Handbook of Environmental Economics

by Maler; Vincent

• ISBN13: 9780444511461
• ISBN10: 0444511466
• Format: Hardcover
• Copyright: 2005-12-21
• Publisher: Elsevier Science

Summary

Many of the frontiers of environmental economics research are at the interface of large-scale and long-term environmental change with national and global economic systems. This is also where some of the most of challenging environmental policy issues occur. Volume 3 of the Handbook of Environmental Economics provides a synthesis of the latest theory on economywide and international environmental issues and a critical review of models for analyzing those issues. It begins with chapters on the fundamental relationships that connect environmental resources to economic growth and long-run social welfare. The following chapters consider how environmental policy differs in a general-equiIibrium setting from a partial-equilibrium setting and in a distorted economy from a perfect economy. The volume closes with chapters on environmental issues that cross or transcend national borders, such as trade and the environment, biodiversity conservation, acid rain, ozone depletion, and global climate change. The volume provides a useful reference for not only natural resource and environmental economists but also international economists, development economists, and macroeconomists.

Table of Contents

Introduction to the Series	v
Contents of the Handbook	vii
Dedication	xi
Preface of the Handbook	xiii
Intertemporal Welfare Economics and the Environment	1105	(42)
Geoffrey Heal
Abstract	1106	(1)
Keywords	1106	(1)
Fundamental dilemmas of dynamic welfare economics	1107	(3)
Dynamic utilitarianism	1110	(5)
Koopmans' axioms	1110	(4)
Harsanyi's axioms	1114	(1)
Utilitarianism -- a summary	1114	(1)
Overtaking	1115	(2)
Limiting payoffs	1117	(1)
Chichilnisky's criterion	1117	(4)
Comparison with overtaking	1120	(1)
The Rawlsian criterion	1121	(1)
Discounting utility or consumption?	1121	(3)
Empirical evidence	1124	(2)
Logarithmic discounting and the Weber--Fechner law	1124	(2)
Constancy of discount rates in normative models	1126	(1)
Final comments on utilitarianism et al.	1126	(1)
Implications for the choice of growth paths	1127	(11)
Stationary solutions	1128	(2)
Dynamic behavior	1130	(1)
Renewable resources and the Green Golden Rule	1131	(1)
The Rawlsian solution	1132	(1)
Chichilnisky's criterion	1132	(4)
Time consistency	1136	(2)
Conclusions on models and objectives	1138	(1)
Conclusions on the choice of a discount rate	1138	(9)
References	1143	(4)
National Income and the Environment	1147	(72)
Geoffrey Heal
Bengt Kristrom
Abstract	1148	(1)
Keywords	1149	(1)
Introduction	1150	(3)
Outline	1152	(1)
Historical background	1153	(1)
The Keynesian imperative and Lindahl's alternative	1154	(4)
The accounts of the nation	1155	(2)
Lindahl's system	1157	(1)
Welfare interpretations of income and wealth	1158	(7)
Sustainable income: a graphical approach	1159	(1)
Sustainable income and the ideas of Fisher, Lindahl and Hicks	1160	(1)
Sustainable income and the Hamiltonian	1161	(1)
Income and welfare -- the separating hyperplane approach	1162	(2)
Taking stock	1164	(1)
A general dynamic model	1165	(2)
Measures of income and the Hamiltonian	1167	(1)
Hicksian income and the Hamiltonian	1167	(1)
National wealth	1168	(6)
Illustration	1171	(3)
Income, wealth and NNP	1174	(1)
Applications and extensions	1175	(7)
Economic growth	1176	(1)
Defensive expenditures	1176	(1)
Non-autonomous Hamiltonians	1177	(1)
Non-utilitarian optima	1178	(2)
Sustainable revenues and national income	1180	(2)
Theoretical issues -- taking stock	1182	(1)
Issues in the construction of a green national product	1183	(10)
Valuation of ecological services	1183	(3)
Valuation of stocks	1186	(4)
Transboundary pollution	1190	(1)
A small open economy	1191	(2)
Expanded social accounting matrices	1193	(1)
Developments in applied green accounting	1194	(3)
The Nordhaus-Tobin measure of economic welfare (MEW)	1194	(1)
Norwegian resource accounts	1195	(1)
Other developments	1196	(1)
Selected applications	1197	(14)
The SEEA	1198	(6)
Sweden	1204	(2)
Indonesia	1206	(2)
Malaysia	1208	(1)
The Philippines	1208	(1)
Genuine savings	1209	(2)
Conclusions	1211	(8)
Acknowledgements	1212	(1)
References	1212	(7)
Economic Growth and the Environment	1219	(54)
Anastasios Xepapadeas
Abstract	1220	(1)
Keywords	1220	(1)
Introduction	1221	(2)
Modelling environmental pollution	1223	(3)
Growth and the environment when the savings ratio is fixed	1226	(7)
Environmental pollution in the Solow model	1226	(7)
Optimal growth and environmental pollution	1233	(12)
The Ramsey--Cass--Koopmans model with environmental pollution	1233	(5)
Optimal emission taxes	1238	(1)
Optimal growth with abatement	1238	(3)
Nonlinear pollution accumulation with optimal emission choice	1241	(2)
Discounting	1243	(2)
Growth and the environment when technical change is endogenous	1245	(7)
AK models and models with increasing returns	1246	(3)
Two-sector models	1249	(1)
Models with product variety	1250	(2)
Empirical evidence	1252	(10)
The environmental Kuznets curve	1253	(7)
Growth, competitiveness and environmental regulation	1260	(1)
Growth accounting and the environment	1260	(2)
Summary and conclusions	1262	(11)
Acknowledgements	1265	(1)
References	1266	(7)
CGE Modeling of Environmental Policy and Resource Management	1273	(34)
Lars Bergman
Abstract	1274	(1)
Keywords	1274	(1)
Introduction	1275	(1)
What is a CGE model -- and what is it good for?	1276	(3)
Categories of CGE models	1276	(1)
CGE models and environmental policy analysis	1277	(1)
What are CGE models good for?	1278	(1)
The history of CGE modeling	1279	(4)
Leif Johansen and the MSG model	1279	(1)
Herber Scarf and Scarf's algorithm	1280	(1)
Dale W. Jorgenson and econometric general equilibrium modeling	1281	(1)
Computers and software	1281	(1)
Environmental CGE modeling	1282	(1)
Some general issues in environmental CGE modeling	1283	(8)
Production sectors	1284	(1)
Production functions	1285	(1)
Emissions and abatement	1286	(1)
Technological change	1287	(1)
Environmental benefits	1288	(1)
International trade in CGE models	1289	(2)
Global ``externality'' CGE models	1291	(4)
The models	1291	(2)
The ``leakage'' issue	1293	(1)
Concluding remarks	1294	(1)
Regional multi-country ``externality'' CGE models	1295	(2)
The models	1295	(1)
Specific features and problems	1296	(1)
Single-country ``externality'' CGE models	1297	(3)
The double dividend issue	1299	(1)
CGE models of resource depletion and management	1300	(1)
Concluding remarks	1301	(6)
Acknowledgements	1302	(1)
References	1302	(5)
Calculating the Costs of Environmental Regulation	1307	(46)
William A. Pizer
Raymond Kopp
Abstract	1308	(1)
Keywords	1308	(1)
Introduction	1309	(2)
Environmental protection costs and consequences: partial equilibrium	1311	(8)
Direct compliance costs	1311	(3)
Indirect costs and revealed cost measures	1314	(2)
Negative costs?	1316	(1)
Government expenditures on environmental protection	1316	(1)
Household regulation	1317	(1)
Uncertainty	1318	(1)
Discounting	1318	(1)
General equilibrium effects	1319	(17)
An example	1321	(6)
Extended market analysis	1327	(1)
Approximating losses in other markets	1327	(2)
General equilibrium analysis	1329	(2)
Numerical analysis	1331	(1)
Environmental policy versus public good provision	1332	(1)
The double dividend	1333	(1)
Dynamic general equilibrium analysis	1334	(2)
Other ``costs'' in general equilibrium models	1336	(1)
Distribution of costs	1336	(6)
Impacts by household	1337	(1)
Households, general equilibrium, and social welfare	1338	(1)
Multicountry analysis	1339	(1)
Impacts by sector	1339	(2)
Impacts by region	1341	(1)
Intergenerational issues	1342	(1)
Conclusions	1342	(11)
Acknowledgements	1344	(1)
References	1344	(9)
Environmental Implications of Non-environmental Policies	1353	(50)
Anil Markandya
Abstract	1354	(1)
Keywords	1355	(1)
Background	1356	(6)
A simple model	1357	(3)
Policy failures	1360	(1)
Plan of the chapter	1361	(1)
Subsidies and related interventions outside the energy sector	1362	(7)
Agricultural subsidies	1363	(1)
Transport subsidies	1364	(1)
Trade policies	1364	(3)
Privatization/deregulation	1367	(2)
Public infrastructure investment	1369	(1)
Fossil fuel energy subsidies	1369	(8)
Economic impacts of energy subsidies	1370	(3)
Environmental impacts of energy subsidies	1373	(3)
Why do energy subsidies exist and what alternatives do we have?	1376	(1)
Simultaneous reductions in energy subsidies and other taxes	1377	(2)
Fiscal policy and the double dividend debate: theory	1379	(11)
Gross welfare double dividend vs. employment double dividend	1379	(1)
Weak vs. strong dividends	1380	(3)
The employment double dividend: the case with involuntary unemployment	1383	(3)
The employment double dividend: the case without involuntary unemployment	1386	(2)
Conclusions from the theoretical double dividend literature	1388	(2)
Empirical evidence on the employment double dividend	1390	(7)
Key aspects of the empirical models	1390	(2)
Analysis of the impacts of the 1992 EU energy tax proposal	1392	(2)
Sensitivity analysis	1394	(2)
Conclusions on the empirical evidence on the employment double dividend	1396	(1)
Conclusions	1397	(6)
Acknowledgements	1398	(1)
References	1399	(4)
International Trade, Foreign Investment, and the Environment	1403	(54)
Michael Rauscher
Abstract	1404	(1)
Keywords	1405	(1)
Introduction	1406	(2)
Environmental regulation and comparative advantage	1408	(10)
The endowment of a country with environmental resources	1408	(2)
Environmental policy and competitiveness	1410	(1)
Trade liberalisation and the gains from trade	1410	(2)
Changes in environmental policy after trade liberalisation	1412	(1)
Environmental policies in open economies	1413	(3)
Trade interventions as instruments of environmental policy	1416	(2)
Imperfect competition, international trade, and the environment	1418	(6)
Monopoly	1418	(1)
International oligopoly and strategic environmental policy: the Nash--Cournot model	1418	(2)
Strategic environmental policy: variations and extensions	1420	(2)
Monopolistic competition and intra-industry trade	1422	(2)
Political economy and environmental policy in open economies	1424	(1)
International factor movements and the environment	1425	(7)
International capital movements and environmental regulation under perfect competition	1426	(1)
The gains from factor mobility	1426	(1)
Environmental policy in open economies and interjurisdictional competition	1427	(5)
Green capital market interventions	1432	(1)
Intertemporal issues	1432	(3)
Stock pollutants and international trade	1432	(2)
Intertemporal trade, foreign debt, and the environment	1434	(1)
The empirical evidence	1435	(8)
Environmental regulation and competitiveness	1435	(1)
The impact of environmental regulation on the international division of labour	1436	(3)
The impact of trade on the environment	1439	(2)
Leakage effects	1441	(1)
Green tariffs	1441	(1)
International factor movements	1441	(1)
Foreign debt and the environment	1442	(1)
Conclusions from the empirical literature	1443	(1)
Environmental agreements and trade agreements	1443	(2)
Summary and conclusions	1445	(12)
Acknowledgements	1447	(1)
References	1447	(10)
The Theory of International Environmental Agreements	1457	(60)
Scott Barrett
Abstract	1458	(1)
Keywords	1458	(1)
Introduction	1459	(3)
Relationship to other cooperation problems	1462	(2)
The problems IEAs are meant to address	1464	(2)
Overview of the chapter	1466	(4)
The non-cooperative and full cooperative outcomes	1470	(5)
Choices and payoffs	1471	(1)
The equilibrium in unilateral policies	1472	(1)
The full cooperative outcome	1473	(1)
Constrained optima	1473	(1)
Example	1474	(1)
Empirical implications	1475	(1)
The one-shot, self-enforcing IEA	1475	(5)
Non-signatory behavior	1475	(1)
Signatory behavior	1476	(2)
Treaty participation	1478	(1)
Example	1478	(2)
Do IEAs help much?	1480	(2)
Beliefs, credibility, and norm-breaking	1482	(2)
Minimum participation	1484	(2)
Strategic complements and coordination	1486	(2)
Compliance versus participation	1488	(6)
Environmental protection as a repeated game	1489	(2)
An infinitely repeated IEA game	1491	(2)
Is compliance a problem?	1493	(1)
Weakly collectively rational treaties	1494	(1)
The distributive role of side payments	1495	(4)
The strategic role of side payments	1499	(1)
Empirical application to acid rain	1500	(2)
Linkage	1502	(2)
Trade leakage	1504	(1)
The strategy of trade restrictions	1505	(1)
Application to ozone layer depletion and global climate change	1506	(3)
A research agenda	1509	(8)
Acknowledgements	1512	(1)
References	1512	(5)
The Economics of Biodiversity	1517	(44)
Stephen Polasky
Christopher Costello
Andrew Solow
Abstract	1518	(1)
Keywords	1518	(1)
Introduction	1519	(1)
Measures of biodiversity	1520	(5)
Measures based on relative abundance	1520	(2)
Measures based on joint dissimilarity	1522	(3)
Sources of value from biodiversity	1525	(7)
Use value and existence values of individual species	1525	(1)
Biological prospecting	1526	(2)
Biodiversity and ecosystem services	1528	(4)
Strategies to conserve biodiversity	1532	(12)
Terrestrial habitat protection	1532	(6)
Marine biodiversity and reserves	1538	(2)
Introduced species	1540	(4)
Incentives to conserve and conservation policy	1544	(7)
Conclusions	1551	(10)
References	1552	(9)
The Economics of Climate Policy	1561
Charles D. Kolstad
Michael Toman
Abstract	1562	(1)
Keywords	1562	(1)
Introduction	1563	(1)
Overview of the climate change issue	1563	(10)
Nature of the challenge	1563	(2)
The potential physical and socioeconomic consequences of climate change	1565	(2)
Mitigation and adaptation	1567	(4)
International policy toward climate change	1571	(2)
Benefits and costs of greenhouse gas control	1573	(9)
Costs of greenhouse gas control	1574	(5)
Benefits of greenhouse gas control	1579	(3)
Fundamental economics of the climate issue	1582	(13)
Simple models of greenhouse gas emissions and climate change	1583	(4)
Uncertainty, irreversibility, learning, and insurance	1587	(1)
What integrated assessment models say	1588	(3)
The optimal timing of emissions control	1591	(2)
Philosophical justifications for climate policy	1593	(2)
Designing climate policy instruments	1595	(9)
Designing incentive-based GHG abatement policy: fundamentals	1596	(2)
Price versus quantity policies: ``hybrids''	1598	(1)
Intertemporal flexibility and GHG policy design	1599	(1)
International GHG policy design	1600	(2)
Emission trading in the Kyoto Protocol	1602	(1)
Nonincentive-based policies	1603	(1)
Economics and international climate agreements	1604	(5)
The paradox of international agreements	1605	(2)
Designing climate agreements to draw in developing nations	1607	(2)
Conclusions	1609
What have we learned?	1609	(1)
Research implications	1610	(1)
Acknowledgements	1611	(1)
References	1611
Author Index	1	(20)
Subject Index	21