Climate Change and Its Socioeconomic Importance

Climate change has played an increasingly key role in recent years and is now one of the leading political priorities worldwide. This article illustrates the scope of the problem, its causes and its impacts, along with the possible solutions that are being considered on the international stage. The existing information regarding these topics is summarised, together with the associated costs and the scale of the effort required to tackle climate change. The article explains why climate change can be seen as a market failure, the importance of public policies to correct this problem and its impact on international trade. The last section considers the international debate taking place in the United Nations Conferences and the Kyoto Protocol as well as what is expected with respect to the future post-Kyoto negotiations.Climate change, policy

Economic techniques to estimate the demand for sustainable products: a case study for fair trade and organic coffee in the United Kingdom

The hedonic approach is used in this paper to estimate how much is paid for the fair trade/organic characteristic of the coffee in the British market. This information is later combined with the Quantity Based Demand System (QBDS) model -developed by the authors- and the Almost Ideal Demand System (AIDS) (Deaton and Muellbauer, 1980) to completely determine the demand function for different coffees. The QBDS model is easier to handle and less data demanding than the AIDS model in this study. Resumen El presente artículo se basa en la utilización del método hedónico para la estimación de la cantidad que se paga por la característica de "Orgánico/Comercio Justo" del café en el mercado británico. La información obtenida se combina después con el modelo Sistema de Demanda Basado en Cantidades (QBDS) - desarrollado por los autores- y el Sistema de Demanda Casi Ideal (AIDS) (Deaton and Muellbauer, 1980) para determinar por completo la función de demanda de los diferentes tipos de café. El modelo QBDS es más sencillo en su utilización y necesita de menos datos que el modelo AIDS. Palabras clave: sistemas de demanda, método hedónico, demanda de café, etiquetadodemand systems, hedonic method, coffee demand, labelling, C13, C21, D12,

Climate Change and Its Socioeconomic Importance

25 p.Climate change has played an increasingly key role in recent years and is now one of the leading political priorities worldwide. This article illustrates the scope of the problem, its causes and its impacts, along with the possible solutions that are being considered on the international stage. The existing information regarding these topics is summarised, together with the associated costs and the scale of the effort required to tackle climate change. The article explains why climate change can be seen as a market failure, the importance of public policies to correct this problem and its impact on international trade. The last section considers the international debate taking place in the United Nations Conferences and the Kyoto Protocol as well as what is expected with respect to the future post-Kyoto negotiations

Economic Evaluation of Energy Efficiency Labelling in Domestic Appliances: the Spanish Market

30 p.This paper estimates the economic value that consumers place on energy efficiency (EE) labels for appliances in the Spanish market. It uses the hedonic method to calculate the price premium paid in the market for that attribute isolated from others. Furthermore, the Quantity Based Demand System (QBDS) is applied to calculate the own and cross price elasticities of demand for both EE appliances and others. These elasticities are useful for improving the design of policies to promote EE. The paper looks at three different appliances marketed in Spain during 2012: washing machines, fridges and dishwashers

Engaging the Public with Science in the Basque Country: On scientists’ experiences and perspectives

4 p.Public participation in the development of science and technology is key in modern societies, and scientists’ understanding of their responsibility and agency within this practice is still underexplored. - Face-to-face forms of science communication are the most commonly reported. - Scientists see science communication as a social responsibility, and they feel responsible to carry it out well. - Scientists describe successful science communication as that which, primarily, brings something positive to its audiences. - Learning about the audience, communicating science-in-the-making, and collaborating with other disciplines (i.e. artists), are seen as the most critical factors for successful science communication

The Role of Regions in Climate Change Policy

Climate change is one of the greatest challenges facing human kind. Urgent policy action is needed. Climate change policies are mainly being discussed at international level by means of the United Nations Conventions and the Kyoto Protocol. However, the bulk of the impact will be felt at regional and local level. And these levels of governance hold many of the competences for implementing policy actions. Regional governments are important agents and should, therefore, be incorporated into the negotiation rounds so that their voices can be heard. This paper illustrates the important role of regions in climate policies and considers many of the policy instruments being designed and implemented. More than 20 major regions are showcased here. Finally, the case of Basque climate policy is described to shed some light as to what regions could do.Climate change, regional policy

Carbon leakage and the future of Old Industrial Regions after Copenhagen

CO2 prices will continue to differ from one country to another for a long time, even if a global post-Kyoto agreement is achieved in the near future. The non-homogeneous nature of climate policies may decrease the competitiveness of some industries with the risk of relocation of activities due to carbon leakage. One of most exposed industries in Europe is iron and steel, as it is highly CO2-intensive and relatively open to international trade. Most studies estimate a leakage of up to 20% as a consequence of all the industrial production activities that are expected to be relocated, and a level of relocation ranging from 1.5% to 35% specifically for the iron and steel sector. This might seem a relatively small macroeconomic impact if measured at country or EU level. However, the picture may be quite different if the analysis is conducted at sub-national level. Therefore, one could argue that there is an important gap in the literature as the relevant studies are applied to a large geographical scale when the fact is that in Europe this industry is highly concentrated in certain specific regions, i.e. the so-called Old Industrial Regions (OIR). This paper seeks to analyse the impact that different levels of relocation of the iron and steel industry in the OIRs will have as a consequence of climate policy. This is done using an AGE (Applied General Equilibrium) model. The results show that although these effects may be diluted from a national perspective, the impact for incumbent regions may be very large, and may in fact significantly reduce their GDPs. Another important outcome emerges when the costs of CO2 reduction derived from industry relocation and from cost-effective policies are compared. Although relocation of industrial activity (i.e. forced output change) can reduce CO2, the cost is very high compared with other options (e.g. induced input substitution). These results can help national and regional policy makers understand the necessary linkages between their environmental and industrial policies.Climate Policy, Regional Economics 

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

The Equivalency Principle for Discounting the Value of Natural Assets: An Application to an Investment Project in the Basque Coast

Making decisions about optimal investments in green infrastructure necessitates setting social discount rates. This paper suggests a practical way for determining the discount rate for projects or programmes in which one of the options is to maintain or improve land in its natural state. We propose an “equivalency principle†to derive a simple rule that sets the discount rate. The rule is based on the premise that the long term value of a naturally preserved land track ought to be at least the same as the value of an identical land track in the vicinity to which permission has been granted for development. We illustrate this principle with various case studies and we apply it to a contentious investment project in the Basque Country associated with the regeneration of a large scale harbour in the province of Gipuzkoa (North of Spain) that involves reclaiming natural land that has important ecological value, including for the conservation of a marine ecosystem.Economic valuation, discounting, equivalency principle, Basque Country