pollution as a source of endogenous fluctuations and periodic welfare inequality in olg economies this article examines the conditions under which endogenous fluctuations and periodic welfare inequality can emerge in olg economies having an environmental dimension

efficient and durable decision rules with incomplete information we compare six concepts of efficiency for economies with incomplete information depending on the stage at which individuals welfare is evaluated and on whether incentive constraints are recognized an example is shown in which an incentive efficient decision rule may be unanimously rejected by the individuals in the economy we define durable decision rules which can resist such unanimous rejection and show that efficient durable decision rules exist

unequal vulnerability to climate change and the transmission of adverse effects through international trade in this paper we consider the unequal distribution of climate change damages in the world and we examine how the underlying costs can spread from a vulnerable to a non vulnerable country through international trade to focus on such indirect effects we treat this topic in a north south trade overlapping generations model in which the south is vulnerable to the damages entailed by global pollution while the north is not we show that the impact of climate change in the south can be a source of welfare loss for northern consumers in both the short and the long run in the long run an increase in the south s vulnerability can reduce the welfare in the north economy even in the case in which it improves its terms of trade in the short run the south s vulnerability can also represent a source of intergenerational inequity in the north therefore we emphasize the strong economic incentives for non vulnerable and a fortiori less vulnerable economies to reduce the climate change damages on more vulnerable countries

sustainability policy and environmental policy a theoretical representative agent economy with a depletable resource stock polluting emissions and productive capital is used to contrast environmental policy which internalises externalised environmental values with sustainability policy which achieves some form of intergenerational equity the obvious environmental policy comprises an emissions tax and a resource stock subsidy each equal to the respective external cost or benefit sustainability policy comprises an incentive affecting the choice between consumption and investment and can be a consumption tax capital subsidy or investment subsidy or a combination thereof environmental policy can reduce the strength of the sustainability policy needed more specialised results are derived in a small open economy with no environmental effects on utility

green taxation and individual responsibility the current article aims at studying the effects of taxation on environmental quality in an economy where its agents are responsible individual responsibility towards nature is modelized by the voluntary effort to which the households have agreed insofar as the improvement of environmental quality is concerned it is an original way to show that the individuals may feel committed towards the environment and assume obligations towards it as well as towards environmental public policy given that in our model such effort is taken from one s allocated time for leisure its opportunity cost is that of the sacrificed time for leisure and is therefore equal to the individual s wage we shall highlight that state intervention through the introduction of a green tax always crowds out individual responsibility however the intensity of this crowding out depends on the performance of the state moreover state intervention could depending on the amount of crowding out reduce the overall quality of the environment in a general equilibrium setting we show that the crowding out effect is not systematic this is because there will then be an interaction between effort or work time and the cost of that effort linked to the individual s wage and therefore to production and finally to work effort in this article we shall discuss the conditions under which public policy crowds out individual responsibility within this context

a multi regional input output analysis of the pollution haven hypothesis from the perspective of global production fragmentation pollution haven hypothesis is an important debate on the environmental effects of international trade the pattern of which has been reshaped obviously by global production fragmentation recently the production process is distributed globally and the pollution haven effect of international trade is becoming more complicated for instance intermediate product trade corresponds to the largest share of embodied emissions and the share of emissions induced by the global value chain related trade is increasing gradually the aim of this paper is to make a comprehensive analysis on the pollution haven hypothesis in carbon emissions embodied in three different trade patterns from global bilateral and national perspectives we propose a method to parcel the pollution haven hypothesis in a multi regional input output analysis and discuss the contribution of production fragmentation for global emissions it is found that international production fragmentation generates global emissions savings the intermediate product trade has a negative balance of avoided emissions the final product trade becomes increasingly less environmentally effective during the period 1995 2009 there are significant differences in the environmental effects of different trade patterns for each country

the effect of technology spillover on co2 emissions embodied in china australia trade abstract co2 emissions embodied in international trade have drawn wide attention in the academia and national climate negotiations in this study we estimate the embodied co2 emissions in the trade between china and australia using long time series disaggregated sectoral data based on missions embodied in bilateral trade eebt method and analyse the major driving forces for these emissions changes based on structural decomposition analysis sda method the results show that export volume contributed to these embodied co2 emissions increase while emission intensity could offset these co2 emissions increase we further predict embodied co2 emission in sino australia trade under different scenarios and the results indicate that technology spillover can significantly reduce embodied co2 emissions in trade electricity transportation and cement industries have significant potential to reduce carbon emissions in addition we evaluate future carbon reduction potential till 2030 the results in this study can inform decision makers for australia and china to formulate energy conservation and emission reduction policies

will china s trade restructuring reduce co2 emissions embodied in international exports china s co2 emissions exports embodied in international trade has recently attracted more attention and raises questions on the liability and responsibility for environmental costs associated with chinese produced goods given that embodied emissions exports and imports are normal phenomena during international trade the key question focuses on china s reduction of embodied emissions exports via trade restructuring a trade restructuring optimization model combined with input output analysis and multi objective programming was established in this study in order to analyze the maximum volume of embodied emissions reduction within bearable cost constraints the results suggest that the trade off cost for china to reduce embodied emissions exports is very high additionally the net exports of china s embodied co2 emissions under a reasonable scenario can only be reduced by 3 26 previous policy suggestions on import export structure adjustments have limited effects on the reduction of china s embodied emission exports and unemployment is an important constraint on embodied co2 emissions export reduction even so china can still take advantage of various positive factors that have emerged in recent years to improve the industrial and energy consumption structures given that the increasing trend of china s embodied co2 emission exports has already changed gradually

ecosystem services from eye opening metaphor to complexity blinder abstract what started as a humble metaphor to help us think about our relation to nature has become integral to how we are addressing the future of humanity and the course of biological evolution the metaphor of nature as a stock that provides a flow of services is insufficient for the difficulties we are in or the task ahead indeed combined with the mistaken presumption that we can analyze a global problem within a partial equilibrium economic framework and reach a new economy project by project without major institutional change the simplicity of the stock flow framework blinds us to the complexity of the human predicament the ecosystem services approach can be a part of a larger solution but its dominance in our characterization of our situation and the solution is blinding us to the ecological economic and political complexities of the challenges we actually face

co2 emissions embodied in china s exports from 2002 to 2008 a structural decomposition analysis abstract this study examines the annual co2 emissions embodied in china s exports from 2002 to 2008 using environmental input output analysis four driving forces including emission intensity economic production structure export composition and total export volume are compared for their contributions to the increase of embodied co2 emissions using a structural decomposition analysis sda technique although offset by the decrease in emission intensity the increase of embodied co2 emissions was driven by changes of the other three factors in particular the change of the export composition was the largest driver primarily due to the increasing fraction of metal products in china s total export relevant policy implications and future research directions are discussed at the end of the paper

light duty vehicles and external impacts product and policy performance assessment abstract in order to demonstrate that welfare theory can be put into practice mathematical programming methods are used here which can handle the aggregation problems facing us when information concerning the relative valuation of external factors emissions safety risks non renewable energy use noise etc is highly uncertain product and policy performance measures are presented and then applied to one time period real data on the single perhaps most welfare affecting man made consumer product of the 20th century light duty vehicles ldvs the focus when examining costs imposed on society due to individuals or other economic units purchase and use of ldvs is here the total external cost from the choice of ldv technology the relative weights of the external factors are then determined endogenously by first using for each ldv model the unconstrained set of weights most favorable to itself the flexibility of the relative weights is then constrained according to assumed knowledge about true external relative costs by this procedure it is possible to aggregate the multiple societal impact factors of ldvs and thus to measure the total external impact of individual ldv models relative to current best practice technology

belief based refinements in signalling games abstract there are many economic problems which when modelled as games of incomplete information give rise to many sequential equilibria severely limiting the usefulness of the model there has recently been a large literature devoted to refining the set of equilibria in order to reduce this multiplicity by restricting the set of admissible disequilibrium beliefs this paper argues that the logical foundations of some refinements and the equilibria they focus on are problematic and further proposes an alternative refinement that avoids the difficulties we also provide an existence theorem covering a broad class of signalling games often studied in economics journal of economic literature classification numbers c72 c70 d82

environmental quality public debt and economic development this article analyzes the consequences on capital accumulation and environmental quality of environmental policies financed by public debt a public sector of pollution abatement is financed by a tax or by public debt we show that if the initial capital stock is high enough the economy monotonically converges to a long run steady state on the contrary when the initial capital stock is low the economy is relegated to an environmental poverty trap we also explore the implications of public policies on the trap and on the long run stable steady state in particular we find that government should decrease debt and increase pollution abatement to promote capital accumulation and environmental quality at the stable long run steady state finally a welfare analysis shows that there exists a level of public debt that allows a long run steady state to be optimal

the principal agent relationship with an informed principal ii common values in many circumstances a principal may have relevant private information when she proposes a contract to an agent we analyze such a principal agent relationship as a noncooperative game the principal proposes a contract which is accepted or rejected by the agent who for most of our analysis has no private information the contract is executed if accepted otherwise the reservation allocation takes effect this allocation may be determined by a pre existing contract which the principal by her proposal is attempting to renegotiate or it may simply be the no trade point in this paper we assume that the principal s information directly affects the agent s payoff before solving the game we discuss pareto efficiency with asymmetric information we define an incentive compatible allocation to be weakly interim efficient wie if there exists no alternative incentive compatible allocation that both parties prefer for all possible beliefs that the agent might have about the principal s private information type we show that any wie allocation is interim efficient ie for some beliefs the rothschild stiglitz wilson rsw allocation relative to the reservation allocation l is the allocation that maximizes the payoff of each type of principal within the class of incentive compatible allocations that guarantee the agent at least the utility he gets from a irrespective of his beliefs about the principal s type the equilibrium set of the contract proposal game consists of the allocations that weakly pareto dominate the rsw allocation thus there is a unique equilibrium outcome if and only if the latter is ie and the equilibrium outcome is the rsw allocation itself after characterizing the equilibrium allocations we study those that are renegotiation proof when either the principal or the agent leads the renegotiation we then compare our contract proposal game which is a signaling model with its screening counterpart we conclude by extending our results to the case in which the agent as well as the principal has private information under the assumption of quasi linear preferences

responsibility and trade emission balances an evaluation of approaches this paper compares two concepts to evaluate the international responsibility of a country with respect to its emissions using a multi regional input output model we show that the trade emission balance and the responsibility emission balance yield the same result in practical work however a lack of data availability implies that the same technology assumption has been commonly adopted in that case also a third alternative exists which simply evaluates the emissions embodied in the trade balance of the country this third alternative yields the same results as the other two approaches at the aggregate level at the level of individual products however the results are clearly different and it turns out that the third alternative answers a different question that is it is appropriate for measuring the emission content of the products that cross the border in our empirical application we consider spain in 1995 and 2000 distinguishing nine different gases co 2 ch 4 n 2 o sf 6 hfcs pfcs so 2 nox and nh 3 c 2010 elsevier b v all rights reserved

optimal tax rules and public sector efficiency with an externality in an overlapping generations model abstract this paper examines optimal tax rules and public sector efficiency integrating them in a second best world with pollution by using an overlapping generations model the second best world is characterized by the comparative statics of green preferences the main results obtained are as follows first the marginal cost of public funds may be reduced by the externalities regardless of the choice of taxes second optimal environmental and non environmental tax rules are additively and directly affected by the dynamic efficiency of capital accumulation per unit labour decal and indirectly by it through the efficiency of the public sector environmental taxes going beyond pigovian ones may be welfare improving if the decal is improved by the environmental tax even optimal non environmental tax rules should additively and directly counter the dynamics of pollution to consider the income effects of the optimal tax system for the future third the additivity property or the principle of targeting does not hold even in the absence of incentive compatibility constraints the essential reasons for this are clarified as follows distortions that should be countered by taxes that is the income effects of the optimal tax system and the decal in this model break the equality between optimal environmental taxes and the externalities measured by governments finally growing environmental concerns may in fact increase pollution the inverse relationship between environmental and labour income taxes may not hold

embodied carbon in trade a survey of the empirical literature this paper critically reviews the literature on embodied carbon in trade and evaluates our present empirical understanding of these flows a careful comparison of quantitative results from this literature exposes significant inconsistencies for instance estimates for emission embodied in world trade in 2004 range between 4 4 gt and 6 2 gt co2 the difference corresponding to around half of europe s annual emissions a few consistent themes do nevertheless emerge from the literature most importantly emissions in trade constitute a large and growing share of global emissions uncertainty about country level embodied emissions remains large however which presents severe limitations for the practical application of embodied carbon principles in climate policy

incentives in principal agent relationships this article identifies some of the major issues that have been examined in the literature on incentives the article begins by discussing the frictions that lie at the heart of incentive problems next the principal s optimal response to these frictions is explored taking as given the characteristics of the agents with whom the principal interacts in a nonrepeated setting the design of individualized contracts contests and tournaments is analyzed then the principal s task of selecting the best agent is addressed and repeated agency relationships are considered

environmental valuation under sustainable development environmentalism has evolved since the 1960 s from a concern with the preservation of wilderness in the american experience to a concern over pollution of human habitat throughout the industrialized world northern anxiety spread to the loss of tropical rainforests and biodiversity in the south where environmentalism evolved further in an encounter with indigenous interpretations conditions and priorities by the late 1980 s climate change emerged as a central issue in a now global discourse on the relationship between environment and development the principle of sustainable development that current needs are to be met as fully as possible while ensuring that the life opportunities of future generations are undiminished relative to present is now widely accepted this paper illustrates that incorporating environmental values per se in decision making will not bring about sustainability unless each generation is committed to transferring to the next sufficient natural resources and capital assets to make development sustainable 11 refs 3 figs

a structural decomposition analysis of the emissions embodied in trade abstract the aim of this study is to quantify the driving forces behind the growth of carbon dioxide emissions embodied in trade eet the world input output database is used to estimate eet in 40 countries during 1995 2007 after which a structural decomposition analysis is applied to avoid biases in the results we have used the input output tables in previous year s prices and chained the outcomes in many developed countries the growth of emissions embodied in imports is much higher than the growth of emissions embodied in exports a key reason for this finding is the change in the structure of trade both in intermediate and in final products emerging economies like the bric countries have increased their share in production and trade at the expense of developed countries producers and consumers in developed countries have shifted towards importing a larger share of products from emerging countries this is the distinguishing feature that led to an increase of emissions embodied in imports for developed countries and an increase of emissions embodied in exports for emerging countries these results suggest policy makers to monitor eet more carefully and take the effects of trade on emissions into consideration

a literature study for dea applied to energy and environment abstract this study systematically summarizes previous research efforts on data envelopment analysis dea applied to energy and environment in the past four decades including concepts and methodologies on dea environmental assessment industrial developments are very important for all nations in terms of their economic prosperities a problem is that the development produces various pollutions on air water and other types of contaminations all of which are usually associated with our health problems and climate changes thus it is necessary for us to consider how to make a balance between economic success and pollution mitigation to maintain a high level of social sustainability in the world it is widely considered that dea is one of the methodologies to examine the level of sustainability this study examines a recent research trend on dea applications from 1980s to 2010s nowadays many researchers have paid serious attention on how to combat various difficulties in the areas of energy and environment as a result the number of articles on dea applications on energy and environment has dramatically increased particularly after 2000s however it is true that dea has strengths and drawbacks in the applications therefore it is very important for us to carefully use dea for guiding large policy issues and business strategies such as the global warming and climate change an underlying premise of this study is that technology innovation in engineering and natural science may solve various problems by linking it with political and managerial efforts the use of dea provides a methodological linkage among them so enhancing the practicality in mitigating problems due to climate change and environmental pollutions this literature study along with a summary on conceptual and methodological developments provides us with guidelines for our future research works on dea on energy and environment issues

the political economy of environmental policy with overlapping generations a two sector overlapping generations model illuminates the intergenerational effects of a tax that protects an environmental stock a traded asset capitalizes the economic returns to future tax induced environmental improvements benefiting the current asset owners the old generation absent a transfer the tax harms the young generation by decreasing their real wage future generations benefit from the tax induced improvement in environmental stock the principal intergenerational conflict arising from the tax is between generations alive at the time society imposes the policy not between generations alive at different times a pareto improving tax can be implemented under various political economy settings

incentive schemes as a signaling device abstract this paper considers a model of moral hazard where the principal has private information for instance in an organizational setting the firm may be better informed about the profitability of a sales area for which it seeks to employ a new sales representative we show how this information asymmetry may lead to a game of signaling which can mute incentives

informed principal problem with moral hazard risk neutrality and no limited liability abstract we consider a principal agent moral hazard problem with risk neutral parties and no limited liability in which the principal has private information the principal s private information creates signaling considerations that may distort the implemented outcome these distortions can explain e g efficiency wages beaudry 1994 and muted incentives inderst 2001 we show that in a large class of environments these distortions vanish if the principal is allowed to offer sufficiently rich contracts

comparing allocations under asymmetric information coase theorem revisited abstract this paper investigates the robustness of coase theorem under asymmetric information we identify the conditions under which the same allocation is attained as an equilibrium in a bilateral trade model no matter which informed or uninformed party has the bargaining power to make a contract offer

industry performance and structural efficiency measures solutions to problems in firm models abstract it is shown that average unit structural efficiency measures do not measure the level of technical efficiency in a firm model of an industry alternative structural efficiency measures generalized to multiple input and multiple output technologies are presented as a solution to the problem of how to estimate the relative performance of an industry as a whole where reallocation of inputs across firms is not feasible compared to existing measures the proposed measures require additional information therefore the linear programming dea models needed to obtain this information are presented this non parametric approach to relative efficiency measurement is also used to obtain economic efficiency estimates for an industry as a whole without imposing a priori restrictions on the relative input and output weights

the present value criterion and environmental taxation the suboptimality of first best decision rules this paper examines the links between environmental taxes and distortionary taxation in a dynamic model of climate change and economic growth under first best conditions labor and capital would remain untaxed and carbon dioxide emissions would be taxed at a rate equal to the present value marginal cost they impose on future society setting the discount rate equal to the marginal productivity of capital under secondbest conditions however this decision rule substantially understates optimal emissions taxes when the resulting revenues are used to provide targeted cuts in distortionary taxes conversely relatively low emissions taxes are economically justified given lump sum revenue recycling

on the role of commitment in a principal agent relationship with an informed principal abstract in many circumstances a principal who has private information when contracting with an agent may perform some further action simultaneously with or after the agent s choice of an action we analyze such a principal agent relationship with an informed principal as a noncooperative game and distinguish two extensive form games first the principal can commit to his subsequent action at the time of contracting second the principal s announcement for his action is not binding at the time of performance we show that commitment by the principal leads to separation and no commitment leads to pooling journal of economic literatureclassification numbers c72 d82

is sustainability optimal examining the differences between economists and environmentalists abstract this paper examines a number of possible explanations for the apparent differences between economists and environmentalists concerning economic growth and sustainable development some of the differences are well known and relate to issues such as resource scarcity intergenerational equity and the composition of social capital however our analysis finds that while economic notions of optimal growth and the techniques of benefit cost analysis have important advantages for evaluating complex tradeoffs because they are quantifiable they may have potentially serious drawbacks as well the paper focuses on two potential sources of bias in the use of welfare economics for social choice first there is a conservative reinforcement in benefit cost analysis which is likely to produce biases against policy interventions to protect a degraded environment second and perhaps more importantly the aggregation of individual willingness to pay as a measure of social benefits is shown to be invalid in the case of positional goods where the demand for the good reflects the desire of individuals to raise their own relative standing this error may cause the economic calculus to be biased against non positional goods including non rival goods such as environmental resources these biases further complicate the already strained assumptions in utilitarian based welfare economics that by relying on revealed preference and consumer sovereignty are unable to distinguish between or apply different weights to the satisfaction of different categories of preferences furthermore because the dynamic consequences of even small biases in judging social optimality may give rise to large social costs or advance an unsustainable path there is a danger in relying solely on a potentially biased measure of welfare as a basis for guiding social choice the paper concludes by suggesting that efforts to correct these drawbacks of economic analysis are likely to result in approaches to sustainable development that narrow the apparent differences between economists and environmentalists

revisiting china africa trade from an environmental perspective international trade patterns can be seen as ways to redistribute natural resources and manufactured products by means of convergence and divergence pathways in support of production and consumption processes worldwide by making needed resources to potential users individuals and economies trade acts as a driver of resource extraction processing degradation especially if this is facilitated by market dynamics in which prices are determined by contingent factors that have no links to the environmental dynamics of resource generation and do not match the real quality of natural capital and ecosystems services involved a fair trade relationship should take these aspects into proper account in so promoting additional criteria for resource value and as a consequence towards efficient resource use and cleaner production processes a comprehensive cost and benefit evaluation to consider the economic and ecological impacts is therefore a much needed prerequisite for a balanced trade relationship to conduct this evaluation we firstly choose the trade data of china with south africa sudan algeria nigeria egypt and morocco in the years 2001 2004 2008 and 2012 as sample set then we apply the emergy accounting approach to the international trade dynamic between china and above selected african countries to quantify the exchange of natural capital and ecosystem services among partners including resources that support know how and technology exchange as well as to identify benefits and compensation measures that may increase trade balance and equity via the prevention of uncompensated resource exploitation by accounting for the environmental support embodied in traded resources and their capability to support an economic process the emergy approach applied in this study provides a complementary tool to economic evaluation which enables a more comprehensive understanding of trade beyond the monetary terms of trade in terms of the total emergy exchange the investigated african countries with the exception of south africa and sudan receive more emergy from china over the investigated period which appears to suggest a reversal of the typical trend in which industrialized economies exploit african countries and return small or no benefit to their economies however the composition of the emergy trade indicates that china s import from africa is mainly composed of primary products whereas manufactured products dominate its export this composition is likely to promote the chinese economy supporting resource processing and jobs as well as increase the lifestyle of the wealthy fractions of the african population as a result of increased access to consumer goods however in turn it may contribute to heavier pollution in china and certainly does not favor the development of local industry in africa thus more balanced import and export relations and trade structure that simultaneously involves human and natural capital will be helpful to construct a cooperative relationship

input output analysis of co2 emissions embodied in trade and the driving forces processing and normal exports in recent years energy related co2 emissions embodied in international trade and the driving forces have been widely studied by researchers using the environmental input output framework most previous studies however do not differentiate different input structures in manufacturing processing exports and normal exports using china as an example this paper exemplifies how implications of results obtained using different export assumptions differ the study posits that the utilization of traditional i o model results in an overestimation of emissions embodied in processing exports and an underestimation in normal exports the estimate of co2 emissions embodied in china s exports drops by 32 when the extended i o model is used the choice of export assumption has more impact on the decomposition results for processing exports the study further highlights that for a country with an export structure similar to china it is meaningful to look into the impact of export assumption in embodied emission studies

is aging harmful to the environment how does aging affect the environment we analyze this question using anoverlapping generations model featuring uncertain lifetimes andenvironmental externalities we show that whether aging is harmful to theenvironment depends on the curvature of utility function which ismeasured by the degree of relative risk aversion we also explore theimplication of the results for environmental policy in an aging society

economic gains and environmental losses from international trade a decomposition of pollution intensity in china s value added trade abstract based on a multi regional input output model this study explores the temporal changes and driving forces of china s environmental losses relative to its economic gains from international trade with each of its 45 trading partners from 1995 to 2015 we find that china suffered larger environment losses per us value added through exports than almost all of its trading partners over time the environmental losses paid by china declined quicker than that of its bilateral trading partners the decomposition results of our research further show that the technology effect played a dominant role in this decline moreover the phenomenon that developed economies have outsourced dirty intermediate production stages to emerging economies via trade in intermediate goods has led to the emerging economies suffering greater environmental losses over time for certain economic gains from international trade

identifying the economic and environmental impacts of china s trade in intermediates within the asia pacific region abstract using value added and employment as the representatives of economic benefits and carbon emissions as the proxy of environmental costs of trade this study analyzes the impacts of china s trade in intermediates with major trading partners in the asia pacific region australia canada japan korea mexico taiwan and the usa on its economy and environment during 2000 2014 through hypothetical extraction method and structural decomposition analysis results show that china s trade in intermediates within the region induced a higher share of carbon emissions than those of value added and employment the economic and environmental impacts of china s trade in intermediates with the seven trading partners were mainly driven up by the intensifying international industrial linkages technical factors induced considerable negative effects on the impacted carbon emissions and employment at the sectoral level the expanding intermediate trade of heavy industries brought the major part of increasing impacts on carbon emissions value added and employment the impacted employment shifted toward high skilled occupations especially in heavy industries and services and the impacted low skilled employment decreased in most sectors finally related policy implications are deduced

intergenerational competitive equilibria under technological uncertainty and an exhaustible resource constraint abstract this paper presents a model of competitive intertemporal equilibrium in a finite horizon overlapping generations economy facing technological uncertainty and an exhaustible resource constraint individuals form rational expectations regarding future prices and economic conditions and income is redistributed from one generation to the next through government mandated lump sum transfers under uncertainty the relationship between resource price appreciation and the interest rate is mediated by consumers risk aversion with respect to consumption in alternative states of nature the intuitively appealing proposition that the expected resource price rises at the expected rate of interest holds only as a special case if future generations are taken to be state contingent in the sense that their composition depends on the states of nature prevailing when they are born then equilibria are generally pareto efficient but if future generations are state independent so that the set of individuals born at a given date is independent of the prevailing state of nature then equilibria may be inefficient because markets do not exist where successive generations may equilibrate their marginal rates of substitution across consumption in alternative contingent states such inefficiencies may be remedied through the implementation of appropriate intergenerational transfers an optimal intergenerational welfare distribution may be supported as a competitive equilibrium if the income transfer regime is properly selected and enforced the social optima that result for a simple version of the model under the maximin welfare criterion indicate that greater sacrifices are required on the part of the present generation when future generations are taken to be state contingent than when they are regarded as state independent this finding provides a possible explanation for the extreme risk aversion of conservationists with respect to the welfare of future generations

signaling quality with increased incentives previous work on informed principal problems with moral hazard suggested that the principal should signal project quality by retaining a larger share of the project and hence lowering incentives for the agent we show that this view is incomplete if project quality and effort are complements and effort is more valuable for high quality projects a principal with a high quality project may separate from a principal with a low quality project by increasing incentives for the agent this holds with a risk neutral agent who is protected by limited liability as well as with a risk averse agent and unlimited liability a dynamic version of our model in which the agent learns project quality in later periods provides an explanation for the use of initially reduced royalty rates in business format franchising contracts

a dea model to evaluate car efficiency this paper evaluates the efficiency of personal cars by using the non parametric data envelopment analysis dea approach analysis and comparison is performed in a normative manner since all the economic and technical parameters used four and ten respectively are not explicitly weighted the data set covers 121 different car models in 1997 as appeared in the german auto motor und sport magazine

sustainable development of forest resources in industrialized countries abstract there is no general consensus about what sustainable development means we seek to clarify the meaning and utility of the concept by focusing on forest resources in countries possessing higher levels of per capita incomes the meaning of sustainable development becomes complex when one asks what social goals are being pursued what types of stability are permitted whether amenities and commodities should receive equal consideration and to what landbase the concept should be applied a simulation linear programming model of california s private forest resource is used to demonstrate that strict decade to decade even flow stability of production may result in lower aggregate levels of output over a prolonged planning period with ending levels of the stock resource that are scarcely greater than when output is permitted to vary over the planning period the model was also used to show that greater levels of output and ending stocks are possible when the land base for sustainability assessment is not a restrictively small geographical area or a single class of ownership in the case of national forests and other public lands the application of the sustainable development concept is significantly more complex because of the importance of amenity values and because of the inherent conflict between development and the preservation of ecosystems in a pristine state

overlapping generations or infinitely lived agents intergenerational altruism and the economics of global warming do we need an overlapping generations model for the economics of global warming to answer this question an infinitely lived agent ila approach and an overlapping generations olg model are contrasted ila and olg can be viewed as polar representations of intergenerational altruism with ila an immortal agent acts through his investment savings decisions as trustee on the behalf of the future generations with olg agents need not behave altruistic they simply save during working years and dissave completely during retirement nevertheless ila and olg must not differ in their implication for greenhouse policy greenhouse gas abatement is a straightforward alternative to physical capital formation and even without altruism each age cohort has an incentive to provide current abatement in order to reduce future damages attributable to climate change indeed under reasonable assumptions and parameter values our simulations reveal such an invariance result provided carbon taxes are the only policy tool and tax revenues are recycled through socially mandated rules projections of economic growth climate change and energy consumption are only insignificantly affected by the choice of approach

the effects of ageing and an environmental trust fund in an overlapping generations model on carbon emission reductions most currently employed integrated assessment models for climate change are of a dynastic nature they employ the ramsey rule linking the interest rate economic growth and the rate of pure time preference this paper argues that although a dynastic framework might be convenient for economic analysis it is restrictive and can be misleading overlapping generations models which do not employ the ramsey rule are more flexible and may give results different from those derived from dynastic models with the integrated assessment model alice 2 0 it is shown how various assumptions on demographic change and public institutions can affect the interest rate thereby influencing the efficient greenhouse gas emission reductions it is concluded that dynastic integrated assessment models are in many respects inappropriate for providing policy makers with quantitative figures about the costs of carbon dioxide emissions and their desirable reduction levels 2001 elsevier science b v all rights reserved

a measure of sustainable national income for the netherlands abstract we present calculations on the sustainable national income sni indicator first proposed by hueting which corrects net national income nni for the costs to bring back environmental resource use to a sustainable level using an applied general equilibrium age model specifying 27 production sectors we calculate different variants of sni for the netherlands in 1990 given a set of pre determined sustainability standards the age model is extended with emissions and abatement cost curves based on large data sets for nine environmental themes the model combines the advantages of a top down approach the age model with the information of a bottom up approach the environmental data and data on emissions reductions costs the presented numerical results show that in 1990 dutch sni is about 50 below nni though many uncertainties are still present in the data and the model the enhanced greenhouse effect is the most expensive environmental theme

co2 emissions per value added in exports of china a comparison with usa based on generalized logarithmic mean divisia index decomposition abstract this study first analyzes co 2 emissions per value added epv in exports of china during 1995 2009 and compares it with that of usa second a generalized logarithmic mean divisia index glmdi method is proposed to decompose the epv gaps between china and usa into five effects this method generalizes existing lmdi methods and makes the multiplicative decomposition of a sum of several terms possible then attribution analysis on value added coefficient effect is conducted results show that aggregate epv of china s exports is 4 20 mt billion us dollars in 1995 which decreases to 2 48 in 2009 for usa it is 0 66 0 33 respectively epv of china s exports is several times greater than that of usa at sectoral level industrial sectors and transport sectors are top sectors with large epv in china s exports which corresponds to the case of usa epv gaps of the service sectors between china and usa have become increasingly prominent since 2000 decomposition results show that emission coefficients value added coefficients and input output structure are the main driving factors of the expanding epv gaps between china and usa attribution analysis on value added coefficient effect the fastest growing effect shows that electrical and optical sector has been the largest contributor to epv gaps between china and usa resulting from value added coefficient effect since 1998 and its effect sharply increases during 1995 2009 policy implications derived are finally discussed

the value of information in a principal agent model with moral hazard the ex post contracting case abstract in a principal agent model with moral hazard a signal about the principal s technology the stochastic mapping from the agent s action to the outcome is observed before the contract is offered the signal is either uninformative null information informative and observed only by the principal private information or also observed by the agent public information we show that from an ex ante standpoint before the signal is observed i the agent prefers private to both null and public information ii the principal sometimes prefers null to both private and public information and iii when the principal prefers public to null information she prefers public to private information whereas the agent prefers private to public information in this last situation we also show that iv for any separating equilibrium with private information there exists a contract with public information that both strictly prefer

informed principal moral hazard and the value of a more informative technology we analyze a principal agent model with moral hazard in which the principal has private information about the technology we characterize perfect bayesian equilibria of the contracting game that possess the following properties i a principal with a more informative technology ends up earning less profits than a principal with a less informative one does ii compared to the complete information case the actions implemented by the privately informed principal can be distorted iii the agent can end up being better off when the principal has private information

a trade related pollution trap for economies in transition evidence from china abstract this study argues that economic growth does not necessarily reverse the pollution haven behavior even if one economy shifts from the low income group to the high income one i e the economy in transition the economy in transition can become a convergence of trade related pollution then getting stuck in a pollution trap through investigating the case of china during 2003 2009 this study examines the features and causes of trade related pollution trap supported by the world input output database and the product specific statistics from china customs this study applies the input output analysis to trace the distribution of pollution embodied in china s foreign trade then it constructs a sector country year panel and applies the fixed effect model to examine causes of the pollution trap the results show that china s pollution terms of trade ptt with developing economies increases and exceeds one while the ptt with developed economies keeps larger than one it supports the feature of pollution trap the results also demonstrate that pollution trap is determined by the synergy of environmental regulation inter industry trade and intra industry trade 1 environmental regulations keep china from becoming pollution haven of developed economies rather than relocating pollution intensive production to other developing economies 2 the current intra industry trade of low value added products worsens china s environmental performance 3 the diluting advantage on labor and the accumulating advantage on capital keep china specializing in pollution intensive production overall the pollution trap may alert economies that applies the outward oriented growth model to prepare for sustainability transition our findings imply that going green rather than moving away is essential in response to trade environment effects more stringent regulation should improve the environmental performance of production and encourage the utilization of clean technology the increasing role of intra industry trade requires to upgrade the commodity structure towards one with higher added value

limits to growth and sustainable development grappling with ecological realities abstract the paper has three main sections the first discusses the limits to growth debate of the 1970s identifying concern with three potential kinds of limits ecological limits to the physical scale of economic activity limits to the economic welfare to be derived from growth of economic activity and social limits to economic growth the second section explores the same issues through the sustainable development literature of the late 1980s and the 1990s to date the principal change over the 20 years concerned a period also framed by the stockholm environment conference and unced is far greater acceptance of the existence of threatening environmental damage and the need for active policy to address it no consensus has yet emerged however on the relationship between economic growth and welfare or ecological or social sustainability the third section indicates the scale of the task if global economic growth is to be reconciled with ecological sustainability and advocates a strategy for sustainability that principally involves differentiating between north and south and forging new economic relations between them

environmental responsibility versus taxation taxation as a tool of environmental economic policy traditionally aims at generating a discouraging effect upon both the consumer and producer environmental degradation should finally stabilize itself the mechanism of taxation replies to a behavioural stimulus taxes versus subsidies recent economic analyses have not aimed at focusing their studies concerning the very responsibility of economic actors on anything else other than the mechanism of taxation taxes thus imply responsible behaviour we shall attempt to highlight that responsibility could be defined independently from taxation and that the affirmation of responsibility is inversed to taxation technically speaking we shall demonstrate that the taxation extolled by the legislator induces a certain crowding out effect as regards to responsibility in the first part of this article we shall therefore insist that economic policies in terms of taxation drive away the sentiment of individual responsibility we shall reason in terms of production and consumption to demonstrate this fact finally we shall insist that a high degree of responsibility could substitute taxation

temporal change of china s pollution terms of trade and its determinants abstract based on the world input output database wiod this study employed a revised pollution terms of trade ptt indicator to investigate the temporal change of china s environmental cost relative to its economic gains from international trade from 1995 to 2009 the results show that china has ptt larger than 1 indicating that china emits more emissions to obtain each unit of value added from exports than its trade partners over the period china s ptt first decreased from 1995 to 2001 and then increased from 2001 to 2009 the further decompositions show that improving technology is the leading driving force to decrease ptt while the change in global trade pattern is the leading force increasing ptt especially after 2001 we further decomposed the temporal change of china s ptt by income group of the trading partners the results show that the change in the global trade pattern is the crucial driving force behind the different changes of ptt by income group

an overlapping generations model of climate economy interactions a numerically calibrated overlapping generations model of climate change and the world economy is examined in this paper in the absence of intergenerational transfers efficient rates of greenhouse gas emissions abatement rise from 16 in the present to 25 in the long run while mean global temperature increases by 7 40c relative to the preindustrial norm a utilitarian optimum which attaches equal weight to each generation s life cycle utility yields abatement rates that rise from 48 to 89 with a long run temperature increase of 3 40c a second best utilitarian path in which intergenerational transfers are by assumption institutionally infeasible also supports stringent abatement measures i introduction the infinitely lived agent framework pioneered by frank ramsey 1928 has emerged as a central structure in the economics of climate change as characterized by ipcc 1996 working group iii climate change occurs when anthropogenic emissions of greenhouse gases principally carbon dioxide but also chlorofluorocarbons methane nitrous oxide and water vapor contribute to long term increases in mean global temperature potentially disrupting ecological systems and climate dependent production activities the best known study on the economics of this subject is nordhaus 1994 dynamic model of climate and the economy dice which incorporates assumptions regarding the costs and benefits of greenhouse gas emissions in a standard one sector growth model in nordhaus analysis a 50 reduction in greenhouse gas emissions would reduce gross world output by 0 93 a doubling of greenhouse gas concentrations relative to the preindustrial norm which is expected to occur by the middle of the twenty first century would reduce output by

signalling and renegotiation in contractual relationships this paper examines how the possibility of renegotiation affects contractual outcomes in signaling games when an infinite number of rounds of renegotiations are allowed before contracts are executed the main results of the paper are 1 contracts may still contain distortions 2 the popular efficient separating equilibrium outcome is never an equilibrium outcome with renegotiation 3 incentive compatibility constraints can be generalized to incorporate renegotiation 4 equilibrium outcomes can be separating and nevertheless depend on the uninformed player s prior and 5 renegotiation in signaling games may lead to outcomes similar to equilibrium outcomes of screening games in which multiple contract purchases are allowed copyright 1993 by the econometric society

trust law sustainability and responsible action abstract the problem of managing for sustainability is marked by the need to make decisions on behalf of others and by the uncertainties that attend such decisions however the economic literature on sustainability has paid scant attention to how decisions on behalf of others might differ from decisions on behalf of oneself and when risk has been modeled explicitly the expected utility hypothesis has generally been used a generation acts sustainably if the expected value of the next generation s utility is not less than the present s this paper investigates how we think about responsibly acting on another s behalf by looking to the united states law of trusts because in important respects the current generation views its responsibility to the future as a trust relationship trust law illuminates responsible decision making under both risk and uncertainty even under conditions of risk more conservative action than would be suggested by the expected utility hypothesis is warranted because it emphasizes preservation of trust principal and disavows profit maximization trust doctrine indicates that special caution should be exercised in conditions of uncertainty finally resource economic concepts of strong sustainability the precautionary principle and the safe minimum standard of conservation are interpreted according to trust principles

warranties as signals under consumer moral hazard this article examines the use of prices and warranties as signals of product quality to consumers who choose how to maintain their purchases the seller s incentives are strongly affected by the interaction of quality and maintenance in determining product reliability two different assumptions about this interaction are made a separating equilibrium in which high quality is signalled with a low warranty and low price is shown to be possible in both cases

structural change in advanced nations a new set of stylised facts we provide new evidence on patterns of structural change in advanced economies reconsidering the stylised facts put forward by kaldor 1963 kuznets 1971 and maddison 1980 since 1980 the services sector has overwhelmingly predominated in the economic activity of the european union japan and the us but there is substantial heterogeneity among services personal finance and business services have low productivity growth and increasing shares in employment and gdp by contrast shares of distribution services are constant and productivity growth is rapid we find that the labour share in value added is declining while the use of ict capital and skilled labour is increasing in all sectors and regions

co2 emissions embodied in china us trade input output analysis based on the emergy dollar ratio to gain insight into changes in co2 emissions embodied in china us trade an input output analysis based on the emergy dollar ratio edr is used to estimate embodied co2 emissions a structural decomposition analysis sda is employed to analyze the driving factors for changes in co2 emissions embodied in china s exports to the us during 2002 2007 the results of the input output analysis show that net export of co2 emissions increased quickly from 2002 to 2005 but decreased from 2005 to 2007 these trends are due to a reduction in total co2 emission intensity a decrease in the exchange rate and small imports of embodied co2 emissions the results of the sda demonstrate that total export volume was the largest driving factor for the increase in embodied co2 emissions during 2002 2007 followed by intermediate input structure direct co2 emissions intensity had a negative effect on changes in embodied co2 emissions the results suggest that china should establish a framework for allocating emission responsibilities enhance energy efficiency and improve intermediate input structure

energy decomposition analysis iea model versus other methods abstract in energy decomposition analysis the international energy agency iea model which is based on the laspeyres index method is included in a recent international collaborative initiative on energy indicators for sustainable development for possible adoption iaea 2005 energy indicators for sustainable development guidelines and methodology international atomic energy agency vienna www pub iaea org mtcd publications pdf pub1222 web pdf from an empirical analysis using the data of the united states we found that the residual term given by the iea model could be significant and that the estimates of the impacts of structure and intensity changes given by the model could be quite different from those given by other decomposition methods the residual term tends to be large when changes in structure and or energy intensity variables are significant since changes in these variables over time are generally larger in the developing countries than in the iea countries there is the question about whether the iea model is an appropriate decomposition method for the developing countries

incomplete contracts and signaling this article presents a principal agent model in which asymmetric information leads to contractual incompleteness i show that in the presence of transactions costs incompleteness may act as a signal of the principal s type two types of transactions costs are considered those incurred ex ante drafting costs and those incurred ex post enforcement or verification costs i prove that in the presence of either of these costs asymmetric information leads to more contractual incompleteness than full information does

driving factors of carbon emissions embodied in china us trade a structural decomposition analysis abstract based on the environmental multi regional input output model this study employed structural decomposition analysis to investigate the driving factors of carbon emissions embodied in china us trade over the period of 1995 2009 effective driving factors were classified into six groups and each group included both factors at home and abroad the results show that factors trade structure of intermediate products at home and export market shares of final products at home presented the largest positive impacts to increments in carbon emissions embodied in chinese exports to the us while the majority of negative impacts was generated by changes in energy intensities at home the increment in carbon emissions embodied in us exports to china was mostly contributed by total demands abroad impacts of other driving factors were much smaller at the sectoral level both positive and negative impacts of driving factors were largely limited to a few sectors e g textiles products machinery transport equipment and electrical equipment here positive impacts were mostly contributed by export market shares of final products at home and total demands abroad and negative impacts were mainly contributed by energy intensities at home policy implications deduced from the results were discussed

energy co2 emissions and value added flows embodied in the international trade of the brics group a comprehensive assessment abstract the brics economies group i e brazil russia india china and south africa has become an important contributor to the growth of the world economy which is increasingly concerned about carbon emissions due to the recent increase in energy use in these countries while the embodied energy use related to emissions of the brics group has been discussed in the literature an integrated analysis of energy carbon footprints and value added flows associated with international trade among the brics group has to date rarely been reported based on an improved multi regional input output model south africa was extracted from the rest of the world in the world input output database wiod to analyze the above mentioned flows embodied in trade within the brics countries as well as between the brics group and other economies the results show that the brics economic entity was a net embodied flows exporter more flows were embodied in intermediate products than in final demand within the brics group compared with other brics economies china which is the largest transit country transferred more embodied flows from russia to other brics countries and drove more embodied flows from major economies including the united states and european countries outside the brics group than those within the brics group however china imported a relatively higher embodied energy and co2 in per unit value added from the brics countries than non brics countries while exporting relative lower embodied energy and co2 per value added to other brics economies than non brics countries the potential policy implications on cleaner development within the brics economies are discussed at the end of this paper

on sustainability and social welfare abstract this paper proposes to define sustainability in terms of leaving it possible for future generations to sustain certain defined targets it is shown that variants of genuine savings and the ecological footprint can then serve as indicators of sustainability the link between sustainability and intergenerational welfare is examined and it is shown how to incorporate indicators of sustainability into a social welfare measure including risk in the analysis

irreversibility and uncertainty cause an intergenerational equity efficiency trade off abstract two important policy goals in intergenerational problems are pareto efficiency and sustainability i e intergenerational equity we demonstrate that the pursuit of these goals is subject to an intergenerational equity efficiency trade off our analysis highlights two salient characteristics of intergenerational problems and policy i temporal irreversibility i e the inability to revise one s past actions and ii uncertainty of future consequences of present actions in human environment systems we employ a two non overlapping generations model that combines an intragenerational production decision on the use of circulating capital and a non renewable resource with a negative intergenerational externality as an unforeseen contingency if initially unknown problems become apparent and policy is enacted after irreversible actions were taken policy making faces a fundamental trade off between ex post pareto efficiency and sustainability that is one can achieve either one of these two goals but not both

the paretian liberal paradox and ecological economics abstract two of the most basic considerations in collective choice are the pareto principle and some minimal protection of individual rights in his impossibility theorem sen 1970 shows that there is a potential inconsistency between preference sovereignty as expressed by the pareto condition and the protection of minimal rights a liberal or liberty condition the paretian liberal paradox plp and the extensive debate surrounding it prompts serious reconsideration of the traditional welfare economics approach the critique of welfarism made by the plp is of central importance for environmental issues given pervasive externalities missing markets uncertainty and potential irreversibilities making collective choice decisions on these issues may require using explicit non utility information and restricting individual preference sovereignty we explore the implications of the plp for long term environmental policy and the transdisciplinary field of ecological economics as a simple pedagogical device relying on sparse principles the plp stimulates an increased awareness of the potential conflict between preferences and rights recognition of the plp focuses attention on what counts as admissible information in collective choice rules for example consideration of the plp illuminates differences in the informational requirements of alternative sustainability concepts

a trading mechanism contingent on several indices we introduce a trading mechanism where the execution of an order on a security can be made contingent on the relation between the clearing price of the security and the clearing price of one or several indices a mechanism similar to ours but limited to only one index was implemented on the tel aviv stock exchange we argue that it is in some cases crucial to make the execution of an order contingent on several indices our mechanism consists of a particular implementation of a double sided multi unit combinatorial auction with substitutes or dmcs auction which we introduced in an earlier article

environmental economics and ecological economics where they can converge abstract environmental economics and ecological economics share the common objective of understanding the human economy environment interaction in order to redirect the economies towards sustainability in pursuing this objective these two perspectives utilise different types of analytical framework and are opposed to each other on many of the fundamental theoretical and methodological issues while the environmental economics has progressed within a narrowly but sharply focused neoclassical analytical approach the ecological economics has expanded by adopting a diversified approach which led to widen the gap between the two this article makes an attempt to highlight the divergence between these two perspectives on different issues and identifies certain research avenues that would potentially bring convergence between these two perspectives