Economics of the Environment : Theory and Policy

by Siebert, Horst

• ISBN13: 9783540220619
• ISBN10: 3540220615
• Edition: 6th
• Format: Hardcover
• Copyright: 2004-11-30
• 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, the regional dimension, environmental use over time and under uncertainty. The book incorporates a variety of economic approaches, including neoclassical analysis, the public goods approach and optimization theory. The different aspects of environmental allocation are studied in the context of a model that is used throughout the book. The sixth edition has been enlarged and revised to integrate recent literature. Among others, new sections have been added on ethical aspects of environmental evaluation, pollution and endogenous growth, the implementation of the Kyoto Protocol, international and European Union emission trading and biodiversity.

Table of Contents

Preface
List of Figures and Tables
Part I Introduction	1	(24)
Chapter 1 The Problem	3	(4)
Chapter 2 Using the Environment - An Allocation Problem	7	(18)
Externalities	7	(1)
Relationship between the Environment and the Economic System	8	(4)
Material Flows between the Environment and the Economic System	12	(1)
Competing Uses	13	(3)
Zero Price of Environmental Use	16	(2)
Environmental Effects of Government Decisions	18	(1)
How Much Environmental Quality?	19	(1)
A Taxonomy of the Environmental Problem	19	(1)
Appendix 2A: Input-Output Analysis and the Environment	20	(3)
Appendix 2B: Applied General Equilibrium Models	23	(2)
Part II Static Allocation Aspect	25	(80)
Chapter 3 Production Theory and Transformation Space	27	(16)
Production Theory	27	(3)
Transformation Space with Environmental Quality	30	(3)
Variables Affecting the Transformation Space	33	(3)
An Alternative Approach of Production Theory	36	(1)
Appendix 3A: Properties of the Transformation Space	37	(4)
Appendix 3B: Transformation Space with Negative Productivity Effect	41	(2)
Chapter 4 Optimal Environmental Use	43	(16)
Criteria for Optimality	43	(2)
Optimization Problem	45	(1)
A Shadow Price for Pollutants	46	(3)
Implications for the Shadow-Price System of the Economy	49	(1)
Optimum and Competitive Equilibrium	50	(3)
Requirements for an Emission-Tax Solution	53	(1)
Appendix 4A: Nonlinear Optimization	54	(1)
Appendix 4B: Implications of the Allocation Problem	55	(1)
Appendix 4C: Implications of the Profit Maximum	56	(3)
Chapter 5 Environmental Quality as a Public Good	59	(38)
Characteristics of a Public Good	59	(3)
Allocation of Public Goods	62	(1)
Social-Welfare Function	63	(2)
Benefit-Cost Analysis	65	(1)
Costs of Environmental Quality	66	(4)
Evaluation of Environmental Quality	70	(4)
Individual Preferences and the Pareto-Optimal Provision of Environmental Quality	74	(3)
Thesis of Market Failure	77	(1)
Lindahl Solution	77	(7)
Mechanisms of Social Choice	84	(7)
Ethical Aspects of Environmental Evaluation	91	(4)
An Example: Ambient Quality Standards	95	(2)
Chapter 6 Property-Rights Approach to the Environmental Problem	97	(8)
Property-Rights Approach	97	(1)
Property Rights and Environmental Allocation	98	(1)
Coase Theorem	99	(2)
Coase Theorem and Transaction Costs	101	(1)
Can Property Rights Be Specified?	102	(3)
Part III Environmental-Policy Instruments	105	(66)
Chapter 7 Incidence of an Emission Tax	107	(20)
Standard-Price Approach	107	(2)
Reaction of Producers	109	(1)
Emission Taxes in Monopoly	110	(1)
General Equilibrium Approach	111	(3)
Allocation in a General Equilibrium Model	114	(4)
Pollution Intensities, Factor Intensities, and Allocation Effects	118	(2)
Overshooting of the Emission Tax	120	(1)
Is there a Double Dividend of Emission Taxes?	120	(4)
Appendix 7A: Reaction of the Individual Firm	124	(1)
Appendix 7B: General Equilibrium Model	124	(3)
Chapter 8 Policy Instruments	127	(26)
Transforming Quality Targets into Individual Behavior	127	(1)
The Principal-Agent Problem	128	(1)
Available Policy Instruments	129	(1)
Criteria for Evaluating Instruments	130	(1)
Moral Suasion	131	(1)
Government Financing and Subsidies	132	(1)
Regulatory Approach	132	(4)
Voluntary Agreements	136	(1)
Emission Taxes	136	(4)
Pollution Licenses	140	(5)
The Bubble Concept	145	(2)
Success of Emission Trading	147	(1)
Institutional Arrangements for Cost Sharing	148	(2)
Combining Standards and an Emission Tax	150	(1)
Liability	150	(3)
Chapter 9 Policy Instruments and the Casuistics of Pollution	153	(10)
Solid Waste	153	(2)
Optimal Waste Reduction	155	(2)
Establishing Scarcity Prices for Waste with Collection Costs	157	(1)
Waste Management and Spatial Structure	157	(1)
Closed Substance Cycle and Product Responsibility	158	(1)
The German System of Waste Management	158	(2)
Emissions from Mobile Sources	160	(1)
Accidental Emissions	161	(1)
Vintage Damages	161	(1)
Pollutants in Consumption Goods	161	(1)
Pollutants in New Products	162	(1)
Externalities in Land Use	162	(1)
Chapter 10 The Political Economy of Environmental Scarcity	163	(8)
The Opportunity Cost Principle	163	(1)
The Polluter-Pays Principle	164	(2)
The Pollutee-Pays Principle	166	(1)
The Precautionary Principle	166	(1)
The Principle of Interdependence	167	(1)
Major Environmental Legislation	168	(3)
Part IV Environmental Allocation in Space	171	(124)
Chapter 11 Environmental Endowment, Competitiveness and Trade	173	(22)
Environmental Systems in Space	173	(1)
Environmental Endowment	174	(1)
National Environmental Policy and Comparative Advantage	175	(2)
Environmental Policy and Trade Flows	177	(2)
Environmental Policy, Imperfect Competition and Trade	179	(1)
Location Advantage	180	(1)
International Specialization and Environmental Quality	180	(1)
The Equalization of Prices for Emissions	181	(1)
Environmental Policy and Gains from Trade	182	(1)
Environmental Pollution: A race to the Bottom?	183	(1)
Empirical Studies of the Impact of Environmental Policy and Trade	184	(1)
Trade Policy as a Means for Environmental Protection?	185	(1)
Environmental Concerns - A Pretext for Protection	186	(1)
Environmental Policy and World Trade Order	187	(3)
Trade Policy to Solve Transfrontier and Global Pollution Problems?	190	(1)
Elements of a Multilateral Environmental Order	190	(2)
Environmental Policy in the Single Market	192	(3)
Chapter 12 Transfrontier Pollution	195	(14)
Transfrontier Diffusion Function versus International Public Good	195	(1)
Distortions from Transfrontier Pollution	196	(1)
The Noncooperative Solution to Transfrontier Pollution	196	(4)
The Cooperative Solution to Transfrontier Pollution	200	(1)
Side Payments	201	(2)
The Bargaining Approach to Transfrontier Pollution	203	(1)
Policy Instruments for Transfrontier Pollution	204	(2)
Positive International Spillovers: The Equatorial Rain Forest	206	(1)
Biodiversity	206	(3)
Chapter 13 Global Environmental Media	209	(16)
The Noncooperative Solution to Global Media	209	(2)
The Cooperative Solution to Global Media	211	(3)
Side Payments and Global Goods	214	(1)
Controlling the Free Rider	215	(1)
Coalitions	216	(1)
The Unilateral First Mover	217	(1)
Uniform Reduction	217	(1)
A Workable System of Transferable Discharge Permits	217	(1)
Reneging the Contract	218	(1)
An International Order for the Global Environment	219	(3)
Implementing the Kyoto Protocol	222	(1)
EU Emission Trading	223	(2)
Chapter 14 Regional Aspects of Environmental Allocation	225	(22)
The Problem	225	(3)
Spatial-Allocation Model	228	(1)
Regional Implications of a National Environmental Policy	229	(1)
Regional Differentiation of the Emission Tax	229	(2)
Location Advantage	231	(1)
Diagrammatic Explanations	232	(3)
Resource Mobility and Adjustment of Emission Taxes	235	(1)
Differences in Environmental Quality	236	(1)
Siting Issues and the National Interest	237	(1)
Regional versus National Authorities	237	(2)
Some Restraints on Regional Authorities	239	(1)
Regional Autonomy and Environmental Media	240	(1)
Environmental Equity and Specialization of Space	241	(1)
Environmental Policy and Regional Planning	242	(1)
Appendix 14A: A Regional Allocation Model	243	(2)
Part V Environmental Allocation in Time and under Uncertainty	245	(2)
Chapter 15 Long-Term Aspects of Environmental Quality	247	(16)
The Problem	247	(2)
Dynamic Model	249	(1)
Implications	249	(2)
Three Strategies for Dynamic Environmental Use	251	(4)
Social Discount Rate and Environmental Allocation	255	(1)
Further Determining Factors of the Shadow Price of Emissions	256	(2)
Appendix 15A: Control Theory	258	(3)
Appendix 15B: A Dynamic Allocation Model	261	(2)
Chapter 16 Economic Growth, Sustainability and Environmental Quality	263	(18)
Interdependencies between Environmental Quality, Growth, and Resources	263	(1)
Growth and Environmental Degradation	264	(6)
The Survival Issue	270	(1)
Environmental Quality as a Normative Restriction for Growth	270	(2)
Optimal Growth	272	(1)
Growth with Finite Resources	272	(1)
Weak or Strong Substitutability	272	(1)
Growth with Human Capital	273	(1)
Endogenous Growth	273	(1)
Sustainable Development	274	(3)
Zero Economic Growth	277	(2)
An Optimistic Note: The Environmental Kuznets Curve	279	(2)
Chapter 17 Risk and Environmental Allocation	281	(14)
Environmental Risks	281	(2)
Risk and Environmental Quality	283	(2)
A Simple Static Model	285	(1)
Risk in an Intertemporal Context	286	(2)
Preventive Environmental Policy	288	(1)
Irreversibilities and Option Values	289	(1)
Allocating Environmental Risks?	290	(1)
Risk Reduction	291	(1)
Allocating the Costs of Risk Reduction	291	(2)
The Response of the Polluter under Uncertainty	293	(2)
About the Author	295	(2)
Bibliography	297	(24)
Subject Index	321