changes in the levels and shares of employment manufacturing into components associated with changes in the share of manufacturing in gdp the growth of manufacturing value added the labour intensity of manufacturing production and economic growth the results indicate that in most cases the decline in manufacturing employment is associated primarily with falling labour intensity of manufacturing rather than an overall decline in the size or share of the manufacturing sector we suggest that deindustrialisation should appropriately be defined in terms of a sustained decline in both the share of manufacturing in total employment and the share of manufacturing in gdp copyright the author 2008 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

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

coal consumption and economic growth in china abstract the aim of this paper is to re examine the relationship between coal consumption and real gdp of china with the use of panel data this paper applies modern panel data techniques to help shed light on the importance of the heterogeneity among different regions within china empirical analyses are conducted for the full panel as well as three subgroups of the panel the empirical results show that coal consumption and gdp are both i 1 and cointegrated in all regional groupings heterogeneity is found in the gdp equation of the full panel the regional causality tests reveal that the coal consumption gdp relationship is bidirectional in the coastal and central regions whereas causality is unidirectional from gdp to coal consumption in the western region thus energy conservation measures will not adversely affect the economic growth of the western region but such measures will likely encumber the economy of the coastal and central regions where most of the coal intensive industries are concentrated

assessing the employment impacts of environmental and natural resource policy this paper provides an introductory guide for environmental andresource economists to methods of assessing the impact of environmentaland natural resource policy on employment it examines five basicapproaches to evaluating the effect of a policy action on employment 1 supply and demand analysis of the affected sector 2 partialequilibrium analysis of multiple markets 3 fixed price generalequilibrium simulations input output i o and social accounting matrix sam multiplier models 4 non linear general equilibriumsimulations computable general equilibrium cge models and 5 econometric estimation of the adjustment process particularly timeseries analysis the basic modeling structure and data requirementsfor each of these approaches are described simple examples of theirapplication to evaluation of environmental and natural resourcepolicy are developed and the relative merits and applicability of each are discussed

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

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

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

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

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

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

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

macroeconomic modeling for assessing sustainability of bioethanol production in thailand abstract the development of bioethanol can bring about socio economic and environmental impacts to support the sustainability analysis of bioethanol development and the decision making on bioethanol promotion in thailand this study aims at assessing the socio economic and environmental effects of bioethanol production using recursive dynamic computable general equilibrium cge modeling the assessment is carried out based on the bioethanol production targets in thailand s alternative energy development plan aedp 2015 capturing cassava ethanol and molasses ethanol simulation scenarios are set up to incorporate the role of bioethanol support policies such as tax reduction production efficiency improvement and widening the price gap between gasoline and gasohol into the analysis the results show that increasing bioethanol production together with improving the efficiency of feedstock cultivation is the most efficient way to enhance economic growth however the higher production and consumption would also lead to more irrigation water demand and air emissions the presentation of bioethanol support policies role in promoting bioethanol along with widespread socio economic and environmental effects focus are novel not only are the results useful for the decision making towards sustainable bioethanol development the methods presented in this study should also be a guideline for other socio economic and environmental impact assessment schemes

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

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

an application of a kaldorian export led model of growth to the united states a kaldorian export led model of growth is analysed using post second world war united states data the structural parameter restrictions of the model are confirmed by the estimates kaldor s model which was originally conceived to be illuminating for describing a region or a small open economy is able to describe the annual fluctuations in the growth rate of a large open economy like that of the united states with only minor adjustments

manufacturing and economic growth in the united states kaldor s growth laws are applied to the post world war ii united states each variable employed in the time series analysis is smoothed with a moving average this procedure successfully mitigates the effects of short term cyclical changes and emphasizes long term economic growth indicate that kaldor s laws are compatible with the economic growth of united states

macroeconomic impacts of bioenergy production on surplus agricultural land a case study of argentina this paper assesses the macroeconomic impacts in terms of gdp trade balance and employment of large scale bioenergy production on surplus agricultural land an input output model is developed with which the direct indirect and induced macroeconomic impacts of bioenergy production and agricultural intensification which is needed to make agricultural land become available for bioenergy production are assessed following a scenario approach the methodology is applied to a case study of argentina the results of this study reveal that large scale pellet production in 2015 would directly increase gdp by 4 imports by 10 and employment by 6 over the reference situation in 2001 when accounting for indirect and induced impacts gdp increases by 18 imports by 20 and employment by 26 compared to 2001 agricultural intensification reduces but does not negate these positive impacts of bioenergy production accounting for agricultural intensification the increase in gdp as a result of bioenergy production on surplus agricultural land would amount to 16 20 in imports and 16 in employment compared to 2001

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

economic growth and kaldor s law the case of turkey 1925 78 in this paper kaldor s enine of growth hypothesis is examined and its validity is tested forr the turkish economy the results obtained regardless of the specification and estimation techniques used consistently support the hypothesis

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

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

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

woody biomass processing potential economic impacts on rural regions abstract this paper estimates the economic and environmental impacts of introducing woody biomass processing wbp into a rural area in central appalachia wbp is among the most promising additions to energy generation portfolios for reducing import dependency while at the same time providing economic opportunity to stimulate regional economies especially in rural regions where economic development options are often limited we use an input output framework to assess wbp under three different pathways fast pyrolysis ethanol and coal biomass to liquids we find that the proposed wbp will increase regional output by 0 5 1 3 of gross regional product it will increase income by 17 32 to 51 31 million dollars each year and regional employment by 218 1 1127 8 jobs depending on the chosen pathway of these impacts the direct portions are 63 77 of the total impact depending on the chosen pathway the economic analysis and the results from the accompanying environmental assessment show that only the ethanol pathway has both economic and environmental benefits we conclude that because long run economic development strategies in rural regions are limited and negative impacts do not alter dramatically the regional environmental profile regional policymakers should include wbp among their development portfolio options

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

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

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

kaldorian approach to greek economic growth in the last 30 years greece has experienced a rapid rate of economic growth which has transformed the economy and enabled it to become a member of the eec specifically greece transformed itself from an agricultural economy with virtually no industrial base to an economy with a significant industrial sector and consequently a relatively high income per capita one can explain this on the lines of a kaldorian framework in this paper we provide an outline of kaldor s growth model and test its relevance to the economic experience of greece during the 1967 1988 period the empirical results suggest that the model can adequately explain the developments in the economy to a considerable degree

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

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

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

interregional assessment of socio economic effects of sugarcane ethanol production in brazil abstract brazil is the largest producer of sugarcane ethanol worldwide 28 billion litres in 2013 and its production is expected to increase substantially in the coming years as the sugarcane ethanol sector contributes significantly to the national economy an expansion of production impacts gdp employment and trade these impacts are not equally distributed throughout the country nor between income classes these differences between regions and income classes are not well understood since previous studies on socio economic impacts used high aggregation levels the objective of this study is to compare the distribution of socioeconomic impacts of sugarcane ethanol production expansion in brazil including the interregional effects across three microregions in the centre south and different income classes the spatial distribution of sugarcane for the supply of 54 billion litres of ethanol in 2030 was used as input for an interregional input output model three scenarios for the quantity and location of sugarcane production are studied based on measures to limit land use i e second generation ethanol higher agricultural yields the results show that expansion of sugarcane ethanol production in brazil in 2030 could increase the national gdp by 2 6 billion usd and employment by 53 000 fte in general the microregional benefits of sugarcane expansion outweigh the downsides from displaced production of other crops and livestock the microregions also benefit to varying extents from sugarcane ethanol expansion outside their borders additional employment is primarily generated in lower income classes there are considerable differences in the impacts across the regions these are related to the structure of the local economy and the scenario and not only dependent on the local potential for sugarcane expansion socio economic impacts of biofuel production should thus be studied on lower aggregation levels to include these differences in benefits across regions and income classes

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

a kaldorian approach to regional economic growth in china kaldor s engine of growth hypothesis is examined in the case of the chinese economy china has in the last decade experienced a rapid industrialization and very strong economic growth using regional data of this growth process the three kaldorian laws of economic growth are tested the empirical results support the hypothesis there seems to be an especially strong relation between productivity and industrial growth

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

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

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