a resilience perspective of the seea abstract while the seea is an important advance in national accounting it remains deficient in a number of ways in regard to natural resources the dynamic and interactive nature of ecosystems means that any linear compartmentalised system of accounting will miss significant changes that influence human wellbeing in particular losses in resilience of critical capital stocks through changes in underlying ecosystem variables that do not contribute directly to valued flows and are therefore not included in the accounts means that the accounts will not recognise that such stocks are becoming riskier likely to collapse and are therefore over valued we present a stock based approach to measuring sustainable development the inclusive wealth approach of arrow kj dasgupta p and maler k g 2003 evaluating projects and assessing sustainable development in imperfect economies environmental and resource economics 26 647 685 at a regional scale using an example from south east australia which includes an assessment of the resilience of critical capital stocks

trade s dynamic solutions to transboundary pollution abstract this study develops a differential game to examine the effects of trade liberalization on transboundary water pollution water pollution is due to wastewater emissions from countries in a shared waterway along the u s mexico border with available data of pollution abatement costs public health damages and trade benefits noncooperative and cooperative games are examined with changes in trade policy and public health damages results show trade liberalization leads mexico to curtail pollution in both games cooperation and trade liberalization limit emissions from both countries and curtail strategic behavior of the united states from mexico s pollution control efforts in the noncooperative game

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

a tax based test for nominal rigidities in classical macroeconomic models with flexible wages and prices whether a tax is levied on producers or consumers does not affect itsultimate incidence if wages or prices are rigid in the short run however then shifting a tax from one side of the market to the othermay have real effects tax changes therefore provide potential testsfor the presence of nominal rigidities this paper examines the priceand output effects of revenue neutral shifts between direct and indirect taxation the results provide evidence against the view thatwages and prices are completely flexible in the short run copyright 1986 by american economic association

the acid rain differential game this paper considers an acid rain differential game countries emit sulphur which is partly transferred to other countries depositions above critical loads ultimately destroy the soil countries face a trade off between the costs of emission reductions and the damage to the soil due to the depletion of the acid buffers because of the transboundary externalities the outcome will depend on whether the countries cooperate or not this paper presents the cooperative outcome and the open loop and markov perfect nash equilibria of the acid rain differential game it will be shown that the depositions always converge to the critical loads but the steady state levels of the buffer stocks differ the theory is used to analyse the acid rain differential game for sulphur between great britain and ireland finally some results are given for the whole of europe

international pollution control cooperative versus noncooperative strategies abstract international pollution control involving two neighboring countries is modeled as a simple two player dynamic game each country produces a good that is consumed by domestic households production of each consumption good results in emissions of pollutants households in each country derive utility from the consumption of the domestically produced good but incur costs through the total stock of pollution stock externality in this setting we characterize cooperative as well as noncooperative pollution control strategies of the governments of the two countries that maximize the discounted stream of net benefits of a representative consumer it turns out that when the governments are restricted to use linear strategies noncooperative behavior results in overall losses for both countries if on the contrary governments use nonlinear markov perfect strategies and the discount rate is small enough a pareto efficient steady state pollution stock can be supported as a differentiable subgame perfect equilibrium thus the emergence of first best solutions cooperative outcomes does not require any institutional arrangements threats retaliation etc but can be brought about through the use of nonlinear markov perfect equilibrium strategies

pigouvian taxation of energy for flow and stock externalities and strategic noncompetitive energy pricing abstract the literature on energy and carbon taxes is by and large concerned about the derivation of globally efficient strategies in contrast this paper considers the dynamic interactions between cartelized energy suppliers and a consumers government that collectively taxes energy carriers for pigouvian motives two different kinds of external costs are associated with energy consumption flow e g acid rain and stock externalities e g global warming the dynamic interactions between a consumers government and a producers cartel are modeled as a differential game with a subgame perfect nash equilibrium in linear and nonlinear markov strategies the major implications are that the nonlinear solutions are pareto inferior to the linear strategies and energy suppliers may preempt energy taxation and thereby may raise the price at front however this effect diminishes over time because the producers price declines while taxes increase

the cost of natural capital consumption accounting for a sustainable world economy abstract the system for integrated environmental and economic accounting seea has been criticized in this journal for ignoring the benefits of ecosystem services for human well being this paper argues that extended national accounts should not attempt measuring economic welfare rather they could and should assess the environmental sustainability of economic activity as the cost of natural capital consumption the global application of seea concepts and methods demonstrates the feasibility of international green accounting for the world economy sustainability costs run to about 3 trillion us or 6 of world gdp large variations at national and regional levels suggest that conventional economic indicators may significantly overstate economic progress in some parts of the world data gaps and lack of data comparability affect these first estimates national and international statistical services should be more aggressive in greening the national accounts more prudent and more sustainable economic policies might be the result

international comparison of resource use and its relation to economic growth the development of total material requirement direct material inputs and hidden flows and the structure of tmr abstract resource flows constitute the materials basis of the economy at the same time they carry and induce an environmental burden associated with resource extraction and the subsequent material flows and stocks which finally end up as waste and emissions a reduction of this material throughput and the related impacts would require a reduction of resource inputs and breaking the link between resource consumption and economic growth would require an increase in resource productivity material flow analysis mfa can be used to quantify resource flows and indicate resource productivity in this article we study the available empirical evidence on the actual de linkage of material resource use and economic growth we compare resource use with respect to total material requirement tmr and direct material input dmi for 11 and 26 countries respectively and the european union eu 15 the dynamics of tmr as well as of the main components are analysed in relation to economic growth in order to show whether there is a decoupling relative or absolute from gdp and a change of the metabolic structure in the course of economic development dmi cap so far only decoupled from gdp cap in relative terms that is in most countries it reached a rather constant level but with the exception of czech republic showed no absolute decline yet tmr cap was reduced in two high income countries and one low income country due to political influence changes in tmr were more influenced by hidden flows hf than by dmi we analyse the dynamics of the structure and composition of tmr in the course of economic development in general the economic development of industrial countries was accompanied by a shift from domestic to foreign resource extraction different relations can be discovered for the share of biomass fossil fuel resources construction resources and metals and industrial minerals

valuation methods and policy making in environmental economics 1 valuation methods and policy making in environmental economics relevance and scope h folmer e van ierland part i the valuation of public goods 2 non market asset prices a comparison of three valuation approaches r c d arge j f shogren 3 valuing public goods in a risky world an experiment p o johansson 4 recreational values pareto optimality and timber supply p o johansson k g lofgren k g maler 5 estimating social benefits of environmental improvements from reduced acid rain deposition a contingent valuation survey s navrud part ii the valuation of health and life 6 benefits of reduced morbidity from air pollution control a survey m dickie s gerking 7 valuing a public good direct and indirect valuation approaches to the measurement of the benefits from air pollution abatement m shechter m kim l golan 8 environmental regulation and the valuation of life interindustry mobility and the market price of safety h w herzog jr a m schlottmann part iii cost benefit analysis 9 disequilibrium cost benefit rules an exposition and extension p o johansson k g lofgren 10 macroeconomic cost benefit analysis of environmental programmes a nentjes part iv aspects of policy making 11 benefit estimation for complex policies a randall j hoehn 12 the acid rain game k g maler index

the externalities problem of transboundary and persistent pollution abstract this paper deals with implementing the efficient allocation of transboundary and persistent pollution in particular we adapt varian s compensation mechanism varian a solution to the problem of externalities when agents are well informed amer econ rev 85 1994 1278 1293 to cover situations in which pollutants extend to neighboring regions and their effects persist over time the main contribution of this paper is the design of a mechanism that implements in subgame perfect equilibrium the efficient pollution levels in this context

the derivation of discount rates with an augmented measure of income abstract most developed economies invest in public goods such as national defense education infrastructure and the environment discount rates used to evaluate such projects should reflect the rate of return on the current mix of investment opportunities rates derived from the productivity of private capital neglect returns beyond the market boundary the present paper derives discount rates using an augmented measure of national income inclusive of non market goods in an empirical application focusing on air pollution and climate damages in the united states economy the paper reports that the difference between augmented and market discount rates averages 0 3 percentage points from 1999 to 2014

growth dynamics the myth of economic recovery comment this comment highlights dierent ways of coding crisis episodes in cerra and saxena 2008 cs and shows that some of their main results are crucially dependent on this coding in particular it can be shown that growth recoveries occur after banking crisis if they are coded like civil war episodes in cs and no recovery occurs after civil wars if they are coded like banking crisis in cs this casts strong doubt on the interpretation oered in cs and illustrates the need of a statistical model of crisis episodes for studying their eect on the economy

seea 2003 accounting for sustainable development abstract the revised seea 2003 elaborates physical and hybrid environmental economic accounts details valuation techniques for natural resources but rejects monetary valuation of environmental degradation as modeling preference for physical accounting and corresponding loss of systemic coherence as compared to the seea 1993 prevents meeting the proclaimed objective of assessing sustainable development

growth and violence argument for a per capita measure of civil war the economics literature typically uses counts of casualties as a measure of conflict intensity despite the fact that the units of observation vary considerably in population size when analysing the impact of conflict on economic growth the use of counts relies on the assumption that a given number of casualties affects large and small populations in the same way using within and between country evidence this paper demonstrates that this standard assumption can be rejected a per capita model of conflict intensity that captures local effects of violence provides a more consistent empirical framework for both between country and within country studies

sectoral changing patterns of china s green gdp considering climate change an investigation based on the economic input output life cycle assessment model abstract the rapid growth of energy intensive and high emission industries has underpinned china s economic boom over the past few decades since her economic development entered the new normal phase in 2013 china has faced the challenge of mitigating greenhouse gas ghg emissions while achieving medium high economic growth transforming the economic development pattern and restructuring the economy is a principal solution and one important prerequisite is discerning great sectoral disparities of ghg emissions and corresponding environmental costs because the diversity of characteristics among different sectors causes the pollutants that are discharged to vary hence this paper aims to assess the environmental costs of china s total and sectoral ghg emissions based on the system of environmental and economic accounts and using the economic input output life cycle assessment model this study calculates the green gdp and green output value of 27 sectors to reflect the environmental costs of ghg emissions in china during 1991 2016 the findings are as follows 1 while china s direct ghg emissions increased from 3 040 60 million tons of carbon dioxide equivalent mtco2eq to 10 641 10 mtco2eq during 1991 2014 declining trends were observed in the total and 16 sectors direct ghg emissions in the subsequent two years 2 although the ratios of direct ghg emissions to total ghg emissions in most sectors decreased total ghg emissions in eight sectors rose first and then fell and in 15 sectors continued to rise 3 china s green gdp grew from 2 003 88 billion chinese yuan to 26 245 25 billion chinese yuan during 1991 2016 and the difference between china s gdp and green gdp decreased from 2 73 to 1 02 and 4 differences between the output value and green output value decreased in over 20 sectors finally some policy implications are given from the perspective of some key sectors of the manufacturing industry agricultural sector and transport storage and post sector

nonmarket benefits of nature what should be counted in green gdp abstract green gross domestic product green gdp is meant to account for nature s value on an equal footing with the market economy several problems bedevil green gdp however one is that nature does not come prepackaged in units like cars houses and bread even worse green gdp requires measurement of the benefits arising from public goods provided by nature for which there are no market indicators of value so what should green gdp count that is the subject of this paper ecological and economic theories are used to describe what should be counted and what should not if green gdp is to account for the nonmarket benefits of nature

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

a dynamic game of a transboundary pollutant with asymmetric players abstract modeling transboundary pollutants in a dynamic game framework provides a foundation for analyzing the impact of various policy options the focus of this analysis is on the results of a tax subsidy scheme used to address the transboundary problem of global climate change a nonzero sum dynamic game with asymmetric players is used to evaluate the policy impact of the tax subsidy scheme on the respective player s value functions and strategies as determined by a nash equilibrium feedback solution the asymmetry of the players is reflected in their respective attitudes toward global climate change with one player benefiting from the change and the other losing

the consequences of a one sided externality in a dynamic two agent framework abstract we develop a dynamic model where all agents contribute to a global externality but only those in a specific region suffer from it we model this in a dynamic setting via a two agent non cooperative overlapping generations model and analyze the consequences for economic growth and intertemporal choices we find that multiple steady states may result from this asymmetry in particular if the agent who is affected by the externality has to spend a large share of his income to offset it then he may be stuck in an environmental poverty trap we provide conditions for the existence of and local convergence to the equilibria as well as a condition for the global convergence to the poverty trap while in addition to maintenance expenditures externalities tend to be addressed via studying taxes investment in r d or alike we focus on capital market integration specifically agents in the affected region can open up their capital market to enable capital inflows we investigate whether an open capital market improves or worsens their welfare while we do find that capital market integration eliminates the environmental poverty trap we show that capital market integration is not always in both agents interest in particular we provide conditions under which the agents prefer autarkic or integrated capital markets

make trade not war this paper analyses theoretically and empirically the relationship between military conflicts and trade we show that the conventional wisdom that trade promotes peace is only partially true even in a model where trade is economically beneficial military conflicts reduce trade and leaders are rational when war can occur because of the presence of asymmetric information the probability of escalation is lower for countries that trade more bilaterally because of the opportunity cost associated with the loss of trade gains however countries more open to global trade have a higher probability of war because multilateral trade openness decreases bilateral dependence to any given country and the cost of a bilateral conflict we test our predictions on a large data set of military conflicts on the 1950 2000 period using different strategies to solve the endogeneity issues including instrumental variables we find robust evidence for the contrasting effects of bilateral and multilateral trade openness for proximate countries we find that trade has had a surprisingly large effect on their probability of military conflict

dematerialization and capital maintenance two sides of the sustainability coin abstract the reductionist trend of equating sustainable development with sustained economic growth needs to be reversed new accounts and balances help to operationalize the elusive notion of sustainability they provide a coherent picture of the interaction between environment and economy greened national accounts measure economic sustainability in terms of produced and natural capital maintenance balances of material flows assess ecological sustainability as the dematerialization of production and consumption both concepts aim to preserve environmental assets but differ in scope strength and evaluation of sustainability first results for germany indicate weak sustainability of the economy strong sustainability is not in sight because of insufficient reduction of material throughput attaining sustainability through integrated policies needs the support of share and stakeholders of sustainable development

evaluating the relationships among economic growth energy consumption air emissions and air environmental protection investment in china abstract this paper analyzed the interactions among china s economic growth and its energy consumption air emissions and air environmental protection investment during 2000 2007 conventional energy and emergy are applied to quantify energy consumption and emissions impact respectively the five indicators based on money energy and emergy including ratio of nonrenewable energy to renewable energy rnr energy use per unit gdp eupg environmental cost per unit gdp ecpg impact of emissions per unit energy consumption iepec and environmental benefit per unit environmental protection investment ebpei are presented to depict the relationships among economic growth and energy consumption and impact of air emissions and air environmental protection investment the results show that energy consumption rapidly rises with china s fast economic growth however energy efficiency and environmental loading intensity from energy consumption are reduced simultaneously but their improvements fall far behind economic growth rate impact of air emissions mainly composed of impact of emissions on human health especially dust is slightly decreased the performance of air environmental protection investment is obviously declined in the study period generally speaking the conflict among economy energy and air environment protection is slightly mitigated but still acute due to great dependence of china s economy on fossil energy and inefficient environmental protection measures finally this paper discusses the corresponding issues and then puts forward some related suggestions

the inclusive wealth index a critical appraisal abstract among recent high profile propositions to revise national accounts and to provide new indicators of sustainability and well being the inclusive wealth framework and the related inclusive wealth index iwi undoubtedly stand out as one of the most promising endeavours built up at the confluence of welfare development and sustainability economics the indicator has been designed to bring information about the wealth of nations and their sustainability in a comprehensive way the inclusive wealth framework is nevertheless fraught with limitations due to questionable theoretical assumptions gaps in data availability unrealistic assumptions about the future and inability to account for distributional issues we propose a non exhaustive critical appraisal of the index and its underlying framework we conclude that these limitations undermine its capacity to fulfil the requirements of a satisfactory sustainability indicator we argue that most problems lie in the substantial discrepancy between the inclusive ambition of the indicator and the scarce means to implement it whereas the interconnectedness of the various assets that constitute wealth as well as their complex evolution through time are acknowledged by the proponents of inclusive wealth the way the iwi is computed is rather a mere addition of layers of actuarial like monetary values for a not inclusive yet range of capital assets caution is thus warranted while using such an approach and shorter range alternatives to pursue similar goals are proposed