Assessing the Economic Impacts of Incorporating Romania's Agricultural and Food Sectors into EU's Customs Union: an Applied General Equilibrium Approach

Joining the European Union club implies, among many other policy changes, full integration of Romania's economy into EU's customs union. This is expected to have significant implications for domestic farmers and food processors. The paper constructs a single-country Applied General Equilibrium (AGE) model to investigate the impact of tariff border adjustments on changes in relative prices, production and trade patterns associated with fifteen local agro-food activities. Moreover, the modelling work identifies those agro-food sectors that have the potential to benefit the most from EU enlargement in terms of output effects given that Romanian producers are capable of fully responding to the incentives provided with integration. These mainly include (bovine) live animals and meat products, sugar, and cereal grains. Agro-food trade with EU intensifies in particular for those commodities for which trade restrictions are still substantial prior to accession. However, the magnitude of changes is relatively small due to the weak integration of domestic agro-food sectors into international trade structures. The AGE model also predicts static welfare gains of 0.65 percent of GDP equivalent variation. These seem to be more associated with better access to EU markets and increased export prices, and less with the preferential unilateral elimination of tariffs or their adjustment to EU's external levels. The model assumptions are highly theoretical and the model structure does not reflect with fidelity the workings of an economy in transition. Nonetheless, it does represent a solid base upon which further improvements could be added and structural transitional issues could be attached to more accurately predict potential outcomes.EU enlargement, Customs union, Agriculture, Romania, AGE modelling

ECONOMIC CAUSES OF TROPICAL DEFORESTATION – A GLOBAL EMPIRICAL APPLICATION

The paper investigates the complex system of causes affecting tropical deforestation at a worldwide level. There is no generally accepted theory in the deforestation literature to indicate which variables should be included in a model of deforestation at an aggregate global level. The paper begins, therefore, by presenting an analytical structure based on formal farm household economic modelling literature. The empirical findings derived from a global regression model tend to confirm the profit maximising market approach to deforestation, i.e. policy and structural variables at the macro-level that stimulate agricultural production provide farmers with incentives to deforest and expand their arable land areas. However, subsequent statistical tests suggest that the causes of tropical deforestation are difficult to identify and quantify at a global level, and that these should be analysed at a more disaggregated level.global tropical deforestation, farm household models

New Climate Economics: Methodological Choices and Recommendations

Projections of future impacts, benefits and costs of climate mitigation and adaptation policies are based on both detailed empirical research, and modelling choices and assumptions that frame the analysis. For instance, assumptions about the expected growth of population and incomes drive the projections of greenhouse gas emissions. Assumptions about the pace and nature of innovation, the economy-environment-society interactions and the relative value of future versus current resources affect the estimates of the long-run benefits or costs of climate policies. Assumptions about future population health in the business-as-usual scenario affect the estimates of the health benefits or harms of climate change mitigation and adaptation policies. Further, estimates and assumptions regarding climate variability affect the benefits of adaptation measures to tackle potential increases in climate-related extreme events. Also, methodological choices about the treatment of disparate, incommensurable impacts are often decisive for policy decisions. This document presents a series of what we refer to as critical issues for climate mitigation and adaptation policy analysis, involving overarching choices that affect multiple areas of expert analysis, and in particular the socio-economic assessments of climate policies. The following pages identify key issues for a comprehensive and realistic economic analysis of climate policies, present a few major options for answering those issues, and recommend a preferred course of action or option for analysts to consider (akin to what some refer to as "new economic thinking"). The issue of risk and uncertainty has been addressed in a separate supporting guidance document, due to its overriding importance and specific inter-disciplinary profile (available on the website of the MCA4climate initiative: www.mca4climate.info). In addition, some practical implementation aspects of the issues discussed below have been provided in Annex 1 at the end of this document. Some of the topics addressed here may be more amenable to qualitative than to quantitative analysis; potential examples include the valuation of non-market "goods" such as human health and environmental protection, and the goal of intergenerational equity. It is nonetheless important to understand the implications of both quantitative and qualitative approaches to these issues, since both approaches are often raised in the discussion of climate policy. The guiding principles underpinning the overall MCA4climate approach

Scenarios as the basis for assessment of mitigation and adaptation

The possibilities and need for adaptation and mitigation depends on uncertain future developments with respect to socio-economic factors and the climate system. Scenarios are used to explore the impacts of different strategies under uncertainty. In this chapter, some scenarios are presented that are used in the ADAM project for this purpose. One scenario explores developments with no mitigation, and thus with high temperature increase and high reliance on adaptation (leading to 4oC increase by 2100 compared to pre-industrial levels). A second scenario explores an ambitious mitigation strategy (leading to 2oC increase by 2100 compared to pre-industrial levels). In the latter scenario, stringent mitigation strategies effectively reduces the risks of climate change, but based on uncertainties in the climate system a temperature increase of 3oC or more cannot be excluded. The analysis shows that, in many cases, adaptation and mitigation are not trade-offs but supplements. For example, the number of people exposed to increased water resource stress due to climate change can be substantially reduced in the mitigation scenario, but even then adaptation will be required for the remaining large numbers of people exposed to increased stress. Another example is sea level rise, for which adaptation is more cost-effective than mitigation, but mitigation can help reduce damages and the cost of adaptation. For agriculture, finally, only the scenario based on a combination of adaptation and mitigation is able to avoid serious climate change impacts

Regional efforts to mitigate climate change in China: A multi-criteria assessment approach

The task of mitigating climate change is usually allocated through administrative regions in China. In order to put pressure on regions that perform poorly in mitigating climate changes and highlight regions with best-practice climate policies, this study explored a method to assess regional efforts on climate change mitigation at the sub-national level. A climate change mitigation index (CCMI) was developed with 15 objective indicators, which were divided into four categories, namely, emissions, efficiency, non-fossil energy, and climate policy. The indicators’ current level and recent development were measured for the first three categories. The index was applied to assess China’s provincial performance in climate protection based on the Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) method. Empirical results show that the middle Yangtze River area and southern coastal area perform better than other areas in mitigating climate change. The average performance of the northwest area in China is the worst. In addition, climate change mitigation performance has a negative linear correlation with energy self-sufficiency ratio but does not have a significant linear correlation with social development level. Therefore, regional resource endowments had better be paid much more attention in terms of mitigating climate change because regions with good resource endowments in China tend to perform poorly

Airborne Drones for Water Quality Mapping in Inland, Transitional and Coastal Waters—MapEO Water Data Processing and Validation

Using airborne drones to monitor water quality in inland, transitional or coastal surface waters is an emerging research field. Airborne drones can fly under clouds at preferred times, capturing data at cm resolution, filling a significant gap between existing in situ, airborne and satellite remote sensing capabilities. Suitable drones and lightweight cameras are readily available on the market, whereas deriving water quality products from the captured image is not straightforward; vignetting effects, georeferencing, the dynamic nature and high light absorption efficiency of water, sun glint and sky glint effects require careful data processing. This paper presents the data processing workflow behind MapEO water, an end-to-end cloud-based solution that deals with the complexities of observing water surfaces and retrieves water-leaving reflectance and water quality products like turbidity and chlorophyll-a (Chl-a) concentration. MapEO water supports common camera types and performs a geometric and radiometric correction and subsequent conversion to reflectance and water quality products. This study shows validation results of water-leaving reflectance, turbidity and Chl-a maps derived using DJI Phantom 4 pro and MicaSense cameras for several lakes across Europe. Coefficients of determination values of 0.71 and 0.93 are obtained for turbidity and Chl-a, respectively. We conclude that airborne drone data has major potential to be embedded in operational monitoring programmes and can form useful links between satellite and in situ observations

Fiscal policy and ecological sustainability: a post-Keynesian perspective

Fiscal policy has a strong role to play in the transition to an ecologically sustainable economy. This paper critically discusses the way that green fiscal policy has been analysed in both conventional and post-Keynesian approaches. It then uses a recently developed post-Keynesian ecological macroeconomic model in order to provide a comparative evaluation of three different types of green fiscal policy: carbon taxes, green subsidies and green public investment. We show that (i) carbon taxes reduce global warming but increase financial risks due to their adverse effects on the profitability of firms and credit availability; (ii) green subsidies and green public investment improve ecological efficiency, but their positive environmental impact is partially offset by their macroeconomic rebound effects; and (iii) a green fiscal policy mix derives better outcomes than isolated policies. Directions for future heterodox macroeconomic research on the links between fiscal policy and ecological sustainability are suggested