Co-optimization of Enhanced Oil Recovery and Carbon Sequestration

In this paper, we present what is to our knowledge the first theoretical economic analysis of CO2- enhanced oil recovery (EOR). This technique, which has been used successfully in a number of oil plays (notably in West Texas, Wyoming, and Saskatchewan), entails injection of CO2 into mature oil fields in a manner that reduces the oil's viscosity, thereby enhancing the rate of extraction. As part of this process, significant quantities of CO2 remain sequestered in the reservoir. If CO2 emissions are regulated, oil producers using EOR should therefore be able to earn sequestration credits in addition to oil revenues. We develop a theoretical framework that analyzes the dynamic co-optimization of oil extraction and CO2 sequestration, through the producer's choice at each point in time of an optimal CO2 fraction in the injection stream (the control variable). We find that the optimal fraction is likely to decline monotonically over time, and reach zero before the optimal termination time. Numerical simulations, based on an ongoing EOR project in Wyoming, confirm this result. They show also that cumulative sequestration is positively related to the oil price, and is in fact much more responsive to oil-price increases than to increases in the carbon tax. Only at very high taxes does a tradeoff between oil output and sequestration arise.

Who collect resources in degraded environment? : a case study from Jhabua District, India

no. 23-07This paper examines the impact of the variation in stocks of three resources, namely, water, forests and fodder biomass, on resource collection time of rural households in India, especially women. Using household level data from 543 households across 60 villages in the Jhabua district of Madhya Pradesh, we estimate reduced form gender-specific time allocation equations derived from a household production model. An increase in groundwater scarcity makes women and children spend more time in water collection. An increase in the total iomass availability in the commons increases the time spent by men and women in grazing activity in addition to making men and women more likely to go for fuelwood collection. The results taken together indicate significant time impacts of natural resource scarcity. Our analysis has important implications for natural resource management initiatives such as community forestry and watershed development programmes, and these programmes have the potential to alleviate poverty by affecting the time allocation decisions of rural households, particularly women. This paper also tries to understand some of the trends emerging from the quantitative/econometric analysis using insights from social anthropology

Poverty and the Environment: Exploring the Relationship between Household Incomes, Private Assets, and Natural Assets

The paper is a study of the relationship between poverty and environment by using a purpose-collected survey data from 535 households in 60 different villages of the Jhabua district of India. The methodology of the study and its finding and derived conclusions are mentioned in the paper.India, Madhya Pradesh, poverty, environment, common-pool natural resources, rural households

On strategic ignorance of environmental harm and social norms

Are people strategically ignorant of the negative externalities their activities cause the environment? Herein we examine if people avoid costless information on those externalities and use ignorance as an excuse to reduce pro-environmental behavior. We develop a theoretical framework in which people feel internal pressure ("guilt") from causing harm-to the environment (e.g., emitting carbon dioxide) as well as external pressure to conform to the social norm for pro-environmental behavior (e.g., offsetting carbon emissions). Our model predicts that people may benefit from avoiding information on their harm to the environment, and that they use ignorance as an excuse to engage in less pro-environmental behavior. It also predicts that the cost of ignorance increases if people can learn about the social norm from the information. We test the model predictions empirically using an experiment combined with a stated-preference survey involving a hypothetical long-distance flight and an option to buy offsets for the flight's carbon footprint. More than half (53 percent) of the subjects choose to ignore information on the carbon footprint alone before deciding their offset purchase, but ignorance significantly decreases (to 29 percent) when the information additionally reveals the share of air travelers who buy carbon offsets. We find evidence that some people use ignorance as an excuse to reduce pro-environmental behavior-ignorance significantly decreases the probability of buying carbon offsets

Political-economic processes and collective decision making

agricultural policies, decision-making, economic policy, game theory, political preference function, ppf