Journal of Environmental Economics and Management最新文献

Payment for ecosystem services (PES) program contracts include penalties for non-performance to ensure that these programs receive the environmental benefits they have been paying for. The standard penalty structure in PES programs requires participants to pay back all program payments received if the contract is terminated before the end of the contract lifetime. We derive the optimal non-completion penalty structure, which decouples the penalty from payments received. In contrast to the backward-looking standard penalty, the optimal penalty is forward-looking and equals the principal's net future environmental benefits lost due to contract non-completion. The optimal penalty thus falls over the life of the contract, in contrast to the standard penalty, which rises over the life of the contract. A numerical policy simulation with heterogeneous agents based on features in federal agricultural conservation programs in the United States suggests that the optimal penalty structure can increase realized net environmental benefits significantly. Our results suggest that performance of most kinds of PES programs can be enhanced by decoupling non-completion penalties from payments and by adjusting how penalties vary over contract lifetimes.

We study the effect of an employer’s communication concerning energy-efficient behavior on a firm’s employees’ behavioral responses. The management aims to enhance energy-efficient behavior performance by irregularly sending online messages to remote employees. We break down each message, analyzing the positive or negative emotions conveyed, collective or individual orientation, and ease of language. Comparing employees’ daily energy efficiency after receiving a message to their daily performance without a previous message, we find that messages generally result in an immediate increase in efficiency. Messages conveying negative emotions and those making a distinction between the manager and the employees have a smaller effect than messages conveying positive emotions and emphasizing a collective orientation that includes both the management and employees. Additionally, shorter messages are more likely to induce improved efficiency. Sending messages significantly impacts driver performance for up to six days after the message, resulting in economically relevant cost reductions.

The degree of substitutability between clean and dirty energy plays a central role in leading economic analyses of optimal environmental policy. Despite the importance, assuming a constant and exogenous elasticity of substitution has been a dominant theoretical approach. We challenge this assumption by developing a dynamic general equilibrium model with an endogenous elasticity of substitution that interacts with the relative share of clean inputs in the economy. We find strong dynamic feedback effects arising from endogenous substitution capacity that amplifies the impact of directed technical change and accelerates the transition to a green economy.

This paper evaluates the bioeconomic performance of individual fishing quota (IFQ) regulations in multiple-species fisheries. In our model, a manager chooses the aggregate quotas under uncertainty over the true stock abundances of two jointly-harvested fish species. Fishers conduct harvest operations under full knowledge of the species-specific productivities of fishing gear. We derive the profit maximizing fishing mortality and economic rent outcomes implemented by fishers under various regulatory designs. We compare bioeconomic performance of an IFQ regulation with discretion over the mix of harvested species against an IFQ regulation that bans at-sea discarding. Both regulations eliminate discards. Discretion allows closer alignment between fisher implemented outcomes and those that maximize long term expected fishery value. Incorporating discretion into regulatory designs provides new prospects for improving fisheries management.

Carbon capture and storage in salt domes or in inactive fields is seen as an appealing option to meet the ambitious objectives of the Paris Agreement. Captured CO${}_2$ emissions can also be injected in active fields to enhance gas or oil recovery. We examine the optimal scale and timing of these different capturing and storage options in a dynamic model of an economy subject to a carbon budget. We consider the socially optimal outcome as well as the outcome under laissez-faire. The social optimum can have different forms depending on the initial carbon budget, the fossil fuel resource stock and the stock of already injected CO${}_2$ in active fields. The level and convexity of the costs of capturing, storing and producing renewable energy plays a role as well. We specify the conditions under which each possible sequence of regimes – no capturing, only enhanced recovery, only storage without enhanced recovery, a combination of both or only renewables – occurs. We quantify our analytical results by calibrating the model and running simulations.

“Tipping points” for dangerous climate damages can transform climate protection into a coordination problem. If the location of the threshold is known, Nash equilibria exist in which the catastrophe is averted even without a climate agreement. However, there usually exists also an equilibrium in which no country exerts effort to prevent it, and the catastrophe occurs. We model equilibrium selection among non-cooperative countries with the help of an external randomization device, and analyze how it affects coalition formation. We find that results are much more nuanced than in the case where non-cooperative countries always coordinate on preventing the catastrophe. In some cases, a “coalition of free-riders” forms that is detrimental to welfare. In other cases, a “threshold equilibrium” emerges in which coalition members commit to do more than the outsiders, and the coalition is just large enough to become active. The grand coalition is also an equilibrium outcome, but is often unstable towards deviations by groups of countries.

The future of travel will be characterized by changes in weather patterns and changes in transportation technology. How will these forces interact? We explore this question by utilizing a unique randomized experiment with Uber riders in Cairo, Egypt. We consider how very hot days ($>$35 °C/95 °F) affect transportation choices, how a sizeable price decrease (simulating a future with autonomous vehicles and access to cheaper transportation) changes travel, and how the interaction of these two elements affects choices. We find that while travel will increase significantly in response to the price decrease, extreme weather dampens this effect by 21%. Individuals receiving subsidies also shift away from public transportation modes and towards private transportation modes, except when the public transit option is air-conditioned. These results provide important insights for policymakers when considering optimal travel policy in the face of climate change.

This paper estimates the mortality impacts of ozone pollution in China and the moderating effects of two possible adaptation strategies. Using an instrument variable constructed from ozone concentrations of nearby upwind cities, we find that ozone pollution significantly increases all-cause, cardiovascular, and respiratory mortality. Healthcare service provision significantly decreases the impacts of ozone pollution on all-cause and cardiovascular mortality, but does not moderate the impact on respiratory mortality. The impact of ozone on RES mortality declines after COVID-19. Healthcare service provision also reduces the distributional impact of ozone across the elderly and younger groups. Projection shows that climate change would induce mortality costs of 0.08% of China's GDP through increasing ozone pollution.

This paper estimates flexible demand systems for heterogeneous households in the United States and links the estimated parameters with an economy-wide model to assess their relative contributions to the social cost of regulation. We estimate elasticities for several final demand categories as well as labor-leisure elasticities that are important for calibrating the labor-leisure choice in the economy-wide model and find that estimated elasticities are relatively similar across regions but vary meaningfully by income. Using the estimated elasticities, we explore the implications of both the functional form and its parameterization in a simplified computable general equilibrium model for the social and distributional costs of illustrative policy scenarios. Model variants with less flexible consumer demand systems overestimate social costs across our entire range of scenarios. Furthermore, we find that parameterizing the model with elasticities that vary with household income is important for adequately characterizing the distributional implications of a policy.

Oil palm remains an important source of rural income in South East Asia. At the same time, Indonesia has become a hotspot for large-scale species extinction and a loss of biodiversity in favor of agricultural production. The present study sets out to assess the environmental performance of smallholder oil palm production with respect to biodiversity. Using a panel dataset that combines conventional farm data together with an account of plant diversity, we estimate a restricted hyperbolic environmental distance function. We integrate loss of biodiversity as an undesirable output into the production model which allows explaining shortfalls in environmental performance and the derivation of shadow prices of biodiversity conservation. We find a substantial environmental inefficiency, which is partly explained by both chemical and manual weeding practices, highlighting the potential for improvements in both the environmental and the economic dimension. Moreover, the value for conserving one species of the average biodiversity on a farmers plantation was 325 USD in 2018. Payments for ecosystem services schemes could be a viable policy response to conserve meaningful levels of biodiversity while simultaneously allowing smallholders to increase palm oil output. In general, addressing drivers of environmental performance in PES designs amplifies its effect without reducing output.