Since its release in 2010, the US government’s social cost of carbon (SCC) has played a central role in climate policy both domestically and internationally. However, rapid progress in climate science and economics over the past decade means that the original SCC estimate is no longer based on the frontier of scientific knowledge. Specifically, extensive new research about the climate, the economy, and their relationship has altered our understanding of the magnitudes of the projected physical and economic impacts of climate change, as well as their heterogeneity across space and time. This article, which was written as the Biden presidential administration was actively rebuilding the US SCC, provides concrete recommendations on how to base the SCC on the most recent research advances and thus return it to the scientific frontier.
{"title":"A Guide to Updating the US Government’s Social Cost of Carbon","authors":"T. Carleton, M. Greenstone","doi":"10.1086/720988","DOIUrl":"https://doi.org/10.1086/720988","url":null,"abstract":"Since its release in 2010, the US government’s social cost of carbon (SCC) has played a central role in climate policy both domestically and internationally. However, rapid progress in climate science and economics over the past decade means that the original SCC estimate is no longer based on the frontier of scientific knowledge. Specifically, extensive new research about the climate, the economy, and their relationship has altered our understanding of the magnitudes of the projected physical and economic impacts of climate change, as well as their heterogeneity across space and time. This article, which was written as the Biden presidential administration was actively rebuilding the US SCC, provides concrete recommendations on how to base the SCC on the most recent research advances and thus return it to the scientific frontier.","PeriodicalId":47676,"journal":{"name":"Review of Environmental Economics and Policy","volume":null,"pages":null},"PeriodicalIF":5.4,"publicationDate":"2022-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47378350","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A disorderly transition to a low-carbon economy may pose significant costs for both financial and nonfinancial firms through the stranding of physical assets, firms’ defaults, and volatility in asset prices. The spread of these disruptions through production and financial networks may exacerbate transition costs. Green financial and monetary policies may help to mitigate the cost of transitioning to a low-carbon future, but coordination among public institutions (governments, central banks, and financial supervisors) is needed. We discuss qualitative, empirical, modeling, policy, and institutional research on this topic and identify priorities for future research.
{"title":"Macrofinancial Risks of the Transition to a Low-Carbon Economy","authors":"Emanuele Campiglio, F. van der Ploeg","doi":"10.1086/721016","DOIUrl":"https://doi.org/10.1086/721016","url":null,"abstract":"A disorderly transition to a low-carbon economy may pose significant costs for both financial and nonfinancial firms through the stranding of physical assets, firms’ defaults, and volatility in asset prices. The spread of these disruptions through production and financial networks may exacerbate transition costs. Green financial and monetary policies may help to mitigate the cost of transitioning to a low-carbon future, but coordination among public institutions (governments, central banks, and financial supervisors) is needed. We discuss qualitative, empirical, modeling, policy, and institutional research on this topic and identify priorities for future research.","PeriodicalId":47676,"journal":{"name":"Review of Environmental Economics and Policy","volume":null,"pages":null},"PeriodicalIF":5.4,"publicationDate":"2022-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49562569","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
F. Funke, Linus Mattauch, I. V. D. Bijgaart, H. Godfray, C. Hepburn, D. Klenert, M. Springmann, Nicolas Treich
Livestock is known to contribute significantly to climate change and to negatively impact global nitrogen cycles and biodiversity. However, there has been little research on economically efficient policies for regulating meat production and consumption. In the absence of first-best policy instruments for the livestock sector, second-best consumption taxes on meat can address multiple environmental externalities simultaneously as well as improve diet-related public health. In this article, we review the empirical evidence on the social costs of meat and examine the rationales for taxing meat consumption in high-income countries. We approach these issues from the perspective of public, behavioral, and welfare economics, focusing in particular on (1) the interaction of multiple environmental externalities of meat production and consumption, (2) “alternative protein” technologies, (3) adverse effects on human health, (4) animal welfare, and (5) distributional effects of meat taxation. We present preliminary estimates of the environmental social costs associated with meat consumption and find that meat is significantly underpriced. We conclude by identifying several directions for future research on optimal meat taxation.
{"title":"Toward Optimal Meat Pricing: Is It Time to Tax Meat Consumption?","authors":"F. Funke, Linus Mattauch, I. V. D. Bijgaart, H. Godfray, C. Hepburn, D. Klenert, M. Springmann, Nicolas Treich","doi":"10.1086/721078","DOIUrl":"https://doi.org/10.1086/721078","url":null,"abstract":"Livestock is known to contribute significantly to climate change and to negatively impact global nitrogen cycles and biodiversity. However, there has been little research on economically efficient policies for regulating meat production and consumption. In the absence of first-best policy instruments for the livestock sector, second-best consumption taxes on meat can address multiple environmental externalities simultaneously as well as improve diet-related public health. In this article, we review the empirical evidence on the social costs of meat and examine the rationales for taxing meat consumption in high-income countries. We approach these issues from the perspective of public, behavioral, and welfare economics, focusing in particular on (1) the interaction of multiple environmental externalities of meat production and consumption, (2) “alternative protein” technologies, (3) adverse effects on human health, (4) animal welfare, and (5) distributional effects of meat taxation. We present preliminary estimates of the environmental social costs associated with meat consumption and find that meat is significantly underpriced. We conclude by identifying several directions for future research on optimal meat taxation.","PeriodicalId":47676,"journal":{"name":"Review of Environmental Economics and Policy","volume":null,"pages":null},"PeriodicalIF":5.4,"publicationDate":"2022-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49221486","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article provides an overview of agri-environmental policies in Australia and New Zealand. Unlike in other developed countries, there is generally no expectation in Australia and New Zealand that farmers will be fully compensated for the costs of complying with agri-environmental policies. Most expenditures aimed at changing farming practices are allocated to projects in particular locations and have specific targets. While this approach has the potential to support evidence-based targeting of policy expenditures, in practice, the quality of targeting and use of evidence have generally been low, reflecting an apparent lack of concern about policy efficiency and cost-effectiveness. For the same reason, early hopes about the potential to use conservation tenders to allocate agri-environmental funds have not been realized. In contrast, efforts to develop markets for irrigation water in Australia and water quality permits in New Zealand have persisted for many years, lessons have been applied, and economic and scientific evidence has been central in the policy process. Command and control regulation to restrict the clearing of native vegetation in Australia has produced mixed results. These policy experiences suggest that effective and efficient agri-environmental policies require a long-term government commitment and a willingness to change policies as needed.
{"title":"Agriculture and the Environment: Policy Approaches in Australia and New Zealand","authors":"D. Pannell, A. Rogers","doi":"10.1086/718053","DOIUrl":"https://doi.org/10.1086/718053","url":null,"abstract":"This article provides an overview of agri-environmental policies in Australia and New Zealand. Unlike in other developed countries, there is generally no expectation in Australia and New Zealand that farmers will be fully compensated for the costs of complying with agri-environmental policies. Most expenditures aimed at changing farming practices are allocated to projects in particular locations and have specific targets. While this approach has the potential to support evidence-based targeting of policy expenditures, in practice, the quality of targeting and use of evidence have generally been low, reflecting an apparent lack of concern about policy efficiency and cost-effectiveness. For the same reason, early hopes about the potential to use conservation tenders to allocate agri-environmental funds have not been realized. In contrast, efforts to develop markets for irrigation water in Australia and water quality permits in New Zealand have persisted for many years, lessons have been applied, and economic and scientific evidence has been central in the policy process. Command and control regulation to restrict the clearing of native vegetation in Australia has produced mixed results. These policy experiences suggest that effective and efficient agri-environmental policies require a long-term government commitment and a willingness to change policies as needed.","PeriodicalId":47676,"journal":{"name":"Review of Environmental Economics and Policy","volume":null,"pages":null},"PeriodicalIF":5.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49320121","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
B. Hasler, M. Termansen, H. Nielsen, C. Daugbjerg, S. Wunder, U. Latacz-Lohmann
European agri-environmental policy has diverse and competing objectives. The Common Agricultural Policy has been the main policy framework guiding the European Union (EU) and its member states in the design and implementation of both mandatory and voluntary agri-environmental policy instruments. Voluntary agri-environmental schemes, which were introduced in the 1990s, continue to play a central role in meeting the EU’s environmental and climate objectives. We find that in achieving their objectives these schemes have faced problems including limited environmental impact, low adoption by farmers, and conflicts between their environmental and income support objectives. The article also finds scant empirical evidence concerning the environmental and economic impacts of the agri-environmental schemes. The article concludes with a discussion of the lessons from past experiences and potential future research and policy directions aimed at increasing the EU’s achievement of agri-environmental and climate objectives.
{"title":"European Agri-environmental Policy: Evolution, Effectiveness, and Challenges","authors":"B. Hasler, M. Termansen, H. Nielsen, C. Daugbjerg, S. Wunder, U. Latacz-Lohmann","doi":"10.1086/718212","DOIUrl":"https://doi.org/10.1086/718212","url":null,"abstract":"European agri-environmental policy has diverse and competing objectives. The Common Agricultural Policy has been the main policy framework guiding the European Union (EU) and its member states in the design and implementation of both mandatory and voluntary agri-environmental policy instruments. Voluntary agri-environmental schemes, which were introduced in the 1990s, continue to play a central role in meeting the EU’s environmental and climate objectives. We find that in achieving their objectives these schemes have faced problems including limited environmental impact, low adoption by farmers, and conflicts between their environmental and income support objectives. The article also finds scant empirical evidence concerning the environmental and economic impacts of the agri-environmental schemes. The article concludes with a discussion of the lessons from past experiences and potential future research and policy directions aimed at increasing the EU’s achievement of agri-environmental and climate objectives.","PeriodicalId":47676,"journal":{"name":"Review of Environmental Economics and Policy","volume":null,"pages":null},"PeriodicalIF":5.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41623023","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There is widespread agreement among most economists that economy-wide carbon pricing will be a necessary (although not necessarily sufficient) component of any policy that can achieve meaningful and cost-effective CO2 reductions in large, complex economies. But there is less agreement about which of two carbon pricing instruments will be better. Some support carbon taxes, while others favor cap-and-trade. How do these two pricing approaches compare? In this survey and synthesis of theory and experience, I show that when carbon taxes and carbon cap-and-trade systems are designed in ways that make them truly comparable, their characteristics and outcomes are similar and, in some respects, fully equivalent. But the two approaches can perform quite differently along some specific dimensions, sometimes favoring taxes and sometimes cap-and-trade. The key differences in performance depend on details of program design. Indeed, what appears at first glance to be a dichotomous choice between two distinct instruments can turn out to be a choice of specific design elements along a policy continuum.
{"title":"The Relative Merits of Carbon Pricing Instruments: Taxes versus Trading","authors":"Robert Stavins","doi":"10.1086/717773","DOIUrl":"https://doi.org/10.1086/717773","url":null,"abstract":"There is widespread agreement among most economists that economy-wide carbon pricing will be a necessary (although not necessarily sufficient) component of any policy that can achieve meaningful and cost-effective CO2 reductions in large, complex economies. But there is less agreement about which of two carbon pricing instruments will be better. Some support carbon taxes, while others favor cap-and-trade. How do these two pricing approaches compare? In this survey and synthesis of theory and experience, I show that when carbon taxes and carbon cap-and-trade systems are designed in ways that make them truly comparable, their characteristics and outcomes are similar and, in some respects, fully equivalent. But the two approaches can perform quite differently along some specific dimensions, sometimes favoring taxes and sometimes cap-and-trade. The key differences in performance depend on details of program design. Indeed, what appears at first glance to be a dichotomous choice between two distinct instruments can turn out to be a choice of specific design elements along a policy continuum.","PeriodicalId":47676,"journal":{"name":"Review of Environmental Economics and Policy","volume":null,"pages":null},"PeriodicalIF":5.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43124554","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
David A Keiser, Sheila M. Olmstead, K. Boyle, V. Flatt, B. Keeler, D. Phaneuf, Joseph S. Shapiro, J. Shimshack
For nearly 50 years, the Clean Water Act (CWA) has served as the main environmental statute that regulates water quality in the United States. Yet the jurisdictional limits of the act, in terms of which waters are regulated, remain unresolved. This article reviews the complicated history of these waters of the United States (WOTUS) and discusses the important role of economics in understanding the benefits and costs of a narrow versus a broad definition of WOTUS. During the Obama and Trump administrations, several economic analyses arrived at different conclusions regarding whether to expand or reduce CWA protections. We examine the key components of these analyses, including a novel federalism analysis used to support deregulation of US waterways. In this analysis, the Trump administration assumed that states would fill regulatory gaps left by the federal government. We conclude with some thoughts about key issues for the Biden administration to consider as it develops its own definition of WOTUS as well as research priorities for economists seeking to inform the debate about WOTUS.
{"title":"The Evolution of the “Waters of the United States” and the Role of Economics","authors":"David A Keiser, Sheila M. Olmstead, K. Boyle, V. Flatt, B. Keeler, D. Phaneuf, Joseph S. Shapiro, J. Shimshack","doi":"10.1086/717917","DOIUrl":"https://doi.org/10.1086/717917","url":null,"abstract":"For nearly 50 years, the Clean Water Act (CWA) has served as the main environmental statute that regulates water quality in the United States. Yet the jurisdictional limits of the act, in terms of which waters are regulated, remain unresolved. This article reviews the complicated history of these waters of the United States (WOTUS) and discusses the important role of economics in understanding the benefits and costs of a narrow versus a broad definition of WOTUS. During the Obama and Trump administrations, several economic analyses arrived at different conclusions regarding whether to expand or reduce CWA protections. We examine the key components of these analyses, including a novel federalism analysis used to support deregulation of US waterways. In this analysis, the Trump administration assumed that states would fill regulatory gaps left by the federal government. We conclude with some thoughts about key issues for the Biden administration to consider as it develops its own definition of WOTUS as well as research priorities for economists seeking to inform the debate about WOTUS.","PeriodicalId":47676,"journal":{"name":"Review of Environmental Economics and Policy","volume":null,"pages":null},"PeriodicalIF":5.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44891694","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article traces the evolution of pollution auctions. The article examines how auction design began with an initially simple auction format and has progressed over time, focusing on auctions in three key pollution regulation programs: the EU Emissions Trading Scheme, the US Regional Greenhouse Gas Initiative, and the California Cap-and-Trade Program. In response to the unique characteristics of pollution regulation, which is aimed at achieving both cost containment and market participation, regulators have created novel and interesting auction designs. The article reviews the theoretical and experimental evidence concerning the outcomes of current auction programs and highlights unique design features of these regulatory systems that are fundamental to both their development and success. A key finding of the article is that even small changes in auction design can lead to significant differences in auction outcomes.
{"title":"The Evolution of Pollution Auctions","authors":"I. MacKenzie","doi":"10.1086/717898","DOIUrl":"https://doi.org/10.1086/717898","url":null,"abstract":"This article traces the evolution of pollution auctions. The article examines how auction design began with an initially simple auction format and has progressed over time, focusing on auctions in three key pollution regulation programs: the EU Emissions Trading Scheme, the US Regional Greenhouse Gas Initiative, and the California Cap-and-Trade Program. In response to the unique characteristics of pollution regulation, which is aimed at achieving both cost containment and market participation, regulators have created novel and interesting auction designs. The article reviews the theoretical and experimental evidence concerning the outcomes of current auction programs and highlights unique design features of these regulatory systems that are fundamental to both their development and success. A key finding of the article is that even small changes in auction design can lead to significant differences in auction outcomes.","PeriodicalId":47676,"journal":{"name":"Review of Environmental Economics and Policy","volume":null,"pages":null},"PeriodicalIF":5.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45367832","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The International Maritime Organization has pledged to reduce carbon emissions from the shipping industry by at least 50 percent below 2008 levels by midcentury. The next step is to design a strategy for implementing this commitment. A carbon levy for international maritime fuel is a critical component of this strategy because it provides across-the-board incentives for near-term mitigation, the robust price signal that is ultimately needed for deploying zero-emission vessels (ZEVs), and near-term funding for R & D and infrastructure investment for ZEVs. This article discusses the rationale for an international maritime carbon levy, key design and implementation issues, and the environmental impacts of such a levy.
{"title":"A Carbon Levy for International Maritime Fuels","authors":"I. Parry, D. Heine, Kelley Kizzier, T. Smith","doi":"10.1086/717961","DOIUrl":"https://doi.org/10.1086/717961","url":null,"abstract":"The International Maritime Organization has pledged to reduce carbon emissions from the shipping industry by at least 50 percent below 2008 levels by midcentury. The next step is to design a strategy for implementing this commitment. A carbon levy for international maritime fuel is a critical component of this strategy because it provides across-the-board incentives for near-term mitigation, the robust price signal that is ultimately needed for deploying zero-emission vessels (ZEVs), and near-term funding for R & D and infrastructure investment for ZEVs. This article discusses the rationale for an international maritime carbon levy, key design and implementation issues, and the environmental impacts of such a levy.","PeriodicalId":47676,"journal":{"name":"Review of Environmental Economics and Policy","volume":null,"pages":null},"PeriodicalIF":5.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44591040","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Kathy Baylis, Jonathan W. Coppess, B. Gramig, Paavani Sachdeva
Canada and the United States have a rich history of policy interventions aimed at improving environmental outcomes from agricultural production. We review the agri-environmental programs in these two countries as well as the related economic literature. Despite the impacts of agriculture on land, water, and climate quality, the literature on agri-environmental programs has largely focused on a few major programs or the adoption of specific management practices. Far less research evaluates programs on active farmland, environmental regulation of agriculture, and the interactions of these policies and programs. Further research is also needed on how the heterogeneity of environmental characteristics and processes affects the outcomes of management practices and how these outcomes might be affected by climate change. Given the continued substantial impacts of agriculture on environmental outcomes, the increased interest of agricultural processors and consumers in these outcomes, and the potential for new models and data to inform research, we conclude that this is an ideal time to examine and apply lessons learned from past program successes and failures as we seek to improve the performance of the next generation of agri-environmental policy interventions.
{"title":"Agri-environmental Programs in the United States and Canada","authors":"Kathy Baylis, Jonathan W. Coppess, B. Gramig, Paavani Sachdeva","doi":"10.1086/718052","DOIUrl":"https://doi.org/10.1086/718052","url":null,"abstract":"Canada and the United States have a rich history of policy interventions aimed at improving environmental outcomes from agricultural production. We review the agri-environmental programs in these two countries as well as the related economic literature. Despite the impacts of agriculture on land, water, and climate quality, the literature on agri-environmental programs has largely focused on a few major programs or the adoption of specific management practices. Far less research evaluates programs on active farmland, environmental regulation of agriculture, and the interactions of these policies and programs. Further research is also needed on how the heterogeneity of environmental characteristics and processes affects the outcomes of management practices and how these outcomes might be affected by climate change. Given the continued substantial impacts of agriculture on environmental outcomes, the increased interest of agricultural processors and consumers in these outcomes, and the potential for new models and data to inform research, we conclude that this is an ideal time to examine and apply lessons learned from past program successes and failures as we seek to improve the performance of the next generation of agri-environmental policy interventions.","PeriodicalId":47676,"journal":{"name":"Review of Environmental Economics and Policy","volume":null,"pages":null},"PeriodicalIF":5.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46332310","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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