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

designing economic instruments for the environment in a decentralized fiscal system designing economic instruments for the environment when external effects are important markets will be inefficient and economists have considered several broad classes of economic instruments to correct these inefficiencies however the standard economic analysis has tended to neglect important distinctions and interactions between the geographic scope of pollutants the enforcement authority of various levels of government and the fiscal responsibilities of the levels of government for example externalities generated in a particular local area may be confined to the local area or may spill over to other jurisdictions also local governments may be well informed about how best to regulate or enforce pollution control within their jurisdiction but they may not consider the effects of their actions on other jurisdictions finally the existence of locally generated waste emissions affects the appropriate assignment of both expenditure and tax responsibilities among levels of government the standard analysis therefore focuses mainly upon an aggregate or national perspective it typically ignores the possibility that the externality may be created and addressed by local governments and it does not consider the implications of decentralization for the design of economic instruments targeted at environmental problems this paper examines the implications of decentralization for the design of corrective policies that is how does one design economic instruments in a decentralized fiscal system in which externalities exist at the local level and in which subnational governments have the power to provide local public services as well as to choose tax instruments that can both finance these expenditures and correct the market failures of externalities

the effect of clean water regulation on profitability testing the porter hypothesis previous theoretical research provides opposing arguments regarding the effect of environmental regulation on profitability this study provides empirical evidence on this debated effect by testing the strong version of the porter hypothesis we employ panel data analysis to examine the effect of water regulation as measured by permitted wastewater discharge limits on the profitability of publicly held firms operating within the chemical manufacturing industries we find that tighter water regulation meaningfully lowers profitability by reinterpreting profitability in terms of sales and costs the results demonstrate that tighter water regulation increases costs conditioned on a given level of sales

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

computable general equilibrium model analysis of economywide cross effects of social and environmental policies in chile abstract the analysis of the linkages between development policies and social and environmental variables is a neglected area within the development literature this paper focuses on the key interrelations among the economic social and environmental elements of the sustainable development triangle a thorough review is undertaken of both social and environmental policies in chile underlining important economic growth and reforms using the static cge model ecogem chile the economywide impacts of several environmental social and combined policies are simulated for the chilean economy six different policies are simulated three environmental policies that impose different taxes on pm10 so 2 and no 2 emissions respectively the same tax on pm10 in a context of high unemployment one social policy that increases government transfers to households and a mixed social environmental policy package where the environmental tax on pm10 and the social transfer policy are simulated simultaneously the results show that environmental tax policies may have negative social effects using real disposable income by quintiles as proxy the impacts depend on the use of the new revenues and the status of employment taxing pm10 emission yields better environmental results than taxing so 2 and no 2 social policies do not show negative environmental impacts combined environmental and social policies improve results thus specific compensating social policies would improve environmental policy acceptance while also reducing poverty or strong income distribution disparities the evidence suggests that environmental policies may have social impacts but not vice versa the results show that the ecogem chile model is useful for analyzing systematically and holistically different economywide policies and their impact on the chilean economy winners and losers may be identified as well as the potential magnitude of gains and losses the results obtained are not all straightforward due to indirect effects

the double dividend second best worlds and real world environmental policy abstract the recent series of papers by bovemberg goulder parry and others argue that the double dividend is unlikely to exist because of second best problems they argue that the imposition of environmental tax in an economy already distorted by income taxes will further distort the economy by reducing incentives to supply labor our paper argues that this is not likely to be the case because of the restrictive assumptions made by these models and because of the role of the environment as a factor of production

is demand for polluting goods manageable an econometric study of car ownership and use in mexico abstract our motivation for estimating a demand system for gasoline and cars is its strategic relevance to policy objectives such as pollution control if demand is responsive to pricing demand reductions for polluting goods will provide an important share of the pollution reductions otherwise cleaner technologies will have to do most of the job we estimate a model of gasoline demand and car ownership in mexico using a panel of annual observations by state key features that we introduce include instrumental variables on differenced data and the treatment of possible dynamics measurement errors in the data and unobserved individual state characteristics we use tests of serial correlation in the a residuals to model the dynamics properly the resulting demand system is quite responsive to pricing even in the short term 0 6 for the own price elasticity of gasoline but we emphasize a medium to long term perspective of 5 10 years as most relevant for policy five to ten year elasticity estimates are in the range of 1 25 to 1 13 applying these elasticity estimates to data on pollution control options for the vehicle fleet in mexico city the costs of reaching a target for pollution reductions would be 45 more expensive if one were not willing to use a demand management instrument such a gasoline tax in the control program

weak complementarity and production abstract this paper describes how weak complementarity a common assumption to characterize consumer preferences for recovering measures of willingness to pay for nonmarketed environmental resources can be used to evaluate the effects of pollution that may affect profits or costs in such cases pollution serves as an externality imposed by third parties on production activities

estimating the general equilibrium benefits of large changes in spatially delineated public goods the purpose of this article is to report a new approach for measuring the general equilibrium willingness to pay for large changes in spatially delineated public goods such as air quality we estimate the parameters of a locational equilibrium model and compute equilibria for alternative scenarios characterizing the availability of public goods within a system of communities welfare measures take into consideration the adjustments of households in equilibrium to nonmarginal changes in public goods the framework is used to analyze willingness to pay for reductions in ozone concentrations in southern california between 1990 and 1995

policy watch government analysis of the benefits and costs of regulation recently congress has shown a greater interest in assessing the economic impact of regulation this interest was driven in part by estimates that federal regulation costs several hundred billion dollars annually in 1996 congress required the director of the office of management and budget to provide estimates of the total annual benefits and costs of individual regulations this essay reviews the increasing use of economic analysis in regulatory decisionmaking critically assesses the first 0mb report and considers how the use of economic analysis can help inform regulatory decisionmaking it argues that policymakers need to address a growing body of evidence that casts doubt on the effectiveness and efficiency of much regulation

controlling acid deposition a general equilibrium assessment in this paper we evaluate the impact of the so2 provisions in the 1990 clean air act a computable general equilibrium cge model of the united states is used to evaluate the implications of this law for a number of economic sectors we find that the largest negative impact falls on the coal industry output in the refining sector also decreases but agricultural production increases as consumers shift spending into food and wood based products

an econometric model of production with endogenous improvement in energy efficiency 1970 1995 the purpose of this paper is to introduce a modification of a standard four input production process where energy is used in an inefficient way due to partly unnecessary waste of energy in this production process r d investment is an additional input in order to improve energy efficiency it closes the gap between energy purchased and energy used effectively the more is invested the less is the waste of energy with the cost and benefit of r d investment incorporated in our model of the firm we analyze the impact of an energy tax on r d effort on output and on the waste of energy the model is implemented empirically by choosing a translog cost function and a set of first order conditions using data for the german chemical industry 1970 1995 in a simulation study based on higher energy prices we found outsourcing as the consequent reaction of the firm more material is used and less of energy labor and capital given the unchanged output level there is no indication of a double dividend in terms of environmental improvement as well as higher demand for labor on the industry level calling for a computable general equilibrium approach in order to answer this open question

sectoral and macroeconomic impacts of the large combustion plants in poland a general equilibrium analysis abstract this paper analyses the final incidence of direct costs of implementation of the eu directive on so 2 and no x emission limits for large combustion plants in poland first we simulate a model from a power sector perspective where compliance with the directive appears to be associated only with direct costs second a more realistic market wide perspective is modeled where abatement costs borne by the power sector become the revenues of the sectors supplying abatement technologies and services simulations indicate that if environmental benefits of implementation are unaccounted for the directive would seem to cause a deadweight loss in the economy the overall impact however is likely to be less negative than what the interest groups claim

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

coupling model of energy consumption with changes in environmental utility abstract this study explores the relationships between metropolis energy consumption and environmental utility changes by a proposed environmental utility of energy consumption euec model based on the dynamic equilibrium of input output economics theory it considers three simulation scenarios fixed technology technological innovation and green building effect it is applied to analyse hong kong in 1980 2007 continual increase in energy consumption with rapid economic growth degraded environmental utility first energy consumption at fixed technology was determined by economic outcome in 1990 it reached a critical balanced state when energy consumption was 22 109 kwh before 1990 x1 22 109 kwh expansion of energy consumption facilitated socio economic development but suppressed environmental benefits second technological innovation strongly influenced energy demand and improved environmental benefits the balanced state remained in 1999 when energy consumption reached 32 33 109 kwh technological innovation dampened energy consumption by 12 99 exceeding the fixed technology condition finally green buildings reduced energy consumption by an average of 17 5 in 1990 2007 they contributed significantly to energy saving and buffered temperature fluctuations between external and internal environment the case investigations verified the efficiency of the euec model which can effectively evaluate the interplay of energy consumption and environmental quality

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

how do federal regulations affect consumer prices an analysis of the regressive effects of regulation this study is the first to measure the impact of federal regulations on consumer prices by combining consumer expenditure and pricing data from the bureau of labor statistics industry supply chain data from the bureau of economic analysis and industry specific regulation information from the mercatus center s regdata database we determine that regulations promote higher consumer prices and that these price increases have a disproportionately negative effect on low income households specifically we find that the poorest households spend larger proportions of their incomes on heavily regulated goods and services prone to sharp price increases while the literature explores other specific costs of regulation noting that higher consumer prices are a probable consequence of heavy regulation this study is the first to provide a thorough empirical analysis of that relationship across industries irrespective of the reasons for imposing new regulations these results demonstrate that in the aggregate the negative consequences are significant especially for the most vulnerable households

environmental policy on the back of an envelope a cobb douglas model is not just a teaching tool abstract to clarify and interpret the workings of a large computable general equilibrium cge model of environmental policy we build an aggregated cobb douglas cd model that can be solved easily and analytically its closed form expressions show exactly how key parameters determine the sign and size of effects from a large new carbon tax on emissions revenue prices output and welfare data and parameters from the detailed dynamic cge model of goulder and hafstead 2018 are used in the cd model to calculate results that can be compared with theirs results from the cd model track aggregates from the large cge model quite closely even though the cd model omits much detail such as the number of sectors intermediate inputs and international trade a cge model is quite useful to generate detailed numerical results and to reflect on particular aspects of environmental policy but the simpler cd model provides a transparent view of exactly how the policy affects key outcomes

the welfare economics of land use planning abstract this paper presents an empirical methodology for the evaluation of the benefits and costs of land use planning the technique is applied in the context of the town and country planning system of the uk and examines the gross and net benefits of land use regulation and their distribution across income groups the results show that the welfare and distributional impacts can be large

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

the effect of epa enforcement funding on private sector pollution control investment the paper estimates the effects of the us environmental protection agency epa enforcement budget upon the demand for pollution control equipment in the private sector there are two possible effects a direct effect occurs when the enforcement budget is used for inspections that result in enforced compliance requiring additional pollution control equipment a second effect is anticipatory and arises from the private sector s objective of minimizing expected costs due to fines imposed by the epa for infractions of pollution control requirements this component of demand depends in part on the epa enforcement budget we find that increases in the epa budget increase the demand for pollution abatement equipment this in turn implies that increases in the epa enforcement budget have been effective in mitigating pollution

valuing nature in a general equilibrium abstract we explore the consequences of modeling the demand for environmental quality improvements as a fully integrated part of a general equilibrium demand system in an applied general equilibrium or cge analysis demand for non market goods depends on a full range of relative prices as well as environmental outcomes we simulate the effects of reducing two air pollutants to improve human health and three ecosystem services provided to households the ecosystem services make non separable contributions to household utility we find that willingness to pay measures of use based ecosystem services are impacted by changes in demand for complementary market goods demand for these goods shifts due to pollution reductions that enhance ecosystem services partial equilibrium estimates of these use values can be measured with substantial error if they fail to account for the general equilibrium adjustments caused by pollution over 300 calibrations of the model identify the model features important to these errors we find that effects on ecosystem services associated with non use values have important implications for the feedback effects on use related measures of economic tradeoffs this is due to how our model integrates market and non market effects reflecting the non market services importance to general equilibrium market outcomes

linking environmental accounting to reward systems the case of the environmental profit and loss account abstract this article aims to analyse how environmental accounting instruments can be linked to corporate reward systems for motivating a company s employees to embrace more environmentally friendly behaviours to this aim the paper focuses on a specific instrument the environmental profit and loss account that grounds on the idea of complementing the traditional profit and loss account by including figurative revenues and costs associated to the environmental impact of business activities based on the empirical evidence derived from a multinational do it yourself retailing chain the paper discusses how key design choices in the process of development of the environmental profit and loss account should be carried out to use this instrument as an input for the reward system and what problems and criticisms this choice implies in so doing the paper contributes to fill a gap in the state of the art literature that so far has given limited attention to the problem of linking environmental accounting instruments to corporate reward systems based on the case analysis the paper concludes with some guidelines concerning the key aspects that should be taken into consideration for this prospect use alignment with the company s strategy definition of quantitative and common objectives integration with other human resource practices and possible connection to monetary rewards then for each aspect the paper discusses the rise of potential trade offs between completeness and controllability of the included items environmental and economic performance cost and precision of the system itself

trade policy and environmental regulation in the asia pacific a simulation the asia pacific economic cooperation apec has the potential to become the world s largest free trade area encompassing both developed and developing countries at the same time environmental standards vary substantially in the region a multilateral computable general equilibrium cge model combined with environmental sub models simulates the environmental effects of trade and environmental policy changes the simulations show i even drastic reductions in trade barriers have only a small effect on pollution ii low environmental standards relative to trade partners do not necessarily result in increased pollution when trade is liberalised iii unilaterally raising environmental standards does not crowd out pollution to countries with laxer standards

tax interaction effects environmental regulation and rule of thumb adjustments to social cost preexisting distortions in factor markets complicate the estimation of the social welfare effects of regulatory interventions the existence of these tax interaction effects ties suggests that general equilibrium ge approaches should be used to evaluate regulatory policies however formal ge analysis is not always feasible for the numerous environmental regulations proposed by federal state and local agencies the question addressed in this paper is whether an empirically based rule of thumb upward adjustment factor is appropriate to properly scale social cost estimates in environmental policy we argue that such rule of thumb adjustments are significantly less reliable than estimates based on a detailed general equilibrium analysis because of the uncertainty about both the magnitude and sign of the social cost distortion in addition to addressing this question the paper gives an overview of ties and their relevance to environmental policy

does the porter hypothesis explain expected future financial performance the effect of clean water regulation on chemical manufacturing firms previous research provides opposing theoretical arguments regarding the effect of environmental regulation on financial performance as one important argument the porter hypothesis claims that tighter regulation improves financial performance this study provides empirical evidence on this debated effect in particular we employ panel data analysis to examine the effect of clean water act regulation as measured by permitted wastewater discharge limits on expected future financial performance as measured by tobin s q for publicly owned firms in the chemical manufacturing industries we find that tighter permitted discharge limits lower tobin s q i e more stringent clean water act regulation undermines expected future financial performance by decomposing tobin s q into its constituent components market value and replacement costs and estimating each component separately we find that tighter permitted discharge limits lower both components with a larger impact on market value which implies that investors revise their expectations of the discounted present value of future profits in response to changes in clean water act regulation

designing economic instruments for the environment in a decentralized fiscal system when external effects are important markets will be inefficient and economists have considered several broad classes of economic instruments to correct these inefficiencies however the standard economic analysis has tended to neglect important distinctions and interactions between the geographic scope of pollutants the enforcement authority of various levels of government and the fiscal responsibilities of the levels of government for example externalities generated in a particular local area may be confined to the local area or may spill over to other jurisdictions also local governments may be well informed about how best to regulate or enforce pollution control within their jurisdiction but they may not consider the effects of their actions on other jurisdictions finally the existence of locally generated waste emissions affects the appropriate assignment of both expenditure and tax responsibilities among levels of government the standard analysis therefore focuses mainly upon an aggregate or national perspective it typically ignores the possibility that the externality may be created and addressed by local governments and it does not consider the implications of decentralization for the design of economic instruments targeted at environmental problems this paper examines the implications of decentralization for the design of corrective policies that is how does one design economic instruments in a decentralized fiscal system in which externalities exist at the local level and in which subnational governments have the power to provide local public services as well as to choose tax instruments that can both finance these expenditures and correct the market failures of externalities

measuring the environmental consequences of trade policy a nonmarket cge analysis the newly approved gatt trade agreement is likely to focus greater attention on the conflicts between the proliferation of diverse national policies toward environmental quality and the need to maintain competitiveness in world markets virtually all policy evaluations of this conflict have been limited by a significant misspecification in existing models none of the available computable general equilibrium cge models for international trading patterns consistently reflect the effects of environmental resources on consumers preferences the purpose of this paper is to report the first generation of a composite nonmarket and cge model nm cge for the european community the united states japan and a single region for the rest of the world the model incorporates the morbidity and mortality effects of particulates sulfur oxides and nitrogen oxides it uses existing nonmarket valuation estimates freeman with a specification for consumer preferences that allows changes in atmospheric emissions to diffuse in different amounts to

general equilibrium benefits for environmental improvements projected ozone reductions under epa s prospective analysis for the los angeles air basin abstract this research demonstrates how locational equilibrium models can be used for benefit measurement with the detail required to match epa s benefit analysis for the first prospective analysis using the projected changes in ozone concentrations for 2000 and 2010 together with the sieg et al int econ rev forthcoming estimates for household preferences for housing education and air quality this paper measures general equilibrium willingness to pay for the policy scenarios developed for the prospective study as they relate to households in the los angeles area benefits are evaluated taking account at the household level of initial air quality conditions relocation based on changes in ozone and price changes the framework generalizes the partial equilibrium general equilibrium comparisons available with conventional computable general equilibrium and property capitalization models estimated general equilibrium gains from the policy range from 33 to 2400 annually at a household level in 1990 dollars

the effects of pollution taxes on urban areas with an endogenous plant location this paper has integrated space into the effect of a direct pollution control on the pollution damage of heavily populated areas like cbd this integration gives us some new insights into the effectiveness of a pollution tax as a pollution control device when the plant location of the firm is endogenized it is shown that when the plant location is endogenous as pollution taxes become higher the firm moves its plant towards the cbd causing higher pollution damage to the cbd residents if the production function exhibits decreasing returns to scale

evaluating policy interventions with general equilibrium externalities abstract we report on the results of analytical and numerical models that describe the effects of non separable externalities or public goods on public policies with important general equilibrium consequences in the numerical exercise we calibrate a general equilibrium model with non separable air quality benefits in order to measure the excess burden and total net benefits of transportation and energy taxes in the 1995 u s economy the change in the physical level and the economic value in air quality associated with a given policy is a function of the substitution patterns between air quality and market goods that we assume the size of the deadweight loss due to pre existing distortions such as a tax on labor income is substantially affected by these substitution patterns

alternative specifications for environmental control costs in a general equilibrium framework abstract we use a computational general equilibrium model to demonstrate that commonly used simplified specifications for environmental control costs do not yield results that are comparable to those obtained when environmental control costs are correctly specified the results indicate that simplified specifications may perform well when the objective is to qualitatively identify sectors disproportionately affected by environmental regulation but not when the goal is to estimate the magnitude of the effects

banning the bulb institutional evolution and the phased ban of incandescent lighting in germany much academic attention has been directed at analysing energy efficiency investments through the lens of behavioural failure these studies have challenged the neoclassical framing of regulation which emphasises the efficiency benefits of price based policy underpinned by the notion of rational individual self mastery the increasing use of a regulatory ban on electric lamps in many countries is one of the most recent and high profile flash points in this dialectic of freedom versus the state in the public policy discourse this paper interrogates this debate through a study of electric lamp diffusion in germany it is argued that neoclassical theory and equilibrium analysis is inadequate as a tool for policy analysis as it takes the formation of market institutions such as existing regulations for granted further still it may be prone to encourage idealistic debates around such grand narratives which may in practice simply serve those who benefit most from the status quo instead we argue for an evolutionary approach which we suggest offers a more pragmatic framing tool which focuses on the formation of market institutions in light of shifting social norms and political goals in our case progress towards energy efficiency and environmental goals

on market equilibrium analysis in this paper we develop the implications of competitive market equilibrium for production and household behavior when some prices are endogenously determined the properties of market equilibrium functions are explored including the effects of pricing policy a slutsky type equation relating compensated and uncompensated market equilibrium functions is derived implications for multimarket welfare analysis are presented focusing on the effects of pricing policy and technical change

using non market valuation to inform the choice between permits and fees in environmental regulation the purpose of this short note is to open an exploration regarding the use of non market valuation to help guide the selection of economically efficient pollution control instruments as long as non market valuation techniques can correctly estimate the slope of the marginal benefit of abatement curve this information along with engineering cost estimates of the unit costs or slope of the marginal abatement cost will provide useful information to policy makers in choosing between fees and permits an illustrative review of the literature suggests that both stated and revealed preference methods have estimated slopes of marginal benefit functions for reducing several pollutants to investigate the efficiency of permits versus fees an illustrative review of corresponding marginal abatement costs is also made for air pollutants affecting visibility the slope of the marginal benefit curve is far greater than the slope of the marginal abatement costs suggesting permits as the efficient instrument for nitrates in groundwater used for drinking the marginal benefit curve is flatter than the rather steep marginal abatement cost suggesting fees taxes would be a more efficient economic instrument we hope this note stimulates more emphasis in non market valuation on estimating the slope of the marginal benefit function to enhance environmental economists ability to make policy recommendations regarding the choice of pollution instruments for specific pollutants

technical change and measuring pollution abatement costs an activity analysis framework the cornerstones of studies that estimate the effectof environmental regulations on an economy areestimates of the pollution abatement costs incurred bythe manufacturing and electric utility sectors however there are concerns regarding the accuracy ofthe surveys used to generate these cost estimates this paper demonstrates that technical change tends toresult in an increasing share of pollution abatementcosts being impossible to measure this finding hasimportant implications for estimating the productivityeffects of environmental regulations developingregulatory budgets and data collection effortsrelated to environmental accounting

explaining the negative correlation between values and practices a note on the hofstede globe debate this note provides an explanation for the presumably counterintuitive negative correlations between values and practices reported by the global leadership and organizational behavior effectiveness project we argue that such results are compatible with basic microeconomic insights concerning diminishing marginal utility this explanation implies that values surveys as they are generally elicit marginal preferences rather than underlying values therefore they are a problematic instrument for the measurement of cultures and need to be improved so as to discriminate between the importance attached to an objective in general and that attached to it given current levels of satiation

the impact of economics on environmental policy abstract environmental economists have seen their ideas translated into the rough and tumble policy world for over two decades they have witnessed the application of economic instruments to several environmental issues including preserving wetlands lowering lead levels and curbing acid rain this essay examines the impact of the rise of economics in the policy world on the making of environmental policy i focus on two related but distinct phenomena the increasing interest in the use of incentive based mechanisms such as tradable permits to achieve environmental goals and the increasing interest in the use of analytical tools such as benefit cost analysis in regulatory decision making i argue that economists and economic instruments have had a modest impact on shaping environmental health and safety regulation but that economists will play an increasingly important role in the future although the role of economics is becoming more prominent it does not follow that environmental policy will become more efficient this apparent inconsistency can be explained by the political economy of environmental policy

is green energy expensive empirical evidence from the spanish electricity market abstract renewable energy promotion and its cost are at the heart of the energy policy debate in many countries the question from an economic perspective is how expensive the promotion of renewable sources through price based incentive schemes is this paper addresses this issue empirically we analyze the spanish electricity market during the period 2008 2012 where renewable energy production rose by 57 to determine how expensive it was we first measure the savings due to the spot price reduction driven by the merit order effect and second we compute the amount paid as incentives to green energy by the electricity system the difference between the two is the net cost of green energy to the electricity markets we present aggregate results for renewable sources as a whole as well as individual results for each technology we show that at the initial stages when renewable capacity was low green energy promotion paid for itself 2008 2009 however from 2010 on when renewable production reached a relatively high level it started to impose a positive net cost on the system finally we found substantial differences among technologies wind energy implied the lowest net cost while solar photovoltaic was the most expensive

applied general equilibrium models for energy studies a survey the importance of energy in any economy developed or underdeveloped became clear after the first oil shock in 1973 since then different studies were carried out to formulate energy policies and to study their impact on the economies since energy policy issues are related to various aspects of the economy such as price formation output determination income generation and distribution consumption behaviour government operation etc a coherent and systematic mechanism is required for such analysis by offering such a framework of analysis age models gained popularity among energy modellers in the 1980s the environmental issues have gained importance and the focus shifted towards curbing and containing emissions of environmentally unfriendly gases resulting from the use of energy age models because of their capability to capture the complexities of the economy have found relevance in analysing the economic impacts of controlling pollution and greenhouse gases this paper surveys the literature on such general equilibrium models as applied to energy studies and reports their special features evolution through time as well as their limitations

reducing co2 emissions under fiscal retrenchment a multi cohort cge model for austria the stabilization of budget deficit and budget debt ratios by fiscal retrenchment in order to fulfill the maastricht criteria for the emu is of central focus in most eu countries at the same time the national policy dimension of acute environmental problems such as global warming has receded in the public eye the environmental dimension nonetheless remains urgent and a re evaluation of the prospects of co2 policy is needed against the background of fiscal retrenchment required by supranational obligations we shall do this for the small open austrian economy by constructing a dynamic multi cohort cge model enabling us to assess quantitatively the lifetime welfare impacts on the cohorts affected by three different options for using co2 permit revenues the distribution of welfare costs of toronto co2 policy across cohorts significantly differs with use this is explained by income inheritance and price effects

environmental tariffs on polluting imports this paper examines the implications for the use of trade measures as weapons to address global environmental concerns there are already proposals in the u s senate to impose an environmental tariff against foreign nations whose cost advantages stem from less stringent environmental standards than the u s the paper argues that trade policy measures typically are not the first best instruments for achieving environmental objectives even theoretically they could be shown to be welfare improving only under a very narrow range of circumstances their use in place of more efficient policy instruments may not only end up distorting the patterns of world trade but also may worsen the overall patterns of environmental quality simulation exercises undertaken here suggest that it is highly unlikely that countries would alter their environmental behavior because of the imposition of the proposed u s tariff hence the proposed legislation has very uncertain environmental consequences even if the policy has been mainly designed to protect domestic industries it would only provide a minor margin of protection because the costs of complying with the environmental standards represent a relatively small element in the total costs the analysis suggests that trade policy introduced in this fashion will have no significant impact on the patterns of world trade and pollution

a presumptive pigovian tax complementing regulation to mimic an emissions fee if regulations are used to make cars and fuels cleaner should gasoline taxes be used to manage demand for trips that pollute anaysis of a well composed program for mexico city indicates that the emission reductions would cost 24 percent more if a tax on gasoline was not introduced a simple analytical framework is developed to analyze the use of abatement requirements to make cars cleaner and a gasoline tax to economize on the use of cars the two instruments should be combined to mimic the incentives that would have beeen provided by an emissions fee thus cleaner cars and fewer trips are analogous to competing suppliers of emission reductions the planner should buy from both so that marginal costs are equal applying that rule the marginal cost of emission reductions is simply the gasoline tax rate divided by emissions per liter

the marginal efficiency effects of taxes and subsidies in the presence of externalities a computational general equilibrium approach abstract using 1983 data we develop a 19 sector computational general equilibrium model incorporating producer producer externalities and producer consumer externalities simulation results indicate that when additional government expenditure is financed by pigouvian taxes the marginal cost of public funds is substantially below one labor sales and output taxes also affect the output of the polluting industries and thus have indirect pigouvian effects which tend to reduce the associated marginal costs of public funds pigouvian taxes are usually more efficient than pigouvian subsidies since the tax revenue can be used to reduce other taxes