Economics of the Environment

by Siebert, Horst

• ISBN13: 9783540737063
• ISBN10: 3540737065
• Edition: 7th
• Format: Hardcover
• Copyright: 2008-03-05
• Publisher: Springer Verlag

Summary

The book interprets nature and the environment as a scarce resource. It offers a theoretical study of the allocation problem and describes different policy approaches to the environmental problem. The entire spectrum of the allocation issue is studied: the use of the environment in a static context, international and trade aspects of environmental allocation, regional dimensions, global environmental media, environmental use over time and under uncertainty. The book incorporates a variety of economic approaches, including neoclassical analysis, the public-goods approach, benefit-cost analysis, property-rights ideas, economic policy and public-finance reasoning, international trade theory, regional science, optimization theory, and risk analysis. The different aspects of environmental allocation are studied in the context of a single model that is used through the book.

Table of Contents

Preface	p. V
List of Figures and Tables	p. XIII
Introduction	p. 1
The Problem	p. 3
Using the Environment - An Allocation Problem	p. 7
Externalities	p. 7
Relationship Between the Environment and the Economic System	p. 8
Material Flows Between the Environment and the Economic System	p. 12
Competing Uses	p. 13
Zero Price of Environmental Use	p. 16
Environmental Effects of Government Decisions	p. 18
How Much Environmental Quality?	p. 19
A Taxonomy of the Environmental Problem	p. 19
Input-Output Analysis and the Environment	p. 20
Applied General Equilibrium Models	p. 23
Static Allocation Aspect	p. 25
Production Theory and Transformation Space	p. 27
Production Theory	p. 27
Variables Affecting the Transformation Space	p. 33
An Alternative Approach of Production Theory	p. 36
Properties of the Transformation Space	p. 37
Transformation Space with Negative Productivity Effect	p. 41
Optimal Environmental Use	p. 43
Criteria for Optimality	p. 43
Optimization Problem	p. 45
A Shadow Price for Pollutants	p. 46
Implications for the Shadow-Price System of the Economy	p. 49
Optimum and Competitive Equilibrium	p. 50
Nonlinear Optimization	p. 54
Implications of the Allocation Problem	p. 55
Implications of the Profit Maximum	p. 56
Environmental Quality as a Public Good	p. 59
Characteristics of a Public Good	p. 59
Allocation of Public Goods	p. 62
Social-Welfare Function	p. 63
Benefit-Cost Analysis	p. 65
Costs of Environmental Quality	p. 66
Evaluation of Environmental Quality	p. 70
Individual Preferences and the Pareto-Optimal Provision of Environmental Quality	p. 74
Thesis of Market Failure	p. 77
Lindahl Solution	p. 77
Mechanisms of Social Choice	p. 84
Ethical Aspects of Environmental Evaluation	p. 91
An Example: Ambient Quality Standards	p. 95
Property-Rights Approach to the Environmental Problem	p. 97
Property-Rights Approach	p. 97
Property Rights and Environmental Allocation	p. 98
Coase Theorem	p. 99
Coase Theorem and Transaction Costs	p. 101
Can Property Rights Be Specified?	p. 102
Environmental-Policy Instruments	p. 105
Incidence of an Emission Tax	p. 107
Standard-Price Approach	p. 107
Reaction of Producers	p. 109
Emission Taxes in Monopoly	p. 110
General Equilibrium Approach	p. 111
Allocation in a General Equilibrium Model	p. 114
Pollution Intensities, Factor Intensities, and Allocation Effects	p. 118
Overshooting of the Emission Tax	p. 120
Is there a Double Dividend of Emission Taxes?	p. 120
Instruments in a Second-Best Setting	p. 124
Reaction of the Individual Firm	p. 124
General Equilibrium Model	p. 124
Policy Instruments	p. 127
Transforming Quality Targets into Individual Behavior	p. 127
The Principal-Agent Problem	p. 128
Available Policy Instruments	p. 129
Criteria for Evaluating Instruments	p. 130
Moral Suasion	p. 131
Government Financing and Subsidies	p. 132
Regulatory Approach	p. 132
Voluntary Agreements	p. 136
Emission Taxes	p. 136
Pollution Licenses	p. 140
The Bubble Concept	p. 145
Success of Emission Trading	p. 147
Institutional Arrangements for Cost Sharing	p. 148
Combining Standards and an Emission Tax	p. 150
Liability	p. 150
Policy Instruments and the Casuistics of Pollution	p. 153
Solid Waste	p. 153
Optimal Waste Reduction	p. 155
Establishing Scarcity Prices for Waste with Collection Costs	p. 157
Waste Management and Spatial Structure	p. 157
Closed Substance Cycle and Product Responsibility	p. 158
The German System of Waste Management	p. 158
Emissions from Mobile Sources	p. 160
Accidental Emissions	p. 161
Vintage Damages	p. 161
Pollutants in Consumption Goods	p. 161
Pollutants in New Products	p. 162
Externalities in Land Use	p. 162
The Political Economy of Environmental Scarcity	p. 163
The Opportunity Cost Principle	p. 163
The Polluter-Pays Principle	p. 164
The Pollutee-Pays Principle	p. 166
The Precautionary Principle	p. 166
The Principle of Interdependence	p. 167
Major Environmental Legislation	p. 168
Environmental Allocation in Space	p. 171
Environmental Endowment, Competitiveness and Trade	p. 173
Environmental Systems in Space	p. 173
Environmental Endowment	p. 174
National Environmental Policy and Comparative Advantage	p. 175
Environmental Policy and Trade Flows	p. 177
Environmental Policy, Imperfect Competition and Trade	p. 179
Location Advantage	p. 180
International Specialization and Environmental Quality	p. 180
The Equalization of Prices for Emissions	p. 181
Environmental Policy and Gains from Trade	p. 182
Environmental Pollution: A Race to the Bottom?	p. 183
Empirical Studies of the Impact of Environmental Policy on Trade	p. 184
Trade Policy as a Means for Environmental Protection?	p. 185
Environmental Concerns - A Pretext for Protection	p. 187
Environmental Policy and World Trade Order	p. 187
Trade Policy to Solve Transfrontier and Global Pollution Problems?	p. 190
Elements of a Multilateral Environmental Order	p. 192
Environmental Policy in the Single Market	p. 193
Transfrontier Pollution	p. 195
Transfrontier Diffusion Function Versus International Public Good	p. 195
Distortions from Transfrontier Pollution	p. 196
The Noncooperative Solution to Transfrontier Pollution	p. 196
The Cooperative Solution to Transfrontier Pollution	p. 200
Side Payments	p. 201
The Bargaining Approach to Transfrontier Pollution	p. 203
Policy Instruments for Transfrontier Pollution	p. 204
Positive International Spillovers: The Equatorial Rain Forest	p. 206
Biodiversity	p. 206
Global Environmental Media	p. 209
Global Warming	p. 209
The Noncooperative Solution to Global Media	p. 210
Side Payments and Global Goods	p. 215
Controlling the Free Rider	p. 216
Sanctions	p. 216
Self-enforcing Contracts	p. 217
Coalitions	p. 217
The Unilateral First Mover	p. 218
Uniform Reduction	p. 219
A Workable System of Transferable Discharge Permits	p. 219
Reneging the Contract	p. 220
An International Order for the Global Environment	p. 221
The Kyoto Protocol and Beyond	p. 223
EU Emission Trading	p. 226
Regional Aspects of Environmental Allocation	p. 229
The Problem	p. 229
Spatial-Allocation Model	p. 232
Regional Implications of a National Environmental Policy	p. 233
Regional Differentiation of the Emission Tax	p. 233
Location Advantage	p. 235
Diagrammatic Explanations	p. 236
Resource Mobility and Adjustment of Emission Taxes	p. 239
Differences in Environmental Quality	p. 240
Siting Issues and the National Interest	p. 241
Regional Versus National Authorities	p. 241
Some Restraints on Regional Authorities	p. 243
Regional Autonomy and Environmental Media	p. 244
Environmental Equity and Specialization of Space	p. 245
Environmental Policy and Regional Planning	p. 246
A Regional Allocation Model	p. 247
Environmental Allocation in Time and Under Uncertainty	p. 249
Long-Term Aspects of Environmental Quality	p. 251
The Problem	p. 251
Dynamic Model	p. 253
Implications	p. 253
Three Strategies for Dynamic Environmental Use	p. 255
Social Discount Rate and Environmental Allocation	p. 259
Further Determining Factors of the Shadow Price of Emissions	p. 260
Control Theory	p. 262
A Dynamic Allocation Model	p. 265
Economic Growth, Sustainability, and Environmental Quality	p. 267
Interdependencies Between Environmental Quality, Growth, and Resources	p. 267
Growth and Environmental Degradation	p. 268
The Survival Issue	p. 274
Environmental Quality as a Normative Restriction for Growth	p. 274
Optimal Growth	p. 276
Growth with Finite Resources	p. 276
Weak or Strong Substitutability	p. 277
Growth with Human Capital	p. 277
Endogenous Growth	p. 277
Sustainable Development	p. 278
Zero Economic Growth	p. 281
An Optimistic Note: The Environmental Kuznets Curve	p. 283
Risk and Environmental Allocation	p. 285
Environmental Risks	p. 285
Risk and Environmental Quality	p. 287
A Simple Static Model	p. 289
Risk in an Intertemporal Context	p. 290
Preventive Environmental Policy	p. 292
Irreversibilities and Option Values	p. 293
Allocating Environmental Risks?	p. 294
Risk Reduction	p. 295
Allocating the Costs of Risk Reduction	p. 295
The Response of the Polluter Under Uncertainty	p. 297
About the Author	p. 299
Bibliography	p. 301
Subject Index	p. 329
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