Do Stock Markets Penalise Environment-Unfriendly Behaviour? Evidence from India.

A growing body of research points to the fact that capital markets react to environmental news and thus create incentives for pollution control in both developed and emerging market economies. In this paper we conduct an event study to examine the impact of environmental rating of large pulp and paper, auto and chlor alkali firms on their stock prices. We find that the market generally penalizes environmentally un-friendly behaviour in that announcement of weak environmental performance by firms leads to negative abnormal returns of up to 43 percent. A positive correlation is found between abnormal returns to a firm's stock and the level of its environmental performance. These findings should be viewed as further evidence of the important role that capital markets could play in environmental management, particularly in developing countries where environmental monitoring and enforcement are weak.green rating, capital market, environmental management, event study

Implementing Kyoto-type Flexibility Mechanisms for India: Issues and Prospects.

This paper examines various aspects of market-based instruments for greenhouse gas (GHG) abatement for India, particularly the linkages among these instruments and issues related to their implementation. It has been argued in light of concessions made at Bonn and Marrakech, the market for Clean Development Mechanism (CDM) projects will be small compared to GHG emissions in developing countries) and that it will be characterised by low demand and low prices. The paper examines these arguments in the context of India and the likely nature and extent of India's involvement in CDM activities. It also addresses the issue of division of gains from implementing CDM projects between the host and funding parties. Another question examined is whether India stands to gain or lose if emissions trading is realised even if it remains outside such an arrangement during the initial commitment period. In the long run, however, it is inevitable that India along with other rapidly industrialising countries will have to take on GHG reduction commitments. In this context, the important questions that this paper addresses are: (i) the possibilities of convergence across Kyoto-type flexibility mechanisms, particularly emissions trading and CDM, and (ii) issues of monitoring, enforcement and verification for these mechanisms. With regard to (ii) the paper compares the pros and cons of emissions trading and CDM from a conceptual and a practical point of view.climate change, clean development mechanism, market-based instruments

Incentive-Based Approaches for Mitigating Greenhouse Gas Emissions: Issues and Prospects for India

Not available

Environmental benefits and cost savings through market-based instruments : an application using state-level data from India

This paper develops a methodology for estimating potential cost savings from the use of market-based instruments (MBIs) when local emissions and abatement cost data are not available. The paper provides estimates of the cost savings for a 50% reduction of particulate emissions in India's five main industrial states, as well as estimates of the benefits from doing so. The estimates are developed by applying World Bank particulate intensity and abatement cost factors to sectoral output data. The estimated costs savings range from 26% to 169% and the benefits are many times greater than the costs even without the use of MBIs. The paper concludes by commenting on the relative difficulty of implementing reductions by market-based instruments and conventional command-and-control regulations.Supported by the MIT Center for Energy and Environmental Policy Research

Environmental Benefits and Cost Savings Through Market-Based Instruments: An Application Using State-Level Data from India.

This paper develops a methodology for estimating potential cost savings from the use of market-based instruments (MBIs) when local emissions and abatement cost data are not available. The paper provides estimates of the cost savings for a 50% reduction of particulate emissions in India's five main industrial states, as well as estimates of the benefits from doing so. The estimates are developed by applying World Bank particulate intensity and abatement cost factors to sectoral output data. The estimated cost savings range from 26% to 169% and the benefits are many times greater than the costs even without the use of MBIs. The paper concludes by commenting on the relative difficulty of implementing reductions by market-based instruments and conventional command-and-control regulations.Water Pollution, Market-based instruments, Command and Control, Environmental Taxes.

DOES GREATER AUTONOMY IMPROVE PERFORMANCE? EVIDENCE FROM WATER SERVICE PROVIDERS IN INDIAN CITIES

We assess the efficiency of urban water supply in 27 Indian cities using data envelopment analysis (DEA). We also group cities by the management structure of their water utilities. Utilities with greater degree of functional autonomy perform better, supporting the hypothesis that more autonomy in management leads to better performance among water utilites. Our results also have implications for urban domestic water pricing--most of the utilities operate under decreasing returns to scale (DRS) implying water should be priced at marginal cost of supply.

Poverty and the Environment-Exploring the Relationship between Household Incomes, Private Assets and Natural Assets

Using purpose-collected survey data from 535 households in 60 different villages of the Jhabua district of India, this paper investigates the extent to which rural households depend on common-pool natural resources for their daily livelihood. Previous studies have found that resource dependence-- defined as the fraction of total income derived from common-pool resources--strongly decreases with income. Our study uncovers a more complex relationship. Firstly, for the subsample of households that use positive amounts of resources, we find that dependence follows a U-shaped relationship with income, declining at first but then increasing. Secondly, we find that the probability of being in the subsample of common-pool resource users follows an inverse U-shaped relationship with income - the poorest and richest households are less likely to collect resources than those with intermediate incomes. Resource use by the rich is therefore bimodal - either very high or--for the very rich households--zero. Thirdly, we find that resource dependence increases at all income levels with an increase in the level of common-pool biomass availability. The combination of these results suggests that the quality of natural resources matters to a larger share of the rural population than had previously been believed, common-pool resources contribute a significant fraction of the income not just of the desperately poor, but also of the relatively rich.India, Madhya Pradesh, poverty, environment, common-pool natural resources,rural households

The value of superfund cleanups : evidence from U.S. Environmental Protection Agency decisions

Under the Superfund law, the U.S. Environmental Protection Agency (EPA) is responsible for inspecting hazardous waste sites and for putting those with the most serious contamination problems on a national priorities list. The EPA then oversees the cleanup of these sites, suing potentially responsible parties for the costs of cleanup when possible, and funding the cleanup of"orphaned"sites out of the Superfund, money raised taxing chemical and petroleum products. The Superfund program is controversial. Cleanups are costly and it is unclear whether the benefits of cleanup, especially the relative benefits of more permanent clenanup, are worth the costs. At many sites, imminent danger of exposure to contaminants can be removed at low cost. What raises the cost of cleanup is the decision to clean up the site for future generations - to incinerate contaminated soil, for example, or to pump and treat an aquifer for 30 years. To shed light on this debate, the authors infer the EPA's willingness to pay (or have others pay) for more permanent cleanups at Superfund sites. They do so by analyzing cleanup decisions for contaminated soils at 110 Superfund sites. They find that, other things being equal, the EPA was more likely to choose less expensive cleanup options. But, holding costs constant, the EPA was more likely to select more permanent options, such as incinerating the soil instead of capping it or putting it in a landfill. The EPA was willing to pay at least twice as much for onsite incineration of contaminated soil as it was for capping the soil. Has the EPA chosen more permanent Superfund cleanups in areas where residents are predominantly white and have high incomes? The authors find no evidence that the percentage of minority residents near a site influences the choice of cleanup selected. But offsite treatment was more likely at sites with higher incomes.General Technology,Environmental Governance,Sanitation and Sewerage,TF030632-DANISH CTF - FY05 (DAC PART COUNTRIES GNP PER CAPITA BELOW USD 2,500/AL,Environmental Economics&Policies

Poverty and the Environment: Exploring the Relationship between Household Incomes, Private Assets, and Natural Assets

Using purpose-collected survey data from 537 households in 60 different villages of the Jhabua district of India, this paper investigates the extent to which rural households depend on common-pool natural resources for their daily livelihood. Previous studies have found that resource dependence— defined as the fraction of total income derived from common-pool resources—strongly decreases with income. Our study finds a more complex relationship. First, for the subsample of households that use positive amounts of resources, we find that dependence follows a U-shaped relationship with income, declining at first but then increasing. Second, we find that the probability of being in the subsample of common-pool resource users follows an inverse U-shaped relationship with income: the poorest and richest households are less likely to collect resources than those with intermediate incomes. Resource use by the rich is therefore bimodal: either very high or—for the very richest households—zero. Third, we find that resource dependence increases at all income levels with an increase in the level of common-pool biomass availability. The combination of these results suggests that the quality of natural resources matters to a larger share of the rural population than had been previously believed; common-pool resources contribute a significant fraction of the income not just of the desperately poor, but also of the relatively rich.

Implementing Kyoto-Type Flexibility Mechanisms for India: Problems and Prospects

The aim of the Forum was to bring representatives from OECD and non-OECD country governments together with representatives from the research community, to identify and discuss key policy issues relating to greenhouse gas emissions trading and other project based mechanisms for GHG emission reduction, such as Joint Implementation and the Clean Development Mechanism. The Forum also aimed to promote dialogue between the various stakeholder groups, and discuss policy needs in the design and implementation of tradeable emissions schemes. Forum participants included representatives from OECD and non-OECD governments, as well as from the research community. Those from industry and other institutions involved with emissions trading, joint implementation and clean development mechanism projects such as the European Commission and the World Bank were also represented