Study on Benefit Transfer in an International Setting. How to Improve Welfare Estimates in the Case of the Countries' Income Heterogeneity?

The paper aims at investigating the validity of benefit transfer in the case of transfers between countries highly heterogeneous in income, and demonstrates relative performance of different benefit transfer methods under these conditions. We examine how income elasticity of WTP varies in line with the levels of income in order to provide scientifically sound elasticity factor for adjusting transferred welfare estimates. In addition, we have noted that using site-specific measures of income substantially outperforms transfers based on GPD per capita. The results provide conclusions for the future benefit transfers between countries differentiated by income. The accuracy of benefit transfer is compared using equivalence testing following the TOSC test; a new, more informative way of reporting equivalence is proposed and developed, based on computing minimum tolerance level rather than specifying it a priori. The empirical studies are one of the first applications of virtually the same study settings and questionnaires in an environmental quality context, what supplements a few previously existing applications in health effects settings. Lake water quality valuation studies were conducted in two countries in transition – Poland and the Czech Republic – that reflected the earlier studies carried out in Norway and Germany. The use of the same questionnaires and scenarios allowed to control for survey artefacts that could possibly bias the willingness to pay. The welfare estimates collected at four different sites provided a wide base for testing the benefit transfer and comparing the performance of methods to improve the transfer accuracy. Finally, the guidelines for future applications have been offered, as particularly valuable for benefit transfers between countries highly heterogeneous in income.benefit transfer, income heterogeneity, contingent valuation, water quality, equivalence testing, TOSC, convolutions, economies in transition

Why do Czech consumers purchase organic food?

The objective of this paper is to analyze empirically factors that explain organic food purchase behaviour, using data on a representative sample of inhabitants of Czech Republic. First, socio-demographic characteristics of organic food consumers are examined. Second, the motivational factors and barriers that affect purchase decision-making related to organic food are identified.The results of the study show that organic food is purchased more likely by younger households, households from larger cities and households with the highest income. Health-related beliefs, environmental beliefs, and normative beliefs have positive effect on organic food purchase. On the other hand, low trust in certification system, lack of information and perceived shorter shelf life of organics are the important barriers to organic food consumption

You broke the planet, you pay for it

Brits and Czechs are willing to pay to meet global climate targets, but only using the 'polluter pays' principle, write Milan Ščasný and Iva Zvěřinov

Internalization of External Costs of Energy Generation in Central and Eastern European Countries

In this article a bottom-up approach to quantification of air pollution externalities from electricity generation is used to show that market-based instruments are not very effective in internalizing these external costs in six CEE countries. Although governments in CEE countries have regulated air emissions by imposing strict command-and-control measures, most of them have also introduced air emission charges and more recently taxes on electricity. We find however that the level of internalization by these two economic instruments is fairly low for existing fossil fired power plants ranging from 3% for coal- and lignite-fuelled plants to 31% for gas-fuelled plants. The picture improves if cross-subsidies for renewable electricity are accounted for but the internalization level is still below air pollution–related external costs, between 9% and 55% for coal- and oil-fired power plants. A substantial over-internalization by these three instruments is however encountered in the case of gas-fired power plants

What Is Effect of Climate Change Mitigating Policies on Energy Sector in Slovakia?

We assess the impacts of more strict regulation than the EU-wide 20% CO2 reduction target in 2020 on Slovak energy sector. Linear dynamic optimisation model MESSAGE with very detailed structure of Slovak energy sector is used for the assessment of impacts of imposing a carbon tax of €17 per tonne of CO2 and for two emission caps on CO2 emission that follow the EU policy to tighten the GHG target at the EU. The impacts on the fuel-mix and the technology-mix of energy sector in Slovakia, air quality and GHG emission, economic costs are assessed. Environmental benefits attributable to air pollutants and greenhouse gasses are quantified by using the ExternE impact pathway analysis. The impacts of 17€ scenario are similar to the baseline scenario. The Slovak public electricity sector achieves CO2 emission intensity of 0.465 t CO2 per MWh that is lower than the EC benchmark already in 2009. Maximal feasible CO2 emission reduction in the Slovak electricity sector is 24.6 % compared to the year 2005. The average carbon intensity will decline to 0.057 tCO2 per MWh in 2020 and result in 15.4 % reduction of CO2 in 2020 compared to the 17€ scenario level. Total production costs are €481 million higher (18.6%) in Cap24.6 scenario. As a consequence of the emission reduction, the externality costs are €190 million smaller in CAP24.6 scenario than in the 17€ scenario in 2020. Our results indicate that it is feasible to reduce CO2 emissions in the power sector in Slovakia more than the 20% reduction target set at the EU level

Internalization of External Costs of Energy Generation in Central and Eastern European Countries

In this article a bottom-up approach to quantification of air pollution externalities from electricity generation is used to show that market-based instruments are not very effective in internalizing these external costs in six CEE countries. Although governments in CEE countries have regulated air emissions by imposing strict command-and-control measures, most of them have also introduced air emission charges and more recently taxes on electricity. We find however that the level of internalization by these two economic instruments is fairly low for existing fossil fired power plants ranging from 3% for coal- and lignite-fuelled plants to 31% for gas-fuelled plants. The picture improves if cross-subsidies for renewable electricity are accounted for but the internalization level is still below air pollution–related external costs, between 9% and 55% for coal- and oil-fired power plants. A substantial over-internalization by these three instruments is however encountered in the case of gas-fired power plants

Taxing Air Pollutants and Carbon Individually or Jointly: Results from a CGE Model Enriched by an Emission Abatement Sector

We analyse the separate and collective impacts of emissions taxation to understand the internalisation effects of externalities. The analysis is carried out using a static computable general equilibrium model, with unemployment, bottom-up abatement technologies represented by a step function, and detailed emission coefficients. Environmental and health external costs are quantified using the ExternE’s Impact Pathway Approach. Emissions, as a result of environmental taxation, fall through reduced output, production factor substitution, and increased end-of-pipe abatement activity. The analysis shows that a full internalization of environmental externalities can result in modest overall economic and environmental welfare gains. There are, however, differences in terms of employment and output, depending on what combination of taxes are applied, which sectors are covered, and how fiscal revenues are redistributed. Air quality benefits range from €35–75 per ton of CO2 abated. Total environmental benefits always exceed GDP loss and the associated welfare loss

Environmental impact of consumption by Czech households: hybrid input–output analysis linked to household consumption data

We quantify direct and indirect emissions resulting from Czech household consumption contributing to climate change, acidification and smog formation. We develop a hybrid environmentally extended input-output model that links the single-region input-output analysis on domestic processes with a multiregional input-output analysis to derive the indirect emissions associated with imports and part of the domestic production. We apply Almon’s algorithm to transform the domestic emissions from industries to product groups. The indirect and direct emission intensities of more than hundred consumption items are then linked to expenditures of almost 3000 individual households to compute the total emissions for each household. We find that emissions attributable to households are not distributed evenly – while the first expenditure decile of households is responsible for less than 4% of all emissions, the tenth decile is responsible for 20-24%. Consumption of services and goods are least emission intensive, while use of electricity, heating, and transportation remain responsible for major part of emissions. The most important factor of emissions attributable to household consumption is total expenditures; the expenditure elasticity of emissions is about 0.8, but we identify consumption groups which emissions are less sensitive to total expenditures (electricity, heating and food) and more sensitive (transportation, goods)

What Is Effect of Climate Change Mitigating Policies on Energy Sector in Slovakia?

We assess the impacts of more strict regulation than the EU-wide 20% CO2 reduction target in 2020 on Slovak energy sector. Linear dynamic optimisation model MESSAGE with very detailed structure of Slovak energy sector is used for the assessment of impacts of imposing a carbon tax of €17 per tonne of CO2 and for two emission caps on CO2 emission that follow the EU policy to tighten the GHG target at the EU. The impacts on the fuel-mix and the technology-mix of energy sector in Slovakia, air quality and GHG emission, economic costs are assessed. Environmental benefits attributable to air pollutants and greenhouse gasses are quantified by using the ExternE impact pathway analysis. The impacts of 17€ scenario are similar to the baseline scenario. The Slovak public electricity sector achieves CO2 emission intensity of 0.465 t CO2 per MWh that is lower than the EC benchmark already in 2009. Maximal feasible CO2 emission reduction in the Slovak electricity sector is 24.6 % compared to the year 2005. The average carbon intensity will decline to 0.057 tCO2 per MWh in 2020 and result in 15.4 % reduction of CO2 in 2020 compared to the 17€ scenario level. Total production costs are €481 million higher (18.6%) in Cap24.6 scenario. As a consequence of the emission reduction, the externality costs are €190 million smaller in CAP24.6 scenario than in the 17€ scenario in 2020. Our results indicate that it is feasible to reduce CO2 emissions in the power sector in Slovakia more than the 20% reduction target set at the EU level

Kvantifikace environmentálních a zdravotních dopadů (externích nákladů) z povrchové těžby hnědého uhlí v Severočeské hnědouhelné pánvi v těžebních lokalitách velkolomů Bílina a ČSA a využití vydobytého hnědého uhlí ve spalovacích procesech pro výrobu elektřiny a tepla na území ČR

This study quantifies environmental and health impacts attributable to revoking the territorial ecological restrictions on open-pit mining of brown coal at Bílina and ČSA mines in the Northern Bohemia mining area, following four options as proposed in 2015 by the Czech government. These impacts are attributable to brown coal mining and burning brown coal in combustion processes to generate electricity and heat and are relevant to the area of the Czech Republic only. Environmental and health impacts are monetarized and mean the external cost from mining and usage of brown coal. Dose response function and Impact pathway analysis are applied to quantify the external costs. External cost of not revoking the territorial ecological restrictions (option 1) declines from 1,200 mil. CZK per annum to zero in 2038, when the mining of brown coal is terminated. For the whole period 2015-2050 the external cost reaches 14 billion CZK cumulatively. Revoking the territorial ecological restrictions at Bílina mine (option 2) increases the external cost by 200 – 500 mil. CZK per annum and by 10 billion CZK cumulatively for the whole period 2015-2050. Revoking the territorial ecological restrictions at Bílina mine and partly at ČSA mine (option 3) differs from option 2 only during 2024-2033 due to partial revoking the territorial ecological restrictions at ČSA mine, when the external cost increases by additional 700 mil. CZK per annum compared to option 1. The cumulative external cost is 14 billion CZK higher in option 3 than in option 1. The complete revoking the territorial ecological restrictions (option 4) leads to cumulative external cost higher by 25 billion CZK compared to option 1. With respect to international pollution transfer and global effects on climate change, the scope of the analysis has crucial role for evaluation of impacts of the national regulation. The underlying scenario of this analysis assumes the impacts on Czech inhabitants only which account for 8-10% of the impacts on the whole EU population. Impacts on energy mix are analysed by partial equilibrium model TIMES