simultaneous attainment of energy goals by means of green certificates and emission permits abstract we discuss the analytical effects of introducing emission permits and green certificates and the corresponding quotas as regulatory mechanisms to respectively reduce emissions from electricity production and ensure a certain deployment of renewable energy the different case studies in this paper show that both instruments can be used in order to reach an emission goal or a goal of renewable energy however the combination of these instruments and the way they are used is shown to be important for the price faced by consumers it is shown that the effect on the consumer price is not an unambiguous increase with the introduction of a green quota there is a choice between quotas leading to a lower consumer price and quotas leading to a higher consumer price as a result of this it is shown that it is always optimal to reach a renewable energy deployment goal by the use of green certificates however to reach an emission goal it is sometimes most favourable with respect to consumer prices to use green certificates and sometimes to use emission permits

white certificate schemes economic analysis and interactions with the eu ets this paper examines the economic environmental and distributional impacts of an idealised tradable white certificate twc scheme and shows how the impacts are modified when the scheme operates in parallel with the eu emissions trading scheme eu ets it uses simple graphical techniques to assess whether a twc scheme will increase decrease or have an ambiguous effect on electricity demand wholesale and retail electricity prices carbon emissions and investment in energy efficiency paying particular attention to the interpretation of additionality

project appraisal and planning twenty years on this paper discusses the use and usefulness of social cost benefit analysis it briefly recalls the main features of the procedures put forward in the book by the authors and addresses some of the issues that have arisen in theoretical work since the early 1970s particularly the implications of uncertainty an analysis of the value of project appraisal under uncertainty is provided the rise and decline of project appraisal in the world bank and elsewhere is charted and reasons are considered particular attention is given to the difficulty of using shadow prices and to the institutional environment it is argued that evidence from analysis of the world bank s projects is consistent with placing a high value on the process of economic appraisal the costs of appraisal are noted as is the need to avoid excessive complexity the paper argues for the importance of an economic appraisal system and of attending to the incentives that operate in such a system

valuation and management of wetland ecosystems we recently completed a study of wetland values in coastal louisiana that employed both willingness to pay and energy analysis based methodologies and were able to bracket a range of values within which we feel fairly confident the true value lies however a large amount of uncertainty remains our current estimates of the total prsent value of an average acre of natural wetlands in louisiana are us 2429 6400 per acre assuming an 8 discount rate to 8977 17000 per acre assuming a 3 discount rate at the lowest value the current annual rate of loss of louisiana wetlands 50 sq miles per year is worth about 77 million at the largest value it is worth about 544 million in this paper we a discuss the fundamental theoretical and practical problems underlying natural resources valuation b summarize our methods and findings for louisiana wetlands and c elaborate on some of the more recalcitrant problems attending applied natural resource valuation including discounting and dealing with uncertainty and imprecision the discount rate makes more difference in the final result than any other one factor and yet there is much disagreement about the appropriate approach to discounting natural resources we discuss the discounting problem as applied to natural resources and argue for lower discount rates for valuing renewable natural resources than apply for other aspects of the economy it now seems clear that no reasonable amount of effort will produce very precise estimates of wetland values and we suspect this is also the case for several other classes of natural resources we elaborate a wetlands asurance bonding system to address these problems

the transition from payroll to consumption receipts with endogenous human capital abstract the transition from payroll to consumption receipts is simulated in a life cycle growth model featuring adult human capital as in other studies savings are higher under the consumption base however unlike those studies much of the additional savings here take human form human capital production increases for all cohorts in or yet to join the labor market as of the tax change the additional human capital production tends to dampen physical capital accumulation when compared with otherwise identical simulations which hold human capital constant the implications for intergenerational incidence are similar to that found in other examinations of the transition to a consumption base

job displacement relative wage changes and duration of unemployment using special cps data on displaced workers this article investigates the wage consequences of job displacement in a framework that emphasizes the effects of past job duration s and unemployment duration s on postdisplacement wages our model also attempts to take account of the simultaneity between unemployment duration and the postdisplacement wage it is found that duration strongly reduces subsequent earnings and that considerable overstatement of the loss in firm specific training investments is implied by conventional routes to measuring wage losses

brazilian policies that encourage deforestation in the amazon this paper shows that general tax policies special tax incentives the rules of land allocation and the agricultural credit system all accelerate deforestation in the amazon these policies increase the size of land holdings and reduce the chances of the poor to become farmers the following are the key provisions i the virtual exemption of agricultural income from income taxation makes agriculture a tax shelter ii rules of public land allocation provide incentives for deforestation because the rules used in determining the security of a claim and its land area encourage land clearing iii the progressive land tax contains provisions that encourage the conversion of forest to crop land or pasture iv the tax credit scheme aimed toward corporate livestock ranches subsidizes inefficient ranches established on cleared forest land and v subsidized credit is available for sudam approved ranches

review of us esco industry market trends an empirical analysis of project data abstract this comprehensive empirical analysis of us energy service company esco industry trends and performance employs two parallel analytical approaches a survey of firms to estimate total industry size and a database of 1500 esco projects from which we report target markets and typical project characteristics energy savings and customer economics we estimate that industry investment for energy efficiency related services reached us 2 billion in 2000 following a decade of strong growth esco activity is concentrated in states with high economic activity and strong policy support typical projects save 150 200 mj m2 year and are cost effective with median benefit cost ratios of 1 6 and 2 1 for institutional and private sector projects the median simple payback time spt is 7 years among institutional customers 3 years is typical in the private sector reliance on dsm incentives has decreased since 1995 preliminary evidence suggests that state enabling policies have boosted the industry in medium sized states escos have proven resilient in the face of restructuring and will probably shift toward selling energy solutions with energy efficiency part of a package we conclude that appropriate policy support both financial and non financial can jump start a viable private sector energy efficiency services industry that targets large institutional and commercial industrial customers

the durability of human capital some new evidence this paper analyzes the effect of chronological aging experience job search change of job and or employer and formal training on the wage growth of a sample of young men following the human capital literature wage growth directly corresponds to human capital and the analysis allows for the assessment of the durability or rate of depreciation of human capital if further investments are not made the findings suggest that human capital is not very durable contrary to some previous estimates given in the literature

white and green comparison of market based instruments to promote energy efficiency the white and green project completed under the eu save programme reviewed policies and measures to promote energy efficiency which involved analysing the experience with instruments that are already implemented and assessing innovative instruments that are proposed in particular the practicability of using white certificates energy efficiency along the same lines as green certificates renewable energy was explored several of the policies and measures were simulated using technical economic model of the markal family the results show that by 2020 it is possible to increase energy effiency by 15 at no cost without taking externalities into account if externalities are considered an increase of 30 35 with respect to the business as usual scenario is justified the wealth of information obtained through the models and analysis provides a set of recommendations for policy makers including 1 the need for closer co ordination between energy policies and environmental and climate policies 2 the opportunity to establish more ambitious targets for energy efficiency 3 the scope for increased eu co ordination 4 the extension of white certificates to the medium and low energy intensive industries 5 the need to support white certificates with accompanying actions such as running information campaigns promoting energy service companies and providing dedicated credit lines 6 the need to develop similar instruments for transport and 7 the continuing need for energy research and development c 2005 published by elsevier ltd

economic value of wetlands based recreation abstract the loss of wetlands is an issue of growing concern previous studies have focused primarily on quantifying the commercial storm protection and energy output values of wetlands relatively little research has been devoted to quantifying the outdoor recreational value of wetlands in this paper the recreational value of wetlands is discussed conceptually within a total economic value framework total economic value contains many value components which are broadly divided into non use current use and future use values each of these value categories can be further subdivided into expenditures and consumer s surplus an empirical study was conducted to measure expenditures and consumer s surplus associated with on site current recreational uses of a coastal wetlands area aggregate expenditures were estimated at approximately 118 million and aggregate consumer s surplus was estimated at approximately 27 million these results suggest that the economic impacts and net economic benefits associated with wetlands based recreation may be substantial hence recreational functions provided by wetlands may be important considerations for wetlands policy and management

the rebound effect microeconomic definitions limitations and extensions abstract the rebound effect results in part from an increased consumption of energy services following an improvement in the technical efficiency of delivering those services this increased consumption offsets the energy savings that may otherwise be achieved if the rebound effect is sufficiently large it may undermine the rationale for policy measures to encourage energy efficiency the nature and magnitude of the rebound effect is the focus of long running dispute with energy economics this paper brings together previous theoretical work to provide a rigorous definition of the rebound effect to clarify key conceptual issues and to highlight the potential consequences of various assumptions for empirical estimates of the effect the focus is on the direct rebound effect for a single energy service indirect and economy wide rebound effects are not discussed beginning with khazzoom s original definition of the rebound effect we expose the limitations of three simplifying assumptions on which this definition is based first we argue that capital costs form an important part of the total cost of providing energy services and that empirical studies that estimate rebound effects from variations in energy prices are prone to bias second we argue that energy efficiency should be treated as an endogenous variable and that empirical estimates of the rebound effect may need to apply a simultaneous equation model to capture the joint determination of key variables third we explore the implications of the opportunity costs of time in the production of energy services and highlight the consequences for energy use of improved time efficiency the influence of time costs on the rebound effect and the existence of a parallel rebound effect with respect to time each of these considerations serves to highlight the difficulties in obtaining reliable estimates of the rebound effect and the different factors that need to be controlled for we discuss the implications of these findings for econometric studies and argue that several existing studies may overestimate the magnitude of the effect

job mobility and earnings over the life cycle previous studies have shown that in the short run quits generally lead to wage increases on the next job and layoffs to no increase or to a wage cut the author of this study argues however that the prospect of a job change for any reason creates a disincentive for a worker to invest in training that is specific to the current job and therefore those who change jobs frequently may earn less over their life cycle than those who other things equal seldom change jobs an analysis of data from the national longitudinal survey of mature men supports that expectation showing that for white males job separations usually lead to wage gains in the short run but nonmobile workers tend to achieve significantly higher wages over the long run

interactions between the power and green certificate markets abstract the current trend of liberalising the power markets is combined with ambitious deployment plans for power production based on renewable energy supplies a new policy scheme to ensure this extension has been developed in the form of a green certificate system with a politically determined target of deployment in such a system producers of renewably based electricity receive tradable certificates in proportion to the electricity they produce the producer can thereby sell these certificates and receive additional revenue apart from the power price this paper studies the price and consumption effects of such a system with a simple model we show that the effects are ambiguous this ambiguity is caused by the interaction between the two markets therefore the green certificate system is difficult to manage if the state has parallel energy targets such as a desired deployment of renewably based energy and a stabilisation or reduction of the energy consumption in addition this complicates the regulation through a deployment target of renewably based power production as the regulator has to be aware of the different effects which follow a specific target until now these effects have not been considered in the analyses of the green certificate system when introducing the system even though it might have considerable consequences for the success of the system

incorporation of risk in regional forest resource accounts abstract to be an appropriate indicator of sustainability a net income measure projected into the future should consider risk several authors have demonstrated how risk can be formally incorporated into welfare measures like green net national product nnp however the resulting measure can be considerably more complex than its deterministic counterpart a practical alternative to formally incorporating risk is to use simulations of the type outlined in this paper to provide information about the expected impact of risk this information can be used to apply a stochastic version of a sustainability rule that requires that the expected value of net income be non declining this paper discusses the importance of risk and uncertainty to welfare measurement and more specifically the measurement of net income from forest services in a region of northern alberta two different approaches to valuing resource extraction are compared the depreciation approach and the wealth based approach provide very different projections of net income we demonstrate that when a renewable resource is subject to risk the wealth based approach provides a more appropriate measure of the influence of resource use on future consumption possibilities and the sustainability of net income

interactions of a tradable green certificate market with a tradable permits market abstract the reduction of greenhouse gas ghg emissions is an important goal in the energy and environmental policies of the european union eu and its member states according to a recent directive proposal from the eu commission the inclusion of renewable technologies is one of the important ways to achieve this emission reduction more policy instruments are on hand to pursue this objective frequently discussed currently is the establishing of a market for tradable permits for co2 emissions to achieve emission reductions in the power industry in parallel with this is the introduction of a green certificate market to promote the development of renewables if these two instruments are brought into play at the same time two separate markets with two individual targets will co exist in a number of countries with a focus on the green certificate market this paper discusses how these two markets may interact with each other in international trade three different cases are analysed 1 a green certificate market without any tradable permits scheme 2 a green certificate market in combination with a tradable permits scheme based on grandfathering and finally 3 a green certificate market in combination with a tradable permits bidding scheme emphasis is placed on analysing the pricing mechanisms in international trade at the green certificate and tradable permits market in relation to the value of the reductions in ghg emissions actually achieved the influence of the permits scheme on the spot market price of electricity is shown and the benefits of trading green certificates compared to a domestic implementation of renewable technologies are discussed the main conclusion is that only if a green certificate market is combined with a tradable permit scheme based on a bidding procedure will trade in certificates be equivalent to the domestic development of renewables using the bidding system no other country will have to pay for co2 reductions in the home country of the renewable development as would otherwise be the case if a tradable permit system based on grandfathering were introduced or even worse if no tradable permits were introduced at all finally it must be stated that even if the green certificate market were introduced alongside with a tradable permit bidding system there still would be no incentives for international certificate trade on account of the need for ghg reductions in the version of the green certificate market discussed in this paper no ghg credits are attached to certificates this means that the development of renewables will add to ghg reductions only in those countries where the plants are established no matter what kind of tradable permit scheme is adopted

integration of environmental concerns into agricultural policies of industrial and developing countries abstract the question which this paper addresses concerns the types of environmental and resource related agricultural policy adjustments that could properly address the costs of resource degradation and increase long term prospects for sustainable development various public policy approaches e g polluter pays principle fiscal measures regulations etc are discussed and analyzed with regard to their environmental and resource impacts the paper provides illustrative experiences from industrial and developing nations and where possible lessons and insights of relevance to policy making in developing countries are sought

african evidence on the relation of poverty time preference and the environment abstract it is typically argued in the economics literature that the poor operate with a higher rate of time preference than their wealthier counterparts the poor it is suggested have a higher rate of time preference because they are more concerned about present survival than they are about saving for the future such thinking is also central to the economic growth for environmental conservation and the poverty induced environmental degradation arguments according to these assertions wealth allows people to consider the future and invest in environmental conservation and poverty leaves people with no alternative but to exploit the environment so that they may feed their families today evidence from the food security and famine early warning fields suggests that households in many african contexts behave quite to the contrary during periods of food shortage poor households will often undertake extreme measures in the present including depriving the family of needed calories in order to preserve productive capital for the future such as a plough oxen or seed stock this evidence suggests that poor african households may in fact have very low rates of time preference this calls into question our general assumptions about discount rates for developing countries for which rates of time preference are a theoretical determinant

agricultural trade liberalization price changes and environmental effects many analyses of agricultural trade liberalization have been undertaken but few have considered the effects on the environment for the developed countries reducing the degree of protection would result in less intensive production therefore environmental stress would be reduced a reduction of trade barriers in industrial countries would result in higher world prices and in a somewhat lower world price variability assuming initially no policy changes for developing countries the question is how the liberalization would affect the environment higher prices in developing countries increase the level of production by intensifying production particularly in the commercial sector and by an area expansion both result in negative environmental effects these could be partly offset by an increase in hired labor in the commercial sector which might reduce pressure at the frontier and on marginal lands as well as by the income effect these off setting effects may be small however the direction of the overall environmental effects cannot be determined unambiguously without empirical examination at the global level the beneficial economic effects of agricultural trade liberalization probably outweigh the expected negative environmental effects in developing countries but this cannot be unambiguously established without valuation

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

integration of environmental concerns into economic analyses of projects and policies in an operational context abstract the efficient use of natural resources both mineral and biological as well as man made capital and human resources is a vital prerequisite for economic and social development one key role of ecological economics is to help value environmental and natural resources more precisely and internalize the cost and benefits of using such resources into the decision making process this paper reviews current economic approaches to the analysis of projects and policies and discusses possibilities for better intergrating environmental concerns into public decision making it reviews current practices as they relate to project analysis the analysis of economic policies and national income accounting a major need at present is not for more theory or techniques but for application of existing methodology and approaches to concrete problems particularly in developing countries the major objective should not be to provide fine turned numbers but to indicate orders of magnitude some project and policy alternatives can be ruled out in this fashion also one can often identify the key estimates to which the decision is sensitive and focus more refined analyses on them cost benefit analysis should be used to the extent possible alongside one needs to consider and to the extent possible rigorously analyze consequences and risks that cannot be measured in monetary terms and use for example multi criteria analysis where possible this together with sound judgement are at present the best inputs into decision making

estimating the willingness to pay for water services in developing countries a case study of the use of contingent valuation surveys in southern haiti progress in improving the quality and quantity of water used by people in rural areas of the developing world has been unsatisfactory in two respects 1 supplies that have been built are frequently neither used correctly nor properly maintained and 2 extension of improved service to unserved populations has been slow though this poor record is not the result of a single factor a major impediment to improved performance is inadequate information on the response of consumers to new service options the behavioral assumptions that typically underlie most rural water supply planning efforts are simple it is commonly assumed that so long as financial requirements do not exceed 5 of income rural consumers will choose to abandon their existing water supply in favor of the improved system several reviews by the world bank bilateral donors and water supply agencies in developing countries have shown however that this simple model of behavioral response to improved water supplies has usually proved incorrect 1 in rural areas many of those served by new systems have chosen to continue with their traditional water use practices

savings and wealth in models with altruistic bequests during recent years much attention has been given to the role of bequests in explaining various aspects of economic behavior for example authors have studied the impact of bequests on physical wealth accumulation laurence kotlikoff and lawrence summers 1981 the interest elasticity of savings owen evans 1983 tax reform laurence seidman 1984 and the distribution of wealth alan blinder 1976a more recently economists have begun to distinguish between human and physical bequests gary becker and nigel tomes 1986 acknowledging the presence of bequest in human form is important in analyzing each of the issues mentioned above outlays on children affect the shape of the family s labor supply and expenditure profiles upon which the level of aggregate savings crucially depends if these outlays are interest sensitive substitutes for physical bequests they will also influence the interest elasticity of savings in the area of tax reform the neutrality of the consumption tax depends on the ability of the government to identify human capital bequests from general consumption raymond batina 1987 if this is not possible the portfolio choice of investment in human versus physical capital may be distorted at the margin finally the unequal transmission of wealth across generations may be explained by the lack of physical bequests and the inefficiently low levels of human bequests made by wealthconstrained households becker and tomes 1986 to distinguish clearly the behavior of constrained households from unconstrained households who make sizeable physical bequests both types of bequests must be recognized this paper introduces a model that makes explicit examination of these issues possible it extends lord s 1989 multiperiod model of life cycle savings and adult human capital investment by adding altruistically motivated human and physical bequests 2 the model is calibrated using microeconomic data on earnings time and goods expenditures on children s human capital and physical bequests we then use the model to examine the contribution of bequests to wealth accumulation and the level of savings this topic is the source of an important but yet unresolved debate between franco modigliani 1988 and kotlikoff 1988 kotlikoff maintains that u s wealth accumulation is primarily the consequence of bequests as opposed to life cycle savings for retirement one type of evidence cited by kotlikoff comes from simulation results demonstrating the failure of realistically calibrated life cycle models to generate sufficiently high saving rates and wealth income ratios alan auerbach and kotlikoff 1987 we show however that if a pure life cycle