Analysis and Use of Information and Communication Tools in Economics of Climate Change

The use of Information and Communication Technologies (ICT) in the context of climate change is of great importance in the scientific community, but can also play an important role in the policy context. On the one hand, the results achievable for mitigation and adaptation are influencing the policy arena, and on the other hand these instruments represent an opportunity for decision-makers to apply innovative forms of public administration based on stakeholder involvement, which can reduce the existing gap between policy-makers and citizens (Oates, 2003). The paper provides an analysis of the main ICT tools and methods used in climate change economics by means of a questionnaire-based survey and focus group discussion with specific experts in this context. The issues addressed are related with the use and relevance of ICT in the different research area of climate change, the perceived usefulness of these tools, and their importance in the scientific, economic and policy contexts. The main problems and limitations of ICT are investigated, together with their potential role in future research.Climate change, Information and Communication Technologies tools (ICT)

Urban Environmental Health and Sensitive Populations: How Much Are the Italians Willing to Pay to Reduce Their Risks?

We use contingent valuation to elicit WTP for a reduction in the risk of dying for cardiovascular and respiratory causes, the most important causes of premature mortality associated with heat wave and air pollution, among the Italian public. The purpose of this study is three-fold. First, we obtain WTP and VSL figures that can be applied when estimating the benefits of heat advisories, other policies that reduce the mortality effects of extreme heat, and environmental policies that reduce the risk of dying for cardiovascular and respiratory causes. Second, our experimental study design allows us to examine the sensitivity of WTP to the size of the risk reduction. Third, we examine whether the WTP of populations that are especially sensitive to extreme heat and air pollution—such as the elderly, those in compromised health, and those living alone and/or physically impaired—is different from that of other individuals. We find that WTP, and hence the VSL, depends on the risk reduction, respondent age (via the baseline risk), and respondent health status. WTP increases with the size of the risk reduction, but is not strictly proportional to it. All else the same, older individuals are willing to pay less for a given risk reduction than younger individuals of comparable characteristics. Poor health, however, tends to raise WTP, so that the appropriate VSL of elderly individuals in poor health may be quite large. Our results support the notion that the VSL is “individuated.â€

Urban Environmental Health and Sensitive Populations: How Much are the Italians Willing to Pay to Reduce Their Risks?

We use contingent valuation to elicit WTP for a reduction in the risk of dying for cardiovascular and respiratory causes, the most important causes of premature mortality associated with heat wave and air pollution, among the Italian public. The purpose of this study is three-fold. First, we obtain WTP and VSL figures that can be applied when estimating the benefits of heat advisories, other policies that reduce the mortality effects of extreme heat, and environmental policies that reduce the risk of dying for cardiovascular and respiratory causes. Second, our experimental study design allows us to examine the sensitivity of WTP to the size of the risk reduction. Third, we examine whether the WTP of populations that are especially sensitive to extreme heat and air pollution—such as the elderly, those in compromised health, and those living alone and/or physically impaired—is different from that of other individuals. We find that WTP, and hence the VSL, depends on the risk reduction, respondent age (via the baseline risk), and respondent health status. WTP increases with the size of the risk reduction, but is not strictly proportional to it. All else the same, older individuals are willing to pay less for a given risk reduction than younger individuals of comparable characteristics. Poor health, however, tends to raise WTP, so that the appropriate VSL of elderly individuals in poor health may be quite large. Our results support the notion that the VSL is “individuated.”Contingent valuation, Willingness to Pay, Mortality risk reductions, Value of a Statistical life, Scope test, Cardiovascular and respiratory risks, Heat waves, Heat advisories, Adaptation to climate change, Air pollution, Premature mortality

Analysis and Use of Information and Communication Tools in Economics of Climate Change

16 p.The use of Information and Communication Technologies (ICT) in the context of climate change is of great importance in the scientific community, but can also play an important role in the policy context. On the one hand, the results achievable for mitigation and adaptation are influencing the policy arena, and on the other hand these instruments represent an opportunity for decision-makers to apply innovative forms of public administration based on stakeholder involvement, which can reduce the existing gap between policy-makers and citizens (Oates, 2003). The paper provides an analysis of the main ICT tools and methods used in climate change economics by means of a questionnaire-based survey and focus group discussion with specific experts in this context. The issues addressed are related with the use and relevance of ICT in the different research area of climate change, the perceived usefulness of these tools, and their importance in the scientific, economic and policy contexts. The main problems and limitations of ICT are investigated, together with their potential role in future research

Using Expert Judgment to Assess Adaptive Capacity to Climate Change: Evidence From a Conjoint Choice Survey

We use conjoint choice questions to ask public health and climate change experts, contacted at professional meetings in 2003 and 2004, which of two hypothetical countries, A or B, they deem to have the higher adaptive capacity to certain effects of climate change on human health. These hypothetical countries are described by a vector of seven attributes, including per capita income, inequality in the distribution of income, measures of the health status of the population, the health care system, and access to information. Probit models indicate that our respondents regard per capita income, inequality in the distribution of income, universal health care coverage, and high access to information as important determinants of adaptive capacity. A universal-coverage health care system and a high level of access to information are judged to be equivalent to $12,000-$14,000 in per capita income. We use the estimated coefficients and country sociodemographics to construct an index of adaptive capacity for several countries. In panel-data regressions, this index is a good predictor of mortality in climatic disasters, even after controlling for other determinants of sensitivity and exposure, and for per capita income. We conclude that our conjoint choice questions provide a novel and promising approach to eliciting expert judgments in the climate change arena.

Economic Valuation of Oceanographic Forecasting Services: A Cost-Benefit Exercise

This paper provides an assessment of the economic value of the oceanographic services provided by the Mediterranean operational forecasting system, MFSTEP. The main purpose of this exploratory study is to carry out a cost-benefit analysis for different development scenarios, by comparing the costs associated with the project implementation with the private benefits that arise from delivering its products on the market. As far as the costs are concerned, a total cost assessment has been performed by identifying, classifying and estimating the wide range of inputs that have been allocated both to the project development and maintenance. Against this context, a cost questionnaire has been designed and administered to all MFSTEP partners. In addition, the study focuses on an end-users analysis in order to examine end-users’ attitudes and interests for the forecasting products, their needs and satisfaction. As before, we make the use of a survey. Finally, this questionnaire is characterized by exploring the use of the contingent valuation approach so as to address and estimate the private benefits derived from the provision of the MFSTEP products. Estimation results show that the mean willingness to pay for accessing the forecasting products amounts to 65 euro per download. Cost-benefit analysis reveals that, from a market perspective relying on the profit maximisation, a total of 163 downloads per day are required for total maintenance costs recovery, whereas 90 downloads per day are required to recover personnel maintenance costs. Finally, 33 downloads per day are required so as to recover durable equipment maintenance costs.Cost-Benefit Analysis, Contingent Valuation, Survey Design, Willingness to Pay, Cost Assessment, Observing and Modelling Oceanographic System

Classifying Ecosystem Services for Economic Valuation: The case of forest water services

Since the release of the Millennium Ecosystem Approach (MEA), the number of studies valuing ecosystem services has grown. As a consequence of this growing literature, different interpretations exist on the classification of services as derived from MEA, and several studies have argued that this may not be the most appropriate framework when the aim of the analysis is economic valuation. The present paper contributes to this debate by reviewing and comparing these critical views in order firstly to clarify the existing confusion in the terminology and interpretations; and secondly to shed some light on a desirable classification and conceptualization of ecosystem services for valuation. To illustrate this, we present an examination of existing primary valuation studies of water related services provided by tropical forests, which we analyze under the MEA classification framework and compare it with an output-based classification, in which the service is defined in terms of its benefits (outputs) to humans. Our results support the idea that an output-based classification should provide more accurate values and could help avoid certain problems such as double accounting and potential underestimation of services values.ecosystem services, Millennium Ecosystems Approach, water services, tropical forests

Discounting the value of natural resources in costbenefit analysis: a case study for policy making

4 p.The issue of discounting (i.e. how future cost and benefits are valued today) plays a major role in policies with long-term effects on the natural environment, such as those required in a climate change context, or decisions which might lead to environmental degradation and biodiversity losses with impacts on future generations. *The “equivalency principle” suggests the idea that two pieces of land, one developed and the other one undeveloped, should be given the same utility (and therefore economic value) by future generations, if they are identical in size, environmental, ecological and site-specific attributes. *In practical terms, the principle implies that the discount rate to be applied for projects with long-term environmental impacts on undeveloped land, should be calculated by assuming equal present value for both types of land (developed and undeveloped). *The case study carried out in the Basque Country supports the idea of using low discount rates for the projects mentioned above, sustaining, therefore, a policy action oriented towards the preservation of the environment. *If the environment and natural resources are to be sustainably managed, market discount rates should not be used to account for future environmental quality in any cost-benefit analysis

Paying for Permanence: Public Preferences for Contaminated Site Cleanup

We use conjoint choice questions to investigate people’s preferences for income and reductions in mortality risks delivered by contaminated site remediation policies. Our survey is self-administered using the computer by residents of four cities in Italy with severely contaminated sites. We estimate the Value of a Statistical Life to be about €5.6 million for an immediate risk reduction. If the risk reduction takes place 20 years from now, however, the implied VSL is about €1.26 million. The discount rate implicit in the responses to the conjoint choice questions is about 7%. People are willing to pay for permanent risk reductions, but not just any amount. Risk reductions in the nearer future are valued more highly than risk reductions in the more distant future. We also find that the VSL is “individuated,” in the sense that it depends on observable individual characteristics of the respondents, familiarity with contaminated sites, concern about the health effects of exposure to toxicants, having a family member with cancer, perceived usefulness of possible government actions, and the respondent’s beliefs about the goals of government remediation programs. Additional questions suggest that respondents discount lives, and do so at a discount rate in the ballpark of that implicit in their risk v. money tradeoffs.Value of a Statistical Life, Latent Risk Reductions, Individual Discount Rates, Conjoint Choice Questions, Contaminated Sites, Remediation

Public Policies for Contaminated Site Cleanup: The Opinions of the Italian Public

Cleaning up contaminated sites is one of the most important environmental policy priorities in many countries. Remediation of contaminated sites is attractive because it reduces risks to human health and ecological systems, and brings a host of potential social and economic benefits. Even when the burden of paying for cleanup is imposed on the parties that are responsible for the contaminated sites, in many countries government programs are established for enforcement purposes, to set cleanup standards, and to address contamination at those sites where the responsible parties are no longer in existence or do not have the means to pay for cleanup (“orphan” sites). This paper presents the results of a survey of the Italian public where we ask citizens to report their opinions about possible goals for such government programs and for cleanup. Our survey respondents are generally in favor of broad-based programs that protect the health of a diverse population—without restricting attention to cleanup beneficiaries in specific age groups or to specific exposure pathways. They also in favor of permanent remedies, even if they cost more, and of cleaning up sites even when the health risk reduction are experienced in the future, as is usually the case with carcinogenic contaminants.Public Policy, Contaminated Sites, Permanent Remedies, Protection of Health and Ecosystems at Contaminated Sites