reforms of environmental policies in the presence of cross border pollution and public private clean up we construct a two country model where pollution from production is transmitted across borders pollution abatement is undertaken by both private producers and the public sector we characterize nash optimal levels of the policy instruments in the two countries emission taxes and funds allocated for public abatement activities we examine the implications of a number of multilateral policy reforms one of our findings is that the magnitude of the beneficial effect of a reform depends on the scope of the reform if it is restricted to a subset of policy instruments then the efficacy of environmental policy reform can be greatly undermined

welfare and trade effects of international environmental agreements we analyse the welfare effects of environmental policy arising from the formation of an international environmental agreement on the participating and non participating countries and thus shed light on the potential incentives for a country to join such an agreement within a n country q goods general equilibrium framework under free trade conditions we consider unilateral and cooperative policy settings and within the latter country specific and fully harmonized policies within the agreement a key result of the paper is the emergence of a negative relationship arising from terms of trade effects between the welfare changes of the participating and non participating countries following the formation of the agreement these however do not result in a zero sum welfare outcome for the world as a whole

trade restrictiveness indices in the presence of externalities an application to non tariff measures we extend the trade restrictiveness index approach to the case of market imperfections and domestic regulations addressing them we focus on standard like non tariff measures ntms affecting cost of production and potentially enhancing demand by reducing negative externalities we apply the framework to the database of kee et al 2009 and derive ad valorem equivalents aves for technical measures about 39 of the product lines affected by ntms exhibit negative aves indicating a net trade facilitating effect of these measures accounting for these effects significantly reduces previous measures of countries trade policy restrictiveness obtained while constraining these ntms to be trade reducing

can cross border pollution reduce pollution we develop a two country model of foreign aid and cross border pollution result ing from production activities in the recipient country there is both private and public abatement of pollution the latter being financed through emissions tax revenue and foreign aid we characterize a nash equilibrium in which the donor country chooses the amount of aid and the recipient chooses the fraction of aid allocated to pollution abatement and the emission tax rate at this equilibrium an increase in the donor s perceived rate of cross

safety first criteria and their measures of risk a cardinal measure of risk which represents the safety first criteria is defined the functional form of that measure is determined for a subgroup of risk averse agents that do not have money illusion an empirical illustration of possible applications of that measure shows a method of identifying the subgroup of agents for which a given alternative dominates the others in a group of risky alternatives when none of these alternatives dominates any of the others according to the first and the second criteria of stochastic dominance

second best carbon taxation in the global economy the green paradox and carbon leakage revisited acceleration of global warming resulting from a future carbon tax is large if the price elasticities of oil demand are large and that of oil supply is small the fall in the world interest rate weakens this weak green paradox effect especially if intertemporal substitution is weak still social damages from greenhouse gases drop if the fall in oil supply and cumulative emissions is strong enough if the current carbon tax is set too low the second best future carbon tax is set below the first best too to mitigate adverse green paradox effects unilateral second best optimal carbon taxes exceed the first best taxes due to an import tariff component the intertemporal terms of trade effects of the future carbon tax increase current and future tariffs and those of the current tax lower the current tariff finally carbon leakage and globally altruistic and unilateral second best optimal carbon taxes if non kyoto oil importers price carbon too low are analysed in a three country model of the global economy

trade liberalization and the environment in the pacific basin coordinated approaches to mexican trade and environment policy in this paper we analyze the environmental implications of growth and opening up of trade in mexico based on an empirical economywide model in particular we study how tradeoffs between growth and environmental objectives can be minimized by using targeted policies on pollution emissions in coordination with outward oriented trade strategies most economywide studies of trade and environment linkages rely on effluent intensities associated with output and do not allow for substitution between nonpolluting factors labor and capital and polluting intermediate consumption such as chemicals or energy lee and roland holst by contrast pollution emissions in the present model are linked to using polluting inputs rather than directly to output levels we also embed this analysis in a dynamic framework to take account of exogenous components of factor supply and productivity growth over the twenty year period 1990 to 2010 the analysis is presented in three stages first pollution abatement policies are considered alone and their effects on growth sectoral allocation and trade are evaluated the next step is to consider trade liberalization alone trade distortions in place before the nafta and uruguay round accords are removed progressively over time and results calibrate the expansionary effects of trade liberalization as well as its environmental implications these include win win cases such as in the fertilizer sector as well as intensified environmental degradation arising from the transportation sector in a third and last scenario we combine environmental and trade policies and show how they interact these results indicate that the combination of policies generally can mitigate the undesirable effects of each set of policies alone such as trade induced pollution growth and the real contractionary effects of environmental policy thus it appears that more liberal and outward oriented trade policy can coexist with more rigorous attention to environmental values the trade and environment debate has

getting agriculture moving do markets provide the right signals abstract political discrimination has often pushed the domestic value of agriculture in developing countries below its value in markets at the border this paper seeks to explain the reasons why border prices themselves undervalue the linkages that agriculture has to economic growth in the early stages of development if agriculture is critically important to stimulating and sustaining rapid economic growth those countries that fail to correct this discrimination exact a heavy toll in economic performance furthermore the poorest countries will suffer the most agricultural development and development of the non agricultural economy are closely linked the traditional market mediated linkages form the core of economic analysis of the role of agriculture in economic development providing labour for an industrial work force food for an expanding population with higher incomes savings for industrial investments markets for industrial output export earnings to pay for imported capital goods and raw materials for agro processing industries a second category of linkages is not well mediated by market forces even when markets are working well the impact of agricultural growth on the rest of the economy through non market linkages can be traced using a simple growth accounting framework that examines contributions to the labour force capital investment and the productivity with which these two physical factors are utilised several linkages stand out as likely to be important and potentially measurable because they draw on the efficiency of decision making in rural households the low opportunity cost of their labour resources the opportunity for farm investment without financial intermediaries the potential to earn high rates of return on public investments that correct for urban bias the contribution of food price stability to increased efficiency in investment decisions and the impact of growth in food production on widespread improvement in nutrient intake and labour productivity each of these factors alone as public investment and favourable policy stimulate growth in the agricultural sector should cause an increase in the efficiency of resource allocation and thus higher total factor productivity several of these mechanisms will also serve to speed factor accumulation by increasing the savings rate or improving factor mobility

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

deforestation in the brazilian amazon comparing the impacts of macroeconomic shocks land tenure and technological change the paper examines the current relevance of the set of variables reported in the literature as driving deforestation in the brazilian amazon the analysis uses a computable general equilibrium cge model adapted to capture regional economic structures and the environmental processes specific to tropical areas the paper compares the impact on deforestation in the brazilian amazon of changes in real exchange rate modifications in agricultural tax and support policies reductions in transportation costs arising from investment in infrastructure in the amazon changes in land tenure regimes and technological change in agriculture affecting productivity and agronomic sustainability

risks and returns from soil conservation evidence from low income farms in the philippines abstract this paper examines risks and returns associated with soil conservation on hillside farms in the philippines stochastic efficiency analysis is combined with a heteroskedastic regression model to assess the impacts of contour hedgerows on low income corn farms regression analysis indicates that over time contour hedgerows can improve yields up to 15 compared with conventional practices the analysis also provides weak support for a hypothesis that hedgerows are variance reducing however results show that the reduction in yield variability afforded by hedgerows is modest and that yield variability may increase by as much as 5 as hedgerow intensity rises tests for stochastic dominance show that compared with the conventional tillage system hedgerows do not constitute an unambiguously dominant production strategy stochastic efficiency with respect to a function is used to identify a range for the coefficient of relative risk aversion within which hedgerows dominate conventional tillage results suggest this range would be rather high hedgerows dominate the conventional cropping strategy only for decision makers with relative risk aversion coefficients in the range 3 5 5 implications for soil conservation adoption in low income settings are discussed

international trade and environmental quality a survey abstract international trade has been incorporating various aspects of environmental issues since 1970 the extent to which environmental problems might affect many facets of trade or vice versa has been the subject of considerable debate over these years in this article we have attempted to establish some of the links between international trade and environmental quality by performing a comprehensive literature review we discuss issues such as establishing direct and indirect effects of international trade on environmental quality effects of trade on economic development environmental quality and energy and their relation with each other and finally the role of governments and international organizations in this context studies have so far revealed some linkages between trade and environment through conventional trade theory however interactions between international trade and types of pollution their sink and assimilative capacity need to be analyzed using a general equilibrium approach currently very little knowledge and agreement on the nature of interactions between trade theories development process and environmental quality exist existing studies have shown that the structure of environmental regulations should be modified to reflect the existence of trade under imperfect competition therefore further research on the interaction between new trade theory and environmental regulation is needed also theoretical and quantitative analysis regarding the effects of environmental regulations on competitiveness and location decision is needed the intensity and type of environmental measures vary across issues and countries therefore harmonizing environmental measures creates an inefficient atmosphere and to assume that trade restrictions will either improve or reverse the environmental damages is a serious mistake given the dynamic and intricate nature of the problem trade and environment debate continues despite vast research and poses a challenge for researchers and policy makers in the foreseeable future

the strategic bequest motive although recent research suggests that intergenerational transfers play an important role in aggregate capital accumulation our understanding of bequest motives remains incomplete we develop a simple model of strategic bequests in which a testator influences the decisions of his beneficiaries by holding wealth in bequeathable forms and by conditioning the division of bequests on the beneficiaries actions the model generates falsifiable empirical predictions that are inconsistent with other theories of intergenerational transfers we present econometric and other evidence that strongly suggests that bequests are often used as compensation for services rendered by beneficiaries

the relative impact of inheritance and other factors on economic inequality an empirically grounded micro simulation of saving with bequests related negatively either in total to average children s income or separately to individual children s incomes is constructed for a single generation in a steady growth economy behavioral parameters are set so that predicted bequests to the next generation are consistent with both the scale and assignment of inheritances taken from a real world source for the simulation generation the relative impact of inheritance and other factors on different aspects of economic inequality is assessed while inheritance is a major cause of wealth inequality its influence on annual income and lifetime resources is small and in the latter case ambiguous inheritance perpetuates and may intensify inequalities arising originally from other causes in that sense it is a secondary cause of inequality but that is not of course to say that it is of secondary importance the extent of its influence on distribution remains an open question which cannot be decided merely by theoretical reasoning but requires in addition something in the nature of a quantitative analysis of the relevant facts wedgwood 1929 pp 60 61

modeling fertilizer externalities around palo verde national park costa rica irrigated rice farming in costa rica involves use of agrochemicals that pollute important wetlands ecosystems such as the palo verde national park in the northeastern province of guanacaste we characterize rice farming in this region apply duality theory to estimate conditional factor demand for fertilizer and then simulate the impacts of alternative policies on fertilizer use using a normalized profit function we also estimate policy impacts on farmer profits as expected prices of rice seeds and fertilizer significantly affect use of fertilizer price incentives or taxes could encourage farming practices that reduce the threat to downstream ecosystems

utility consistent discrete continuous choices in soil conservation a utility consistent model of participation and participation intensity choices for a voluntary soil conservation program is developed a modified form of roy s identity is used to derive a two equation system that links the discrete dichotomous choice participation and the continuous choice intensity to the same utility function the model corrects for selectivity bias that arises in single equation approaches an application to a filter strip program in two counties in illinois and michigan demonstrates that different factors affect responses to the program across the sample regions estimated willingness to accept payments for participation in the program suggest policy impacts are not uniform across locations

the recovery of agricultural productivity in sub saharan africa abstract this paper presents a new view of cross country agricultural productivity in sub saharan africa for the first time the wheat units approach to output aggregation is applied to africa this approach avoids many of the problems caused by exchange rate distortion and related problems when international output comparisons are based on agricultural value added measures of agricultural productivity based on the wheat unit aggregates reveal a striking recovery of growth in agricultural productivity during the mid 1980s these results contrast sharply with those derived from standard output aggregates based on agricultural value added this contrast is true for both partial and total factor productivity analyses technical change measured by expenditures for agricultural research and macroeconomic reform which leads to improved economic incentives for agriculture might account for up to two thirds of this recovery if this explanation is correct it raises concerns for the sustainability of africa s recent gains reduced public investment in agricultural research for example reduces current fiscal deficits at the expense of future growth in productivity

consumption risk farm characteristics and soil conservation adoption among low income farmers in the philippines abstract this paper investigates patterns of soil conservation adoption among low income farmers in the philippines a model is presented that focuses attention on the role of assets and consumption risk in influencing soil conservation adoption decisions results from a reduced form probit model of adoption are reported these econometric findings indicate that patterns of soil conservation adoption reflect relative risk considerations in addition to farm and household characteristics farm size tenure security labor availability and land quality all exhibit a positive association with soil conservation adoption in contrast controlling on these and other household characteristics the probability of adoption falls as consumption risk rises these results underscore a need for greater sensitivity among policymakers to the role of consumption risk in influencing soil conservation decisions in low income settings

poverty consumption risk and soil conservation abstract this paper studies the impact of poverty and uninsured consumption risk on incentives to invest in soil conservation a stochastic dynamic model is used to show how consumption risks and costs of investment influence incentives to adopt soil conservation measures on low income farms the model is calibrated using production data from hillside farms in the philippines simulations with the model demonstrate how the value of soil conservation depends on the cost of investing the risk characteristics of the soil conservation method and differences among households in capacity to bear risk model predictions are compared with empirical adoption patterns as described by a probit model and nonparametric kernel regressions of adoption probability empirical findings show how differences in farm size tenure security risk exposure and access to credit help to explain patterns of soil conservation adoption implications for policy are discussed

trims environmental taxes and foreign investment various second best policy mixes of investment measures and environmental taxes for a polluted small open economy with foreign capital and immovable trade restrictions are examined the optimal policy mix depends on the types of trade restrictions when tariffs are in place strict policies of pollution taxes and export requirements are optimal for alleviating tariff induced consumption and production distortions when involuntary quotas are used in lieu of tariffs however the optimal policy mix is a zero export requirement and pigouvian taxes on pollution for the case of vers however the optimal policy demands export requirements and a less stringent pollution tax trims impots environnementaux et investissement etranger ce memoire examine certains ensembles de politiques de second ordre portant sur l investissement et les impots environnementaux dans une petite economie ouverte polluee ou il y a capital etranger et restrictions au commerce international quand on a des droits de douane en place des politiques de fiscalite environnementale et d exportations requises sont optimales pour corriger les distorsions aux patterns de production et de consommation engendrees par les droits de douane cependant quand des contingentements involontaires sont en place plutot que des droits de douane le melange optimal de politiques est de ne pas requerir d exportation mais d imposer des taxes a la pigou sur la pollution pour ce qui est des restrictions volontaires a l exportation le melange optimal de politiques reclame une taxe moins forte sur la pollution accompagnee par un certain niveau d exportation requis

adoption of agricultural innovations in developing countries a survey this paper reviews various studies which have provided a description and possible explanation to patterns of innovation adoption in the agricultural sector the survey points out that the tendency of many studies to consider innovation adoption in dichotomous terms adoption nonadoption may not be appropriate in many cases where the actual decisions are defined over a more continuous range more attention needs to be given to the socio cultural and institutional environment in area studies so that their interrelation with economic factors affecting adoption can be inferred the presence of several interrelated innovations is another aspect that needs to be considered more carefully in future research since a number of simultaneous decisions may be involved furthermore the possibility of regular sequential patterns in adopting components of a new technological package should be specifically addressed in future studies finally the impact of differential adoption rates on land holding distribution merits attention in future research

the family as an incomplete annuities market families can self insure against uncertain dates of death through implicit or explicit agreements with respect to consumption and interfamily transfers interfamily transfers need have nothing to do with altruistic feelings they may simply reflect risk sharing behavior of completely selfish family members although family annuity markets are incomplete even small families can substitute by more than 70 percent for perfect market annuities given adverse selection and transaction costs family risk pooling may be preferred to public market annuities in the absence of public annuities these risk sharing arrangements provide powerful incentives for marriage and family formation

coordinating climate and trade policies pareto efficiency and the role of border tax adjustments abstract this paper explores the role of trade instruments in globally efficient climate policies focusing on whether or not some form of border tax adjustment bta is warranted when carbon prices differ internationally the analysis shows that while there is no case for bta when all instruments can be freely deployed pareto efficiency does require a form of bta when carbon taxes in some countries are constrained its purpose then is to partly counteract the impact on emissions of inappropriate carbon pricing there or equivalently to undo the trade distortions such pricing creates the required form of bta is generally complex but a special case is identified in which it optimally has the simple structure envisaged in practical policy discussions it is also shown that the efficiency case for bta depends critically on whether climate policies are pursued by carbon taxation or by cap and trade

trade and tax policy reform and the environment the economics of soil erosion in developing countries the widespread view that trade reform is bad for the environment has rarely been subjected to close scrutiny in a developing country model we trace general equilibrium impacts of tax and tariff policy changes on upland resource allocation and by implication on the rate of erosion our analysis highlights the role of domestic market linkages as conduits between lowland and upland economies when economywide effects are taken into account indirect policies such as tariff reforms may in some cases provide better means for reducing upland erosion than would direct environmental policies

is chinese trade policy motivated by environmental concerns abstract this paper analyses whether china s export vat rebates and export taxes are driven by environmental concerns since china struggles to enforce environmental regulation trade policy can be used as a second best environmental policy in a general equilibrium model it is possible to show that the second best export tax increases in a product s pollution intensity the empirical analysis investigates whether the export tax equivalent of partial vat rebates and export taxes are higher for products which are more pollution intensive along several dimensions the results indicate that the vat rebate rates are set in a way that discourages exports of water pollution intensive so 2 intensive and energy intensive products from 2007 on moreover the conservation of natural resources such as minerals metals wood products and precious stones seems to be a key determinant of china s export vat rebate rates there is little evidence that export taxes are motivated by environmental concerns

economic factors in farmer adoption of agroforestry patterns observed in western kenya abstract a study of agroforestry adoption by 3 000 project participants in siaya and south nyanza districts in kenya supports three hypotheses 1 1 historical increases in tree domestication and management intensity are responses to declining supply of uncultivated tree resources increased subsistence and commercial demand for tree products and perceived risks of ecological degradation adoption of agroforestry is most likely where consistent with economic incentives for land use change 2 2 high variability in individual farmers tree growing strategies reflects differences in resources and livelihood strategies and household level returns to agroforestry relative to alternative options for meeting specific objectives 3 3 farmers reduce risks associated with new agroforestry practices through incremental adoption and adaptation and cost and risk reducing modifications in technology design

international trade and the environment policy reform in a polluted small open economy abstract this paper investigates sufficient conditions for welfare improving policy reforms in a small open economy facing many trade and pollution distortions we investigate and compare reform in tax regimes quota regimes and mixed regimes where some pollutants are regulated with taxes and others with quotas it is also shown that the welfare benefits of reforming pollution policy are greater in an economy with international factor mobility than in an economy not subject to such mobility

trade transboundary pollution and foreign lobbying in this paper we explore the use of trade policy in addressing transboundary stock pollution problems such as acid rain and water pollution we show that a tariff determined by the current level of accumulated pollution can induce the time path of emissions optimal for the downstream polluted country but if the upstream polluting country can lobby the downstream government to impose lower tariffs distortions brought by corruption and foreign lobbying lead to a rise in the upstream country s social welfare and to a decrease in social welfare in the downstream country thus the usefulness of trade policy as a tool for encouraging cooperation and internalizing transboundary externalities depends critically on the degree of governments susceptibility to foreign political influence

environmental and resource economics a canadian retrospective the paper reviews research contributions to environmental and resource economics by scholars in canada we focus mainly on work from the past 25 years but also highlight earlier pathbreaking work we begin by looking at broad trends in research both internationally and within canada we then review canadian contributions to various topics in the field canadians have played a leading role in the development of the field especially in resource economics international environmental economics and the valuation of environmental amenities

emissions leakage environmental policy and trade frictions abstract we develop a two good general equilibrium model of a small open economy to decompose the effect of a country s unilateral strengthening of environmental policy on pollution emissions in the rest of the world known as emissions leakage we show analytically and numerically that the level of emissions leakage depends on the level of trade friction in the service sector in the model production in the manufacturing sector is associated with pollution emissions and production in the service sector is clean in a special case with free trade in manufacturing and no trade in services no leakage occurs allowing for trade in services we solve for the relationship between trade frictions in the service sector and leakage at lower levels of service sector s trade friction leakage from a small strengthening of environmental regulation decreases increases if services are imported exported finally we simulate the model calibrating the to the canadian economy to compare these effects relative sizes over a range of plausible parameter values leakage is about 18 lower when using trade friction levels estimated from the literature rather than assuming no trade friction in services

agricultural expansion and deforestation modelling the impact of population market forces and property rights abstract this paper compares four different modelling approaches to agricultural expansion and deforestation and explores the implications of assumptions about the household objectives the labour market and the property rights regime a major distinction is made between population and market based explanations many of the popular policy prescriptions are based on the population approach assuming subsistence behaviour and limited market integration within a more realistic particularly for the long term effects market approach well intentioned policies such as agricultural intensification programmes may boost deforestation many forest frontier contexts are also characterized by forest clearing giving farmers land rights deforestation becomes an investment to the farmer and a title establishment strategy land titling and credit programmes may therefore increase deforestation

consequences of a food security strategy for economic welfare income distribution and land degradation the philippine case like many developing countries the philippines pursues a food security strategy in which self sufficiency and price stabilization feature prominently in addition to their widely debated welfare effects food policies based on price and trade restrictions may also accelerate land degradation by promoting expansion of relatively erosive grain crops the paper explores the welfare and environmental implications of food policies first with a simple heuristic model then with an applied general equilibrium model comparing market restrictions with technical progress as alternative food policy strategies the authors find that the former increase land degradation and reduce welfare moreover anti poverty and distributional benefits often claimed for such interventions may be illusory

on five hot issues on wealth distribution throughout the last twenty years a lot of attention has been devoted by economists to the accumulation and distribution of wealth it appears clearly that we are now quite rich in hypotheses and models but still very poor in data this brief paper will focus on five hot issues on the distribution of wealth 1 is wealth inequality mainly due to income differences 2 what is the quantitative importance of inheritance on wealth accumulation and inequality 3 is equal sharing an egalitarian rule 4 do consumers segmentation or assets distinction help understanding wealth distribution 5 is there a long term increase or decrease of the strikingly similar degree of wealth inequality among industrialized countries

pareto superiority of unegalitarian equilibria in stiglitz model of wealth distribution with convex saving function this paper extends the conclusions obtained by stiglitz and others about the asymptotic wealth distribution in the neo classical growth model when the saving function is convex it is shown not only that locally stable two class unegalitarian equilibria may exist along with the egalitarian equilibrium but also that they necessarily are pareto superior to it more generally the paper also analyzes the class of pareto optimal unegalitarian equilibria

the economic costs of reducing greenhouse gas emissions under a u s national renewable electricity mandate the electricity sector is the largest source of greenhouse gas emissions ghgs in the u s many states have passed and congress has considered renewable portfolio standards rps mandates that specific percentages of electricity be generated from renewable resources we perform a technical and economic assessment and estimate the economic costs and net ghg reductions from a national 25 percent rps by 2025 relative to coal based electricity this policy would reduce ghg emissions by about 670 million metric tons per year 11 percent of 2008 u s emissions the first 100 million metric tons could be abated for less than 36 metric ton however marginal costs climb to 50 for 300 million metric tons and to as much as 70 metric ton to fulfill the rps the total economic costs of such a policy are about 35 billion annually we also examine the cost sensitivity to favorable and unfavorable technology development assumptions we find that a 25 percent rps would likely be an economically efficient method for utilities to substantially reduce ghg emissions only under the favorable scenario these estimates can be compared with other approaches including increased r d funding for renewables or deployment of efficiency and or other low carbon generation technologies

links between rural poverty and the environment in developing countries asset categories and investment poverty abstract this paper presents a framework for analyzing the links between poverty and the environment in rural areas of developing countries it introduces the concept of investment poverty and relates it to other measures of poverty in analysis of these links the notion of poverty is examined in the context of categories of assets and categories of environment change with particular focus on farm household income generation and investment strategies as determinants of the links the strength and direction of the poverty environment links are shown to differ even invert depending on the composition of the assets held by the rural poor and the types of environmental problems they face policy strategies need to focus on conditioning variables that affect market development community wealth infrastructure household asset distribution and the affordability and appropriateness of natural resource conservation technologies

optimal soil conservation and the reform of agricultural pricing policies abstract soil degradation is often blamed for the poor performance of agriculture in developing economies so too are policies which keep the prices of both outputs and inputs artificially low some economists have argued that pricing reforms will encourage soil depletion others say that such reforms will encourage soil conservation to evaluate these claims this paper develops models of the optimal control of soil erosion and soil fertility it is shown that the effect could go either way but that there are strong reasons for suspecting that pricing reforms will not affect soil conservation dramatically

socially optimal forestry abstract the faustmann rule is the major contribution of economic theory to the analysis of forestry management it is typical to consider the faustmann rule in the context of a model of a forestry firm in which there is some periodicity in the rate of harvesting over time this paper on the other hand shows the faustmann rule to be associated with socially optimal sustained yield or steady state regimes in the course of so doing attention is placed on the role of the shadow price of a tree in the determination of an optimal harvesting policy

tariff and environmental policies with product standards for a small open economy with consumption based pollution emissions the first best optimal policy prescription is free trade along with a pigouvian tax on emissions therefore a package of coordinated tax reform by replacing tariffs with emission taxes can lower pollution emissions and increase market access and hence improve residents welfare and government revenue as long as the initial tariffs are relatively high numerical simulations confirm the results obtained abstract from author

ricardian equivalence long run leviathan abstract this paper presents a heterogenous overlapping generations with altruism model in which intergenerational discounting is stochastic the model nests three popular macroeconomics models those of ramsey economic journal 38 152 1928 543 559 diamond american economic review 55 1965 1126 1150 and a variant of the blanchard journal of political economy 93 2 1985 223 247 buiter the economic journal 98 391 1988 279 293 weil journal of public economics 38 2 1989 183 198 model it is shown that under a mild condition originally derived by weil journal of monetary economics 19 3 1987 377 391 the long run capital intensity is robust to practically every popular theoretical criticism of the standard ricardian model these criticisms include the imperfect inheritability of time preference parameters and hence finite horizons on the part of all households myopia in the form of overly discounting the future borrowing constraints distortionary labor taxation exchange strategic bequest motives common cultural constraints egalitarian bequests and primogeniture endogenous fertility and joy of giving while precautionary saving can theoretically violate long run neutrality the asymptotic capital intensity is still bounded below by preference parameters the overall conclusions are sharply at odds with those found in most articles dealing with the theoretical foundations of ricardian equivalence

impacts of tenancy arrangements on investment and efficiency evidence from pakistan in this article we use farm level data from the punjab province in pakistan to analyze the impact of three tenancy contracts on investment in soil improving and productivity enhancing measures and farm productivity a multivariate tobit model that accounts for potential substitutability and complementarity of investment options as well as endogeneity of tenure arrangements was employed in the empirical analysis our empirical results indicate that land tenure arrangements influence farmers decisions to invest in soil improving and productivity enhancing measures in particular owner cultivators with secured tenancy arrangements were found to be more likely to invest in soil improving and productivity enhancing measures compared to those on leased contracts we also find that output per hectare was highest on land cultivated by owners and lowest on land under sharecropping tenancy lending support to the marshallian inefficiency hypothesis

double dividend with trade distortions analytical results and evidence from chile abstract the double dividend debate evolves around the possibility or not of substituting environmental taxes for more distortionary taxes to reduce both pollution degradation and or damages the first dividend and the excess burden of existing taxes the second dividend without eroding tax revenues this paper contributes to the double dividend debate with a formal analysis and some numerical evidence emphasizing trade and environmental distortions the substitution of environmental taxes for trade distortions has been neglected in the double dividend debate which has centered on labor market distortions conditions for the existence of a double dividend are derived for different characterizations of preferences and policy menus we empirically explore the trade environment double dividend with an applied general equilibrium model of the chilean economy the model includes many distortions and a vector of six air pollution effluents their health incidences and associated damages which are assumed nonseparable from market goods findings suggest solid evidence of a trade environment double dividend in the case of chile swapping environmental taxes for trade distortions improves welfare the swap would even pay for itself under the assumption of separable pollution damages from market good consumption

general equilibrium effects of environmental policy a cge modeling approach estimation of emission control cost functions is often carried out in a partial equilibrium framework i e under the assumption that emission control measures have negligible effects on input and output prices in this paper a computable general equilibrium model is used for simulation of the impact on factor prices and resource allocation of reductions of so infx sup no infx su and co2 emissions thus the model includes markets for tradable emission permits and the equilibrium prices of permits reflect the marginal costs of emission control the results suggest that major emission reductions are likely to have general equilibrium effects and thus that emission control cost functions that fail to take these effects into account may give a distorted picture of the economic impact of emission control

the welfare consequences of pollution tax harmonization a key and often controversial issue in environmental negotiations is the appropriate extent of harmonization of environmental policies this paper within a general equilibrium model of international trade with endogenous pollution discharges identifies instances in which pollution tax harmonization can deliver potential pareto improvements

economics of erosion control and seed fertilizer technologies for hillside farming in honduras abstract with population growth still at very high rates and large scale commercial farmers and cattle ranchers owning much of the more fertile valley land small scale farmers are concentrated on increasingly marginal steeply sloping hillsides in central america the continuing soil erosion and land degradation in these low input staple crop production hillside farming systems lead many to be pessimistic about increasing the agricultural incomes of these farmers however this study shows that the appropriate combination of improved technologies and agricultural policy or alternative production diversification strategies can improve the incomes of small scale hillside farmers in southern honduras by over 50 the technology components considered are stone walls and ditches combined with living tree barriers to prevent erosion of the hillsides and a package of improved sorghum seed seed treatment and modest doses of nitrogenous fertilizer a whole farm mathematical programming framework is used to determine the potential farm level income effects of the soil conservation and seed fertilizer technologies the main conclusion is that erosion control devices and yield increasing crop varieties and fertilizer are an effective technology introduction strategy for the erosion prone hillside landholdings found in many areas of central america if policy actions or diversification strategies for disposal of surplus grain are found which are effective in reducing the risk of low income from cereal price reductions in high production years adoption of the improved technologies is shown to be profitable for small scale farmers another benefit not explicitly considered would be to slow the very rapid growth of urban poverty in these countries sensitivity analysis results indicated that neither risk aversion nor the increased availability of crop land or initial cash have any substantial effects on the predicted adoption level of the improved technologies or on their income impacts for these farmers

trade and the environment a partial synthesis there is an emerging consensus in the environmentalist community opposing free trade while some economists view this as simply another outlet for protectionism recent work has begun to move beyond the rhetoric to probe more deeply into the theoretical and empirical relationships between international trade and environmental quality the purpose of the present paper is twofold we first integrate some of the existing literature by using the simple concepts of general equilibrium pollution supply and demand our survey of the trade and environment literature is more

what do we know about the study of distributed generation policies and regulations in the americas a systematic review of literature abstract policy makers are increasingly in search for evidence based solutions for meeting contemporary challenges of energy services that are both low carbon and sustainable one of the emerging trends are policies and regulations that incent distributed electricity generation dg the question that this article addresses is what is the current state of the study of these policies or regulations in the americas the focus on the americas was chosen because the article is part of a larger research project that explores regulations for dg in brazil and canada this article uses a non traditional means for synthesizing academic work systematic literature review to explore the current state of peer reviewed publications on the subject it is a means of transparently locating evaluating and synthesizing information to avoid bias in data collection in total 87 articles were included in the review climate change is the main driving force for dg as identified in the articles job creation or the green economy was cited as a motivating factor more strongly in north america while in the southern countries the issue of diversifying the energy mix and avoiding infrastructure costs was more pronounced many articles dealt with the issue of mechanisms for incenting dg and over half of these focused on aspects of feed in tariffs incentive mechanisms vary depending on policy goals of the jurisdictions with renewable portfolio standards being more popular in the u s the review showed that there is little emphasis on the social impacts and benefits of the regulations or policies and that specific urban challenges and local governance is not widely investigated pointing to a need for future study in these areas

structural adjustment and soil degradation in tanzania a cge model approach with endogenous soil productivity abstract in this paper a model of the nitrogen cycle in the soil is incorporated in a computable general equilibrium cge model of the tanzanian economy thus establishing a two way link between the environment and the economy for a given level of natural soil productivity profit maximising farmers choose input levels and hence production volumes which in turn influence soil productivity in the following years through the recycling of nitrogen from the residues of roots and stover and the degree of erosion the model is used to simulate the effects of typical structural adjustment policies like a reduction in agro chemicals subsidies reduced implicit export tax rate etc after 10 years the result of a joint implementation is a 9 higher gross domestic product gdp level compared to the baseline scenario the effect of soil degradation is found to represent a reduction in the gdp level of more than 5 for the same time period

the role of intergenerational transfers in aggregate capital accumulation this paper uses historical u s data to directly estimate the contribution of intergenerational transfers to aggregate capital accumulation the evidence presented indicates that intergenerational transfers account for the vast majority of aggregate u s capital formation only a negligible fraction of actual capital accumulation can be traced to life cycle or hump savings a major difference between this study and previous investigations of this issue is the use of more accurate longitudinal age earnings and age consumption profiles these profiles are simply too flat to generate substantial life cycle savings this paper suggests the importance of and need for substantially greater research and data collection on intergenerational transfers life cycle models of savings that emphasize savings for retirement as the dominant form of capital accumulation should give way to models that illuminate the determinants of intergenerational transfers

migration and the environment policy reform in a polluted open economy previous literature on labour migration has paid little attention to the influence of environmental attributes this paper attempts to remedy this void by developing a simple two region general equilibrium model with amenities playing a key role in affecting migration flows specifically we argue that in the presence of an environmental externality interregional labour migration depends not only on wages but also on amenities people may leave a region offering higher wages if the resulting utility loss from worsened amenities exceeds the gain in wages policies should be adopted by regions or nations to regulate the environment to provide for the quality of living to attain this goal regional or international policy cooperation on tradable pollution permits can be superior to pollution permits supplied independently by each region or nation while non tradable between them

the interface between growth trade pollution and natural resource use in chile evidence from an economywide model abstract we investigate the implications of trade liberalization and pollution taxes on aggregate income pollution and natural resource use in chile with a neoclassical economywide model comprising 75 sectors the model incorporates 13 measures of pollution effluents which are linked to the use of polluting inputs and energy use we estimate the economic and environmental impact of chile s participation in nafta mercosur of unilateral trade liberalization and effluent taxes unilateral trade liberalization induces substantial worsening of pollution emissions and expansion of resource based sectors partly because of access to cheaper energy nafta integration is environmentally benign in terms of pollution emissions

the contribution of agriculture to economic growth some empirical evidence the paper analyzes the contribution of agriculture to economic growth by employing cross section data for the developing and developed countries during 1960 1970 and 1970 1979 it is found that in the context of mr chenery syrquin s model intercountry variation in agricultural growth explains a significant portion of intercountry variation in the industrial non agricultural growth further in the context of an aggregate production function agricultural growth is found to contribute significantly to productivity increases and thus to overall economic growth for the developing countries sample of the 1970 79 period the results show that a one percent increase in agricultural growth leads to approximately four tenths of a percentage point increase in productivity it is also found that export growth contributes positively to productivity growth while the inflation rate contributes negatively

distributed cogeneration for commercial buildings can we make the economics work abstract although the benefits of distributed cogeneration are widely cited adoption has been slow in the united states adoption could be encouraged by making cogeneration more economically attractive either by increasing the expected returns or decreasing the risks of such investments we evaluate the expected returns from demand response capacity markets regulation markets accelerated depreciation pricing co 2 emissions and net metering we find that 1 there is an incentive to overcommit in the capacity market due to lenient non response penalties 2 there is significant revenue potential in the regulation market though demand side resources are yet to participate 3 a price on co 2 emissions will make cogeneration more attractive relative to conventional utility supplied energy and 4 accelerated depreciation is an easy and effective mechanism for improving the economics of cogeneration we go on to argue that uncertainty in fuel and electricity prices present a significant risk to cogeneration projects and we evaluate the effectiveness of feed in tariffs at mitigating these risks we find that guaranteeing a fixed electricity payment is not effective a two part feed in tariff with an annual capacity payment and an energy payment that adjusts with fuel costs can eliminate energy price risks

a note on soil depth failing markets and agricultural pricing comment abstract bulte and van soest bulte e van soest d 1999 a note on soil depth failing markets and agricultural pricing journal of development economics 58 245 254 argue that higher agricultural output prices result in greater soil conservation when labor markets function well but have ambiguous effects when labor markets are absent the latter result is not attributable to labor market failure but rather occurs whenever labor supply is less than perfectly elastic consistent with the more general model presented here empirical evidence from a number of developing countries suggests that well functioning labor markets are associated with decreases in investment in soils

pollution intensity of gdp and trade policy can the world bank be wrong abstract what are the environmental implications of open trade policies in developing countries economic theory and environmental critics suggest they worsen environmental quality this conventional wisdom has been challenged by several studies which suggest that outward oriented trade policies are likely to be win win enhance economic growth and environmental quality this paper challenges revised conventional wisdom rcw by demonstrating that developing countries with outward oriented trade policies have higher pollution intensities of gdp than those following inward oriented policies the paper examines why the evidence reported here differs so sharply from rcw studies considers the policy implications of these results and identifies reasons why despite them it may not make sense to totally discount future potential win win opportunities

targeted carbon tax reforms abstract in the presence of intersectoral linkages sector specific carbon tax changes can have complex general equilibrium effects in particular a carbon tax on the emissions of a sector can lead to an increase in aggregate emissions we analytically characterise how incremental taxes on the emissions of any set of sectors affect aggregate emissions we show that carbon tax reforms that target sectors based on their position in the production network can achieve a greater reduction in aggregate emissions than reforms that target sectors based on their direct emissions alone we illustrate the effects of carbon tax reforms by calibrating our intersectoral network model to the economies of two countries

rural bias in the east and south east asian rice economy indonesia in comparative perspective this study analyses the rise in protection of rice farmers in east and south east asia since 1960 a statistical model of price formation is tested for japan south korea malaysia the philippines and indonesia on average about 90 per cent of variation in rice prices in these five countries relative to the world price can be an attributed to efforts at price stabilisation rather than farmer protection or discrimination in earlier periods the shift from urban bias to rural bias is more a result of price stabilisation and declining real rice prices in world markets than basic shifts in political economy

cross border pollution terms of trade and welfare we construct a two good general equilibrium model of international trade for two small open economies where pollution from production is transmitted across borders governments in both countries impose emission taxes non cooperatively within this framework we examine the effect of changes in the degree of cross border pollution on nash emission taxes emission levels and welfare we do so under two scenarios when changes in cross border pollution do not affect domestic pollution non strategic and when they do strategic we also examine the effect of changes in international terms of trade on pollution and welfare when cross border pollution is non strategic

climate and international trade policies when emissions affect production possibilities abstract in this paper we develop a model of international trade and climate change in which emission discharges arising from production have a feedback effect on national production sectors by impacting upon effective factor endowments with this context the objectives are first to provide a general characterization of pareto efficient climate and trade policies and second to examine the possibility starting from non pareto efficient equilibria for pareto improving environmental policies we provide conditions under which several particular reforms of carbon taxes are welfare improving

the family inheritance and the intergenerational transmission of inequality unequal inheritance of material wealth is commonly considered a major cause of inequality in consumption however theoretical models of the intergenerational transmission of inequality by becker blinder and ishikawa imply that unequal inheritance may either increase or reduce consumption inequality differences in inherited wealth resulting from unequal parental incomes increase inequality in recipients consumption however unequal bequests caused by differences among families in the endowed ability of children or the costs of producing human capital are equalizing empirical results confirm these predictions the inheritance received by children is inversely related to both children s income and parental education thus bequests are compensatory in that ceteris paribus low income children inherit more than their advantaged contemporaries

population poverty and policies poverty population and the environment are closely linked with common property resources as the central element explaining externalities within each component the essential first step in breaking the cycle of poverty is to increase agricultural productivity domestic food production must then be raised followed by measures to ensure that these sectoral gains are environmentally and economically sustainable appropriate policy would integrate agriculture as an important component of interventions designed to break into the cycle of poverty population and environmental degradation for agriculture to play such a positive role however governments cannot allow agricultural investments to remain entirely a matter of response to private incentives generated by world markets these empirical relationships suggest that prices in world markets undervalue the contribution of agriculture to breaking the cycle of poverty as well as its role in sustaining rapid economic growth government policies must endeavor to repair these market failures through the nature of their agricultural investments and the design of their policies if the cycle of poverty is to be broken

trade and pollution linkages piecemeal reform and optimal intervention we demonstrate how coordinated trade and environmental policy can achieve ef ficiency and pollution mitigation gains superior to those obtained without such coordination we show how trade and environment linkages give rise to complex second best policy issues and derive optimal interventions and sufficient conditions for welfare improving piecemeal trade and environmental policy reforms in a small economy changing trade and environ ment distortions in proportion to their optimal levels increases welfare we decompose the economic and environment effects of policies targeted at trade and pollution in both con sumption and production we also decompose production responses into output adjustments and changes in pollution intensities

urban bias of consequences classes and causality choice theoretic accounts of urban bias ub in ldcs are popular because they also explain rural bias in richer countries such misguided elegance notwithstanding class theoretic not simply marxist productionist accounts are preferable why 1 ub alleges persistently inefficient and or unfair i anti rural outcomes ii intra rurally biases towards rural elites who in return deliver surpluses townwards 2 if ub declines for one outcome it must increase for others unless pro urban classes weaken relative to pro rural thus farm price ub fell in 1975 90 in many ldcs but with urban rural class power balances little changed public expenditure ub rose to compensate 3 yet long term development transforms such balances shifting many outcomes from ub to rural bias 4 explaining 2 and 3 involves understanding urban rural class relations when and to obtain which outcomes do rural elites seek rural rather than urban alliances choice game coalition theories help but only within i

green technology transfers and border tax adjustments we develop a two country general equilibrium model of foreign technology transfers tied to environmental clean up and border tax adjustments in the presence of transboundary pollution pollution is generated in the aid recipient as a by product in the production of a dirty good which it consumes as well as exports to the donor country in contrast to the literature which typically treats aid as a monetary transfer we assume that foreign aid consists of a transfer of environmental technology that lowers the cost of public clean up we also consider a border tax adjustment bta as a secondary policy instrument used in order to internalize the residual transboundary externality we study the environmental and welfare outcomes of the technology transfer and the bta as well as the interaction between the two policy instruments we derive conditions under which the additional presence of a bta may lead to a lower transfer and less public pollution abatement in the recipient with counter productive consequences for both the environment and welfare contrary to intuition we find that the green technology transfer and the border tax adjustment are not always complements

farm nonfarm linkages in rural sub saharan africa this paper is an accumulation over the past 25 years of a body of detailed work examining the structure of africa s rural nonfarm economy first it systematically reviews empirical evidence on the nature and magnitude of the african rural nonfarm economy it then explores differences across locality and size across countries and over time in an effort to assess likely patterns of growth a subsequent review of key production and consumption parameters allows an estimate of the magnitude of the agricultural growth multipliers in africa the paper concludes with a brief discussion of policies and programs that will be necessary if farm nonfarm growth linkages are to achieve their full potential

incentives regulations and sustainable land use in costa rica deforestation in costa rica has proceeded at a rapid pace of the remaining 2 700 km2 of virgin forests on privately owned land over 300 km2 are being deforested each year pressure on national parks which cover about 27 percent of costa rica is likely to increase in the future preliminary information indicates that contrary to our expectations most of the deforestation at present is not being done by squatters but driven by profit and asset maximization motives of the timber industry banana companies and large cattle ranchers setting aside 27 percent of the country s land as parks and reserves was a major policy decision aside from the removal of some perverse incentives operating inside park areas the main issue there is one of sound management including protection from intruders strengthening enforcement and controlled tourism on the remaining primary and secondary forest areas on privately owned land outside the parks a key question is whether public interests connected with external costs of deforestation warrant public intervention the paper suggests that a differentiated approach to this and other questions is needed depending on the costs and benefits involved and it discusses incentives and regulations which influence land use and makes proposals for reforms

new economic theories this paper analyses some of the most important spillovers of recent developments of economic theory into environmental economics attention is given to the anlaysis of sustainable economic development paths where endogenous growth models are used the implications of environmental dumping and more generally of policies concerning global environmental issues where new trade theories are very useful and the effectiveness of environmental policy instruments when markets are imperfectly competitive where industrial organisation theory is employed the paper does not only note recent developments in environmental economics but also relates these to the previous environmental economics literature thus it can be assessed whether new results actually improve our knowledge of crucial economic and environmental issues

natural resource management and economywide policies in costa rica a computable general equilibrium cge modeling approach a computable general equilibrium cge model is used to trace the effects of government policies on costa rican forests in the presence of incomplete markets the results indicate that correcting the market failure would as expected reduce deforestation more interestingly in the presence of the market failure lowering the tax on unskilled labor reduces deforestation because people gain employment in other parts of the economy taxation of other produced goods changes the incentives for deforestation for example a tax on agricultural products elevates the relative price of capital and shifts resources away from the capital intensive industrial sector toward the agricultural and forest sectors as a result such a tax increases deforestation

economic incentives and natural resource management among small scale farmers addressing the missing link small scale farmers face numerous challenges to invest in natural resource management practices the problems are interlinked with such perverse economic problems as high transaction costs and risk rooted in the lack of comprehensive institutional and organizational services to farmers for risk reduction and incentive creation failure to address such a missing link undermines success in natural resource management this paper ponders the importance of such a missing link and proposes analytic framework that explicitly integrates the economics of natural resource management into institutional and organizational analysis the framework features the instrumentality of integrated institutional and organizational innovation to create opportunities and incentives to small scale farmers to encourage investment in natural resource management practices

pension wealth and individual saving some new evidence attemprs to measure the tmpact of soctal security and private pensions on household saving have occupied much of the literature in empirical public finance over the past decade empirical estimates of those impacts have been quite varied see the discussion in aaron 1982 this paper provides new estimates of the impact of changes in holdings of social security and private pension annuities on the level of non pension wealth the data examined are drawn from surveys conducted for the u s president s commission on pension policy the impact of the social security system on individual saving has been a concern since feldstein s 1974 pioneering paper l the theoretical argument of feldstein and of barro 1974 1978 centers around the funding status of social security i e the degree to which an unfunded social security system reduces private saving empirical tests of the effects of social security on saving in this line of research have been conducted in the perfect certainty version of the life cycle model modigliani and ando 1957 modigliani and brumberg 1954 in that approach social security affects non pension saving through its impact on individual intertemporal budget constraints disposable income during the working period falls by the amount of

free trade and global warming a trade theory view of the kyoto protocol this paper demonstrates how three important results in environmental economics true under mild conditions in closed economies are false or need serious amendment in a world with international trade in goods since the three results we highlight have framed much of the ongoing discussion and research on the kyoto protocol our viewpoint from trade theory suggests a re examination may be in order specifically we demonstrate that in an open trading world but not in a closed economy setting 1 unilateral emission reductions by the rich north can create self interested emission reductions by the unconstrained poor south 2 simple rules for allocating emission reductions across countries such as uniform reductions may well be efficient even if international trade in emission permits is not allowed and 3 when international emission permit trade does occur it may make both participants in the trade worse off and increase global emissions

pollution content tariffs environmental rent shifting and the control of cross border pollution this paper considers the optimal unilateral policy for a country that imports a good from a neighbouring country and is harmed by pollution generated during the production of that good if the foreign country has a variable abatement technology then home has an incentive to impose a tax on the pollution content of imports a pollution content tariff foreign regulation of pollution does not eliminate home s incentives to intervene but instead may create rent shifting opportunities by making the right to pollute a scarce asset foreign pollution quotas create rents that the home government can try to extract

an exogeneity test for a simultaneous equation tobit model with an application to labor supply a test of weak exogeneity in the simultaneous equation tobit model is proposed and illustrated using a female labour supply model estimated using cross section data the test statistic can be simply output from any standard tobit maximum likelihood package and is asymptotically efficient the procedure provides consistent estimators for the simultaneous tobit model whose asymptotic covariance matrix is a simple extension of the usual tobit formula we also provide the lagrange multiplier test of weak exogeneity this abstract was borrowed from another version of this item

public pollution abatement regional capital mobility and tax competition the environmental economics literature has ignored the effects of the interaction among capital mobility private and public pollution abatement and cross border pollution on environmental policies we analyze these effects in the context of a general equilibrium model we find among other things that i when countries are symmetric the presence of public pollution abatement makes nash equilibrium pollution taxes efficient while lump sum taxes remain inefficient and ii when countries are asymmetric both taxes are inefficient and the nash equilibrium pollution taxes depend mainly on the direction of capital mobility factor intensity and the degree of cross border pollution these results indicate that policy cooperation is more important when countries are different

competition for environmental aid and aid fungibility abstract aid from environmentally conscious donors to developing recipients has long been thought of as a very promising way of preserving the global environment however aid is fungible and recipients cannot commit to using it for the purpose it was intended we analyze competition for aid games with aid fungibility and cross border pollution to gain insights on how to allocate environmental aid more efficiently we set up a two stage game of two recipients receiving aid from a donor interested in minimizing pollution recipients cannot commit on the use of aid but they can commit on the infrastructure necessary to use aid for pollution abatement we find that the success of competition for aid games depends critically on the degree of cross border pollution this determines whether it is more efficient to set up such games between recipients with little or a lot of cross border pollution between them