Exploring the direction on the environmental and business performance relationship at the firm level. Lessons from a literature review

The interest of scientists and companies in understanding the business implications of environmental investment is timely; however, a dilemma remains at the firm level: is the environment a “strategic competitive factor”, as in the “Porter point of view”, or is it a “luxury good”, as in the “Wagner point of view”? Our research contributes to this debate through a review of the papers published in scientific journals between 2000 and 2015 that discussed the direction of the relationship between the environmental and business performances of enterprises. The objectives of the research are: (a) to verify if there is an agreement in the scientific literature of the last 15 years about the “Porter–Wagner dilemma” when focusing at the firm level; (b) to underline the prevalent cause and effect directions of the relationship between environmental and business performance; and (c) to investigate the reasons for any disagreements in this topic among the scientists. The results show that the main agreement regards the positive bi-directional relationship, as a virtuous cyclic approach with mutual effects between business and environmental performance; nevertheless, more complex hypotheses emerge, such as nonlinear and/or conditional relationship, that need to be further explored. On the other hand, the Porter–Wagner dilemma remains, and the main reason for the non-agreement among scientists can be due to the several non-homogeneous variables considered in the analyses. Thereafter, as lesson for scientists, the priority is to share univocal methods to measure firms’ environmental and business performances

Challenges and complexities in application of LCA approaches in the case of ICT for a sustainable future

In this work, three of many ICT-specific challenges of LCA are discussed. First, the inconsistency versus uncertainty is reviewed with regard to the meta-technological nature of ICT. As an example, the semiconductor technologies are used to highlight the complexities especially with respect to energy and water consumption. The need for specific representations and metric to separately assess products and technologies is discussed. It is highlighted that applying product-oriented approaches would result in abandoning or disfavoring of new technologies that could otherwise help toward a better world. Second, several believed-untouchable hot spots are highlighted to emphasize on their importance and footprint. The list includes, but not limited to, i) User Computer-Interfaces (UCIs), especially screens and displays, ii) Network-Computer Interlaces (NCIs), such as electronic and optical ports, and iii) electricity power interfaces. In addition, considering cross-regional social and economic impacts, and also taking into account the marketing nature of the need for many ICT's product and services in both forms of hardware and software, the complexity of End of Life (EoL) stage of ICT products, technologies, and services is explored. Finally, the impact of smart management and intelligence, and in general software, in ICT solutions and products is highlighted. In particular, it is observed that, even using the same technology, the significance of software could be highly variable depending on the level of intelligence and awareness deployed. With examples from an interconnected network of data centers managed using Dynamic Voltage and Frequency Scaling (DVFS) technology and smart cooling systems, it is shown that the unadjusted assessments could be highly uncertain, and even inconsistent, in calculating the management component's significance on the ICT impacts.Comment: 10 pages. Preprint/Accepted of a paper submitted to the ICT4S Conferenc

An Economic and Life Cycle Analysis of Regional Land Use and Transportation Plans, Research Report 11-25

Travel and emissions models are commonly applied to evaluate the change in passenger and commercial travel and associated greenhouse gas (GHG) emissions from land use and transportation plans. Analyses conducted by the Sacramento Area Council of Governments predict a decline in such travel and emissions from their land use and transportation plan (the “Preferred Blueprint” or PRB scenario) relative to a “Business-As-Usual” scenario (BAU). However, the lifecycle GHG effects due to changes in production and consumption associated with transportation and land use plans are rarely, if ever, conducted. An earlier study conducted by the authors, applied a spatial economic model (Sacramento PECAS) to the PRB plan and found that lower labor, transport, and rental costs increased producer and consumer surplus and production and consumption relative to the BAU. As a result, lifecycle GHG emissions from these upstream economic activities may increase. At the same time, lifecycle GHG emissions associated with the manufacture of construction materials for housing may decline due to a shift in the plan from larger luxury homes to smaller multi-family homes in the plan. To explore the net impact of these opposing GHG impacts, the current study used the economic production and consumption data from the PRB and BAU scenarios as simulated with the Sacramento PECAS model as inputs to estimate the change in lifecycle GHG emissions. The economic input-output lifecycle assessment model is applied to evaluate effects related to changes in economic production and consumption as well as housing construction. This study also builds on the findings from two previous studies, which suggest potential economic incentives for jurisdictional non-compliance with Sustainable Communities Strategies (SCSs) under Senate Bill 375 (also known as the “anti-sprawl” bill). SB 375 does not require local governments to adopt general plans that are consistent with the land use plans included in SCSs, and thus such incentives could jeopardize implementation of SCSs and achievement of GHG goals. In this study, a set of scenarios is simulated with the Sacramento PECAS model, in which multiple jurisdictions partially pursue the BAU at differing rates. The PRB is treated as a straw or example SCS. The scenarios are evaluated to understand how non-conformity may influence the supply of housing by type, and holding other factors constant, the geographic and income distribution of rents, wages, commute costs, and consumer surplus

The Impact on U.S. Industries of Carbon Prices with Output-Based Rebates over Multiple Time Frames

The effects of a carbon price on U.S. industries are likely to change over time as firms and customers gradually adjust to new prices. The effects will also depend on the number of countries implementing the policy as well as offsetting policies to compensate losers. We examine the effects of a $15/ton CO2 price, including Waxman-Markey-type allocations to vulnerable industries, over four time horizons -- the very short-, short-, medium-, and long-runs -- distinguished by the ability of firms to raise output prices, change their input mix, and reallocate capital. We find that if firms cannot pass on higher costs, the loss in profits in a number of industries will indeed be large. When output prices can rise to reflect higher energy costs, the reduction in output and profits is substantially smaller. Over the medium- and long-terms, however, when more adjustments occur, the impact on output is more varied due to general equilibrium effects. The use of the H.R. 2454 rebates can substantially offset the output losses over all four time frames considered. We also consider competitiveness and leakage effects—changes in trade flows and changes in emissions in the rest of the world. We examine two measures of leakage: “trade-related” leakage that accounts for both the increased volume of net imports into the U.S. as well as the higher carbon intensity of these imports, and a broader leakage measure that includes the effect of increased fossil fuel consumption in countries not undertaking a carbon-pricing policy.carbon price, competitiveness, input-output analysis, output-based allocations, carbon leakage

Biofuels, poverty, and growth: A computable general equilibrium analysis of Mozambique

"Large private investments in biofuels are presently underway in Mozambique. This paper uses an economywide model to assess the implications of these investments for growth and income distribution. Our results indicate that biofuels provide an opportunity to enhance growth and poverty reduction. Overall, the proposed biofuel investments increase Mozambique's annual economic growth by 0.6 percentage points and reduce the incidence of poverty by about six percentage points over the 12-year phase-in period. However, the benefits depend on production technology. Our results indicate that an outgrower approach to producing biofuels is more pro-poor, due to the greater use of unskilled labor and accrual of land rents to smallholders in this system, compared with the more capital-intensive plantation approach. Moreover, the expected benefits of outgrower schemes will be further enhanced if they result in technology spillovers to other crops." from authors' abstractBiofuels, economic growth, Poverty, Developing countries,

Impact of Carbon Price Policies on U.S. Industry

This paper informs the discussion of carbon price policies by examining the potential for adverse impacts on domestic industries, with a focus on detailed sector-level analysis. The assumed policy scenario involves a unilateral economy-wide $10/ton CO2 charge without accompanying border tax adjustments or other complementary policies. Four modeling approaches are developed as a proxy for the different time horizons over which firms can pass through added costs, change input mix, adopt new technologies, and reallocate capital. Overall, we find that a readily identifiable set of industries experience particularly adverse impacts as measured by reduced output and that the relative burdens on different industries are remarkably consistent across the four time horizons. Output rebounds considerably over longer time horizons, and the adverse impacts on profits diminish even more rapidly in most cases. Over the short term employment losses mirror output declines, while gains in other industries fully offset the losses over the longer horizons. At the same time, leakage abroad is considerable in some sectors, particularly when reductions in exports are considered.carbon price, competitiveness, input-output analysis

Improvement of the Model for Calculating the Operating Profit of Industrial Enterprises Taking into Account the Problem of Optimal Distribution of Productive Resources

On the ground of the conducted research, based on the stated goals and objectives, the model of calculating the operating profit of industrial enterprises, which is based on economic and mathematical dependencies, and takes into account the problem of optimal distribution of production resources in the system of operational management has been improved. Great attention has been paid to the analysis of the cost factors in the system of analysis of the ratio of “costs – volume – profit”, the definition of the optimal distribution of productive resources from the set of possible (admissible) ones in the organization of labor and production, the difference between accounting and economic approaches to calculating profit, the difference in approaches to the classification of overhead costs in terms of activity-based costing.On the ground of the conducted research, based on the stated goals and objectives, the model of calculating the operating profit of industrial enterprises, which is based on economic and mathematical dependencies, and takes into account the problem of optimal distribution of production resources in the system of operational management has been improved. Great attention has been paid to the analysis of the cost factors in the system of analysis of the ratio of “costs – volume – profit”, the definition of the optimal distribution of productive resources from the set of possible (admissible) ones in the organization of labor and production, the difference between accounting and economic approaches to calculating profit, the difference in approaches to the classification of overhead costs in terms of activity-based costing

Agglomeration Elasticities in New Zealand

This paper analyses the relationship between firms’ multi-factor productivity and the effective employment density of the areas where they operate. Quantifying these agglomeration elasticities is of central importance in the evaluation of the wider economic benefits of transport investments. We estimate agglomeration elasticities using the Statistics New Zealand prototype Longitudinal Business Database: a firm-level panel covering the period 1999 to 2006. We estimate that an area with 10 percent higher effective density has firms with productivity that is 0.69 percent higher, once we control for the industry specific production functions and sorting of more productive firms across industries and locations. We present separate estimates of agglomeration elasticities for specific industries and regions, and examine the interaction of agglomeration with capital, labour, and other inputs.Agglomeration, urban density, transport evaluation, productivity

Causes of and Remedies for the People’s Republic of China’s External Imbalances: The Role of Factor Market Distortion

The current account surplus of the People’s Republic of China (PRC) has drawn much foreign and domestic attention. This paper focuses on the reasons and remedies for the PRC’s current account surpluses. Rather than deploying the standard explanations, we argue that asymmetric market liberalization and the related factor market distortion is the root reason for the PRC’s external imbalances. These cost distortions have artificially lowered PRC production costs, raised profits, and improved their products’ international competitiveness which has not only stimulated the economy, but also brought about severe structural risks. We completed a crude estimation for factor cost distortions in the PRC during 2000–2009 which matched its current account surpluses quite well. In order to rebalance the economy, we recommend that the PRC should adopt a comprehensive reform package focusing on removing the factor market distortions.prc; current account surplus; economic rebalancing; exchange rate; factor market distortion

Rural Electrification and Manufacturing Firm Performance in Benin – An Ex-Ante Impact Assessment

Productive electricity use is widely believed to contribute to positive impacts of electrification projects. This paper investigates these impacts by comparing the performance of micro manufacturing enterprises in grid-covered and non-covered villages in Northern Benin. Using firm-level data, the empirical analysis employs a Propensity Score Matching. While beneficial impacts are found from firm creation after electrification, firms that existed before actually show a non-significantly inferior performance to their matched counterparts from a non-electrified region. Complementary measures that sensitize firms about the implications of a grid connection are recommended as important features of program design.Mobility; Impact evaluation; propensity score matching; productive electricity use