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EEU-Sweden

2013-10-13

Productivity development in Icelandic, Norwegian and Swedish fisheries

This article analyses the Total Factor Productivity (TFP) performance of fisheries in Iceland, Norway and Sweden during the period 1973 to 2003. We measure TFP growth using real gross value added as output and capital input, labour input and a stock input index based on the major fish stocks. In developed neighbouring countries, we expect rapid diffusion of fishing technology innovations contributing to productivity convergence. In addition, innovations in the public regulation and the industrial organization may also have influenced productivity growth during the period.

2013-09-21

Cropping system diversification, conservation tillage and modern seed adoption in Ethiopia: Impacts on household income, agrochemical use and demand for labor

The type and combination of sustainable agricultural practices (SAPs) adopted have a significant effect on agricultural productivity and food security. This study develops a multinomial endogenous switching regression model of farmers' choice of combination of SAPs and impacts on maize income and agrochemicals and family labor use in rural Ethiopia.

2013-09-15

Veblen’s theory of the leisure class revisited: implications for optimal income taxation

Several previous studies have demonstrated the importance of relative consumption comparisons for public policy. Yet, almost all of them have ignored the role of leisure for status comparisons. Inspired by Veblen (The theory of the leisure class. Macmillan, New York, 1899), this paper assumes that people care about their relative consumption and that leisure has a displaying role in making relative consumption more visible, based on a two-type model of optimal income taxation.

2013-07-30

Determining Benefits and Costs for Future Generations

This article is a good example of EfDs mission: combining policy advice and research. It is based on a consultancy for the US EPA who asked Maureen Cropper to lead a process with a panel of experts to help advise them on what discount rate to use for climate change – and specifically about falling discount rates. This paper (and a longer one in REEP that is forthcoming) is a byproduct of that work.

2013-05-14

Easy come, easy go

A growing number of experimental studies focus on the differences between the lab and the field. One important difference between many lab and field experiments is how the endowment is obtained. By conducting a dictator game experiment, we investigate the influences of windfall and earned endowment on behavior in the laboratory and in the field.

2013-05-13

The truth, the whole truth, and nothing but the truth—A multiple country test of an oath script

Hypothetical bias is one of the main issues bedeviling the field of nonmarket valuation. The general criticism is that survey responses reflect how people would like to behave, rather than how they actually behave. In our study of climate change and carbon emissions reductions, based on the increasing bulk of evidence from psychology and economics regarding the effects of making promises, we investigate the effect of an oath script in a contingent valuation survey.

2013-04-05

The Impact of Food Price Inflation on Subjective Well-being: Evidence From Urban Ethiopia

The world has experienced dramatic food price inflation in recent years, which sparked social unrest and riots in various developing countries. In this paper, we use a novel approach to measure the impact of food price inflation on subjective well-being of urban households in Ethiopia, a country which exhibited one of the highest rates of food price inflation during 2007–2008.

2013-03-05

Integrating soil science into agricultural production frontiers

This paper integrates soil science variables into an economic analysis of agricultural output among small-scale farmers in Kenya's highlands. The integration is valuable because farmers’ choice of inputs depends on both the status of the soil and socioeconomic conditions. The study uses a stochastic production frontier in which the individual farm's distance to the frontier depends systematically on individual factors.

2013-03-05

Environmental Policy, First Nature Advantage and the Emergence of Economic Clusters

We explain the spatial concentration of economic activity when the cost of environmental policy – which is increasing in the concentration of pollution – acts as a centrifugal force, while positive knowledge spillovers and a site with natural cost advantage act as centripetal forces. We study the agglomeration effects caused by trade-offs between centripetal and centrifugal forces which eventually determine the distribution of economic activity across space.

2013-03-01

Sweden’s CO2 tax and taxation reform experiences

A CO2 tax assures that different fossil fuels are taxed in a neutral way according to actual CO2 emissions. The Swedish experience can be summarized by increased tax levels over time and steps taken towards a more uniform national price on fossil CO2. Moreover, the CO2 tax base is only moderately elastic to price changes (particularly in the short run) when it comes to petrol and diesel implying quite stable tax revenues. On the other hand, the CO2 tax seems to have had a major impact on fuels used for heating purposes, where biofuels and other non-fossil energy sources (such as energy from waste and surplus heat from industrial processes) have significantly increased their shares.

2013-02-21

Putting a price on the future of our children and grandchildren

Discounting has the dubious distinction of being the most controversial issue in social cost-benefit analysis. This is largely because choosing the discount rate will often dominate other choices a modeler makes. For example, consider how we might estimate future damages from greenhouse gas emissions.

2013-02-12

On Social Sanctions and Beliefs: A Pollution Norm Example

A prevailing view in the literature is that social sanctions can support, in equilibrium, high levels of obedience to a costly norm. The reason is that social disapproval and stigmatization faced by the disobedient are highest when disobedience is the exception rather than the rule in society.

2013-02-01

Life satisfaction and air quality in Europe

Concerns for environmental quality and its impact on people's welfare are fundamental arguments for the adoption of environmental legislation in most countries. In this paper, we analyze the relationship between air quality and subjective well-being in Europe. We use a unique dataset that merges three waves of the European Social Survey with a new dataset on environmental quality including SO2 concentrations and climate in Europe at the regional level. We find a robust negative impact of SO2 concentrations on self-reported life satisfaction.

2013-01-19

Thanks but No Thanks: A New Policy to Avoid Land Conflict

Land conflicts can be detrimental. An important goal of development policy is to help define and instill respect for borders. This is often implemented through mandatory and expensive interventions that rely on the expansion of government land administration institutions.

2013-01-18

Conspicuous Leisure: Optimal Income Taxation When Both Relative Consumption and Relative Leisure Matter

In previous studies on public policy under relative-consumption concerns, leisure comparisons have been ignored. In this paper, we consider a two-type optimal non-linear income tax model, in which people care about both their relative consumption and their relative leisure. Increased consumption positionality typically implies higher marginal income tax rates for both ability types, whereas leisure positionality has an offsetting role.

2012-11-21

The effect of religiosity and religious festivals on positional concerns – an experimental investigation of Ramadan

This article examines the effect of religion on positional concerns using survey experiments. We focus on two of the dimensions of religion – degree of religiosity and religious festivals. By conducting the experiments during both the most important day of Ramadan (the Night of Power) and a day outside Ramadan, we find that Ramadan overall has a small and negative impact on positional concerns.

2012-10-18

REDD+ and Community-Controlled Forests in Low-Income Countries Any Hope for a Linkage?

Deforestation and forest degradation are estimated to account for between 12 percent and 20 percent of annual greenhouse gas emissions. These activities, largely in the developing world, released about 5.8 Gt per year in the 1990s, which was more than all forms of transport combined. The idea behind REDD+ is that payments for sequestering carbon can tip the economic balance away from loss of forests and in the process yield climate benefits.

2012-10-15

Climate negotiations under scientific uncertainty

How does uncertainty about “dangerous” climate change affect the prospects for international cooperation? Climate negotiations usually are depicted as a prisoners’ dilemma game; collectively, countries are better off reducing their emissions, but self-interest impels them to keep on emitting. We provide experimental evidence, grounded in an analytical framework, showing that the fear of crossing a dangerous threshold can turn climate negotiations into a coordination game, making collective action to avoid a dangerous threshold virtually assured.

2012-08-15

Discounting: Unbalanced Growth, Uncertainty, and Spatial Considerations

The economics of climate change and the various measures that should be implemented to reduce future damages are highly tied to the use of cost-benefit analysis. Traditional approaches ignore the fact that environmental amenities do not experience the same growth rate as do most of the sectors in the economy, which leads to changing relative prices. Uncertainty should also be considered, especially when one is conducting cost-benefit analysis involving the long-run damages from climate change. This article reviews some theoretical approaches to the economics of discounting and discusses issues associated with unbalanced growth, uncertainty, and spatial discounting.

2012-08-09

Lessons learned from investing in marine and coastal management initiatives in the East Asian Seas

The concept that underlies the interventions of the Global Environment Facility (GEF) International Waters Program is adaptive management at the Large Marine Ecosystem (LME) scale across the sequence of interventions from assessment and analysis to development of regional strategic action programs and national implementation of action plans to address transboundary environmental concerns. The GEF has provided grants to recipient countries in the East Asian Seas region covering five LMEs since the early 1990s and amounting to about US$200 million. This paper analyses GEF support to the Seas of the East Asian Region to draw lessons for future investments in LME management.

2012-08-07

Nudging Boserup? The Impact of Fertilizer Subsidies on Investment in Soil and Water Conservation

The new fertilizer subsidies in sub-Saharan Africa are intended to increase agricultural production and ensure development of a fertilizer market. Fertilizer adoption requires complementary inputs, such as investment in soil and water conservation (SWC), for efficient and optimal nutrient uptake, and many fertilizer subsidy programs implicitly assume that fertilizer subsidies crowd in such investments.

2012-06-18

Greening growth through strategic environmental assessment of sector reforms

Climate change and escalating degradation of ecosystem services place the need for greening economic growth on the international policy agenda. To make growth greener and more inclusive, it is crucial to change the institutions and incentive structures in national sector reforms and to involve poor and vulnerable groups in decision making.

2012-06-06

Policy SEA: lessons from development co-operation

This professional practice report reflects upon lessons learned from piloting and evaluating an innovative approach to policy strategic environmental assessment (SEA) in developing countries. The primary analytical focuses of the approach are institutions and governance characteristics, plus it places strong emphasis on learning. The piloting provides valuable insights about the conduct of SEA at the policy level and in socio-political where there is limited experience with SEA.

2012-06-01

Measuring risk aversion among the urban poor in Kolkata, India

We examine risk preferences in an urban setting in a low-income developing country with nonstudent subjects by adapting the experimental approach of Holt and Laury (HL; 2002). We conducted 22 group experiments with 404 participants and used in-kind payoffs. The average respondent was ‘riskaverse’ (the midpoint of Constant Relative Risk Aversion (CRRA) intervals among participants was 0.53, roughly in line with most similar studies in poor countries).

2012-06-01

Policy Instruments for Sustainable Development at Rio +20

Twenty years ago, governments gathered for the United Nations Conference on Environment and Development in Rio de Janeiro. The “Rio Declaration” laid out several principles of sustainable development, including the central role of policy instruments. In this article, we take stock of where we stand today in implementing sound and effective environmental policy instruments throughout the world, particularly in developing and transitional economies.

2012-05-15

Trade policies for biofuels

The purpose of the present article is to consider optimal trade policies for biofuels, taking into account the potential for carbon leakage and the complex set of policies used or discussed for biofuels. First, the authors consider the case of optimal trade policies and find that the combination of an import standard and a border carbon adjustment welfare dominates using only a border carbon adjustment (BCA).

2012-05-11

Behavioral Economics and Environmental Policy

This article provides an interpretive survey on implications of insights from behavioral economics for environmental policy. In particular, it discusses whether, and if so how, policy implications based on conventional economic theory have to be modified when insights from behavioral economics are considered.

2012-04-30

Climate Policy, Uncertainty, and the Role of Technological Innovation

We study how uncertainty about climate change severity affects the relative benefits of early abatement and a portfolio of research and development (R&D) in lowering future abatement costs. Optimal early abatement depends on the curvature of the marginal benefit and marginal abatement cost (MAC) functions and how the uncertain parameter affects marginal benefits.

2012-04-30

How Should Support for Climate-Friendly Technologies Be Designed?

Stabilizing global greenhouse gas concentrations at levels to avoid significant climate risks will require massive ‘‘decarbonization’’ of all the major economies over the next few decades, in addition to the reduced emissions from other GHGs and carbon sequestration. Achieving the necessary scale of emissions reductions will require a multifaceted policy effort to support a broad array of technological and behavioral changes. Change on this scale will require sound, well-thought-out strategies.

2012-04-01

Social Background, Cooperative Behavior, and Norm Enforcement

Studies have shown that there are differences in cooperative behavior across countries. Furthermore, differences in the use and the reaction on the introduction of a norm enforcement mechanism have been documented in cross-cultural studies, recently. We present data which prove that stark differences in both dimensions can exist even within the same town. For this end, a unique data set was created, based on public goods experiments conducted in Cape Town, South Africa.

2012-03-01

The Centenary of Jens Warming’s Optimal Landing Tax in Fisheries

This note acknowledges Jens Warming's contributions (1911, 1931) on what has since come to be known as the open access problem in fisheries. Warming, in a static framework, suggested an optimal landing tax before Pigou (1920) and described the sole owner solution later suggested by Scott (1955b). I describe these results using Warming's framework and point to his previously overlooked contribution concerning the dynamic aspect of fisheries.

2012-02-27

Conserve or convert? Pan-tropical modeling of REDD–bioenergy competition

The land competition between tropical bioenergy plantations and payments for forest carbon conservation (e.g., through an international scheme for Reduced emissions from deforestation and forest degradation, REDD+) is modeled using spatially explicit data on biofuel feedstock (oil palm and sugar cane) suitability and forest biomass carbon stocks.

2012-02-27

REDD+ readiness implications for Sri Lanka in terms of reducing deforestation

Any system to compensate countries for reduced emissions from deforestation and forest degradation (REDD+) requires a historical reference level against which future performance can be measured. Here we examine the possibilities Sri Lanka, a small forest country with limited data on forest carbon stocks, has to get ready for REDD+. We construct a historical reference level using available forest inventory data combined with updated 2008 and 2009 in situ carbon density data for Sri Lankan forests.

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