Environmental regulation in Indonesia

Since the early 1980s environmental regulation has received high priority in Indonesian policy making. Given Indonesia's dependence upon foreign donors for its economic program, external pressures inevitably played a significant role in stimulating this development. But internally generated factors were also of considerable importance. Mounting evidence of the economic and social costs of environmental degradation, the rise of a middle class, and the connection between environmental questions and other hotly contested political issues such as conflicts over land tenure and resources, the rights of workers, farmers and indigenous minorities, the demand for democratisation and greater press freedom all played a part in, moving the environment to centre stage

Environmental statistics and optimal regulation

Any organism is embedded in an environment that changes over time. The timescale for and statistics of environmental change, the precision with which the organism can detect its environment, and the costs and benefits of particular protein expression levels all will affect the suitability of different strategies-such as constitutive expression or graded response-for regulating protein levels in response to environmental inputs. We propose a general framework-here specifically applied to the enzymatic regulation of metabolism in response to changing concentrations of a basic nutrient-to predict the optimal regulatory strategy given the statistics of fluctuations in the environment and measurement apparatus, respectively, and the costs associated with enzyme production. We use this framework to address three fundamental questions: (i) when a cell should prefer thresholding to a graded response; (ii) when there is a fitness advantage to implementing a Bayesian decision rule; and (iii) when retaining memory of the past provides a selective advantage. We specifically find that: (i) relative convexity of enzyme expression cost and benefit influences the fitness of thresholding or graded responses; (ii) intermediate levels of measurement uncertainty call for a sophisticated Bayesian decision rule; and (iii) in dynamic contexts, intermediate levels of uncertainty call for retaining memory of the past. Statistical properties of the environment, such as variability and correlation times, set optimal biochemical parameters, such as thresholds and decay rates in signaling pathways. Our framework provides a theoretical basis for interpreting molecular signal processing algorithms and a classification scheme that organizes known regulatory strategies and may help conceptualize heretofore unknown ones.Comment: 21 pages, 7 figure

Vintage-Differentiated Environmental Regulation

Vintage-differentiated regulation (VDR) is a common feature of many environmental and other regulatory policies in the United States. Under VDR, standards for regulated units are fixed in terms of the units’ respective dates of entry, or “vintage,” with later entrants facing more stringent regulation. In the most common application, often referred to as “grandfathering,” units produced prior to a specific date are exempted from new regulation or face less stringent requirements. The vintage-differentiated approach has long appealed to many participants in the policy community, for reasons associated with efficiency, equity, and simple politics. First, it is frequently more cost-effective—in the short-term—to introduce new pollutionabatement technologies at the time that new plants are constructed than to retrofit older facilities with such technologies. Second, it seems more fair to avoid changing the rules of the game in mid-stream, and hence to apply new standards only to new plants. Third, political pressures tend to favor easily-identified existing facilities rather than undefined potential facilities. On the other hand, VDRs can be expected—on the basis of standard investment theory—to retard turnover in the capital stock (of durable plants and equipment), and thereby to reduce the cost-effectiveness of regulation in the long-term, compared with equivalent undifferentiated regulations.1 A further irony is that, when this slower turnover results in delayed adoption of new, cleaner technology, VDR can result in higher levels of pollutant emissions than would occur in the absence of regulation. In this Article, I survey previous applications and synthesize current thinking regarding VDRs in the environmental realm, and develop lessons for public policy and for future research. In Part 2, I describe the ubiquitous nature of VDRs in U.S. regulatory policy, and examine the reasons why VDRs are so common. In Part 3, I establish a theoretical framework for analysis of the cost-effectiveness of alternative types of environmental policy instruments to provide a context for the analysis of VDRs. In Part 4, I focus on the effects of VDRs, and describe a general theory of the impacts of these instruments in terms of their effects on technology adoption, capital turnover, pollution abatement costs, and environmental performance. In Parts 5 and 6, I examine empirical analyses of the impacts of VDRs in two significant sectors: Part 5 focuses on the effects of VDRs in the U.S. auto industry, and Part 6 on the effects of new source review, which is a form of VDR, in power generation and other sectors. In Part 7, I examine implications for policy and research, and recommend avenues for improvements in both.

Environmental Regulation Can Arise Under Minimal Assumptions

Models that demonstrate environmental regulation as a consequence of organism and environment coupling all require a number of core assumptions. Many previous models, such as Daisyworld, require that certain environment-altering traits have a selective advantage when those traits also contribute towards global regulation. We present a model that results in the regulation of a global environmental resource through niche construction without employing this and other common assumptions. There is no predetermined environmental optimum towards which regulation should proceed assumed or coded into the model. Nevertheless, polymorphic stable states that resist perturbation emerge from the simulated co-evolution of organisms and environment. In any single simulation a series of different stable states are realised, punctuated by rapid transitions. Regulation is achieved through two main subpopulations that are adapted to slightly different resource values, which force the environmental resource in opposing directions. This maintains the resource within a comparatively narrow band over a wide range of external perturbations. Population driven oscillations in the resource appear to be instrumental in protecting the regulation against mutations that would otherwise destroy it. Sensitivity analysis shows that the regulation is robust to mutation and to a wide range of parameter settings. Given the minimal assumptions employed, the results could reveal a mechanism capable of environmental regulation through the by-products of organisms

Environmental Regulation, Energy, and Market Entry

As my contribution to a symposium, I was asked to identify and to discuss conflicts between environmental regulation and pursuit of the goals of national energy policy. I identify three contexts in which I see clear conflicts between environmental regulation and energy policy - gasoline production, importation of liquefied natural gas, and transmission of electricity. In each case, I conclude that the conflict is attributable to state and local regulations. In the case of the gasoline market, I conclude that the market is beginning to perform poorly because of a combination of state land use regulations that make it impossible to construct new refineries and state gasoline-type mandates that are in the process of transforming the highly competitive and efficient national gasoline market into scores of much smaller inefficient markets that are increasingly susceptible to both unilateral and collusive exercises of market power. In the case of the natural gas market, I conclude that state and local government attempts to assert the power to veto federally approved liquefied natural gas terminals place us in jeopardy of experiencing a devastating shortage of natural gas in the next few years. In the case of electricity transmission, I conclude that our rapidly growing shortage of transmission capacity is already costing us many billions of dollars per year and increasing dramatically our vulnerability to widespread blackouts and price spikes, and that the shortage is attributable primarily to state and local land use regulation. In each case, the conflict can be eliminated only by reducing the power of state and local regulators and/or by transferring some regulatory power from state and local institutions to federal institutions

Environmental Law: A Reevaluation of Federal Pre-Emption and the Commerce Clause

This Comment addresses how the concern of state and local governments to regain control over environmental regulation has resulted in a marked increase in conflicts with the commerce and supremacy clauses of the Constitution. Various tests have been used by the courts to determine violations of these Constitutional provisions where environmental objectives are sought through local laws. In the field of environmental litigation, traditional tests are constantly challenged to meet the changing moral climate of the nation. This Comment weighs the desire of local legislatures for more responsive environmental regulation against the federal goal of uniform regulation and unrestrained interstate commerce, concluding that the court must decide on a policy of pre-emption in order for the nation to know whether environmental reform will be spearheaded from the states or the federal government

Unmasking the Porter hypothesis: Environmental innovations and firm-profitability

We examine impacts of different types of environmental innovations on firm profits. Following Porter's (1991) hypothesis that environmental regulation can improve firms' competitiveness we distinguish regulation induced and voluntary environmental innovations. We find that innovations which reduce environmental externalities reduce firms' profits, as long as they are induced by regulations. However, innovation that increases a firm's material or energy efficiency in terms of material or energy consumption has a positive impact on profitability. This positive result holds both for regulation induced and voluntary innovations, although the effect is significantly larger for regulation-driven innovation.We conclude that the Porter hypothesis does not hold in general for its 'strong' version but has to be qualified by the type of environmental innovation. Our finding rest on firm level data from the German part of the Community Innovation Survey in 2009. --Environmental innovation,environmental regulation,Porter hypothesis,competitiveness

LAND VALUES AND ENVIRONMENTAL REGULATION

Environmental Economics and Policy, Land Economics/Use,

The Unbearable Lightness of Regulatory Costs

The Article counters the presumption that increased environmental regulation necessarily decreases economic prosperity. It analyzes the European chemical regulatory structure and deduces that any costs imposed on the consumer are minimal, and more cost effective than watered-down American regulations covering the same subject matter with approximately the same cost imposed on the consumer-taxpayer. It argues the Office of Management and Budget and regulated industries have consistently overestimated the costs of environmental regulation and promoted the theory that environmental regulation causes factories and jobs to move offshore. It concludes that deregulation may not spur growth

Environmental Regulation: Choice of Instruments under Imperfect Compliance

Compliance is an important issue in environmental regulation. In this paper, we discuss some of the key elements of the problem and analyze a situation where emissions are not random and firms are risk-neutral. We study the firm's decision on emissions and compliance when the environmental regulation is based on standards and the enforcement agency audits the firm with a certain probability. We then compare total emissions when environmental regulation is based on different instruments: standards, taxes, and tradable permits. We show that when compliance is an issue, environmental taxes are superior to the other instruments. We also analyze the (static) efficiency of the solution.environmental regulation, audits and compliance, environmental standards, other instruments.