The Environmental Kuznets Curve from Multiple Perspectives

The analysis finds that in addition to U-shaped paths of environmental quality arising for growth in income per capita, growth in population can also produce socially efficient patterns that are U-shaped. Sufficient conditions for both types of paths are identified for a range of models and parameters, including symmetrical models with homothetic, constant-returns functions such as with CES functions. Similar results are also shown to arise in decentralized economies under either homogeneous or heterogeneous income levels.Environmental Kuznets Curve, Economic Growth, Environmental Quality

The environmental Kuznets curve from mulitple perspectives

The analysis finds that in addition to U-shaped paths of environmental quality arising for growth in income per capita, growth in population can also produce socially efficient patterns that are U-shaped. Sufficient conditions for both types of paths are identified for a range of models and parameters, including symmetrical models with homothetic, constant-returns functions such as with CES functions. Similar results are also shown to arise in decentralized economies under either homogeneous or heterogeneous income levels

The Welfare Effects of Environmental Taxation

Recent literature has investigated whether the welfare gains from environmental taxation are larger or smaller in a second-best setting than in a first-best setting. This question has mainly been addressed indirectly, by asking whether the second-best optimal environmental tax is higher or lower than the first-best Pigouvian rate. Even this indirect question, though, has itself been approached indirectly, comparing the second-best optimal environmental tax to a proxy for its first-best value, an expression for marginal social damage (MSD). On closer examination, however, MSD becomes ambiguously defined and variable in a second-best setting, making it an unreliable proxy for the first-best Pigouvian rate. With these concerns in mind, the current analysis reevaluates the central welfare question both directly and indirectly and finds that when compared directly to its first-best Pigouvian value, the second-best optimal environmental tax generally rises with increased revenue requirements. Even in cases where the second-best optimal environmental tax is lower than its first-best value, the welfare gains may be greater than in a first-best setting. These results suggest that the marginal fiscal benefit (revenue recycling effect) exceeds the marginal fiscal cost (tax base effect) over a range of environmental tax rates that, for benchmark models, extends above the first-best Pigouvian rate. Results in the tax interaction literature are fully consistent with these interpretations once the effects of normalizations and numeraires are fully recognized. These findings reinforce the intuition that environmental policy complements rather than competes with the provision of other public goods.Optimal Environmental Tax, Second-best, Double Dividend, Tax Interaction Effect, Revenue Recycling, Tax Base Effect, Pigouvian Rate, Excess Burden

The effect of small solar powered 'Bͻkͻͻ' net fans on mosquito net use : results from a randomized controlled cross-over trial in southern Ghana

Long-lasting insecticidal nets (LLINs) are ineffective malaria transmission prevention tools if they are unused. Discomfort due to heat is the most commonly reported reason for not using nets, but this problem is largely unaddressed. With increasing rural electrification and the dropping price of solar power, fans could improve comfort inside nets and be affordable to populations in malaria endemic areas. Here, results are presented from a pilot randomized controlled cross-over study testing the effect of fans on LLIN use.; Eighty-three households from two rural communities in Greater Accra, Ghana, randomized into three groups, participated in a 10-month cross-over trial. After a screening survey to identify eligible households, all households received new LLINs. Bͻkͻͻ net fan systems (one fan per member) were given to households in Group 1 and water filters were given to households in Group 2. At mid-point, Group 1 and 2 crossed over interventions. Households in Group 1 and 2 participated in fortnightly surveys on households' practices related to nets, fans and water filters, while households in Group 3 were surveyed only at screening, mid-point and study end. Entomological and weather data were collected throughout the study. Analysis took both 'per protocol' (PP) and 'intention to treat' (ITT) approaches. The mid- and end-point survey data from Group 1 and 2 were analysed using Firth logistic regressions. Fortnightly survey data from all groups were analysed using logistic regressions with random effects.; Provision of fans to households appeared to increase net use in this study. Although the increase in net use explained by fans was not significant in the primary analyses (ITT odds ratio 3.24, p > 0.01; PP odds ratio = 1.17, p > 0.01), it was significant in secondary PP analysis (odds ratio = 1.95, p < 0.01). Net use was high at screening and even higher after provision of new LLINs and with follow up. Fan use was 90-100% depending on the fortnightly visit.; This pilot study could not provide definitive evidence that fans increase net use. A larger study with additional statistical power is needed to assess this association across communities with diverse environmental and socio-demographic characteristics

Comment on “Landing Fees versus Harvest Quotas with Uncertain Fish Stocks”

In “Landing fees vs. harvest quotas with uncertain fish stocks”, Martin Weitzman maintains that the conventional view among both fisheries economists and fisheries managers is that “prices” are inferior to “quantities” as instruments for regulating the fishing industry. Weitzman takes the opposite position, appealing to two well-established ideas in economics: 1) his own seminal insight on “prices vs. quantities”(Weitzman 1974), and 2) the “powerful general theme in economics that a ‘price signal’ can compress into a simple reduced form all relevant information for inducing correct decentralized decisions.” His paper is an attempt to capture and formalize his intuition on the subject using a standard dynamic fishery model with a stochastic stock-recruitment relation which introduces uncertainty, and evaluating the performance of both landing fees and harvest quotas in comparison to a hypothetical “perfect-information” optimal solution. The basic model is a well-known type which gives rise to a “bang-bang” optimal escapement target, S*. Weitzman rigorously solves the optimizing fishery manager’s dynamic programming problem for each management regime, and shows that the result for a constant landing fee (corresponding to S*) is identical to the “perfect-information” solution, but that both are superior to the harvest quota. This result is undoubtedly correct for the models being appraised. The basis for this finding is less clear, however, since the assumptions which have given rise to this result are not explicitly identified. Indeed, on closer examination, the source of these striking results appears to be unrelated to “prices vs. quantities” in the classic sense. Furthermore, the theme in economics that a ‘price signal’ can compress information and induce correct decentralized decisions appears to be unrelated since there are no differentiated decentralized decisions to be made in the model

Determinants of Urban Land Market Outcomes: Evidence from California

Our understanding of the effects of land use regulations and other aspects of urban form has been hindered by limited aggregate data and gradual temporal changes in policies. More widely available GIS data on land use and land economics presents opportunities to overcome these obstacles. This study was undertaken to explore the potential for land economics research that draws on parcel level spatial data for urban land markets, and uses differences across a sample of cities as the source of variation. Policy obstacles such as protected open spaces and other land use regulations, like the limitations caused by land forms such as water bodies and mountains, can be expected to alter the supply of land in ways that will be reflected in land market outcomes across cities. Based on a sample of data for 46 California cities, this exploratory analysis analyzed land market outcomes as a function of population, income and other factors in a closed-economy model, including a ratio that measures the concentration of developed lands within a city’s radius or perimeter. The approach produced robust relationships consistent with other studies, and results consistent with expectations not just in terms of the signs of the estimated coefficients but in terms of their magnitudes as well. Indeed, the elasticity of land development with respect to population has been estimated to be 0.79-0.82 based on open city models. The evidence suggests that both land forms and land use regulations have a positive effect on land prices; however, it was not possible with the current data to distinguish the amenity effects of proximity to oceans and mountains from the supply constraints on radial city expansion. The analysis, nevertheless, provides encouraging evidence for future research of this kind.This is the author's peer-reviewed final manuscript, as accepted by the publisher. The published article is copyrighted by Elsevier and can be found at: http://www.journals.elsevier.com/land-use-policy/.Keywords: closed city model, urban land market, land use regulations, identification proble

The Welfare Effects of Environmental Taxation

Recent literature has investigated whether the welfare gains from environmental taxation are larger or smaller in a second-best setting than in a first-best setting. This question has mainly been addressed indirectly, by asking whether the second-best optimal environmental tax is higher or lower than the first-best Pigouvian rate. Even this indirect question has itself been approached indirectly, comparing the second-best optimal environmental tax to a proxy for its first-best value, marginal social damage (MSD). On closer examination, however, MSD becomes ambiguously defined and variable in a second-best setting making it an unreliable proxy for the Pigouvian rate. Given these observations, the current analysis reevaluates these welfare questions and finds that when compared directly to its first-best value, the second-best optimal environmental tax generally rises with increased revenue requirements. Even in cases where the second-best environmental tax is lower than its first-best value, the welfare gains may be greater than in a first-best setting. These results suggest that the marginal fiscal benefit (revenue recycling effect) exceeds the marginal fiscal cost (tax base effect) over a range of environmental tax rates that, for benchmark models, extends above the first-best Pigouvian rate. These findings reinforce the intuition that environmental policy complements rather than competes with the provision of other public goods.Keywords: Revenue recycling, Second-best, Tax interaction effect, Pigouvian rate, Excess burden, Double dividend, Optimal environmental tax, Tax base effec

Towards Greater Certainty in Upper Klamath Basin Water Management

In 2001, an extreme drought tightened water supply in the Upper Klamath Basin (basin) while earlier 2001 increases in Endangered Species Act (ESA) water requirements for basin fish species elevated demands. The Bureau of Reclamation (Reclamation), which manages irrigation water in parts of the basin located near the Oregon-California border, responded by severely curtailing water allocations to Reclamation Project (project) irrigators for the 2001 growing season. Consequently, project irrigators lost approximately $35 million in farm income, demonstrating that ESA requirements have significantly changed how water must be managed in the basin. These circumstances prompted Reclamation to establish a federally-funded water bank to provide greater supply certainty in the basin. Yet this certainty is undermined by several significant factors which influence the cost effectiveness and geographic impacts of future bank operations. These include unspecified higher ESA water requirements due to a recent ninth circuit court ruling, greatly increased energy rates to irrigators due to a mid-2006 contract termination with the regional energy provider, uncertain water returns from land idling due to a shortage of data on subirrigation, and unknown annual availabilities of groundwater. Furthermore, although the bank has provided a water supply cushion, greater certainty at a lower cost would result from increased geographic and institutional flexibility in water bank operations. This paper evaluates the potential impacts of the above uncertainties on water bank cost-effectiveness and land idling distribution. Additionally, given the infrastructural and institutional limitations on water transfers in the basin, the cost effectiveness of different levels of water trading flexibility will be compared to assess both realistic and potential banking arrangements. The above objectives are addressed using a mathematical optimization model and a Geographic Information System (GIS) of hydrologic, agronomic and economic data. The model reflects farmer behavior by minimizing farm losses in the context of institutional and physical constraints. Irrigated areas in the basin are spatially arranged in a GIS divided into 15 county-defined units, each with different soil classes, crop rotations, irrigation technologies (impacting energy requirements), and land values. Results are anticipated to provide greater certainty over the spatial and economic impacts of energy price increases and possible changes in ESA requirements. Furthermore, they are anticipated to clarify the significance of subirrigation and groundwater to water management decisions in the basin. The water bank analysis is expected to confirm well documented evidence that increased flexibility induces greater cost effectiveness, but the spatial impacts of these adjustments are uncertain. In the Klamath, cost effectiveness of flexibility may imply that an irrigation infrastructure should be established capable of monitoring and measuring individual transfers

Economics of oilseed crops and their biodiesel potential in Oregon's Willamette Valley

This study assesses the economic potential of biodiesel production in the Willamette Valley for six oilseeds as potential feedstocks: canola, flax, camelina, yellow mustard, sunflower, and safflower. We evaluate costs and returns from feedstock production, oilseed crushing, and biodiesel processing. Our analysis is based on the best available information on cost of production, yield, other technical parameters, market prices, and government subsidies and tax credits