The economic effects of the EU biofuel target.

In this paper we use the CGE model DART to assess the economic impacts and optimality of different aspects of the EU climate package. A special focus is placed on the 10% biofuel target in the EU. In particular we analyze the development in the biofuel sectors, the effects on agricultural production and prices, and finally overall welfare implications. One of the main findings is that the EU emission targets alone lead to onlyminor increases in biofuel production. Additional subsidies are necessary to reach the 10% biofuel target. This in turn increases European agricultural prices by up to 7%. Compared to a cost-effective scenario in which the EU 20% emission reduction target is reached, additional welfare losses occur due to separated carbon markets and the renewable quotas. The biofuel target has relatively small negative or even positive welfare effects in some scenarios.CGE model; Climate policy; EU; Biofuels;

Challenges of Forest Fires in Russia

Forest fires in Russia have increased in scale in recent years. While climatic conditions do influence the incidence of fires, their increase also reflects socioeconomic changes and policy failures associated with the forest management system in Russia, such as the overemphasis on privatized forestry and the misallocation of forest protection budgets disfavoring the sparsely populated and forest-rich eastern regions

Economic Costs of Ocean Acidification: A Look into the Impacts on Shellfish Production. ESRI WP391. June 2011

Ocean acidification is increasingly recognized as a major global problem. Yet economic assessments of its effects are currently almost absent. Unlike most other marine organisms, mollusks, which have significant commercial value worldwide, have relatively solid scientific evidence of biological impact of acidification and allow us to make such an economic evaluation. By performing a partial-equilibrium analysis, we estimate global and regional economic costs of production loss of mollusks due to ocean acidification. Our results show that the costs for the world as a whole could be over 100 billion USD with an assumption of increasing demand of mollusks with expected income growths. The major determinants of cost levels are the impacts on the Chinese production, which is dominant in the world, and the expected demand increase of mollusks in today’s low-income countries, which include China, in accordance with their future income rise

Economic costs of extratropical storms under climate change: An application of FUND. ESRI WP273. January 2009

Extratropical cyclones have attracted some attention in climate policy circles as a possible significant damage factor of climate change. This study conducts an assessment of economic impacts of increased storm activities under climate change with the integrated assessment model FUND 3.4. In the base case, the direct economic damage of enhanced storms due to climate change amounts to $2.4 billion globally (approximately 35% of the total economic loss of storms at present) at the year 2100, while its ratio to the world GDP is 0.0007%. The paper also shows various sensitivity runs exhibiting up to 4 times the level of damage relative to the base run

International Climate Policy and Regional Welfare Weights. ESRI WP332. December 2009

We impute a global social welfare function that is consistent with the burden sharing in the Kyoto Protocol and in two proposals for a post-Kyoto treaty. The Kyoto Protocol favored the EU. The Frankel proposal for a post-Kyoto treaty continues the favorable treatment of the EU, while the EU proposal puts more weight on the wellbeing of other OECD countries at the expense of its own residents. Ignoring income differences, the EU proposal for a post-Kyoto treaty favors developing countries. However, if income differences are taken into account, the EU proposal is not at all generous to developing countries

Damage Costs of Climate Change through Intensification of Tropical Cyclone Activities: An Application of FUND. ESRI WP259, October 2008

Climate change may intensify tropical cyclone activities and amplify their negative economic effects. We simulate the direct economic impact of tropical cyclones enhanced by climate change with the integrated assessment model FUND 3.4. The results show that in the base case, the direct economic damage of tropical cyclones ascribed to the effect of climate change amounts to $19 billion globally (almost the same level as the baseline (current) global damage of tropical cyclones) in the year 2100, while the ratio to world GDP is 0.006%. The US and China account for much of the absolute damage, whereas small island states incur the largest damage if evaluated as the share to GDP. The results also show that they are sensitive to the choice of baseline and of the wind-speed elasticity of storm damage

How Could the Benefits of Climate Change Adaptation Be Incorporated into Economic Evaluation of Development Projects?

・Quantifying the economic benefits of climate change adaption may help attract more investments in projects with high adaptation benefits.・Quantification often faces the challenge of representing uncertainties of many possible futures including those related to climate change impacts.・There are methods available that help quantify the adaptation benefits of projects amidst uncertainties, and a case study of irrigation development projects in Kenya illustrates their usefulness.・Using such an evaluation method, the analysis of this case study visually demonstrated that development of irrigation infrastructure and introduction of improved farming methods in the study area could reduce vulnerability of farmers’ income and rice production there to future uncertainties, including potential negative impacts of climate change

Preferences for Nuclear Power in Post-Fukushima Japan: Evidence from a Large Nationwide Household Survey

Utilizing the data of a large nationwide household survey conducted in 2014, we investigate public preferences on nuclear power in Japan after the Fukushima nuclear accident and the role of four sets of factors: (1) household/individual socioeconomic characteristics, (2) psychological status, (3) geographical aspects, and (4) Fukushima accident-related experiences. The preferred energy mix, according to the averaged responses from the survey, includes 0.59 for renewables, 0.29 for fossil fuels, and 0.12 for nuclear—much more skewed towards the renewables than the actual national share of renewables of less than 0.2. Male, older, unmarried, less educated, high-income people, and government party supporters have a preference towards a higher share of nuclear power, except if they live near nuclear power plants. The experience of blackout and aversion to nuclear power during the Great East Japan Earthquake of 2011 lowers the share of nuclear power in the preferred mix

Strategic uncertainty, indeterminacy, and the formation of international environmental agreements

Since the end of the Kyoto Protocol, global climate negotiations have shifted away from setting binding short-run targets on emissions towards placing long-term limits on global warming. We investigate how this alters the incentives for participation in a technology-centered international environmental agreement (IEA) where countries choose between conventional abatement and a breakthrough abatement technology that exhibits a network externality. When switching technologies is costly, we obtain that equilibrium adoption is indeterminate because the future adoption rate is subject to strategic uncertainty. Participation in an IEA that mandates the adoption of the breakthrough technology will be complete only if countries expect that all other countries will adopt eventually. Long-run temperature targets can be regarded as a device to coordinate countries' expectations on that outcome

Working Paper

Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Global Availability of Phosphorus and Its Implications for Global Food Supply: An Economic Overview Markus Heckenmüller, Daiju Narita, Gernot Klepper Abstract: Being of crucial importance for agricultural production and also having experienced significant price volatility, phosphate and its future availability have drawn growing attention from both academics and the public over the last years. This paper overviews the recent literature and data on the availability of phosphorus and discusses the economic aspects of phosphate scarcity by describing major price determinants of the global phosphate market. We show that past price fluctuations of phosphate rock and phosphate fertilizers are not a reflection of physical phosphate rock depletion but rather attributable to numerous other demand-and supply-side factors. Given the current reserve estimates for phosphate rock, neither an exhaustion of global reserves nor a peak event is likely to occur within this century. However, these estimates are subject to a significant degree of uncertainty. Moreover, the global distribution of phosphate production and reserves is highly skewed and has the potential to pose a threat to food security in developing countries through factors such as the volatility of the phosphate rock price or price setting by suppliers with significant market power