Template-Type: ReDIF-Paper 1.0 Number: 2007.1 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-001.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.1 Title: How Fast are Small Tourist Countries Growing? The 1980-2003 Evidence Author-Name: Francesco Pigliaru Author-X-Name-First: Francesco Author-X-Name-Last: Pigliaru Author-WorkPlace-Name: University of Cagliari Author-Name: Rinaldo Brau Author-X-Name-First: Rinaldo Author-X-Name-Last: Brau Author-WorkPlace-Name: University of Cagliari Author-Name: Alessandro Lanza Author-X-Name-First: Alessandro Author-X-Name-Last: Lanza Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and CRENoS Abstract: We analyze the empirical relationship between growth, country size and tourism specialization by using a dataset covering the period 1980-2003. We find that tourism countries grow significantly faster than all the other sub-groups considered in our analysis. Tourism appears to be an independent determining factor for growth, and the reason for that is neither because they are poorer than the average, nor because they are very open to trade. Another finding of our paper is that small states are fast-growing only when they are highly specialized in tourism. In contrast with some previous conclusions in the literature, smallness per se is not good for growth. Keywords: Small States, Growth, Tourism, Cross Country Comparisons Classification-JEL: F43, O57 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.2 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-002.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.2 Title: Consumers’ Attitudes on Services of General Interest in the EU: Accessibility, Price and Quality 2000-2004 Author-Name: Carlo Fiorio Author-X-Name-First: Carlo Author-X-Name-Last: Fiorio Author-WorkPlace-Name: University of Milan Author-Name: M. Florio Author-X-Name-First: M. Author-X-Name-Last: Florio Author-WorkPlace-Name: University of Milan Author-Name: S. Salini Author-X-Name-First: S. Author-X-Name-Last: Salini Author-WorkPlace-Name: University of Milan Author-Name: P. Ferrari Author-X-Name-First: P. Author-X-Name-Last: Ferrari Author-WorkPlace-Name: University of Milan Abstract: The research question addressed by this paper is a simple one: are European consumers happy with the services provided by the utilities after two decades of reforms? We focus on electricity, gas, water, telephone in the EU 15 Member States. The variables we analyse are consumers’ satisfaction with accessibility, price and quality, as reported in three waves of Eurobarometer survey, 2000-2002-2004, comprising around 47,000 observations. We use ordered logit models to analyze the impact of privatization and regulatory reforms, as represented by an OECD dataset, controlling for individual and country characteristics. Our results do not support a clear association between consumers’ satisfaction and a standard reform package of privatization, vertical disintegration, liberalization. Keywords: Consumers’ Satisfaction, Gas, Electricity, Telephone, Water, Eurobarometer Classification-JEL: L94, L95, L96, L50 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.3 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-003.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.3 Title: Concession Bidding Rules and Investment Time Flexibility Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: University of Padova Author-Name: Cesare Dosi Author-X-Name-First: Cesare Author-X-Name-Last: Dosi Author-WorkPlace-Name: University of Padova Abstract: We study the competition to operate an infrastructure service by developing a model where firms report a two-dimensional sealed bid: the price to consumers and the concession fee paid to the government. Two alternative bidding rules are considered in this paper. One rule consists of awarding the exclusive right of exercise to the firm that reports the lowest price. The other consists of granting the franchise to the bidder offering the highest fee. We compare the outcome of these rules with reference to two alternative concession arrangements. The former imposes the obligation to immediately undertake the investment required to roll-out the service. The latter allows the winning bidder to optimally decide the investment time. The focus is on the effect of bidding rules and managerial flexibility on expected social welfare. We find that the two bidding rules provide the same outcome only when the contract restricts the autonomy of the franchisee, and we identify the conditions under which time flexibility can provide a higher social value. Keywords: Concessions, Auctions, Bidding Rules, Managerial Flexibility Classification-JEL: L51, D44, D92 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.4 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-004.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.4 Title: Evaluating the Empirical Performance of Alternative Econometric Models for Oil Price Forecasting Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: University of Milan Bicocca Author-Name: Chiara Longo Author-X-Name-First: Chiara Author-X-Name-Last: Longo Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Anil Markandya Author-X-Name-First: Anil Author-X-Name-Last: Markandya Author-WorkPlace-Name: University of Bath and Fondazione Eni Enrico Mattei Author-Name: Elisa Scarpa Author-X-Name-First: Elisa Author-X-Name-Last: Scarpa Author-WorkPlace-Name: Risk Management Department, Intesa-San Paolo Abstract: The relevance of oil in the world economy explains why considerable effort has been devoted to the development of different types of econometric models for oil price forecasting. Several specifications have been proposed in the economic literature. Some are based on financial theory and concentrate on the relationship between spot and futures prices (“financial” models). Others assign a key role to variables explaining the characteristics of the physical oil market (“structural” models). The empirical literature is very far from any consensus about the appropriate model for oil price forecasting that should be implemented. Relative to the previous literature, this paper is novel in several respects. First of all, we test and systematically evaluate the ability of several alternative econometric specifications proposed in the literature to capture the dynamics of oil prices. Second, we analyse the effects of different data frequencies on the coefficient estimates and forecasts obtained using each selected econometric specification. Third, we compare different models at different data frequencies on a common sample and common data. Fourth, we evaluate the forecasting performance of each selected model using static and dynamic forecasts, as well as different measures of forecast errors. Finally, we propose a new class of models which combine the relevant aspects of the financial and structural specifications proposed in the literature (“mixed” models). Our empirical findings can be summarized as follows. Financial models in levels do not produce satisfactory forecasts for the WTI spot price. The financial error correction model yields accurate in-sample forecasts. Real and strategic variables alone are insufficient to capture the oil spot price dynamics in the forecasting sample. Our proposed mixed models are statistically adequate and exhibit accurate forecasts. Different data frequencies seem to affect the forecasting ability of the models under analysis. Keywords: Oil Price, WTI Spot And Futures Prices, Forecasting, Econometric Models Classification-JEL: C52, C53, Q32, Q43 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.5 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-005.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.5 Title: The Rise of Accelerated Seasoned Equity Underwritings Author-Name: William L. Megginson Author-X-Name-First: William L. Author-X-Name-Last: Megginson Author-WorkPlace-Name: The University of Oklahoma Author-Name: Bernardo Bortolotti Author-X-Name-First: Bernardo Author-X-Name-Last: BBortolotti Author-WorkPlace-Name: Università di Torino and Fondazione Eni Enrico Mattei Author-Name: Scott B. Smart Author-X-Name-First: Scott B. Author-X-Name-Last: Smart Author-WorkPlace-Name: Indiana University Abstract: Seasoned equity offerings (SEOs) executed through accelerated underwritings have increased global market share recently, raising over $850 billion since 1998, and now account for over half (two-thirds) of the value of U.S. (European) SEOs. We examine 31,242 global SEOs, executed during 1991-2004, which raise over $2.9 trillion for firms and selling shareholders. Compared to fully marketed deals, accelerated offerings occur more rapidly, raise more money, and require fewer underwriters. Importantly, accelerated deals reduce total issuance cost by about 250 basis points. Accelerated deals sell equal fractions of primary and secondary shares, whereas in traditional SEOs primary shares dominate. Announcement period returns are comparable for traditional and accelerated offerings, while secondary and mixed offerings trigger more negative market responses than do primary offerings. We conclude that this rapid, worldwide shift towards accelerated underwriting creates a spot market for SEOs, and represents the long-predicted shift towards an auction model for seasoned equity sales. Keywords: Equity Offerings, Underwriting, Investment Banking Classification-JEL: G15, G24 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.6 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-006.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.6 Title: Uncertain R&D, Backstop Technology and GHGs Stabilization Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Massimo Tavoni Author-X-Name-First: Massimo Author-X-Name-Last: Tavoni Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: This paper analyses optimal investments in innovation when dealing with a stringent climate target and with the uncertain effectiveness of R&D. The innovation needed to achieve the deep cut in emissions is modelled by a backstop carbon-free technology whose cost depends on R&D investments. To better represent the process of technological progress, we assume that R&D effectiveness is uncertain. By means of a simple analytical model, we show how accounting for the uncertainty that characterizes technological advancement yields higher investments in innovation and lower policy costs. We then confirm the results via a numerical analysis performed with a stochastic version of WITCH, an energy-economy-climate model. The results stress the importance of a correct specification of the technological change process in economy-climate models. Keywords: Climate Change, Information and Uncertainty, Environmental Policy, Optimal R&D Investments Classification-JEL: O32, Q54, Q55 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.7 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-007.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.7 Title: A CGE-Analysis of Energy Policies Considering Labor Market Imperfections and Technology Specifications Author-Name: Robert Küster Author-X-Name-First: Robert Author-X-Name-Last: Küster Author-WorkPlace-Name: Universität Stuttgart Author-Name: ingo Ellersdorfer Author-X-Name-First: Ingo Author-X-Name-Last: Ellersdorfer Author-WorkPlace-Name: Universität Stuttgart Author-Name: Ulrich Fahl Author-X-Name-First: Ulrich Author-X-Name-Last: Fahl Author-WorkPlace-Name: Universität Stuttgart Abstract: The paper establishes a CGE/MPSGE model for evaluating energy policy measures with emphasis on their employment impacts. It specifies a dual labor market with respect to qualification, two different mechanisms for skill specific unemployment, and a technology detailed description of electricity generation. Non clearing of the dual labor market is modeled via minimum wage constraints and via wage curves. The model is exemplarily applied for the analysis of capital subsidies on the application of technologies using renewable energy sources. Quantitative results highlight that subsidies on these technologies do not automatically lead to a significant reduction in emissions. Moreover, if emission reductions are achieved these might actually partly result from negative growth effects induced by the promotion of cost inefficient technologies. Inefficiencies in the energy system increase unemployment for both skilled and unskilled labor. Keywords: CGE, Energy Economic Analysis, Employment Impact, Choice of Technology Classification-JEL: Q42, Q43, Q48, Q52 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.8 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-008.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.8 Title: The Production and Consumption Accounting Principles as a Guideline for Designing Environmental Tax Policy Author-Name: Mònica Serrano Author-X-Name-First: Mònica Author-X-Name-Last: Serrano Author-WorkPlace-Name: Universitat de Barcelona Abstract: This paper evaluates two alternative tax policies aimed at reducing atmospheric pollutant emissions. One based upon an environmental tax that burdens directly firms’ emissions, and the other one that burdens both directly and indirectly household consumption’s emissions. Applying input-output approach, we reallocate the emissions generated in the economy according to the responsibility definition, i.e. the production or the consumption accounting principle. Afterwards, we analyse the effects on the products’ prices of implementing an ad-quantum environmental tax based on the Producer Pays Principle (PPP) and/or on the User Pays Principle (UPP). The results obtained, show that both PPP and UPP environmental tax have the same effect on the final products’ prices. However, the price of the intermediate products is only affected by the PPP environmental tax, whereas the UPP environmental tax keeps the prices unchanged. Keywords: Input-Output Analysis, Environmental Taxes, Atmospheric Pollutants Classification-JEL: C67, H23, Q53 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.9 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-009.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.9 Title: Economic and Poverty Impacts of a Voluntary Carbon Reduction for a Small Liberalized Developing Economy: The Case of the Philippines Author-Name: Erwin L. Corong Author-X-Name-First: Erwin L. Author-X-Name-Last: Corong Author-WorkPlace-Name: De La Salle University-Manila Abstract: This paper analyzes the economic and poverty effects of a voluntary carbon emission reduction for a small liberalized economy—the Philippines. The simulation results indicate that tariff reductions undertaken by the Philippine government between 1994 and 2005 reduced the cost of fossil fuels thereby resulting in an increase in carbon emissions. The economic cost of reducing carbon emissions by imposing a carbon tax appears minimal as the reduction in consumer prices due to tariff reductions outweigh the increase in production cost from the imposition of a carbon tax. Overall results suggest that maintaining carbon emissions relative to 1994 levels appears to be a sensible alternative for the country Keywords: Climate Change, Carbon Emissions, International Trade, Computable General Equilibrium, Micro-Simulation, Macro-Micro Models, Philippines Classification-JEL: C68, D58, F18, I39, Q56 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.10 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-010.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.10 Title: The WITCH Model. Structure, Baseline, Solutions Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Emanuele Massetti Author-X-Name-First: Emanuele Author-X-Name-Last: Massetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Massimo Tavoni Author-X-Name-First: Massimo Author-X-Name-Last: Tavoni Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: WITCH – World Induced Technical Change Hybrid – is a regionally disaggregated hard-link hybrid global model with a neoclassical optimal growth structure (top-down) and a detailed energy input component (bottom-up). The model endogenously accounts for technological change, both through learning curves that affect the prices of new vintages of capital and through R&D investments. The model features the main economic and environmental policies in each world region as the outcome of a dynamic game. WITCH belongs to the class of Integrated Assessment Models as it possesses a climate module that feeds climate changes back into the economy. Although the model’s main features are discussed elsewhere (Bosetti et al., 2006), here we provide a more thorough discussion of the model’s structure and baseline projections, to describe the model in greater detail. We report detailed information on the evolution of energy demand, technology and CO2 emissions. We also explain the procedure used to calibrate the model parameters. This report is therefore meant to provide effective support to those who intending to use the WITCH model or interpret its results. Keywords: Climate Policy, Hybrid Modelling, Integrated Assessment, Technological Change Classification-JEL: O33, O41, Q43 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.11 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-011.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.11 Title: Public Policies for Contaminated Site Cleanup: The Opinions of the Italian Public Author-Name: Anna Alberini Author-X-Name-First: Anna Author-X-Name-Last: Alberini Author-WorkPlace-Name: University of Maryland Author-Name: Margherita Turvani Author-X-Name-First: Margherita Author-X-Name-Last: Turvani Author-WorkPlace-Name: University of Venice-IUAV Author-Name: Aline Chiabai Author-X-Name-First: Aline Author-X-Name-Last: Chiabai Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Stefania Tonin Author-X-Name-First: Stefania Author-X-Name-Last: Tonin Author-WorkPlace-Name: University of Venice-IUAV Abstract: Cleaning up contaminated sites is one of the most important environmental policy priorities in many countries. Remediation of contaminated sites is attractive because it reduces risks to human health and ecological systems, and brings a host of potential social and economic benefits. Even when the burden of paying for cleanup is imposed on the parties that are responsible for the contaminated sites, in many countries government programs are established for enforcement purposes, to set cleanup standards, and to address contamination at those sites where the responsible parties are no longer in existence or do not have the means to pay for cleanup (“orphan” sites). This paper presents the results of a survey of the Italian public where we ask citizens to report their opinions about possible goals for such government programs and for cleanup. Our survey respondents are generally in favor of broad-based programs that protect the health of a diverse population—without restricting attention to cleanup beneficiaries in specific age groups or to specific exposure pathways. They also in favor of permanent remedies, even if they cost more, and of cleaning up sites even when the health risk reduction are experienced in the future, as is usually the case with carcinogenic contaminants. Keywords: Public Policy, Contaminated Sites, Permanent Remedies, Protection of Health and Ecosystems at Contaminated Sites Classification-JEL: I18, J18, K32, Q53 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.12 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-012.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.12 Title: An Analytic Hierarchy Process for The Evaluation of Transport Policies to Reduce Climate Change Impacts Author-Name: Maria Berrittella Author-X-Name-First: Maria Author-X-Name-Last: Berrittella Author-WorkPlace-Name: Università di Palermo Author-Name: A. Certa Author-X-Name-First: A. Author-X-Name-Last: Certa Author-WorkPlace-Name: Università di Palermo Author-Name: M. Enea Author-X-Name-First: M. Author-X-Name-Last: Enea Author-WorkPlace-Name: Università di Palermo Author-Name: P. Zito Author-X-Name-First: P. Author-X-Name-Last: Zito Author-WorkPlace-Name: Università di Palermo Abstract: Transport is the sector with the fastest growth of greenhouse gases emissions, both in developed and in developing countries, leading to adverse climate change impacts. As the experts disagree on the occurrence of these impacts, by applying the analytic hierarchy process (AHP), we have faced the question on how to form transport policies when the experts have different opinions and beliefs. The opinions of experts have been investigated by a means of a survey questionnaire. The results show that tax schemes aiming at promoting environmental-friendly transport mode are the best policy. This incentives public and environmental-friendly transport modes, such as car sharing and car pooling. Keywords: Analytic Hierarchy Process, Transport Policies, Climate Change Classification-JEL: C90, Q54, R48 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.13 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-013.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.13 Title: The Kyoto Protocol and the Effect of Existing and Planned Measures in the Agricultural and Forestry Sector in the EU25 Author-Name: Carlo Giupponi Author-X-Name-First: Carlo Author-X-Name-Last: Giupponi Author-WorkPlace-Name: Università degli Studi di Milano Author-Name: Francesco Bosello Author-X-Name-First: Francesco Author-X-Name-Last: Bosello Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Barbara Buchner Author-X-Name-First: Barbara Author-X-Name-Last: Buchner Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Jacopo Crimi Author-X-Name-First: Jacopo Author-X-Name-Last: Crimi Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Andrea Povellato Author-X-Name-First: Andrea Author-X-Name-Last: Povellato Author-WorkPlace-Name: Istituto Nazionale di Economia Agraria (INEA) Abstract: Agricultural and forestry activities cover the majority of the EU territory: in particular agriculture is the main lad use type, accounting for more than 41% of the land use in the EU15, while in the new Member States this share ranges between 30 and 60 %, whereas forestry is the second. The role of agriculture as both a source of and as a sink of greenhouse gases (GHG) varies significantly because of the diversity of production systems adopted by farmers and of the environmental conditions in Europe. The effectiveness of the policy measures adopted so far in the agro-forestry sector to meet the Kyoto target are reported in the National Communications to the UNFCC which now reached its 4th edition. National Communication were used in this reports as the main source of information to develop a country by country survey of policy measure - both from a qualitative and a quantitative perspective - allowing to understand the progresses the Members States are making towards their commitments, also thanks to a comparative assessment of this release with the previous communications to the UNFCC. Although not all members’ states did provide quantitative estimations, the comparison of the third fourth edition of the National Communication showed that almost all the countries have revised their estimations and projections of GHG emissions. It is also worth noting that that even though the measures reported at the country level still respond mainly to Common Agricultural Policy (CAP) requirements or to the improvement of air and water quality standards, the issue of climate change has become increasingly prominent in the design of agro-forestry development strategies. Keywords: Agriculture, Forestry, Climate Change, Greenhouse Gases, Policy Measures, EU25, Meacap Classification-JEL: Q54 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.14 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-014.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.14 Title: A Review of Recent Studies on Cost Effectiveness of GHG Mitigation Measures in the European Agro-Forestry Sector Author-Name: Carlo Giupponi Author-X-Name-First: Carlo Author-X-Name-Last: Giupponi Author-WorkPlace-Name: Università degli Studi di Milano Author-Name: Francesco Bosello Author-X-Name-First: Francesco Author-X-Name-Last: Bosello Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Andrea Povellato Author-X-Name-First: Andrea Author-X-Name-Last: Povellato Author-WorkPlace-Name: Istituto Nazionale di Economia Agraria (INEA) Abstract: Over the last twenty years, climate change has become an increasing concern for scientists, public opinions and policy makers. Due to the pervasive nature of its impacts for many important aspects of human life, climate change is likely to influence and be influenced by the most diverse policy or management choices. This is particularly true for those interventions affecting agriculture and forestry: they are strongly dependent on climate phenomena, but also contribute to climate evolution being sources of and sinks for greenhouse gases. This paper offers a survey of the existing literature assessing cost, effectiveness and efficiency of greenhouse gas mitigation strategies, or broader economic reforms, targeted to the agricultural and forestry sectors. The specific focus is on European Countries. Different methodological approaches, research questions addressed and results are examined. The main finding is that agriculture and forestry can potentially provide GHG reduction at a competitive cost. Nevertheless this cost is positive; accordingly, mitigation policies should be carefully designed either to balance costs with expected benefits or to avoid excessive penalisation of the sectors involved. Finally needs are highlighted for improving the existing knowledge and research methodologies. Keywords: Agriculture, Forestry, Climate Change, Greenhouse Gases, Policy Measures, Cost-Effectiveness, Meacap Classification-JEL: Q54 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.15 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-015.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.15 Title: Forestry and the Carbon Market Response to Stabilize Climate Author-Name: Massimo Tavoni Author-X-Name-First: Massimo Author-X-Name-Last: Tavoni Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Brent Sohngen Author-X-Name-First: Brent Author-X-Name-Last: Sohngen Author-WorkPlace-Name: AED Economics, Ohio State University Abstract: This paper investigates the potential contribution of forestry management in meeting a CO2 stabilization policy of 550 ppmv by 2100. In order to assess the optimal response of the carbon market to forest sequestration we couple two global models. An energy-economy-climate model for the study of climate policies is linked with a detailed forestry model through an iterative procedure to provide the optimal abatement strategy. Results show that forestry is a determinant abatement option and could lead to significantly lower policy costs if included. Linking forestry management to the carbon market has the potential to delay the policy burden, and is expected to reduce the price of carbon of 40% by 2050. Biological sequestration will mostly come from avoided deforestation in tropical forests rich countries. The inclusion of this mitigation option is demonstrated to crowd out some of the traditional abatement in the energy sector and to lessen induced technological change in clean technologies. Keywords: Forestry, Climate Policy, Technological Innovation Classification-JEL: Q23, Q52, Q55 Creation-Date: 200701 Template-Type: ReDIF-Paper 1.0 Number: 2007.16 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-016.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.16 Title: Climate Change and the Stability of Water Allocation Agreements Author-Name: Erik Ansink Author-X-Name-First: Erik Author-X-Name-Last: Ansink Author-WorkPlace-Name: Wageningen University Author-Name: Arjan Ruijs Author-X-Name-First: Arjan Author-X-Name-Last: Ruijs Author-WorkPlace-Name: Wageningen University Abstract: We analyse agreements on river water allocation between riparian countries. Besides being efficient, water allocation agreements need to be stable in order to be effective in increasing the efficiency of water use. In this paper, we assess the stability of water allocation agreements, using a game theoretic model. We consider the effects of climate change and the choice of a sharing rule on stability. Our results show that both a decrease in mean river flow and an increase in the variance of river flow decrease the stability of an agreement. An agreement where the downstream country is allocated a fixed amount of water has the lowest stability compared to other sharing rules. Keywords: Water Allocation, Stability, Climate Change, Game Theory Classification-JEL: C7, Q25 Creation-Date: 200702 Template-Type: ReDIF-Paper 1.0 Number: 2007.17 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-017.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.17 Title: Compact or Spread-Out Cities: Urban Planning, Taxation, and the Vulnerability to Transportation Shocks Author-Name: François Gusdorf Author-X-Name-First: François Author-X-Name-Last: Gusdorf Author-WorkPlace-Name: CIRED Author-Name: Stéphane Hallegatte Author-X-Name-First: Stéphane Author-X-Name-Last: Hallegatte Author-WorkPlace-Name: Centre International de Recherche sur l'Environnement et le Développement Ecole Nationale de la Météorologie Abstract: This paper shows that cities made more compact by transportation taxation are more robust than spread-out cities to shocks in transportation costs. Such a shock, indeed, entails negative transition effects that are caused by housing infrastructure inertia and are magnified in low-density cities. Distortions due to a transportation tax, however, have in absence of shock detrimental consequences that need to be accounted for. The range of beneficial tax levels can, therefore, be identified as a function of the possible magnitude of future shocks in transportation costs. These taxation levels, which can reach significant values, reduce city vulnerability and prevent lock-ins in under-optimal situations. Keywords: Urban transportation, Housing, Inertia, Vulnerability, Transportation Taxation Classification-JEL: R21, R48, H23, H31 Creation-Date: 200702 Template-Type: ReDIF-Paper 1.0 Number: 2007.18 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-018.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.18 Title: A Bug’s Life: Competition Among Species Towards the Environment Author-Name: Giovanni Bella Author-X-Name-First: Giovanni Author-X-Name-Last: Bella Author-WorkPlace-Name: University of Cagliari Abstract: A model of different species competing for the same environment is presented, and possible explanations of peaceful coexistence or rather internecine conflicts are consequently derived. By means of a Lotka-Volterra dynamic system we describe the evolution of two populations (bees and locusts) that differently approach the management of those natural resources they contend for, and thus make a simple parable of today’s societies playing the current environmental scenario. Keywords: Competing, Species, Lotka-Volterra, Dynamics, Natural Resource Management Classification-JEL: C61, Q34, Q57 Creation-Date: 200702 Template-Type: ReDIF-Paper 1.0 Number: 2007.19 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-019.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.19 Title: “Spot, Bilateral and Futures Trading in Electricity Markets. Implications for Stability” Author-Name: Valeria Termini Author-X-Name-First: Valeria Author-X-Name-Last: Termini Author-WorkPlace-Name: SSPA Author-Name: Laura Cavallo Author-X-Name-First: Laura Author-X-Name-Last: Cavallo Author-WorkPlace-Name: Prime Minister's Office Abstract: The design of wholesale electricity markets in the transition towards liberalization presents significant differences from country to country. Some spot markets have imposed the concentration of transactions to ensure market liquidity. Other markets are based on bilateral trading. The debate about the optimal trading mechanism mainly concentrates on how to deal with the trade off between the liquidity of the market and the stability of the system. The solution chosen by some market is a mandatory pool with a regulated market for electricity derivatives, that allows to hedge price volatility and to mitigate market power. This paper investigates whether, in the presence of a futures market, spot and bilateral trading can operate together and what are possible outcomes in terms of liquidity of the spot market and stability of the system. The paper extends existing literature on the role of futures market on the behavior of spot market prices, developing a multi-period model in which electricity consumers can choose whether to trade on the spot market or negotiate bilateral contracts. Results suggest that a spot market with futures contracts and a market for bilateral contracts are not necessarily alternative ways to manage stability problems, but may co-exist with positive and synergic outcomes on price behaviors and market power. Keywords: Derivatives, Electricity, Market power, Hedging Classification-JEL: G18, L94, Q41, Q48 Creation-Date: 200702 Template-Type: ReDIF-Paper 1.0 Number: 2007.20 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-020.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.20 Title: Endogenous Business Cycles and the Economic Response to Exogenous Shocks Author-Name: Stéphane Hallegatte Author-X-Name-First: Stéphane Author-X-Name-Last: Hallegatte Author-WorkPlace-Name: Centre International de Recherche sur l'Environnement et le Développement and Ecole Nationale de la Météorologie Author-Name: Michael Ghil Author-X-Name-First: Michael Author-X-Name-Last: Ghil Author-WorkPlace-Name: University of California Abstract: In this paper, we investigate the macroeconomic response to exogenous shocks, namely natural disasters and stochastic productivity shocks. To do so, we make use of an endogenous business cycle model in which cyclical behavior arises from the investment–profit instability; the amplitude of this instability is constrained by the increase in labor costs and the inertia of production capacity and thus results in a finite-amplitude business cycle. This model is found to exhibit a larger response to natural disasters during expansions than during recessions, because the exogenous shock amplifies pre-existing disequilibria when occurring during expansions, while the existence of unused resources during recessions allows for damping the shock. Our model also shows a higher output variability in response to stochastic productivity shocks during expansions than during recessions. This finding is at odds with the classical real-cycle theory, but it is supported by the analysis of quarterly U.S. Gross Domestic Product series; the latter series exhibits, on average, a variability that is 2.6 times larger during expansions than during recessions. Keywords: Business cycles, Natural disasters, Productivity shocks, Output variability Classification-JEL: E01, E20, E32, E40, Q54 Creation-Date: 200702 Template-Type: ReDIF-Paper 1.0 Number: 2007.21 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-021.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.21 Title: Climate Coalitions: A Theoretical and Computational Appraisal Author-Name: Thierry Bréchet Author-X-Name-First: Thierry Author-X-Name-Last: Bréchet Author-WorkPlace-Name: Université Catholique de Louvain Author-Name: François Gerard Author-X-Name-First: François Author-X-Name-Last: Gerard Author-WorkPlace-Name: Center for Operations Research and Econometrics (CORE) and Université Catholique de Louvain Abstract: Using an updated version of the CWS model (introduced by Eyckmans and Tulkens in Resource and Energy Economics 2003), this paper intends to evaluate with numbers the respective merits of two competing notions of coalition stability in the standard global public goods model as customarily applied to the climate change problem. After a reminder of the model structure and of the definition of the two game theoretical stability notions involved – namely, core stability and internal-external stability, the former property is shown to hold for the grand coalition in the CWS model only if resource transfers of a specific form between countries are introduced. It is further shown that while the latter property holds neither for the grand coalition nor for most large coalitions, it is nevertheless verified in a weak sense that involves transfers (dubbed “potential internal stability”) for most small coalitions. The reason for this difference is brought to light, namely the differing rationale that inspires the transfers in either case. Finally, it is shown that the stable coalitions that perform best (in terms of carbon concentration and global welfare) are always composed of both industrialized and developing countries. Two sensitivity analyses confirm the robustness of all these results. Keywords: Climate Change, Coalitions, Simulation, Integrated Assessment Classification-JEL: C71, C73, D9, D62, F42, Q2 Creation-Date: 200702 Template-Type: ReDIF-Paper 1.0 Number: 2007.22 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-022.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.22 Title: Stringency and Distribution in the EU Emissions Trading Scheme –The 2005 Evidence Author-Name: Stefan P. Schleicher Author-X-Name-First: Stefan P. Author-X-Name-Last: Schleicher Author-WorkPlace-Name: Austrian Institute of Economic Research Author-Name: Claudia Kettner Author-X-Name-First: Claudia Author-X-Name-Last: Kettner Author-WorkPlace-Name: Austrian Institute of Economic Research Author-Name: Angela Köppl Author-X-Name-First: Angela Author-X-Name-Last: Köppl Author-WorkPlace-Name: Austrian Institute of Economic Research Author-Name: Gregor Thenius Author-X-Name-First: Gregor Author-X-Name-Last: Thenius Author-WorkPlace-Name: Austrian Institute of Economic Research Abstract: With the release of the verified emissions for installations covered by the EU Emissions Trading Scheme for the first trading year 2005 we are able to compare actual emissions and allowances for each installation. Based on data available for 24 Member States as of January 2007, this paper uses a thorough data analysis for about 9,900 installations to investigate evidence on three issues: first, the stringency of the total allocation cap and allocation differences both among the Member States and a selection of emission intensive sectors; second, the distribution of the size of installations; and third, the spread of allocation discrepancies and possible allocation biases regarding the size of installations. Keywords: Emission Trading, EU Emissions Trading Scheme, Climate Policy Classification-JEL: D61, O1, Q51, Q54 Creation-Date: 200702 Template-Type: ReDIF-Paper 1.0 Number: 2007.23 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-023.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.23 Title: Designing a Decision Support System for Marine Reserves Management: An Economic Analysis for the Dutch North Sea Author-Name: Arjan Ruijs Author-X-Name-First: Arjan Author-X-Name-Last: Ruijs Author-WorkPlace-Name: Environmental Economics and Natural Resources Group Wageningen University Author-Name: Hongyu Ding Author-X-Name-First: Hongyu Author-X-Name-Last: HDing Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Venice International University Author-Name: Ekko C. van Ierland Author-X-Name-First: Ekko C. Author-X-Name-Last: van Ierland Author-WorkPlace-Name: Wageningen University Abstract: In this paper we discuss how a Decision Support System (DSS) for managing the marine environment can be set up. We use the Driving force-Pressure-State-Impact-Respond (DPSIR) framework to analyze which are the major driving forces impacting upon the marine environment in the North Sea. Moreover, a number of potential responses are identified. Furthermore, a preliminary and simplified optimization model has been set up and can be used in a DSS to decide on the best location of marine reserves for the protection of species. The model is based on a bio-economic metapopulation model that can be used to decide which parts of the sea should be opened for fisheries and which should be protected as marine reserve. It accounts for the dispersal of fish and considers both the economic returns from fisheries and the ecological value of marine biodiversity. A number of suggestions are given on how to extend and improve the DSS. Keywords: Decision Support System, Marine Biodiversity Conservation, DPSIR Framework, Bioeconomic Modeling, North Sea Classification-JEL: Q2, Q5, Q57, Q58 Creation-Date: 200702 Template-Type: ReDIF-Paper 1.0 Number: 2007.24 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-024.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.24 Title: Economic Dynamics, Emission Trends and the EKC Hypothesis New Evidence Using NAMEA and Provincial Panel Data for Italy Author-Name: Massimiliano Mazzanti Author-X-Name-First: Massimiliano Author-X-Name-Last: Mazzanti Author-WorkPlace-Name: University of Ferrara Author-Name: Anna Montini Author-X-Name-First: Anna Author-X-Name-Last: Montini Author-WorkPlace-Name: University of Bologna Author-Name: Roberto Zoboli Author-X-Name-First: Roberto Author-X-Name-Last: Zoboli Author-WorkPlace-Name: CERIS-CNR and Catholic University of Milan Abstract: This paper provides new empirical evidence on delinking trends concerning emission-related indicators in Italy. We discuss methodological issues regarding the analysis of delinking and examine the related Environmental Kuznets Curves (EKC) literature to explore and assess the most value added research lines after more than a decade of intensive research in the field. The main contribution of the paper is in providing EKC evidence exploiting environmental-economic merged panel datasets at a decentralized level exploiting long time series and rich cross section heterogeneity at both sectoral and provincial level. This crucially augments the unsatisfactory outcomes deriving from cross country analyses, which are less informative for policy purposes since they provide averages for environmental-economic relationships. Two panel datasets: 1990-2000 emissions at province level; and sectoral disaggregated NAMEA emissions sources for 1990-2001 are analyzed. We find mixed evidence supporting the EKC hypothesis. Some of the pollutants in the NAMEA data, such as CO2, CH4 and CO, produce inverted-U shaped curves with coherent within range turning points. Other emission trends for the period under consideration show monotonic or even N shaped (SOX, NOX, PM10) relationship. Other emissions show relatively less robust results, with mixed evidence arising from different specifications. This partially confirms some of the criticisms directed to EKC empirical investigations. However, our analysis shows that probably there is no single EKC dynamic, but rather many EKC dynamics, differing depending on (i) period of observation; (ii) country/area; (iii) emissions/environmental pressures; (iv) sectors. Sectoral disaggregated analysis highlights that an aggregated outcome should hide some heterogeneity across different sectors. Services tend to present an inverted-N shape in most cases. Manufacturing industry shows a mix of EKC inverted- U and N shapes, depending on the emission considered. The same is true for industry (all industries, not only manufacturing): though a turning point has been experienced, N shapes may lead to increased emissions with respect to very high levels of the income driver. The analysis of provincial data shows that inverted-U shaped curves are present for some of the emissions in the SINAnet- APAT database, such as CH4, NMVOC, CO and PM10, with coherent within range turning points. Other emission trends show a monotonic relationship (CO2 and N2O), or in some cases an inverted-N shaped relationship (SOX and NOX). This kind of analysis at macro sector and/or specific sector level appear to be the most promising and robust field of future research for the assessment of EKC dynamics. National studies grounded in geographical heterogeneity, rather than regional/international analysis, and focused on sectoral trends, are more informative for policy making. The implementation of such investigations needs larger datasets than are currently available. We thus point to the need for increasing and continual effort on constructing integrated environmental/economic statistical accounts. Keywords: Decoupling, NAMEA Emissions, Economic Drivers, Kuznets Curve, Environmental Efficiency Classification-JEL: C23, Q38, Q56 Creation-Date: 200702 Template-Type: ReDIF-Paper 1.0 Number: 2007.25 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-025.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.25 Title: Redealing the Cards: How the Presence of an Eco-Industry Modifies the Political Economy of Environmental Policies Author-Name: Joan Canton Author-X-Name-First: Joan Author-X-Name-Last: Canton Author-WorkPlace-Name: GREQAM, Université de la Méditerranée Abstract: An incumbent government maximizes its chances of being reelected. Its objective function encompasses both social welfare and political contributions. Its only instrument is a pollution tax. In an open-economy context, we introduce an eco-industry in addition to lobbies of polluting firms and environmentalists. Not only does the eco-industry lobby add a new political contribution toward a higher environmental tax, it also modifies the incentives of the usual lobbies. When the foreign environmental policy is constant, environmentalists can be in favor of a decrease in the local tax in order to reduce foreign pollution. It could also be in the interest of a vertical industrial pressure group to lobby toward more stringent environmental policy. In general, the impact of lobbying activities on the politically optimal tax is ambiguous as pressure groups push in different directions. Keywords: Eco-Industry, Environmental Taxation, Lobbies, Political Economy Classification-JEL: H23, D72 Creation-Date: 200702 Template-Type: ReDIF-Paper 1.0 Number: 2007.26 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-026.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.26 Title: Environmental Taxation and International Eco-Industries Author-Name: Joan Canton Author-X-Name-First: Joan Author-X-Name-Last: Canton Author-WorkPlace-Name: GREQAM, Université de la Méditerranée Abstract: Environmental policies are discussed when two countries differ in their ability to abate pollution. Northern eco-industries (the industry supplying abatement activities) are more efficient than Southern ones. Segmented environmental markets and a Northern monopoly yield identical second-best taxes in both countries. When markets are global, Southern countries underestimate the market power of eco-industries. Introducing competition creates positive (resp. negative) rent-shifting distortions in South (resp. North). Cooperation could reduce Northern pollution but has ambiguous consequences in South. Keywords: Eco-Industry, Strategic Environmental Policy, Asymmetric Oligopolies Classification-JEL: D62, H23, F12 Creation-Date: 200702 Template-Type: ReDIF-Paper 1.0 Number: 2007.27 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-027.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.27 Title: Abatement and Transaction Costs of Carbon-Sink Projects Involving Smallholders Author-Name: Oscar Cacho Author-X-Name-First: Oscar Author-X-Name-Last: Cacho Author-WorkPlace-Name: University of New England Author-Name: Leslie Lipper Author-X-Name-First: Leslie Author-X-Name-Last: Lipper Author-WorkPlace-Name: Food and Agriculture Organization Abstract: Agroforestry projects have the potential to help mitigate global warming by acting as sinks for greenhouse gasses. However, participation in carbon-sink projects may be constrained by high costs. This problem may be particularly severe for projects involving smallholders in developing countries. Of particular concern are the transaction costs incurred in developing projects, measuring, certifying and selling the carbon-sequestration services generated by such projects. This paper addresses these issues by analysing the implications of transaction and abatement costs in carbon-sequestration projects. A model of project participation is developed, which accounts for the conditions under which both buyers and sellers would be willing to engage in a carbon transaction that involves a long-term commitment. The model is used to identify critical project-design variables (minimum project size, farm price of carbon, minimum area of participating farms). A project feasibility frontier (PFF) is derived, which shows the minimum project size that is feasible for any given market price of carbon. The PFF is used to analyse how the transaction costs imposed by the Clean Development Mechanism of the Kyoto Protocol affect project feasibility. Keywords: Agroforestry, Climate Policy, Carbon Sequestration Costs Classification-JEL: Q23, Q57, O1, O13 Creation-Date: 200703 Template-Type: ReDIF-Paper 1.0 Number: 2007.28 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-028.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.28 Title: Carbon Sequestration with Reforestations and Biodiversity-Scenic Values Author-Name: A. Caparrós Author-X-Name-First: A. Author-X-Name-Last: Caparrós Author-WorkPlace-Name: Spanish Council for Scientific Research (CSIC) Author-Name: E. Cerdá Author-X-Name-First: E. Author-X-Name-Last: Cerdá Author-WorkPlace-Name: University Complutense Madrid Author-Name: P. Ovando Author-X-Name-First: P. Author-X-Name-Last: Ovando Author-WorkPlace-Name: Spanish Council for Scientific Research (CSIC-IPGP) Author-Name: P. Campos Author-X-Name-First: P. Author-X-Name-Last: Campos Author-WorkPlace-Name: Spanish Council for Scientific Research (CSIC-IPGP) Abstract: This paper presents an optimal control model to analyze reforestations with two different species, including commercial values, carbon sequestration and biodiversity or scenic values. We solve the model qualitatively with general functions and discuss the implications of partial or total internalization of environmental values, showing that internalizing only carbon sequestration may have negative impacts on biodiversity-scenic values. To evaluate the practical relevance, we compare reforestations in the South-west of Spain with cork-oaks (a slow growing native species) and with eucalyptus (a fast growing alien species). We do the analysis with two different carbon crediting methods: the Carbon Flow Method and the Ton Year Accounting Method. With the .first method forest surface increases more, but using mainly eucalyptus. With the second, additional reforestations are done mainly using cork-oaks. We value the impact on visitors of these reforestations using stated preferences methods, showing that when these values are internalized cork-oaks are favored. Keywords: Optimal Control, Forests, Carbon, Sequestration, Biodiversity, Scenic, Stated Preferences, Carbon Accounting Classification-JEL: Q23, Q26, Q51, Q57 Creation-Date: 200703 Template-Type: ReDIF-Paper 1.0 Number: 2007.29 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-029.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.29 Title: Predicting the Deforestation–Trend Under Different Carbon–Prices Author-Name: Georg E. Kindermann Author-X-Name-First: Georg E. Author-X-Name-Last: Kindermann Author-WorkPlace-Name: International Institute for Applied Systems Analysis (IIASA) Author-Name: Michael Obersteiner Author-X-Name-First: Michael Author-X-Name-Last: Obersteiner Author-WorkPlace-Name: International Institute for Applied Systems Analysis (IIASA) Author-Name: Ewald Rametsteiner Author-X-Name-First: Ewald Author-X-Name-Last: Rametsteiner Author-WorkPlace-Name: International Institute for Applied Systems Analysis (IIASA) Author-Name: Ian McCallcum Author-X-Name-First: Ian Author-X-Name-Last: McCallcum Author-WorkPlace-Name: International Institute for Applied Systems Analysis (IIASA) Abstract: Background: Global carbon stocks in forest biomass are decreasing by 1.1 Gt of carbon annually, owing to continued deforestation and forest degradation. Deforestation emissions are partly offset by forest expansion and increases in growing stock primarily in the extra-tropical north. Innovative financial mechanisms would be required to help reducing deforestation. Using a spatially explicit integrated biophysical and socio-economic land use model we estimated the impact of carbon price incentive schemes and payment modalities on deforestation. One payment modality is adding costs for carbon emission, the other is to pay incentives for keeping the forest carbon stock intact. Results, Baseline scenario calculations show that close to 200mil ha or around 5% of today’s forest area will be lost between 2006 and 2025, resulting in a release of additional 17.5 GtC. Today’s forest cover will shrink by around 500 million hectares, which is 1/8 of the current forest cover, within the next 100 years. The accumulated carbon release during the next 100 years amounts to 45 GtC, which is 15% of the total carbon stored in forests today. Incentives of 6 US$/tC for the standing biomass paid every 5 years will bring deforestation down by 50%. This will cause costs of 34 billion US$/year. On the other hand a carbon tax of 12$/tC harvested forest biomass will also cut deforestation by half. The tax income will decrease from 6 billion US$ in 2005 to 4.3 billion US$ in 2025 and 0.7 billion US$ in 2100 due to decreasing deforestation speed. Conclusions, Avoiding deforestation requires financial mechanisms that make retention of forests economically competitive with the currently often preferred option to seek profits from other land uses. Incentive payments need to be at a very high level to be effective against deforestation. Taxes on the other hand will generate budgetary revenues by the regions which are already poor. A combination of incentives and taxes could turn out to be a viable solution for this dilemma. Increasing the value of forest land and thereby make it less easily prone to deforestation would act as a strong incentive to increase productivity of agricultural and fuelwood production, which could be supported by revenues generated by the deforestation tax. Keywords: Deforestation, Carbon Prices Classification-JEL: Q57, Q58 Creation-Date: 200703 Template-Type: ReDIF-Paper 1.0 Number: 2007.30 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-030.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.30 Title: A Modelling Framework for Addressing the Synergies between Global Conventions through Land Use Changes: Carbon Sequestration, Biodiversity Conservation, Prevention of Land Degradation and Food Security in Agricultural and Forested Lands in Developing Countries Author-Name: Raul Ponce-Hernandez Author-X-Name-First: Raul Author-X-Name-Last: Ponce-Hernandez Author-WorkPlace-Name: Trent University Abstract: This paper proposed a methodological framework for the assessment of carbon stocks and the development and identification of land use, land use change and land management scenarios, whereby enhancing carbon sequestration synergistically increases biodiversity, the prevention of land degradation and food security through the increases in crop yields. The framework integrates satellite image interpretation, computer modelling tools (i.e. software customization of off-the-shelf soil organic matter turnover simulation models) and Geographical Information Systems (GIS). The framework addresses directly and indirectly the cross-cutting ecological concerns foci of major global conventions: climate change, biodiversity, the combat of desertification and food security. Their synergies are targeted by providing procedures for assessing and identifying simultaneously carbon sinks, potential increases in plant diversity, measures to prevent land degradation and enhancements in food security through crop yields, implicit in each land use change and land management scenario. The scenarios aim at providing “win-win” options to decision makers through the framework’s decision support tools. Issues concerning complex model parameterization and spatial representation were tackled through tight coupling soil carbon models to GIS via software customization. Results of applying the framework in the field in two developing countries indicate that reasonably accurate estimates of carbon sequestration can be obtained through modeling; and that alternative best soil organic matter management practices that arrest shifting “slash-and-burn” cultivation and prevent burning and emissions, can be identified. Such options also result in increased crop yields and food security for an average family size in the area, while enhancing biodiversity and preventing land degradation. These options demonstrate that the judicious management of organic matter is central to greenhouse gas mitigation and the attainment of synergistic ecological benefits, which is the concern of global conventions. The framework is to be further developed through successive approximations and refinement in future, extending its applicability to other landscapes. Keywords: Climate Change, Greenhouse Gas Mitigation, Carbon Sequestration, Soil Organic Matter, Modeling, Land-Use Change, Land Management, Ecological Synergies, Agriculture Classification-JEL: C15, C21, Q1, Q15, Q24 Creation-Date: 200703 Template-Type: ReDIF-Paper 1.0 Number: 2007.31 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-031.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.31 Title: Are Workers. Enterprises Entry Policies Conventional Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: University of Padova Author-Name: Gianpaolo Rossini Author-X-Name-First: Gianpaolo Author-X-Name-Last: Rossini Author-WorkPlace-Name: University of Bologna Abstract: One of the main reasons why workers’ enterprises (WE) still represent a relevant chunk of the economy may lie in some affinities with conventional profit maximizing firms. To prove this, we compare the entry policies of WEs and conventional firms when they can decide size at entry while having to stick to it afterwards. Even though short run differences remain, a long run coincidence appears besides that under certainty. Endogenizing size and time of entry in an uncertain dynamic environment we see that WEs enter at the same trigger and size of conventional firms. Both of them wait less and choose a dimension larger than the minimum efficient scale. This may be another way to explain why WE are still an important share of the economy (Hesse and Cihàk, 2007) despite the ongoing mantra of their imminent demise. Keywords: Workers’ Enterprises, Entry, Uncertainty, Rigidity Classification-JEL: G13, J54, L3 Creation-Date: 200703 Template-Type: ReDIF-Paper 1.0 Number: 2007.32 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-032.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.32 Title: Do Social Relations Affect Economic Welfare? A Microeconomic Empirical Analysis Author-Name: Giacomo Degli Antoni Author-X-Name-First: Giacomo Author-X-Name-Last: Degli Antoni Author-WorkPlace-Name: University of Milano-Bicocca Abstract: Over the last few years, many studies have shown that social networks affect the socioeconomic development. This paper presents evidence, through the Italian microdata representative of the entire Italian population, that the quality and quantity of interpersonal relations of agents can increase their economic welfare. Two proxies of interpersonal relations at an individual level are considered: a proxy for the density and one for the quality of network structure of personal contacts. Both seem to have a positive effect on the level of household economic welfare of agents. This result proves robust to the inclusion of a variety of control variables and to the use of different econometric methods. Keywords: Networks, Social Interactions, Household Economic Welfare, Microdata, Fuzzy Logic Classification-JEL: D10, Z13 Creation-Date: 200703 Template-Type: ReDIF-Paper 1.0 Number: 2007.33 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-033.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.33 Title: Carbon Leakage with International Technology Spillovers Author-Name: Reyer Gerlagh Author-X-Name-First: Reyer Author-X-Name-Last: Gerlagh Author-WorkPlace-Name: University of Manchester Author-Name: Onno Kuik Author-X-Name-First: Onno Author-X-Name-Last: Kuik Author-WorkPlace-Name: Vrije Universiteit Abstract: In this paper we study the effect of international technology spillovers on carbon leakage. We first develop and analyse two simple competing models for carbon leakage. The first model represents the pollution haven hypothesis. It focuses on the international competition between firms that produce energy-intensive goods. The second model highlights the role of a globally integrated carbon-energy market. We calculate formulas for the leakage rates in both models and, through meta-analysis, show that the second model captures best the major mechanisms reported in the CGE literature on carbon leakage. We extend this model with endogenous energy-saving technology and international technology spillovers. This feature is shown to decrease carbon leakage. We build-in the endogenous energy-saving technology in a large CGE model and verify that the results from the formal model carry over. Carbon leakage becomes negative for moderate levels of international technology spillover. Keywords: arbon-Leakage, Climate Policy, Induced Technological Change; Trade and Environment Classification-JEL: F18, O39, Q25, Q4 Creation-Date: 200703 Template-Type: ReDIF-Paper 1.0 Number: 2007.34 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-034.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.34 Title: The Impact of a Carbon Tax on International Tourism Author-Name: Richard S.J. Tol Author-X-Name-First: Richard S.J. Author-X-Name-Last: Tol Author-WorkPlace-Name: ESRI Abstract: A simulation model of international tourist flows is used to estimate the impact of a carbon tax on aviation fuel. The effect of the tax on travel behaviour is small: a global $1000/tC would change travel behaviour to reduce carbon dioxide emissions from international aviation by 0.8%. This is because the imposed tax is probably small relative to the air fare. A $1000/tC tax would less than double air fares, and have a smaller impact on the total cost of the holiday. In addition, the price elasticity is low. A carbon tax on aviation fuel would particularly affect long-haul flights, because of high emissions, and short-haul flights, because of the emission during take-off and landing. Medium distance flights would be affected least. This implies that tourist destinations that rely heavily on short-haul flights (that is, islands near continents, such as Ireland) or on intercontinental flights (e.g., Africa) will see a decline in international tourism numbers, while other destinations may see international arrivals rise. If the tax is only applied to the European Union, EU tourists would stay closer to home so that EU tourism would grow at the expense of other destinations. Sensitivity analyses reveal that the qualitative insights are robust. A carbon tax on aviation fuel would have little effect on international tourism, and little effect on emissions. Keywords: International Tourism, Tax, Carbon Dioxide, Aviation Classification-JEL: L83, L93, Q54 Creation-Date: 200703 Template-Type: ReDIF-Paper 1.0 Number: 2007.35 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-035.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.35 Title: Optimal Timing of Environmental Policy; Interaction Between Environmental Taxes and Innovation Externalities Author-Name: Reyer Gerlagh Author-X-Name-First: Reyer Author-X-Name-Last: Gerlagh Author-WorkPlace-Name: University of Manchester Author-Name: Snorre Kverndokk Author-X-Name-First: Snorre Author-X-Name-Last: Kverndokk Author-WorkPlace-Name: Ragnar Frisch Centre for Economic Research Author-Name: Knut Einar Rosendahl Author-X-Name-First: Knut Einar Author-X-Name-Last: Rosendahl Author-WorkPlace-Name: Statistics Norway Abstract: This paper addresses the impact of endogenous technology through research and development (R&D) and learning by doing (LbD) on the timing of environmental policy. We develop two models, the first with R&D and the second with LbD. We study the interaction between environmental taxes and innovation externalities in a dynamic economy and prove policy equivalence between the second-best R&D and the LbD model. Our analysis shows that the difference found in the literature between optimal environmental policy in R&D and LbD models can partly be traced back to the set of policy instruments available, rather than being directly linked to the source of technological innovation. Arguments for early action in LbD models carry over to a second-best R&D setting. We show that environmental taxes should be high compared to the Pigouvian levels when an abatement industry is developing. We illustrate our analysis through numerical simulations on climate change policy. Keywords: Environmental Policy, Technological Change, Research and Development, Learning by Doing Classification-JEL: H21, O30, Q42 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.36 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-036.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.36 Title: Valuing the Cultural Monuments of Armenia: Bayesian Updating of Prior Beliefs in Contingent Valuation Author-Name: Anna Alberini Author-X-Name-First: Anna Author-X-Name-Last: Alberini Author-WorkPlace-Name: AREC, University of Maryland Author-Name: Alberto Longo Author-X-Name-First: Alberto Author-X-Name-Last: Longo Author-WorkPlace-Name: Queen's University Belfast Abstract: We use contingent valuation to place a value on the conservation of built cultural heritage sites in Armenia. When we present the hypothetical scenario in the questionnaire we spell out what would happen to the monuments in the absence of the government conservation program. We posit that respondents combine such information with their own prior beliefs, which the questionnaire also elicits, and that the WTP for the good or program is likely to be affected by these updated beliefs. We propose a Bayesian updating model of prior beliefs, and empirically implement it using the data from our survey. We find that uncertainty about what would happen to the monument in the absence of the program results in lower WTP amounts. Keywords: Valuation of Cultural Heritage Sites, Non-Market Valuation, Contingent Valuation, Bayesian Updating, Prior Beliefs Classification-JEL: Z10 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.37 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-037.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.37 Title: What Distinguishes EMAS Participants? An Exploration of Company Characteristics Author-Name: Roeland Bracke Author-X-Name-First: Roeland Author-X-Name-Last: Bracke Author-WorkPlace-Name: Ghent University Author-Name: Tom Verbeke Author-X-Name-First: Tom Author-X-Name-Last: Verbeke Author-WorkPlace-Name: European University College Abstract: Empirical research on the characteristics of environmentally responsive companies has focussed almost exclusively on US and Japanese firms. For Europe, which is commonly considered as the greenest of the three major developed economic markets, similar research is lacking. This paper seeks to fill this gap by empirically investigating the business and financial characteristics, stakeholder pressure and public policies distinguishing companies that have implemented the European Eco-Management and Audit System (EMAS) and those that have not using a unique firm-level dataset of European publicly quoted companies. The contribution of this paper is twofold. First of all, the decision to implement EMAS has not been widely analysed. Secondly, we focus on European firms which allows us to assess if and to what extent European firms behave like their US or Japanese counterparts. We find that the EMAS participation decision is positively influenced by the solvency ratio, the share of non-current liabilities and the average labour cost. Also, two measures of company size are positively associated with EMAS participation: both the absolute company size as well as the relative size of a company compared to its sector average. The profit margin on the other hand exerts a negative influence according to our results. We further show that public policy can heavily influence the EMAS participation decision: companies whose headquarters is located in a member state that actively encourages EMAS have a higher probability of participation. Keywords: EMAS, European Companies, Public Policy Classification-JEL: L2 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.38 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-038.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.38 Title: Total Factor Productivity Growth and the Environment: A Case for Green Growth Accounting Author-Name: Anastasios Xepapadeas Author-X-Name-First: Anastasios Author-X-Name-Last: Xepapadeas Author-WorkPlace-Name: University of Crete Author-Name: E. Tzouvelekas Author-X-Name-First: E. Author-X-Name-Last: Tzouvelekas Author-WorkPlace-Name: University of Crete Author-Name: D. Vouvaki Author-X-Name-First: D. Author-X-Name-Last: Vouvaki Author-WorkPlace-Name: University of Crete Abstract: We examine whether the use of the environment, proxied by CO2 emissions, as a factor of production contributes, in addition to conventional factors of production to output growth, and thus it should be accounted for in total factor productivity growth (TFPG) measurement and deducted from the .residual. A theoretical framework of growth accounting methodology with environment as a factor of production which is unpaid in the absence of environmental policy is developed. Using data from a panel of 23 OECD countries, we show that emissions. growth have a statistically significant contribution to the growth of output, that emission augmenting technical change is present along with labor augmenting technical change, and that part of output growth which is traditionally attributed to technical change should be attributed to the use of the environment as a not fully compensated factor of production. Our results point towards the need for developing a concept of "Green Growth Accounting". Keywords: Solow Residual, Total Factor Productivity Growth, Growth, Environment, Green Growth Accounting Classification-JEL: O47, Q2 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.39 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-039.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.39 Title: How Overconfident are Current Projections of Anthropogenic Carbon Dioxide Emissions? Author-Name: Klaus Keller Author-X-Name-First: Klaus Author-X-Name-Last: Keller Author-WorkPlace-Name: Penn State University Park Author-Name: Louise I. Miltich Author-X-Name-First: Louise I. Author-X-Name-Last: Miltich Author-WorkPlace-Name: Penn State University Park Author-Name: Alexander Robinson Author-X-Name-First: Alexander Author-X-Name-Last: Robinson Author-WorkPlace-Name: Penn State University Park Author-Name: Richard S.J. Tol Author-X-Name-First: Richard S.J. Author-X-Name-Last: Tol Author-WorkPlace-Name: Economic and Social Research Institute Abstract: Analyzing the risks of anthropogenic climate change requires sound probabilistic projections of CO2 emissions. Previous projections have broken important new ground, but many rely on out-of-range projections, are limited to the 21st century, or provide only implicit probabilistic information. Here we take a step towards resolving these problems by assimilating globally aggregated observations of population size, economic output, and CO2 emissions over the last three centuries into a simple economic model. We use this model to derive probabilistic projections of business-as-usual CO2 emissions to the year 2150. We demonstrate how the common practice to limit the calibration timescale to decades can result in biased and overconfident projections. The range of several CO2 emission scenarios (e.g., from the Special Report on Emission Scenarios) misses potentially important tails of our projected probability density function. Studies that have interpreted the range of CO2 emission scenarios as an approximation for the full forcing uncertainty may well be biased towards overconfident climate change projections. Keywords: Carbon Dioxide, Emissions, Scenarios, Data Assimilation, Markov Chain Monte Carlo Classification-JEL: Q540 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.40 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-040.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.40 Title: Environmental Efficiency, Emission Trends and Labour Productivity: Trade-Off or Joint Dynamics? Empirical Evidence Using NAMEA Panel Data Author-Name: Massimiliano Mazzanti Author-X-Name-First: Massimiliano Author-X-Name-Last: Mazzanti Author-WorkPlace-Name: University of Ferrara Author-Name: Roberto Zoboli Author-X-Name-First: Roberto Author-X-Name-Last: Zoboli Author-WorkPlace-Name: CERIS-CNR Milan & Catholic University of Milan Abstract: The paper provides new empirical evidence on the relationship between environmental efficiency and labour productivity using industry level data. We first provide a critical and extensive discussion around the interconnected issues of environmental efficiency and performance, firm performances and labour productivity, and environmental and non-environmental innovation dynamics. The most recent literature dealing with environmental innovation, environmental regulations and economic performances is taken as reference. We then test a newly adapted EKC hypothesis, by verifying the correlation between the two trends of environmental efficiency (productivity, namely sector emission on added value) and labour productivity (added value on employees) over a dynamic path. We exploit official NAMEA data sources for Italy over 1990-2002 for 29 sectoral branches. The period is crucial since environmental issues and then environmental policies came into the arena, and a restructuring of the economy occurred. It is thus interesting to assess the extent to which capital investments for the economy as a whole are associated with a positive or negative correlation between environmental efficiency of productive branches and labour productivity, often claimed by mainstream theory dealing with innovation in environmental economics. We believe that on the basis of the theoretical and empirical analyses focusing on innovation paths, firm performances and environmental externalities, there are good reasons to expect a positive correlation between environmental and labour productivities, or in alternative terms a negative correlation between mission intensity of production and labour productivity. The tested hypothesis is crucial within the long standing discussion over the potential trade-off or complementarity between environmental and labour productivity, strictly associated with sectoral and national technological innovation paths. The main added value of the paper is the analysis of the aforementioned hypothesis by exploiting a panel data set based on official NAMEA sectoral disaggregated accounting data, providing both cross section heterogeneity and a sufficient time span. We find that for most emissions, if not all, a negative correlation emerges between labour productivity and environmental productivity. Though this trend appears driven by the macro sectors services, manufacturing and industry, this evidence is not homogenous across emissions. In some cases U-shapes arise, mainly for services, and the assessment of Turning Points is crucial. Manufacturing and industry, all in all, seem to have a stronger weight. Overall, then, labour productivity dynamics seem to be complementary to a decreasing emission intensity of productive processes. The extent to which this evidence derives from endogenous market forces, industrial restructuring and/or from policy effects is scope for further research. The relative role of manufacturing and services in explaining this pattern is also to be analysed in future empirical analyses. In addition, the role of capital stocks and trade openness are extensions which may add value to future analyses carried out on the same NAMEA dataset. Keywords: Decoupling, NAMEA Emissions, Labour Productivity, Sectoral Added Value, Kuznets Curves, Environmental Efficiency Classification-JEL: C23, Q38, Q56 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.41 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-041.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.41 Title: Populism and Neopopulism in Latin America: Clientelism, Trade Union Organisation and Electoral Support in Mexico and Argentina in the ‘90s Author-Name: Veronica Ronchi Author-X-Name-First: Veronica Author-X-Name-Last: Ronchi Author-WorkPlace-Name: Università degli Studi di Milano Abstract: The state of anomie that has characterised and still characterises most Latin American countries, resulting from the fragmentation of the social fabric, has encouraged the rise of successful personalist leaderships in the ‘90s. This paper aims at investigating how neopopulism developed in Latin America, considering as main actors the two Presidents who have best embodied this ideal: Carlos Salinas de Gortari, (Mexico 1988-1994) and Carlos Menem (Argentina 1989-1999). Neopopulism is based on an economic project, the neoliberal policy based on cuts in the welfare, which seems very far from the populist positions of the past. Populism revives through the charisma of these Presidents, bypassing institutional or organisational forms of mediation between the leader and the masses. The development of selected social policies has gained strong political support from the lower classes, including extensive institutional reforms. Keywords: Latin America, Mexico, Argentina, ’90s, Populism, Neopopulism Classification-JEL: I38, J88, N16, N26, N36, N46 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.42 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-042.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.42 Title: The Neoliberal Myth in Latin America: The Cases of Mexico and Argentina in the ‘90s Author-Name: Veronica Ronchi Author-X-Name-First: Veronica Author-X-Name-Last: Ronchi Author-WorkPlace-Name: Università degli Studi di Milano Abstract: During the ‘90s most Latin American countries were submitted to neoliberal structural reform policies. Neoliberal policies imposed market supremacy, reduced the State’s role in the economy and deregulated the markets. This paper aims at describing how these policies affected the most important macroeconomic indexes, with special emphasis on Argentina and Mexico, the two countries that suffered most from the economic crises of the ‘80s and ‘90s, and where the neoliberal policies were applied with greater orthodoxy. In spite of a slight improvement in some macroeconomic indexes, in Latin America neoliberalism failed to reduce poverty and unemployment, and was unable to guarantee a fair distribution of the wealth and improve welfare. Keywords: Latin America, Mexico, Argentina, ’90s, Neoliberalism Classification-JEL: E21, E22, E24, E26, N16, N26, N36, O16 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.43 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-043.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.43 Title: Equity Weighting and the Marginal Damage Costs of Climate Change Author-Name: David Anthoff Author-X-Name-First: David Author-X-Name-Last: Anthoff Author-WorkPlace-Name: FNU, ZMK Author-Name: Cameron Hepburn Author-X-Name-First: Cameron Author-X-Name-Last: Hepburn Author-WorkPlace-Name: University of Oxford Author-Name: Richard S.J. Tol Author-X-Name-First: Richard S.J. Author-X-Name-Last: Tol Author-WorkPlace-Name: Economic and Social Research Institute Abstract: Climate change would impact different countries differently, and different countries have different levels of development. Equity-weighted estimates of the (marginal) impact of greenhouse gas emissions reflect these differences. Equity-weighted estimates of the marginal damage cost of carbon dioxide emissions are substantially higher than estimates without equity-weights; equity-weights may also change the sign of the social cost estimates. Equity weights need to be normalised. Our estimates differ by two orders of magnitude depending on the region of normalisation. A discounting error of equity weighted social cost of carbon estimates in earlier work (Tol, Energy Journal, 1999), led to an error of a factor two. Equity-weighted estimates are sensitive to the resolution of the impact estimates. Depending on the assumed intra-regional income distribution, estimates may be more than twice as high if national rather than regional impacts are aggregated. The assumed scenario is important too, not only because different scenarios have different emissions and hence warming, but also because different scenarios have different income differences, different growth rates, and different vulnerabilities. Because of this, variations in the assumed inequity aversion have little effect on the marginal damage cost in some scenarios, and a large effect in other scenarios. Keywords: Marginal Damage Costs, Climate Change, Equity Classification-JEL: Q54 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.44 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-044.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.44 Title: Group Rewards and Individual Sanctions in Environmental Policy Author-Name: Bouwe R. Dijkstra Author-X-Name-First: Bouwe R. Author-X-Name-Last: Dijkstra Author-WorkPlace-Name: University of Nottingham Author-Name: Dirk T.G. Rübbelke Author-X-Name-First: Dirk T.G. Author-X-Name-Last: Rübbelke Author-WorkPlace-Name: Chemnitz University of Technology Abstract: We examine an incentive scheme for a group of agents, where all agents are rewarded if the group meets its target. If the group does not meet its target, only the agents that meet their individual target are rewarded. In environmental policy, the EU burden sharing agreement and the UK Climate Change Agreements feature this incentive scheme. There is only a difference in outcome between group and individual rewards if emissions are stochastic. Group rewards generally lead to higher expected emissions than individual rewards. The attraction of the group reward scheme may lie in its fairness and its tough-looking targets. Keywords: Team Incentive Scheme, Stochastic Pollution, UK Climate Change Agreements Classification-JEL: Q54, Q58 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.45 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-045.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.45 Title: Trust in International Organizations: An Empirical Investigation Focusing on the United Nations Author-Name: Benno Torgler Author-X-Name-First: Benno Author-X-Name-Last: Torgler Author-WorkPlace-Name: Queensland University of Technology Abstract: The literature on social capital has strongly increased in the last two decades, but there still is a lack of substantial empirical evidence about the determinants of international trust. This empirical study analyses a cross-section of individuals, using micro-data from the World Values Survey, covering 38 countries, to investigate trust in international organizations, specifically in the United Nations. In line with previous studies on international trust we find that political trust matters. We also find that social trust is relevant, but contrary to previous studies the results are less robust. Moreover, the paper goes beyond previous studies investigating also the impact of geographic identification, corruption and globalization. We find that a higher level of (perceived) corruption reduces the trust in the UN in developed countries, but increases trust in developing and transition countries. A stronger identification with the world as a whole also leads to a higher trust in the UN and a stronger capacity to act globally in economic and political environment increases trust in the UN. Keywords: International Organizations, United Nations, International Trust, Political Trust, Social Trust, Corruption, Globalization Classification-JEL: Z130, D730, O190 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.46 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-046.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.46 Title: The Impact of Temperature Change on Energy Demand: A Dynamic Panel Analysis Author-Name: Enrica De Cian Author-X-Name-First: Enrica Author-X-Name-Last: De Cian Author-WorkPlace-Name: School of Advanced Studies in Venice and Fondazione Eni Enrico Mattei Author-Name: Elisa Lanzi Author-X-Name-First: Elisa Author-X-Name-Last: Lanzi Author-WorkPlace-Name: School of Advanced Studies in Venice and Fondazione Eni Enrico Mattei Author-Name: Roberto Roson Author-X-Name-First: Roberto Author-X-Name-Last: Roson Author-WorkPlace-Name: University Ca’ Foscari of Venice and Fondazione Eni Enrico Mattei Abstract: This paper presents an empirical study of energy demand, in which demand for a series of energy goods (Gas, Oil Products, Coal, Electricity) is expressed as a function of various factors, including temperature. Parameter values are estimated econometrically, using a dynamic panel data approach. Unlike previous studies in this field, the data sample has a global coverage, and special emphasis is given to the dynamic nature of demand, as well as to interactions between income levels and sensitivity to temperature variations. These features make the model results especially valuable in the analysis of climate change impacts. Results are interpreted in terms of derived demand for heating and cooling. Non-linearities and discontinuities emerge, making it necessary to distinguish between different countries, seasons, and energy sources. Short- and long-run temperature elasticities of demand are estimated. Keywords: Energy Demand, Cooling Heating Effect , Temperature, Dynamic Panel Classification-JEL: C3, Q41, Q54 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.47 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-047.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.47 Title: Production Functions for Climate Policy Modeling: An Empirical Analysis Author-Name: Edwin van der Werf Author-X-Name-First: Edwin Author-X-Name-Last: van der Werf Author-WorkPlace-Name: Kiel Institute for the World Economy Abstract: Quantitative models for climate policy modeling differ in the production structure used and in the sizes of the elasticities of substitution. The empirical foundation for both is generally lacking. This paper estimates the parameters of two-level CES production functions with capital, labour and energy as inputs, and is the first to systematically compare all nesting structures. Using industry-level data from 12 OECD countries, we find that the nesting structure where capital and labour are combined first, fits the data best, but for most countries and industries we cannot reject that all three inputs can be put into one single nest. These two nesting structures are used by most climate models. However, while several climate policy models use a Cobb-Douglas function for (part of the) production function, we reject elasticities equal to one, in favour of considerably smaller values. Finally we find evidence for factor-specific technological change. With lower elasticities and with factor-specific technological change, some climate policy models may find a bigger effect of endogenous technological change on mitigating the costs of climate policy. Keywords: Climate Policy, Input Substitution, Technological Change Classification-JEL: O13, Q32, Q43, Q55 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.48 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-048.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.48 Title: A Politico-Economic Model of Aging, Technology Adoption and Growth Author-Name: Giovanni Prarolo Author-X-Name-First: Giovanni Author-X-Name-Last: Prarolo Author-WorkPlace-Name: University of Bologna and Fondazione Eni Enrico Mattei Author-Name: Francesco Lancia Author-X-Name-First: Francesco Author-X-Name-Last: Lancia Author-WorkPlace-Name: University of Bologna Abstract: Over the past century, all OECD countries have been characterized by a dramatic increase in economic conditions, life expectancy and educational attainment. This paper provides a positive theory that explains how an economy might evolve when the longevity of its citizens both influences and is influenced by the process of economic development. We propose a three periods OLG model where agents, during their lifetime, cover different economic roles characterized by different incentive schemes and time horizon. Agents’ decisions embrace two dimensions: the private choice about education and the public one upon innovation policy. The theory focuses on the crucial role played by heterogeneous interests in determining innovation policies, which are one of the keys to the growth process: the economy can be discontinuously innovation-oriented due to the different incentives of individuals and different schemes of political aggregation of preferences. The model produces multiple development regimes associated with different predictions about life expectancy evolution, educational investment dynamics, and technology adoption policies. Transitions between these regimes depend on initial conditions and parameter values. Keywords: Growth, Life Expectancy, Human Capital, Systemic Innovation, Majority Voting Classification-JEL: D70, J10, O14, O31, O43 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.49 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-049.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.49 Title: Gender Issue and Water Management in the Mediterranean Basin, Middle East and North Africa Author-Name: Giulia Minoia Author-X-Name-First: Giulia Author-X-Name-Last: Minoia Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: This article aims to investigate some aspects of the social process related to water resources management and gender relations. Given that gender and water management are interrelated issues exposed to a growing attention at the international level, it is therefore necessary to identify relations between the academic literature, the institutional framework and the field-based research. This document has been inspired by the Nostrum DSS project (Network on Governance, Science and Technology for Sustainable Water Resources Management in the Mediterranean), a Co-ordination Action funded by the European Commission, which involves eighteen partners from the North and South shores of the basin. As the scope of the project is to disseminate Best Practice Guidelines for the design and implementation of Decision Support System tools (DSS) to identify optimal water resources management regimes, this article is proposing an analysis of a particular geographical and social frame related to the social actors involved in the project, but there are no connections between the paper and the project itself. To create a network between science, policy and civil society is one of the main objectives of the project in order to reach an improved governance and planning in the field of sustainable water management. Therefore, to investigate gender sensitivity in some areas of the basin shall provide a clue. This overview of academic and institutional background refers to a particular geographical and cultural area, the Middle Eastern and North African region. In the first section lies the theoretical background, that has been extrapolated from international organisations guidelines and scholars’ publications. The second section is specifically focused on the Egyptian geographical context. The first paragraph presents a review of the guidelines suggested by international organisations related to policies on gender and water, as parts of the changes that the global scenario has recently been facing, with the shift from the micro level to the macro level. The second paragraph then describes the side effects of these overspread trends, which are identified in their missing relations with the social context of the intervention. The third and fourth paragraphs introduce the issue of women’s role in water management in the Middle Eastern and North African Regions, while highlighting relations between women’s involvement in the public sphere and the role they cover in local communities organisations. The proportion of the political representation faced by women in this region is also discussed, tackling their overspread participation in agriculture and their unrecognised working status. The fifth paragraph of this paper will discuss a case study in Egypt, concerning an initiative promoted by international donors and the government aimed at increasing community participation in the design and management of irrigation canals. The case study gives a concrete sample to discuss plusses and problems of women’s participation in water users organisations, synthesising many of the theoretical issues that have been raised in the first three parts of this article. Keywords: Irrigation, Gender, Regional Development Policy Classification-JEL: J16, Z13 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.50 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-050.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.50 Title: SME Performance, Innovation and Networking Evidence on Complementarities for a Local Economic System Author-Name: Massimiliano Mazzanti Author-X-Name-First: Massimiliano Author-X-Name-Last: Mazzanti Author-WorkPlace-Name: University of Ferrara Author-Name: Susanna Mancinelli Author-X-Name-First: Susanna Author-X-Name-Last: Mancinelli Author-WorkPlace-Name: University of Ferrara Abstract: The paper addresses the relevancy of networking activities and R&D as main drivers of productivity performance and ouput innovation, for small and medium enterprises (SME) playing in a local economic system. Given the intangible nature of many techno organisational innovation and networking strategies, original recent survey data for manufacturing and services are exploited. The aim is to provide new evidence on the complementarity relationships concerning different networking activities and R&D in a local SME oriented system in Northern Italy. We first introduce a methodological framework to empirically test complementarity among R&D and networking, in a discrete setting. Secondly, we consequently present empirical evidence on productivity drivers and on complementarity between R&D and networking strategies, with respect to firm productivity and process/product output innovation. R&D is a main driver of innovation and productivity, even without networking. This may signify, in association with the evidence on complementarity, that firm expenditures on R&D are a primary driver for performance. The complementarity with networking is a consequential step. Networking by itself cannot thus play a role in stimulating productivity and innovation. It can be a complementary factor in situations where cooperation and networking are needed to achieve economies of scale and/or to merge and integrate diverse skills, technologies and competencies. This is compatible with a framework where networking is the public good part of an impure public good wherein R&D plays the part of the private-led driving force towards structural break from the business as usual scenario. Managers and policy makers should be aware that in order to exploit asset complementarity, possibly transformed into competitive advantages, both R&D and networking are to be sustained and favoured. our evidence suggests that R&D may be a single main driver of performance. Since R&D expenditures are associated with firm size, a policy sustain is to be directed towards firm enlargement. After a certain threshold firms have the force to increase expenditures. The size effect is nevertheless non monotonous. Then, but not least important, for the majority of firms still remaining under a critical size threshold, policy incentives should be directed to R&D in connection with networking, through which a virtuous circle may arise. It is worth noting that it is not networking as such the main engine. Networking elements are crucially linked to innovation dynamics; it is nevertheless innovation that explains and drives networking, and not the often claimed mere existence of local spillovers or of a civic associative culture in the territory. Such public good factors exist but are likely to evolve with and be sustained by firm innovative dynamics. Keywords: Firm Competitiveness, Innovation, R&D, Networking, Complementarity, Local Economic System Classification-JEL: D21, L25, O3, O14, Z13 Creation-Date: 200704 Template-Type: ReDIF-Paper 1.0 Number: 2007.51 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-051.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.51 Title: AD-DICE: An Implementation of Adaptation in the DICE Mode Author-Name: Kelly C. de Bruin Author-X-Name-First: Kelly C. Author-X-Name-Last: de Bruin Author-WorkPlace-Name: Wageningen University Author-Name: Rob B. Dellink Author-X-Name-First: Rob B. Author-X-Name-Last: Dellink Author-WorkPlace-Name: Wageningen University Author-Name: Richard S.J. Tol Author-X-Name-First: Richard S.J. Author-X-Name-Last: Tol Author-WorkPlace-Name: Institute for Environmental Studies Abstract: Integrated Assessment Models (IAMS) have helped us over the past decade to understand the interactions between the environment and the economy in the context of climate change. Although it has also long been recognized that adaptation is a powerful and necessary tool to combat the adverse effects of climate change, most IAMs have not explicitly included the option of adaptation in combating climate change. This paper adds to the IAM and climate change literature by explicitly including adaptation in an IAM, thereby making the trade-offs between adaptation and mitigation visible. Specifically, a theoretical framework is created and used to implement adaptation as a decision variable into the DICE model. We use our new AD-DICE model to derive the adaptation cost functions implicit in the DICE model. In our set-up, adaptation and mitigation decisions are separable and AD-DICE can mimic DICE when adaptation is optimal. We find that our specification of the adaptation costs is robust with respect to the mitigation policy scenarios. Our numerical results show that adaptation is a powerful option to combat climate change, as it reduces most of the potential costs of climate change in earlier periods, while mitigation does so in later periods. Keywords: Integrated Assessment Modelling, Adaptation, Climate Change Classification-JEL: Q25, Q28 Creation-Date: 200705 Template-Type: ReDIF-Paper 1.0 Number: 2007.52 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-052.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.52 Title: Interactive Problem Structuring with ICZM Stakeholders Author-Name: Frank van Kouwen Author-X-Name-First: Frank Author-X-Name-Last: van Kouwen Author-WorkPlace-Name: Utrecht University Author-Name: Carel Dieperink Author-X-Name-First: Carel Author-X-Name-Last: Dieperink Author-WorkPlace-Name: Utrecht University Author-Name: Paul P. Schot Author-X-Name-First: Paul P. Author-X-Name-Last: Schot Author-WorkPlace-Name: Utrecht University Author-Name: Martin J. Wassen Author-X-Name-First: Martin J. Author-X-Name-Last: Wassen Author-WorkPlace-Name: Utrecht University Abstract: Integrated Coastal Zone Management (ICZM) is struggling with a lack of science-management integration. Many computer systems, usually known as “decision support systems”, have been developed with the intention to make scientific knowledge about complex systems more accessible for coastal managers. These tools, allowing a multi-disciplinary approach with multi-criteria analyses, are designed for well-defined, structured problems. However, in practice stakeholder consensus on the problem structure is usually lacking. Aim of this paper is to explore the practical opportunities for the new so-called Quasta approach to structure complex problems in a group setting. This approach is based on a combination of Cognitive Mapping and Qualitative Probabilistic Networks. It comprehends a new type of computer system which is quite simple and flexible as well. The tool is tested in two workshops in which various coastal management issues were discussed. Evaluations of these workshops show that (1) this system helps stakeholders to make them aware of causal relationships, (2) it is useful for a qualitative exploration of scenarios, (3) it identifies the quantitative knowledge gaps of the problem being discussed and (4) the threshold for non technicians to use this tool is quite low. Keywords: Integrated Coastal Zone Management, Problem Structuring, Stakeholder Participation, Cognitive Mapping, Interactive Policy Making Classification-JEL: Q5 Creation-Date: 200705 Template-Type: ReDIF-Paper 1.0 Number: 2007.53 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-053.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.53 Title: Environmental Regulation and the Export Dynamics of Energy Technologies Author-Name: Francesco Crespi Author-X-Name-First: Francesco Author-X-Name-Last: Crespi Author-WorkPlace-Name: University of Roma Tre Author-Name: Valeria Costantini Author-X-Name-First: Valeria Author-X-Name-Last: Costantini Author-WorkPlace-Name: University of Roma Tre Abstract: The pollution haven hypothesis affirms that an open market regime will encourage the flow of low technology polluting industries toward developing countries, due to potential comparative advantages related to low environmental standards. In contrast, the hypothesis suggested by Porter and van der Linde claims for a competitive dynamic behaviour by innovating firms, allowing a global diffusion of environmental-friendly technologies. Environmental regulation may represent a relevant mechanism through which technological change is induced. In this way countries subject to more stringent environmental regulations may become net exporters of environmental technologies. This paper provides new evidence on the evolution of export flows of environmental technologies across different countries for the energy sector. Advanced economies, particularly the European Union, have given increasing attention to the role of energy policies as tools for sustaining the development path. The Kyoto Protocol commitments, together with growing import dependence of energy products, have stimulated the attention on the analysis of innovation processes in this specific sector. The analysis uses a gravity model in order to test the determinants and the transmission channels through which environmental technologies for renewable energies and energy efficiency are exported to advanced and developing countries. Our results are consistent with the existence of the Porter and van der Linde hypothesis, where environmental regulation represents a significant component of comparative advantages. What strongly emerges is that the stringency of environmental regulation supplemented by the strength of National Innovation System is a crucial driver of export performance in the field of energy technologies. Keywords: Environmental Regulation, Trade and Environment, Energy Technologies Classification-JEL: F18, F21, Q43, Q55, Q56 Creation-Date: 200705 Template-Type: ReDIF-Paper 1.0 Number: 2007.54 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-054.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.54 Title: Governance and Environmental Policy Integration in Europe: What Can We learn from the EU Emission Trading Scheme? Author-Name: Michela Catenacci Author-X-Name-First: Michela Author-X-Name-Last: Catenacci Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Barbara Buchner Author-X-Name-First: Barbara Author-X-Name-Last: Buchner Author-WorkPlace-Name: International Energy Agency Author-Name: Alessandra Sgobbi Author-X-Name-First: Alessandra Author-X-Name-Last: Sgobbi Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: The European Union Emission Trading System (EU ETS) is a landmark environmental policy, representing the world’s first large-scale greenhouse gas (GHG) trading program. The coexistence of state actors and top-down processes with stakeholders participation and flexible abatement strategies make the EU ETS a powerful instrument of cross sectoral integration of environmental concerns, which benefits from a high level of interaction among the actors involved and a significant degree of information exchange. However, the same peculiarities of the system make it difficult to identify a correspondence with a single mode of governance. The EU ETS shows characteristics of the decision making processes and institutions engaged, the tools and instruments used as well as the actors involved, which change according to the different levels of governance, and belong both to the old and to the new modes of governance. The emission trading scheme represents a clear example of Multi-Level governance, where the different modes of governance interact among them and affect each other. Keywords: Environmental Policy Integration, Climate Change, Emission Trading, EU Policy Classification-JEL: H23, F53, Q28 Creation-Date: 200705 Template-Type: ReDIF-Paper 1.0 Number: 2007.55 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-055.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.55 Title: On International Equity Weights and National Decision Making on Climate Change Author-Name: David Anthoff Author-X-Name-First: David Author-X-Name-Last: Anthoff Author-WorkPlace-Name: FNU, ZMK Author-Name: Richard S.J. Tol Author-X-Name-First: Richard S.J. Author-X-Name-Last: Tol Author-WorkPlace-Name: Economic and Social Research Institute Abstract: Estimates of the marginal damage costs of carbon dioxide emissions require the aggregation of monetised impacts of climate change over people with different incomes and in different jurisdictions. Implicitly or explicitly, such estimates assume a social welfare function and hence a particular attitude towards equity and justice. We show that previous approaches to equity weighing are inappropriate from a national decision maker’s point of view, because domestic impacts are not valued at domestic values. We propose four alternatives (sovereignty, altruism, good neighbour, and compensation) with different views on concern for and liability towards foreigners. The four alternatives imply radically estimates of the social cost of carbon and hence the optimal intensity of climate policy. Keywords: Domestic Climate Policy, Social Cost of Carbon, Equity Weights Classification-JEL: Q54 Creation-Date: 200705 Template-Type: ReDIF-Paper 1.0 Number: 2007.56 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-056.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.56 Title: Modeling Linkages Between Climate Policy and Land Use: An Overview Author-Name: Edwin van der Werf Author-X-Name-First: Edwin Author-X-Name-Last: van der Werf Author-WorkPlace-Name: Kiel Institute for the World Economy Author-Name: Sonja Peterson Author-X-Name-First: Sonja Author-X-Name-Last: Peterson Author-WorkPlace-Name: Kiel Institute for the World Economy Abstract: Agriculture and forestry play an important role in emitting and storing greenhouse gases. For an efficient and cost-effective climate policy it is therefore important to explicitly include land use, land use change, and forestry (LULUCF) in economy-climate models. This paper gives an overview and assessment of existing approaches to include land use, land-use change, and forestry into climate-economy models or to link economy-climate models to land-use models. Keywords: Climate Change, Climate Policy, Modeling, Land Use Classification-JEL: Q23, Q24, Q25, Q42 Creation-Date: 200705 Template-Type: ReDIF-Paper 1.0 Number: 2007.57 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-057.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.57 Title: The Environmental Kuznets Curve in a World of Irreversibility Author-Name: Fabien Prieur Author-X-Name-First: Fabien Author-X-Name-Last: Prieur Author-WorkPlace-Name: GREQAM and INRA-LAMETA Abstract: We develop an overlapping generations model where consumption is the source of polluting emissions. Pollution stock accumulates with emissions but is partially assimilated by nature at each period. The assimilation capacity of nature is limited and vanishes beyond a critical level of pollution. We first show that multiple equilibria exist. More importantly, some exhibit irreversible pollution levels although an abatement activity is operative. Thus, the simple engagement of maintenance does not necessarily suffice to protect an economy against convergence toward a steady state having the properties of an ecological and economic poverty trap. In contrast with earlier related studies, the emergence of the environmental Kuznets curve is no longer the rule. Instead, we detect a sort of degenerated Environmental Kuznets Curve that corresponds to the equilibrium trajectory leading to the irreversible solution. Keywords: Overlapping Generations, Irreversible Pollution, Poverty Trap, Environmental Kuznets Curve Classification-JEL: Q56, D62, D91 Creation-Date: 200705 Template-Type: ReDIF-Paper 1.0 Number: 2007.58 File-URL:https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-058.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.58 Title: Production Outsourcing, Organizational Governance and Firm’s Technological Performance: Evidence from Italy Author-Name: Roberto Antonietti Author-X-Name-First: Roberto Author-X-Name-Last: Antonietti Author-WorkPlace-Name: University of Bologna Author-Name: Giulio Cainelli Author-X-Name-First: Giulio Author-X-Name-Last: Cainelli Author-WorkPlace-Name: University of Bari Abstract: Aim of this paper is to study whether and how the firm’s decision to outsource production activities affects its technological performance. In particular, we look at how the alignment between the firm’s governance strategy and the underlying attributes of the transactions affects the capacity of the firm to introduce new products and processes. Using microeconomic data on a repeated cross-section of Italian manufacturing firms for the period 1998-2003, we develop a two-stage approach: first, we estimate the determinants of the firm’s organizational governance (production outsourcing); second, we incorporate a measure of governance misalignment into a technological performance relation. We find (i) that firms not aligned with the optimal organizational governance perform less well in terms of process innovation than more aligned competitors, but (ii) that misalignment has a positive effect on product innovation. However, this counterintuitive result is strongly characterized by non-linear effects that reverse the latter correlation for high values of governance misfit. Keywords: Production Outsourcing, Organizational Governance, Misalignment, Technological Performance, Non-Linearity Classification-JEL: L23, L24, L25, O31 Creation-Date: 200705 Template-Type: ReDIF-Paper 1.0 Number: 2007.59 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-059.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.59 Title: Urban Transport Policies and the Environment: Evidence from Italy Author-Name: Marco Percoco Author-X-Name-First: Marco Author-X-Name-Last: Percoco Author-WorkPlace-Name: Bocconi University Abstract: The paper reviews urban transport policies in Italian cities and their impact on the concentration of NO2 and PM10. Using parametric and non-parametric techniques, it finds no significant effect of the policy actions currently implemented. Further, it finds evidence of a weak positive impact of plans adoption. These results are interpreted as evidence of positive externalities among actions. Finally, by also discussing case studies, the paper points out the absence of economic instruments and argues that significant welfare gains would derive from their adoption. Keywords: Urban Transport Policies, Traffic Externalities, Pollution Abatement Classification-JEL: Q53, R41 Creation-Date: 200705 Template-Type: ReDIF-Paper 1.0 Number: 2007.60 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-060.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.60 Title: Linking of Repeated Games. When Does It Lead to More Cooperation and Pareto Improvements? Author-Name: Pierre von Mouche Author-X-Name-First: Pierre Author-X-Name-Last: von Mouche Author-WorkPlace-Name: Wageningen Universiteit Author-Name: Henk Folmer Author-X-Name-First: Henk Author-X-Name-Last: Folmer Author-WorkPlace-Name: Wageningen Universiteit and Rijksuniversiteit Groning Abstract: Linking of repeated games and exchange of concessions in fields of relative strength may lead to more cooperation and to Pareto improvements relative to the situation where each game is played separately. In this paper we formalize these statements, provide some general results concerning the conditions for more cooperation and Pareto improvements to materialize or not and analyze the relation between both. Special attention is paid to the role of asymmetries. Keywords: Environmental Policy, Linking, Folk Theorem, Tensor Game, Prsioners' Dilemma, Full Cooperation, Pareto Efficiency, Minkowski Sum, Vector Maximum, Convex Analysis Classification-JEL: C72 Creation-Date: 200705 Template-Type: ReDIF-Paper 1.0 Number: 2007.61 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-061.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.61 Title: A Global Land Use and Biomass Approach to Reduce Greenhouse Gas Emissions, Fossil Fuel Use and to Preserve Biodiversity Author-Name: Arthur Riedacker Author-X-Name-First: Arthur Author-X-Name-Last: Riedacker Author-WorkPlace-Name: INRA Unité Mona Abstract: As average growth consumptions per capita and world population will continue to grow, the promotion of sustainable developments during the next half a century implies to take into account environmental aspects, local potentialities and futures changes in population as well climatic, economic and social factors. At the global level, land and fossil fuel availability per capita, capacity of absorption of greenhouse gas emissions are considered the most important environmental factors. Whereas at local levels are to be considered preservation or improvement of soil fertility, of water regimes, of quality of air, soil and water. Biodiversity must be taken into account at both levels to cope also with climate change. But as underlined by IPCC lead authors, up to now there is no tool available to deal with these issues in a comprehensive and adequate manner. A new tool, presented here, the Integrated Environmental Assessment (IEA) has therefore been developed. It takes into account all actions, from the sun to final services, in three stages: solar energy bioconversion and phytomass production at I; conversion of phytomass and non renewable resources into final products and waste disposal at II ; arrangement of products to meet final needs, such as nutrition, housing mobility etc. at III. IEAs start at the global level with the “GIEA” , the results of which are then to be confronted with constraints at local levels from “LIEAs”. This new tool can be used to identify impacts of technological changes in land management and to compare alternative practices better than with LCAs. It was used to analyze environmental impacts of technological changes between 1950 and 2000 in France, in wheat production at stage I. It appeared that not only yields, but also the primary mitigation potential (PMP) per hectare have been multiplied by 4, whereas the net primary energy gain per ha has been multiplied by 3.2. Besides this, 14,5 Mha (the area of the French forest about a quarter of France) land use change could be avoided; in the case of deforestation this would have led to the emission of more than 4 billion tons of CO2. Lessons are drawn from the past and for the next fifty years: In developed and industrialized countries, alternative managements of land and increased use of non food phytomass can and should be envisaged. In Sub-Saharan Africa population is expected to double during the next 50 years and soil fertility is drastically decreasing; agricultural practices are no longer sustainable. If no changes appear in agriculture, forests and GHG emission from deforestation as well as biodiversity are threatened by further and inevitable land use change. Increasing yields per hectare should therefore become the priority; it would at the same time increase food security, improve mitigation and adaptation to climate change, help to combat deforestation and desertification, better preserve biodiversity, and ultimately also allow more bioenergy production: This would improve the food security and at the same time help to achieve the objectives of the three main UN environmental conventions and of the UN Millennium Goal. Keywords: Greenhouse Gas Emission, Fossil Fuel, Biodiversity Classification-JEL: Q23, Q27 Creation-Date: 200706 Template-Type: ReDIF-Paper 1.0 Number: 2007.62 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-062.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007. Title: Atmospheric Pollution and Consumption Patterns in Spain: An Input-Output Approach Author-Name: Mònica Serrano Author-X-Name-First: Mònica Author-X-Name-Last: Serrano Author-WorkPlace-Name: Universitat de Barcelona Author-Name: Jordi Roca Author-X-Name-First: Jordi Author-X-Name-Last: Roca Author-WorkPlace-Name: Universitat de Barcelona Abstract: This paper analyses the relationship between Spanish household consumption patterns and atmospheric pollutant emissions in 2000. Applying an input-output approach we estimate the relative responsibility of different types of households in the emissions of nine different atmospheric pollutants: the six greenhouse gases (CO2, CH4, N2O, SF6, HFCs and PFCs) regulated by the Kyoto protocol and three other gases (SO2, NOx and NH3). We combine input-output tables, national consumer survey statistics and environmental pollution satellite accounts into an environmental extended input-output model. We also analyse the assumptions required in order to apply the model to available data. We find that there is a positive and very high relationship between the level of household expenditure and the direct and indirect emissions generated by household consumption. However, the emission intensities tend to decrease with the expenditure level for the different atmospheric pollutants, with the exception of the synthetic greenhouse gases (SF6, HFCs and PFCs). Keywords: Input-Output Analysis, Consumption Pattern, Atmospheric Pollution Classification-JEL: C67, D12, Q53 Creation-Date: 200706 Template-Type: ReDIF-Paper 1.0 Number: 2007.63 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-063.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.63 Title: Interaction of European Carbon Trading and Energy Prices Author-Name: Derek W. Bunn Author-X-Name-First: Derek Author-X-Name-Last: Bunn Author-WorkPlace-Name: London Business School Author-Name: Carlo Fezzi Author-X-Name-First: Carlo Author-X-Name-Last: Fezzi Author-WorkPlace-Name: University of East Anglia Abstract: This paper addresses the economic impact of the EU Emission Trading Scheme for carbon on wholesale electricity and gas prices. Specifically, we analyse the mutual relationships between electricity, gas and carbon prices in the daily spot markets in the United Kingdom. Using a structural co-integrated VAR model, we show how the prices of carbon and gas jointly influence the equilibrium price of electricity. Furthermore, we derive the dynamic pass-trough of carbon into electricity price and the response of electricity and carbon prices to shocks in the gas price. Keywords: Carbon Emission Trading, Energy Markets, Structural VECM Classification-JEL: Q48, L94, C32 Creation-Date: 200706 Template-Type: ReDIF-Paper 1.0 Number: 2007.64 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-064.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.64 Title: Naïve Learning in Social Networks: Convergence, Influence and Wisdom of Crowds Author-Name: Matthew O. Jackson Author-X-Name-First: Matthew O. Author-X-Name-Last: Jackson Author-WorkPlace-Name: Stanford University Author-Name: Benjamin Golub Author-X-Name-First: Benjamin Author-X-Name-Last: Golub Author-WorkPlace-Name: Division of the Humanities and Social Sciences Abstract: We study learning and influence in a setting where agents communicate according to an arbitrary social network and naïvely update their beliefs by repeatedly taking weighted averages of their neighbors’ opinions. A focus is on conditions under which beliefs of all agents in large societies converge to the truth, despite their naïve updating. We show that this happens if and only if the influence of the most influential agent in the society is vanishing as the society grows. Using simple examples, we identify two main obstructions which can prevent this. By ruling out these obstructions, we provide general structural conditions on the social network that are sufficient for convergence to truth. In addition, we show how social influence changes when some agents redistribute their trust, and we provide a complete characterization of the social networks for which there is a convergence of beliefs. Finally, we survey some recent structural results on the speed of convergence and relate these to issues of segregation, polarization and propaganda. Keywords: Social Networks, Learning, Diffusion, Bounded Rationality Classification-JEL: D85, D83, A14, L14, Z13 Creation-Date: 200706 Template-Type: ReDIF-Paper 1.0 Number: 2007.65 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-065.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.65 Title: In Search of Stars: Network Formation among Heterogeneous Agents Author-Name: Aljaž Ule Author-X-Name-First: Aljaž Author-X-Name-Last: Ule Author-WorkPlace-Name: University of Amsterdam Author-Name: Jacob K. Goeree Author-X-Name-First: Jacob K. Author-X-Name-Last: Goeree Author-WorkPlace-Name: California Institute of Technology Author-Name: Arno Riedl Author-X-Name-First: Arno Author-X-Name-Last: Riedl Author-WorkPlace-Name: University of Maastricht Abstract: This paper reports results from a laboratory experiment on network formation among heterogeneous agents. The experimental design extends the Bala-Goyal (2000) model of network formation with decay and two-way flow of benefits by allowing for agents with lower linking costs or higher benefits to others. Furthermore, agents’ types may be common knowledge or private information. In all treatments, the (efficient) equilibrium network has a “star” structure. With homogeneous agents, equilibrium predictions fail completely. In contrast, with heterogeneous agents stars frequently occur, often with the high-value or low-cost agent in the center. Stars are not born but rather develop: with a high-value agent, the network’s centrality, stability, and efficiency all increase over time. Probit estimations based on best-response behaviour and other-regarding preferences are used to analyze individual linking behavior. Our results suggest that heterogeneity is a major determinant for the predominance of star-like structures in real-life social networks. Keywords: Network Formation, Experiment, Heterogeneity, Private Information Classification-JEL: C72, C92, D82, D85 Creation-Date: 200706 Template-Type: ReDIF-Paper 1.0 Number: 2007.66 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-066.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.66 Title: The Stability of Exchange Networks Author-Name: Gönül Dogan Author-X-Name-First: Gönül Author-X-Name-Last: Dogan Author-WorkPlace-Name: Tilburg University Author-Name: M.A.L.M. van Assen Author-X-Name-First: M.A.L.M. Author-X-Name-Last: van Assen Author-WorkPlace-Name: Tilburg University Author-Name: Arnout van de Rijt Author-X-Name-First: Arnout Author-X-Name-Last: van de Rijt Author-WorkPlace-Name: Cornell University Author-Name: Vincent Buskens Author-X-Name-First: Vincent Author-X-Name-Last: Buskens Author-WorkPlace-Name: Utrecht University Abstract: This paper develops a formal model of exchange network stability that combines expected value theory (Friedkin 1995) with the economic literature on network dynamics. We identify stable networks up to size 8 for varying costs and investigate whether they are Pareto efficient and egalitarian. Only a very small number of networks are stable. Odd cycles and networks consisting of dyads and at most one isolate are the only egalitarian, efficient, and stable networks for a large cost range. We show that some of these results are generalizable to networks of any size and are independent of using expected value theory. Keywords: Exchange Networks, Stability, Efficiency, Equity, Social Dilemma Classification-JEL: D85 Creation-Date: 200706 Template-Type: ReDIF-Paper 1.0 Number: 2007.67 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-067.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.67 Title: Why are Trade Agreements Regional? Author-Name: Ben Zissimos Author-X-Name-First: Ben Author-X-Name-Last: Zissimos Author-WorkPlace-Name: Vanderbilt University Abstract: This paper shows how distance may be used to coordinate on a unique equilibrium in which trade agreements are regional. Trade agreement formation is modeled as coalition formation. In a standard trade model with no distance between countries, a familiar problem of coordination failure arises giving rise to multiple equilibria; any one of many possible trade agreements can form. With distance between countries, and through strategic interaction in tariff setting, regional trade agreements generate larger rent-shifting effects than non regional agreements, which countries use to coordinate on a unique equilibrium. Under naive best responses, regional agreements give way to free trade. Keywords: Coalition, Coordination, Regionalism, Preferential Trade Agreement, Trade Liberalization Classification-JEL: F02, F13, F15, C72 Creation-Date: 200706 Template-Type: ReDIF-Paper 1.0 Number: 2007.68 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-068.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.68 Title: “Almost” Subsidy-free Spatial Pricing in a Multi-dimensional Setting Author-Name: Alexei Savvateev Author-X-Name-First: Alexei Author-X-Name-Last: Savvateev Author-WorkPlace-Name: New Economic School Author-Name: Jacques Drèze Author-X-Name-First: Jacques Author-X-Name-Last: Drèze Author-WorkPlace-Name: CORE, Catholic University of Louvain Author-Name: Michel Le Breton Author-X-Name-First: Michel Author-X-Name-Last: Le Breton Author-WorkPlace-Name: Université de Toulouse I, GREMAQ and IDEI Author-Name: Shlomo Weber Author-X-Name-First: Shlomo Author-X-Name-Last: Weber Author-WorkPlace-Name: outhern Methodist University Abstract: Consider a population of citizens uniformly spread over the entire plane, that faces a problem of locating public facilities to be used by its members. The cost of every facility is financed by its users, who also face an idiosyncratic private access cost to the facility. We assume that the facilities’ cost is independent of location and access costs are linear with respect to the Euclidean distance. We show that an external intervention that covers 0.19% of the facility cost is sufficient to guarantee secession-proofness or no cross-subsidization, where no group of individuals is charged more than its stand alone cost incurred if it had acted on its own. Moreover, we demonstrate that in this case the Rawlsian access pricing is the only secession-proof allocation. Keywords: Secession-Proofness, Optimal Jurisdictions, Rawlsian Allocation, Hexagonal Partition, Cross-Subsidization Classification-JEL: D70, H20, H73 Creation-Date: 200706 Template-Type: ReDIF-Paper 1.0 Number: 2007.69 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-069.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.69 Title: The Formation of Financial Networks Author-Name: Ana Babus Author-X-Name-First: Ana Author-X-Name-Last: Babus Author-WorkPlace-Name: Erasmus University Rotterdam Abstract: Modern banking systems are highly interconnected. Despite their various benefits, the linkages that exist between banks carry the risk of contagion. In this paper we investigate how banks decide on direct balance sheet linkages and the implications for contagion risk. In particular, we model a network formation process in the banking system. Banks form links order to reduce the risk of contagion. The network is formed endogenously and serves as an insurance mechanism. We show that banks manage to form networks that are resilient to contagion. Thus, in an equilibrium network, the probability of contagion is virtually 0. Keywords: Financial Stability, Network Formation, Contagion Risk Classification-JEL: C70, G21 Creation-Date: 200706 Template-Type: ReDIF-Paper 1.0 Number: 2007.70 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-070.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.70 Title: A Theory of Strategic Diffusion Author-Name: Sanjeev Goyal Author-X-Name-First: Sanjeev Author-X-Name-Last: Goyal Author-WorkPlace-Name: University of Cambridge Author-Name: Andrea Galeotti Author-X-Name-First: Andrea Author-X-Name-Last: Galeotti Author-WorkPlace-Name: University of Essex Abstract: The important role of friends, neighbors and colleagues in shaping individual choices has been brought out in a number of studies over the years. The presence of significant ‘local’ influence in shaping individual behavior suggests that firms, governments and developmental agencies should explicitly incorporate it in the design of their marketing and developmental strategies. This paper develops a framework for the study of optimal strategies in the presence of social interaction. We focus on the case of a single player who exerts costly effort to get a set of individuals – engaged in social interaction – to choose a certain action. Our formulation allows for different types of social interaction (ranging from sharing of information to direct adoption externalities) and also allows for the player to have incomplete information concerning the connections among individuals. The analysis starts by showing that incorporating information on social interaction can have large effects on the profits of a player. We then show that an increase in the level and dispersion of social interaction can raise or lower the optimal strategy and profits of the player, depending on the content of the interaction. We then study the value of social network information for the player and find that it depends on the dispersion in social connections. The economic interest of these results is illustrated via a discussion of two economic applications: advertising in the presence of word of mouth communication and seeding a network. Keywords: Social Interaction, Seeding the Network, Word of Mouth Communication, Diffusion Strategy Classification-JEL: D8, L15 Creation-Date: 200706 Template-Type: ReDIF-Paper 1.0 Number: 2007.71 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-071.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.71 Title: Climate Change, Energy Demand and Market Power in a General Equilibrium Model of the World Economy Author-Name: Roberto Roson Author-X-Name-First: Roberto Author-X-Name-Last: Roson Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Ca' Foscari University Author-Name: Francesco Bosello Author-X-Name-First: Francesco Author-X-Name-Last: Bosello Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and University of Milan Author-Name: Enrica De Cian Author-X-Name-First: Enrica Author-X-Name-Last: De Cian Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and School of Advanced Studies in Venice Abstract: Future energy demand will be affected by changes in prices and income, but also by other factors, like temperature levels. This paper draws upon an econometric study, disentangling the contribution of temperature in the determination of the annual regional demand for energy goods. Combining estimates of temperature elasticities with scenarios of future climate change, it is possible to assess variations in energy demand induced (directly) by the global warming. We use this information to simulate a change in the demand structure of households in a CGE model of the world economy, in a set of assessment exercises. The changing demand structure triggers a structural adjustment process, influencing trade flows, regional competitiveness of industries and regions, and welfare. We also consider the possible existence of imperfect competition in the energy markets, analyzing the impact of changes in energy demand with an alternative model version, in which energy industries are modeled as Cournot oligopolies. Keywords: Climate Change, Energy, Computable General Equilibrium Models, Imperfect Competition Classification-JEL: D58, F12, Q43, Q54 Creation-Date: 200707 Template-Type: ReDIF-Paper 1.0 Number: 2007.72 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-072.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.72 Title: Fixed Instruments to Cope with Stock Externalities An Experimental Evaluation Author-Name: Gastón Giordana Author-X-Name-First: Gastón Author-X-Name-Last: Giordana Author-WorkPlace-Name: LAMETA, Université Montpellier I Author-Name: Marc Willinger Author-X-Name-First: Marc Author-X-Name-Last: Willinger Author-WorkPlace-Name: LAMETA, Université Montpellier I Abstract: We evaluate the effectiveness of non optimal and temporally inconsistent incentive policies for regulating the exploitation of a renewable common-pool resource. The corresponding game is an N-person discrete-time deterministic dynamic game of T periods fixed duration. Three policy instruments with parameters that remain constant for the whole horizon are evaluated: a pigouvian tax (flat tax), an ambient tax (ambient flat tax) and an instrument combining the two previous ones (mixed flat instrument). We test in the lab the predictions of the model solved for 3 distinct behavioural assumptions: (a) sub-game perfection, (b) myopic behaviour, and (c) joint payoff maximization. We find that subjects behave myopically in the unregulated situation, which agrees with previous results in the literature. Conditional on predictions, the mixed flat instrument and the flat tax are the most effective policies in approaching the optimum extraction path. However, in absolute terms the ambient flat tax and the mixed flat instrument curb most significantly the mean extraction path towards the optimum path. Paradoxically, these instruments are the less efficient ones. Keywords: Policy Instruments, Renewable Common-pool Resources, Dynamic Externalities, Experimental Economics Classification-JEL: D9, D62, H23, H26, H30, Q20, Q28 Creation-Date: 200707 Template-Type: ReDIF-Paper 1.0 Number: 2007.73 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-073.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.73 Title: Trust and Growth Author-Name: Oguzhan Dincer Author-X-Name-First: Oguzhan Author-X-Name-Last: Dincer Author-WorkPlace-Name: Illinois State University Author-Name: Eric Uslaner Author-X-Name-First: Eric Author-X-Name-Last: Uslaner Author-WorkPlace-Name: University of Maryland-College Park Abstract: Using data from US states, we find a positive relationship between trust and growth. According to our results, a 10 percentage point increase in trust increases the growth rate of per capita income by 0.5 percentage point, growth rate of housing prices by 1.25 percentage points, and the growth rate of employment by 2.5 percentage points over a decade. Keywords: Trust, Economic Growth Classification-JEL: Z13, R11 Creation-Date: 200707 Template-Type: ReDIF-Paper 1.0 Number: 2007.74 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-074.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.74 Title: Climate Change: National and Local Policy Opportunities in China Author-Name: Fei Teng Author-X-Name-First: Fei Author-X-Name-Last: Teng Author-WorkPlace-Name: Tsinghua University Author-Name: Alun Gu Author-X-Name-First: Alun Author-X-Name-Last: Gu Author-WorkPlace-Name: Tsinghua University Abstract: Climate Change poses a wide range of potentially very severe threats in China. This aggravates the existing vulnerability of China and is one of the big challenges faced by the Chinese government. Adaptation programmes and projects are being developed and implemented at national and local level. As China is engaged in heavy investment in infrastructure development as a consequence of the rapid process of development and urbanization, mainstreaming adaptation into such development process is a priority for China. China has also made positive contributions to reducing greenhouse gas emissions through participations in the CDM under the Kyoto Protocol framework. Although mitigation is not a priority at national or local level, it has been integrated into national and local development plans explicitly. This paper addresses the following questions: What is the policy space for climate change mitigation and adaptation policy at national and local level and what is already being done? The three case studies at local level - Beijing, Guangdong and Shanghai – presented here, highlight the local benefits in terms of local pollution of integrating mitigation policies into local development. However, financial constraints usually prevent such a positive policy integration. National policies and international cooperation aiming at bridging the financial gap and promoting technology transfer would help in integrating local pollution control and mitigation efforts in China today. Keywords: Climate Change, Local Policy, National Policy, Mitigation, Local Pollution Classification-JEL: H7, Q54, Q56, O53 Creation-Date: 200707 Template-Type: ReDIF-Paper 1.0 Number: 2007.75 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-075.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.75 Title: Research Evaluation as a Policy Design Tool: Mapping Approaches across a Set of Case Studies Author-Name: Valeria Papponetti Author-X-Name-First: Valeria Author-X-Name-Last: Papponetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Massimiano Bucchi Author-X-Name-First: Massimiano Author-X-Name-Last: Bucchi Author-WorkPlace-Name: University of Trento Abstract: This paper provides an overview of research evaluation practices across countries. The main aim is to investigate whether research assessment is implemented and to see to what extent its results are used to revise policy strategies, identify new research priorities, allocate financial resources or enhance public understanding of R&D. The paper addresses a set of cases studies, four within Europe (UK, Finland, Italy, and Spain) and two outside (US and Japan). Each case study provides an outline of the strategies devised to improve the domestic science system; offers a map of the main actors of science policy and introduces the main performers of research assessment. A short overview of how evaluation is approached at European level is also given. The study shows that approaches vary significantly from case to case and that it is not always possible to identify a clear research evaluation framework. In some cases, new strategies have been devised to improve the research system and the process of renovation has affected the structure and the role of research assessment. Overall, official documents across countries emphasise that research evaluation is not a means in itself, and call on its use as a policy design tool. However, very few cases of “management by results” can be identified. The success of research evaluation practice is always tied to strong cultural support and it is where research assessment meets with reluctance and mistrust that it yields no fruit. The absence of an “evaluative culture” is the main obstacle to an efficient research evaluation system. Keywords: Research Evaluation Systems, Management by Results, Evaluative Culture, Research Policy, Policy Planning Classification-JEL: Creation-Date: 200707 Template-Type: ReDIF-Paper 1.0 Number: 2007.76 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-076.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.76 Title: Estimating Tourist Externalities on Residents: A Choice Modeling Approach to the Case of Rimini Author-Name: Paolo Figini Author-X-Name-First: Paolo Author-X-Name-Last: Figini Author-WorkPlace-Name: University of Bologna Author-Name: Massimiliano Castellani Author-X-Name-First: Massimiliano Author-X-Name-Last: Castellani Author-WorkPlace-Name: University of Bologna Author-Name: Laura Vici Author-X-Name-First: Laura Author-X-Name-Last: Vici Author-WorkPlace-Name: University of Bologna Abstract: During their holidays, tourists produce direct and indirect effects on local residents, which can either be positive or negative. In this paper we investigate how residents of Rimini, a popular Italian seaside resort hosting more than ten million national and foreign overnight stays every year, internalise such effects. We use a stated preference approach and, in particular, a discrete choice modelling technique; within this framework, we are able to test some conjectures about residents’ welfare, by measuring their willingness to pay for alternative scenarios regarding the use of the territory. Tourist policies and public investments in the destination affect residents’ welfare, and our results might suggest areas of potential synergies and trade-off, leading to important policy implications. Keywords: Tourism, External Effects, Discrete Choice Modelling Classification-JEL: Q56, L83, C25 Creation-Date: 200707 Template-Type: ReDIF-Paper 1.0 Number: 2007.77 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-077.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.77 Title: Experts and Non-experts Author-Name: Irene Valsecchi Author-X-Name-First: Irene Author-X-Name-Last: Valsecchi Author-WorkPlace-Name: University of Milano-Bicocca Abstract: The paper is concerned with the interaction between two agents: an expert, announcing his probability that a particular state of the world will occur, and a non-expert decision-maker, who takes action according to his posterior beliefs. The decision-maker considers the expert an experiment of uncertain reliability and takes the received messages as the outcomes of such an experiment. The model of the expert in the decision-maker’s mind bears no relation with any measure of the expert’s actual information. The paper shows that messages will be biased, notwithstanding solidarity between the agents. However, the longer the interaction, the less severe will be the bias. Keywords: Opinion, Expert, Instructions Classification-JEL: D81, L21 Creation-Date: 200707 Template-Type: ReDIF-Paper 1.0 Number: 2007.78 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-078.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.78 Title: Legal Families and Environmental Protection: Is there a Causal Relationship? Author-Name: Giuseppe Di Vita Author-X-Name-First: Giuseppe Author-X-Name-Last: Di Vita Author-WorkPlace-Name: University of Catania Abstract: In this paper we build up the analysis of La Porta et al. (1998), to investigate the importance of legal families in explaining the variations in pollution emissions in different countries. The main intuition behind our analysis is that the nations in which the rights of shareholders are more protected, promote real and financial investment; this increases the speed at which the per-capita income corresponding to the declining branch of the Environmental Kutznets Curve (EKC) is achieved. In econometrics different regression analyses were performed using as dependent variables three different kinds of pollutants (CO2, fine suspended particulates and waste), including as an explanation some financial variables never before considered in this kind of study. Keywords: Dummy Variables, Environmental Kutznets Curve, Legal Families, Panel Data, Pollution Emissions Classification-JEL: K4, Q0 Creation-Date: 200707 Template-Type: ReDIF-Paper 1.0 Number: 2007.79 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-079.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.79 Title: Spatial Agglomeration, Technology and Outsourcing of Knowledge Intensive Business Services Empirical Insights from Italy Author-Name: Roberto Antonietti Author-X-Name-First: Roberto Author-X-Name-Last: Antonietti Author-WorkPlace-Name: University of Bologna Author-Name: Giulio Cainelli Author-X-Name-First: Giulio Author-X-Name-Last: Cainelli Author-WorkPlace-Name: University of Bari and CERIS-CNR Abstract: Aim of this paper is to explore the main drivers of outsourcing of knowledge intensive business services by Italian manufacturing firms. While anecdotal and empirical evidence has emphasized labour cost and scale economies as behind firms’ choices to outsource production or service activities, here we focus on spatial agglomeration and technology as important factors. Using microeconomic data on a repeated cross-section of Italian manufacturing firms for the period 1998-2003, we develop a two-stage model in order to avoid selection bias: first, we estimate the determinants of the firm's decision to outsource business-related services; second, we estimate the main factors underlying the intensity and complexity of KIBS outsourcing, expressed by the number of service activities that are externalized. Our results show that labour cost-savings are not relevant in driving the decision to outsource KIBS, but ICT, R&D and location within a dense and technologically developed industrial district have very positive effects. Keywords: KIBS, Service Outsourcing, R&D, ICT, Spatial Agglomeration Classification-JEL: L24, L84, R32, R12 Creation-Date: 200707 Template-Type: ReDIF-Paper 1.0 Number: 2007.80 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-080.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.80 Title: The Music Market in the Age of Download Author-Name: Iacopo Grassi Author-X-Name-First: Iacopo Author-X-Name-Last: Grassi Author-WorkPlace-Name: Università Federico II Abstract: Internet, mp3 files, peer-to-peer software and digital technologies for copying have radically modified the music sector. In this paper I present a theoretical model, that investigates the consequences of the appearance of a pirate low quality good (typically a mp3 file) in the music market. In this paper I propose a model of sampling, consider the possibility that the firm modifies its business entering into the low quality segment and investigate the supposed conflict between the recording company, whose profit depends on the CD sold, and the artist, whose profits depend in part on the live performance, the demand of which can increase for the positive externality due to the illegal download of music. Keywords: File-sharing, Copyright, Sample Effect, Mp3, Concert Classification-JEL: L86 Creation-Date: 200707 Template-Type: ReDIF-Paper 1.0 Number: 2007.81 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-081.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.81 Title: Modelling Negotiated Decision Making: a Multilateral, Multiple Issues, Non-Cooperative Bargaining Model with Uncertainty Author-Name: Alessandra Sgobbi Author-X-Name-First: Alessandra Author-X-Name-Last: Sgobbi Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: University of Venice, Fondazione Eni Enrico Mattei and EuroMediterranean Center on Climate Change Abstract: The relevance of bargaining to everyday life can easily be ascertained, yet the study of any bargaining process is extremely hard, involving a multiplicity of questions and complex issues. The objective of this paper is to provide new insights on some dimensions of the bargaining process – asymmetries and uncertainties in particular – by using a non-cooperative game theory approach. We develop a computational model which simulates the process of negotiation among more than two players, who bargain over the sharing of more than one pie. Through numerically simulating several multiple issues negotiation games among multiple players, we identify the main features of players’ optimal strategies and equilibrium agreements. As in most economic situations, uncertainty crucially affects also bargaining processes. Therefore, in our analysis, we introduce uncertainty over the size of the pies to be shared and assess the impacts on players’ strategic behaviour. Our results confirm that uncertainty crucially affects players’ behaviour and modifies the likelihood of a self-enforcing agreement to emerge. The model proposed here can have several applications, in particular in the field of natural resource management, where conflicts over how to share a resource of a finite size are increasing. Keywords: Bargaining, Non-Cooperative Game Theory, Simulation Models, Uncertainty Classification-JEL: C61, C71, C78 Creation-Date: 200707 Template-Type: ReDIF-Paper 1.0 Number: 2007.82 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-082.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.82 Title: International Energy R&D Spillovers and the Economics of Greenhouse Gas Atmospheric Stabilization Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, University of Venice, CEPR, CESifo and CMCC Author-Name: Emanuele Massetti Author-X-Name-First: Emanuele Author-X-Name-Last: Massetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Catholic University of Milan and CMCC Author-Name: Massimo Tavoni Author-X-Name-First: Massimo Author-X-Name-Last: Tavoni Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Catholic University of Milan and CMCC Abstract: It is widely recognized that technological change has the potential to reduce GHG emissions without compromising economic growth; hence, any better understanding of the process of technological innovation is likely to increase our knowledge of mitigation possibilities and costs. This paper explores how international knowledge flows affect the dynamics of the domestic R&D sector and the main economic and environmental variables. The analysis is performed using WITCH, a dynamic regional model of the world economy, in which energy technical change is endogenous. The focus is on disembodied energy R&D international spillovers. The knowledge pool from which regions draw foreign ideas differs between High Income and Low Income countries. Absorption capacity is also endogenous in the model. The basic questions are as follows. Do knowledge spillovers enhance energy technological innovation in different regions of the world? Does the speed of innovation increase? Or do free-riding incentives prevail and international spillovers crowd out domestic R&D efforts? What is the role of domestic absorption capacity and of policies designed to enhance it? Do greenhouse gas stabilization costs drop in the presence of international technological spillovers? The new specification of the WITCH model presented in this paper enables us to answer these questions. Our analysis shows that international knowledge spillovers tend to increase free-riding incentives and decrease the investments in energy R&D. The strongest cuts in energy R&D investments are recorded among High Income countries, where international knowledge flows crowd out domestic R&D efforts. The overall domestic pool of knowledge, and thus total net GHG stabilization costs, remain largely unaffected. International spillovers, however, are also an important policy channel. We therefore analyze the implication of a policy mix in which climate policy is combined with a technology policy designed to enhance absorption capacity in developing countries. Significant positive impacts on the costs of stabilising GHG concentrations are singled out. Finally, a sensitivity analysis shows that High Income countries are more responsive than Low Income countries to changes in the parameters and thus suggests to focus additional empirical research efforts on the former. Keywords: Climate Policy, Energy R&D, International R&D Spillovers, Stabilization Classification-JEL: H0, H2, H3 Creation-Date: 200707 Template-Type: ReDIF-Paper 1.0 Number: 2007.83 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-083.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.83 Title: Climate Policy and the Optimal Extraction of High- and Low-Carbon Fossil Fuels Author-Name: Edwin van der Werf Author-X-Name-First: Edwin Author-X-Name-Last: van der Werf Author-WorkPlace-Name: Kiel Institute for the World Economy Author-Name: Sjak Smulders Author-X-Name-First: Sjak Author-X-Name-Last: Smulders Author-WorkPlace-Name: University of Calgary and Tilburg University Abstract: We study how restricting CO2 emissions affects resource prices and depletion over time. We use a Hotelling-style model with two non-renewable fossil fuels that differ in their carbon content (e.g. coal and natural gas) and in addition are imperfect substitutes in final good production. We show that an economy facing a CO2 flow-constraint may substitute towards the relatively dirty input. As the economy tries to maximise output per unit of emissions it is not only carbon content that matters: productivity matters as well. With an announced constraint the economy first substitutes towards the less productive input such that more of the productive input is available when constrained. Preliminary empirical results suggest that it is cost-effective to substitute away from dirty coal to cleaner oil or gas, but to substitute from natural gas towards the dirtier input oil. Keywords: Climate Policy, Non-Renewable Resources, Input Substitution Classification-JEL: O13, Q31, Q43 Creation-Date: 200708 Template-Type: ReDIF-Paper 1.0 Number: 2007.84 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-084.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.84 Title: Environmental and Pro-Social Norms: Evidence from 30 Countries Author-Name: Benno Torgler Author-X-Name-First: Benno Author-X-Name-Last: Torgler Author-WorkPlace-Name: Queensland University of Technology Author-Name: Bruno S. Frey Author-X-Name-First: Bruno S. Author-X-Name-Last: Frey Author-WorkPlace-Name: CREMA, Institute for Empirical Research in Economics, University of Zurich and CESifo Author-Name: Clevo Wilson Author-X-Name-First: Clevo Author-X-Name-Last: Wilson Author-WorkPlace-Name: The School of Economics and FinanceT, Queensland University of Technology Abstract: The paper investigates the relationship between pro-social norms and its implications for improved environmental outcomes, an area which has been neglected in the environmental economics literature. We provide empirical evidence, demonstrating a strong link between perceived environmental cooperation (reduced public littering) and increased voluntary environmental morale, using European Values Survey (EVS) data for 30 Western and Eastern European countries. The robust results suggest that environmental morale and perceived environmental cooperation, as well as identifying the factors that strengthen these relationships, potentially bring about better environmental outcomes. Keywords: Environmental Preferences, Environmental Morale, Conditional Cooperation, Pro-Social Behavior Classification-JEL: H260, H730, D640 Creation-Date: 200708 Template-Type: ReDIF-Paper 1.0 Number: 2007.85 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-085.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.85 Title: Impact of Cultural Tourism upon Urban Economies: An Econometric Exercise Author-Name: Elena Bellini Author-X-Name-First: Elena Author-X-Name-Last: Bellini Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Ugo Gasparino Author-X-Name-First: Ugo Author-X-Name-Last: Gasparino Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Barbara Del Corpo Author-X-Name-First: Barbara Author-X-Name-Last: Del Corpo Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: William Malizia Author-X-Name-First: William Author-X-Name-Last: Malizia Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: In recent years, interest in tourism has spread rapidly throughout many small and medium European cities, which previously have not necessarily considered themselves as tourist destinations. Tourism is increasingly seen as a potential lever towards high economic growth, measured both in terms of income and employment. In the present Working Paper we report the analysis on the economic impact undertaken in the framework of the PICTURE Project, showing the results of a novel econometric exercise to statistically assess the impacts of cultural tourism upon European municipalities. More precisely the analysis aims at estimating the effects of tourism specialisation on local income and prices. The Working Paper is built as follows. Section 1 presents and discusses secondary data about tourism facts and figures, including the economic impact of tourism upon European economies, with a focus on cultural tourism. An extensive review of literature, which identifies the main categories of impacts and the currently available methodologies to assess them, is undertaken. Section 2 focuses on the state of the art. Section 3 describes the database built for the analysis, sources and variables. In order to visually represent the spatial variability of the main parameters, a series of thematic maps at NUTS 3 level(“Maps of European tourism”), using GIS (Geographical Information System) are also included in the Working Paper. Section 4 shows the results of the econometric analysis of European panel data for the estimation of the effects of tourism specialisation on both local incomes and prices. Section 5 concludes. Keywords: Cultural Tourism, Economic Growth Classification-JEL: O4, R0, L83 Creation-Date: 200709 Template-Type: ReDIF-Paper 1.0 Number: 2007.86 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-086.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.86 Title: Trip-Level Analysis of Efficiency Changes in Oregon’s Deepwater Trawl Fishery Author-Name: David Tomberlin Author-X-Name-First: David Author-X-Name-Last: Tomberlin Author-WorkPlace-Name: National Marine Fisheries Service Author-Name: Garth Holloway Author-X-Name-First: Garth Author-X-Name-Last: Holloway Author-WorkPlace-Name: University of Reading Abstract: In 2003, an industry-financed, government-administered buyback of trawl fishing permits and vessels took place on the US West Coast, resulting in the retirement of about one-third of the limited-entry trawl fleet. The lack of cost data in this fishery precludes an analysis of how the buyback has affected profitability, but changes in technical efficiency can provide some insight into the program’s effects. This paper, the first of a planned series of analyses of the buyback’s effect on technical efficiency in the trawl fleet, applies stochastic frontier analysis to assess whether technical efficiency changed perceptibly after 2003. We adopt a hierarchical modeling approach estimated with Markov Chain Monte Carlo methods, and present results from both Cobb-Douglas and translog specifications. The analysis is limited to 13 boats active in Oregon’s deepwater ‘DTS’ fishery, which targets dover sole, thornyheads, and sablefish. The results suggest that the buyback has had little impact on trip-level technical efficiency in the study fishery. However, departures from the frontier are markedly bi-modal, indicating that a mixed-density approach to estimation may be more appropriate. Keywords: Fishery Buyback, Technical Efficiency, Stochastic Production Frontier, Bayesian Inference, Markov Chain Monte Carlo Classification-JEL: Q2, L5, C1 Creation-Date: 200709 Template-Type: ReDIF-Paper 1.0 Number: 2007.87 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-087.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.87 Title: Many-to-One Matching when Colleagues Matter Author-Name: Pablo Revilla Author-X-Name-First: Pablo Author-X-Name-Last: Revilla Author-WorkPlace-Name: Universidad Pablo de Olavide Abstract: This paper studies many-to-one matching market in which each agent’s preferences not only depend on the institution that hires her, but also on the group of her colleagues, which are matched to the same institution. With an unrestricted domain of preferences the non-emptiness of the core is not guaranteed. Under certain conditions on agents’ preferences, we show that two possible situations in which, at least, one stable allocation exists, emerge. The first condition, called Group Togetherness, reflects real-life situations in which agents are more concerned about an acceptable set of colleagues than about the firm hiring them. The second one, Common Best Colleague, refers to markets in which a workers’ ranking is accepted by workers and firms present in such markets. Keywords: Many-to-one matching, Hedonic, Coalitions, Stability, Colleagues Classification-JEL: C78, D71 Creation-Date: 200709 Template-Type: ReDIF-Paper 1.0 Number: 2007.88 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-088.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.88 Title: Forecasting Weekly Electricity Prices at Nord Pool Author-Name: Hipòlit Torró Author-X-Name-First: Hipòlit Author-X-Name-Last: Torró Author-WorkPlace-Name: Universitat de València Abstract: This paper analyses the forecasting power of weekly futures prices at Nord Pool. The forecasting power of futures prices is compared to an ARIMAX model of the spot price. The time series model contains lagged external variables such as: temperature, precipitation, reservoir levels and the basis (futures price less the spot price); and generally reflects the typical seasonal patterns in weekly spot prices. Results show that the time series model forecasts significantly beat futures prices when using the Diebold and Mariano (1995) test. Furthermore, the average forecasting error of futures prices reveals that they are significantly above the settlement spot price at the ‘delivery week’ and their size increases as the time to maturity increases. Those agents taking positions in weekly futures contracts at Nord Pool might find the estimated ARIMAX model useful for improving their expectation formation process for the underlying spot price. Keywords: Electricity Markets, Power Derivatives and Forecasting Electricity Prices Classification-JEL: G13, L94 Creation-Date: 200709 Template-Type: ReDIF-Paper 1.0 Number: 2007.89 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-089.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.89 Title: Sustainability and Optimality in Economic Development: Theoretical Insights and Policy Prospects Author-Name: Y. Hossein Farzin Author-X-Name-First: Y. Hossein Author-X-Name-Last: Farzin Author-WorkPlace-Name: University of California Abstract: This paper takes sustainability to be a matter of intergenerational welfare equality and examines whether an optimal development path can also be sustainable. It argues that the general “zero-net-aggregate-investment” condition for an optimal development path to be sustainable in the sense of the maximin criterion of intergenerational justice is too demanding to be practical, especially in the context of developing countries. The maximin criterion of sustainability may be more appealing to the rich advanced industrial countries, but is too costly and ethically unreasonable for developing nations as it would act as an intergenerational “poverty equalizer”. The paper suggests that a compromise development policy that follows the optimal growth approach but adopts certain measures to mitigate the intergenerational and intragenerational welfare inequalities may better serve these countries. Some of the principal elements of such a policy are highlighted. Keywords: Sustainability, Intergenerational Equity, Optimality, Discounting, Development Policy Classification-JEL: Q01, Q56, O21, O13, D62, D63 Creation-Date: 200709 Template-Type: ReDIF-Paper 1.0 Number: 2007.90 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-090.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.90 Title: Traditional Natural Resources Management Practices and Biodiversity Conservation in Ghana: A Review of Local Concepts and Issues on Change and Sustainability Author-Name: Paul Sarfo-Mensah Author-X-Name-First: Paul Author-X-Name-Last: Sarfo-Mensah Author-WorkPlace-Name: Kwame Nkrumah University of Science Author-Name: W. Oduro Author-X-Name-First: W. Author-X-Name-Last: Oduro Author-WorkPlace-Name: Wildlife and Range Management Abstract: This paper reviews the importance of traditional natural resources management practices in Ghana. It highlights the roles of traditional beliefs, taboos and rituals in the management and conservation of key natural resources in the country. The paper is based on desk studies undertaken as part of anthropological studies conducted in the forest-savanna transitional agroecological zone of Ghana to study the spirituality of forests and conservation. Among the major conclusions of the paper is that although the potential of traditional natural resources management for biodiversity conservation in Ghana is enormous, the sustainability of these practices is seriously threatened. This stems from the rapid changes in the belief systems. Both biophysical and socio-economic factors were found to underlie these changes. The breakdown of traditional beliefs and associated taboos which underpin traditional natural resources management practices were found to be the greatest threat to the sustainability of these practices. The paper recommends that more anthropological research should investigate local perceptions of forest space and landscape, biodiversity conservation and traditional beliefs, and their significance for natural resources management. Such studies would provide valuable insights into the changing values of local people in relation to protected areas such as sacred groves and forest reserves and the management of other natural resources. Keywords: Forest –Savanna Transition, Sacred Groves, Traditional Beliefs, Biodiversity Conservation, Change and Sustainability Classification-JEL: Q2, Q57 Creation-Date: 200709 Template-Type: ReDIF-Paper 1.0 Number: 2007.91 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-091.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.91 Title: The Rule of The Jungle in Pakistan: A Case Study on Corruption and Forest Management in Swat Author-Name: Lorenzo Pellegrini Author-X-Name-First: Lorenzo Author-X-Name-Last: Pellegrini Author-WorkPlace-Name: Institute of Social Studies (ISS) Abstract: Corruption in the forest sector of Swat, Pakistan is impairing the sustainable management of forest. We analyze corruption in a case study setting against the backdrop of the reform options that are most often cited as possible solutions. As we highlight in this study, the ‘crime and punishment’ approach is not feasibly implemented if the overall institutional environment is weak. Since countrywide overhaul of corruption through sweeping reform programs, the other reform approach, is a difficult and lengthy task, there is a need for an alternative kind of reform. In the case of a corruption-ridden centralised forest management regime, institutional reform should move away from enforcement of existing institutions and promote communal management of natural resources by locals. Keywords: Corruption, Forest Management, Environmental Policy, Institutional Reform Classification-JEL: D73, Q24, Q57 Creation-Date: 200709 Template-Type: ReDIF-Paper 1.0 Number: 2007.92 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-092.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.92 Title: Welfare and Distribution Effects of Water Pricing Policies Author-Name: Arjan Ruijs Author-X-Name-First: Arjan Author-X-Name-Last: Ruijs Author-WorkPlace-Name: Wageningen University Abstract: In this paper, distribution and welfare effects of changes in block price systems are evaluated. A method is discussed to determine, for a Marshallian demand function, equivalent variation in case of a block price system. The method is applied to analyze welfare and distribution effects of changing water prices in the Metropolitan Region of São Paulo. Results show that there is a trade off between average welfare and income distribution. A pro-poor price system may result in lower average welfare than a flat price system, but in higher individual welfare for the poor. Moreover, there is a trade off between revenues for the water company and income distribution. Even though pro-poor price systems may not be as good for average welfare as flat price systems, their direct effects on poverty are important. Introducing pro-poor price systems, however, may have financial consequences for the water companies. Keywords: Water Demand, Welfare Economics, Equivalent Variation Classification-JEL: D63, Q25, Q56 Creation-Date: 200709 Template-Type: ReDIF-Paper 1.0 Number: 2007.93 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-093.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.93 Title: Trade, Technique and Composition Effects: What is Behind the Fall in World-Wide SO2 Emissions 1990-2000? Author-Name: Jean-Marie Grether Author-X-Name-First: Jean-Marie Author-X-Name-Last: Grether Author-WorkPlace-Name: University of Neuchâtel Author-Name: Nicole A. Mathys Author-X-Name-First: Nicole A. Author-X-Name-Last: Mathys Author-WorkPlace-Name: University of Lausanne and EPFL Author-Name: Jaime de Melo Author-X-Name-First: Jaime Author-X-Name-Last: de Melo Author-WorkPlace-Name: University of Geneva and CEPR Abstract: Combining unique data bases on emissions with sectoral output and employment data, we study the sources of the fall in world-wide SO2 emissions and estimate the impact of trade on emissions. Contrarily to concerns raised by environmentalists, an emission-decomposition exercise shows that scale effects are dominated by technique effects working towards a reduction in emissions. A second exercise comparing the actual trade situation with an autarky benchmark estimates that trade, by allowing clean countries to become net importers of emissions, leads to a 10% increase in world emissions with respect to autarky in 1990, a figure that shrinks to 3.5% in 2000. Additionally, back-of-the-envelope calculations suggest that emissions related to transport are of the same magnitude. In a third exercise, we use linear programming to simulate extreme situations where world emissions are either maximal or minimal. It turns out that effective emissions correspond to a 90% reduction with respect to the worst case, but that another 80% reduction could be reached if emissions were minimal. Keywords: Trade, Growth, Environment, Decomposition, Embodied Emissions in Trade, Transport Classification-JEL: F11, Q56 Creation-Date: 200710 Template-Type: ReDIF-Paper 1.0 Number: 2007.94 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-094.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.94 Title: Capital Structure and Regulation: Does Ownership Matter? Author-Name: Carlo Cambini Author-X-Name-First: Carlo Author-X-Name-Last: Cambini Author-WorkPlace-Name: Politecnico di Torino, DISPEA Author-Name: Bernardo Bortolotti Author-X-Name-First: Bernardo Author-X-Name-Last: Bortolotti Author-WorkPlace-Name: Università di Torino and Fondazione Eni Enrico Mattei Author-Name: Laura Rondi Author-X-Name-First: Laura Author-X-Name-Last: Rondi Author-WorkPlace-Name: Politecnico di Torino and CERIS-CNR Author-Name: Yossi Spiegel Author-X-Name-First: Yossi Author-X-Name-Last: Spiegel Author-WorkPlace-Name: Tel Aviv University and CEPR Abstract: We construct a comprehensive panel data of 96 publicly traded European utilities over the period 1994-2005 in order to study the relationship between the capital structure of regulated firms, regulated prices, and investments, and examine if and how this interaction is affected by ownership structure. We show that firms in our sample increase their leverage after becoming regulated by an independent regulatory agency, but only if they are privately controlled. Moreover, we find that the leverage of these firms has a positive and significant effect on regulated prices, but not vice versa, and it also has a positive and significant effect on their investment levels. Our results are consistent with the theory that privately-controlled firms use leverage strategically to shield themselves against regulatory opportunism. Keywords: Regulated Utilities, Regulatory Agencies, Capital Structure, Leverage, Investment, Private and State Ownership Classification-JEL: L51, G31, G32, L33 Creation-Date: 200710 Template-Type: ReDIF-Paper 1.0 Number: 2007.95 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-095.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.95 Title: Optimal Energy Investment and R&D Strategies to Stabilise Greenhouse Gas Atmospheric Concentrations Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, University of Venice, CEPR, CESifo and CMCC Author-Name: Emanuele Massetti Author-X-Name-First: Emanuele Author-X-Name-Last: Massetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Catholic University of Milan and CMCC Author-Name: Massimo Tavoni Author-X-Name-First: Massimo Author-X-Name-Last: Tavoni Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Catholic University of Milan and CMCC Abstract: The stabilisation of GHG atmospheric concentrations at levels expected to prevent dangerous climate change has become an important, global, long-term objective. It is therefore crucial to identify a cost-effective way to achieve this objective. In this paper we use WITCH, a hybrid climate-energy-economy model, to obtain a quantitative assessment of some cost-effective strategies that stabilise CO2 concentrations at 550 or 450 ppm. In particular, this paper analyses the energy investment and R&D policies that optimally achieve these two GHG stabilisation targets (i.e. the future optimal energy mix consistent with the stabilisation of GHG atmospheric concentrations at 550 and 450 ppm). Given that the model accounts for interdependencies and spillovers across 12 regions of the world, optimal strategies are the outcome of a dynamic game through which inefficiency costs induced by global strategic interactions can be assessed. Therefore, our results are somehow different from previous analyses of GHG stabilisation policies, where a central planner or a single global economy are usually assumed. In particular, the effects of free-riding incentives in reducing emissions and in investing in R&D are taken into account. Technical change being endogenous in WITCH, this paper also provides an assessment of the implications of technological evolution in the energy sector of different stabilisation scenarios. Finally, this paper quantifies the net costs of stabilising GHG concentrations at different levels, for different allocations of permits and for different technological scenarios. In each case, the optimal long-term investment strategies for all available energy technologies are determined. The case of an unknown backstop energy technology is also analysed. Keywords: Climate Policy, Energy R&D, Investments, Stabilisation Costs Classification-JEL: H0, H2, H3 Creation-Date: 200710 Template-Type: ReDIF-Paper 1.0 Number: 2007.96 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-096.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.96 Title: Pollution, Health and Life Expectancy: How Environmental Policy Can Promote Growth Author-Name: Xavier Pautrel Author-X-Name-First: Xavier Author-X-Name-Last: Pautrel Author-WorkPlace-Name: Université de Nantes Abstract: This article investigates the influence of environmental policy on growth assuming that the channel of transmission relies on the link between pollution, health and the survival probability, in an overlapping generations model à la Blanchard (1985) where growth is driven by a mechanism à la Romer (1986). We demonstrate that environmental policy has an ambiguous effect on growth in the steady-state when the detrimental impact of pollution on health and lifetime is taken into account: for low levels of taxation, environmental policy promotes growth while it is harmful to growth for high levels. Furthermore, we show that the environmental policy is more likely to promote growth (i.e. it stimulates growth for a wider range of environmental taxes) when public expenditures in health and/or the impact of pollution on health are important. Finally, using numerical simulations, we find that for the value of parameters chosen the environmental policy will be more likely to harm growth when agents smooth consumption over time. Keywords: Growth, Environment, Overlapping generations Classification-JEL: Creation-Date: 200710 Template-Type: ReDIF-Paper 1.0 Number: 2007.97 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-097.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.97 Title: Production Offshoring and the Skill Composition of Italian Manufacturing Firms: A Counterfactual Analysis Author-Name: Roberto Antonietti Author-X-Name-First: Roberto Author-X-Name-Last: Antonietti Author-WorkPlace-Name: University of Padua Author-Name: Davide Antonioli Author-X-Name-First: Davide Author-X-Name-Last: Antonioli Author-WorkPlace-Name: University of Ferrara Abstract: This work explores the effects of cross-border relocation of production on the skill composition of Italian manufacturing firms. Its aim is to assess if the firms’ strategy to offshore production activities towards cheap labor countries determines a bias in the relative employment of skilled versus unskilled workers. Using a balanced panel of firm-based data across the period 1995-2003, we test this skill-bias hypothesis by means of a counterfactual experiment in which we employ a difference-in-differences propensity score matching estimator in order to control for selectivity bias without relying on a specific functional form of the relations of interest. In line with the literature, our results point to confirm a general, although weak, skill bias effect of production offshoring on the labor-force composition of Italian manufacturing: in particular, we find that firms farming out production stages in 1998-2000 show an upward shift in the skill ratio with respect to the counterfactual of firms not moving their production abroad. However, when we look at the single components of the skill ratio, we find that the skill bias effect is primarily driven by a fall in the employment of production workers, while a weak or not significant effect is found with respect to the employment of skilled personnel. Keywords: Production Offshoring, Skill Bias, Difference-in-Differences, Propensity Classification-JEL: J24, F16, L24 Creation-Date: 200711 Template-Type: ReDIF-Paper 1.0 Number: 2007.98 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-098.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.98 Title: Technology Spillovers and Stability of International Climate Coalitions Author-Name: Miyuki Nagashima Author-X-Name-First: Miyuki Author-X-Name-Last: Nagashima Author-WorkPlace-Name: Wageningen University Author-Name: Rob Dellink Author-X-Name-First: Rob Author-X-Name-Last: RDellink Author-WorkPlace-Name: Wageningen University and Institute for Environmental Studies, VU University of Amsterdam Abstract: Cooperation in international environmental agreements appears difficult to attain because of strong free-riding incentives. This paper explores how different technology spillover mechanisms among regions can influence the incentive structures to join and stabilise an international agreement. We use an applied modelling framework (STACO) that enables us to investigate stability of partial climate coalitions. Technology spillovers to coalition members increase their incentives to stay in the coalition and reduce abatement costs, which leads to larger global payoffs and a lower global CO2 stock. Several theories on the impact of technology spillovers are evaluated by simulating a range of alternative specifications. We find that while spillovers are a good instrument to improve stability of bilateral agreements, they cannot overcome the strong free rider incentives that are present in larger coalitions. This conclusion is robust against the specification of technology spillovers. Keywords: Climate Change Modelling, International Environmental Agreements, Non-cooperative Game Theory, Technology Spillovers Classification-JEL: C72, O33, Q54 Creation-Date: 200711 Template-Type: ReDIF-Paper 1.0 Number: 2007.99 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-099.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.99 Title: Uncertainty and the Double Dividend Hypothesis Author-Name: Eftichios Sartzetakis Author-X-Name-First: Eftichios Author-X-Name-Last: Sartzetakis Author-WorkPlace-Name: University of Macedonia Author-Name: Panagiotis D. Tsigaris Author-X-Name-First: Panagiotis D. Author-X-Name-Last: Tsigaris Author-WorkPlace-Name: Thompson Rivers University Abstract: This paper examines the double dividend hypothesis in the presence of labour income uncertainty. Empirical evidence shows that uncertainty over labour income is particularly significant in developing, while not negligible in developed countries. Under uncertainty, and assuming incomplete capital markets, the tax system plays a role in providing social insurance and a green tax reform influences its effectiveness. We show that the increase in environmental tax reduces consumption risk while the balanced budget decrease in labour income tax increases income risk. We find that the total welfare effect of a green tax reform differs substantially from the case of certainty. The critical parameters determining the existence of a second dividend are the lump sum transfers, the relative substitutability of the two goods for leisure and the initial tax rates relative to their optimal that determine also the response of labour supply to a change in the tax mix. Keywords: Double Dividend Hypothesis, Environmental Taxation, Labor Income Taxation, Uncertainty, Tax Incidence Analysis Classification-JEL: H21, H23, D62 Creation-Date: 200711 Template-Type: ReDIF-Paper 1.0 Number: 2007.100 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-100.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.100 Title: The Computational Difficulty of Bribery in Qualitative Coalitional Games Author-Name: Andrew Dowell Author-X-Name-First: Andrew Author-X-Name-Last: Dowell Author-WorkPlace-Name: University of Liverpool Author-Name: Michael Wooldridge Author-X-Name-First: Michael Author-X-Name-Last: Wooldridge Author-WorkPlace-Name: University of Liverpool Author-Name: Peter McBurney Author-X-Name-First: Peter Author-X-Name-Last: McBurney Author-WorkPlace-Name: University of Liverpool Abstract: Qualitative coalitional games (QCG) are representations of coalitional games in which self interested agents, each with their own individual goals, group together in order to achieve a set of goals which satisfy all the agents within that group. In such a representation, it is the strategy of the agents to find the best coalition to join. Previous work into QCGs has investigated the computational complexity of determining which is the best coalition to join. We plan to expand on this work by investigating the computational complexity of computing agent power in QCGs as well as by showing that insincere strategies, particularly bribery, are possible when the envy-freeness assumption is removed but that it is computationally difficult to identify the best agents to bribe. Keywords: Bribery, Coalition Formation, Computational Complexity Classification-JEL: C63, C78 Creation-Date: 200711 Template-Type: ReDIF-Paper 1.0 Number: 2007.101 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-101.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.101 Title: A Stochastic Multiple Players Multi-Issues Bargaining Model for the Piave River Basin Author-Name: Alessandra Sgobbi Author-X-Name-First: Alessandra Author-X-Name-Last: Sgobbi Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, University of Venice, CEPR, CEPS, CMCC and CESifo Abstract: The objective of this paper is to investigate the usefulness of non-cooperative bargaining theory for the analysis of negotiations on water allocation and management. We explore the impacts of different economic incentives, a stochastic environment and varying individual preferences on players’ strategies and equilibrium outcomes through numerical simulations of a multilateral, multiple issues, non-cooperative bargaining model of water allocation in the Piave River Basin, in the North East of Italy. Players negotiate in an alternating-offer manner over the sharing of water resources (quantity and quality). Exogenous uncertainty over the size of the negotiated amount of water is introduced to capture the fact that water availability is not known with certainty to negotiating players. We construct the players’ objective function with their direct input. We then test the applicability of our multiple players, multi-issues, stochastic framework to a specific water allocation problem and conduct comparative static analyses to assess sources of bargaining power. Finally, we explore the implications of different attitudes and beliefs over water availability. Keywords: Bargaining, Non-Cooperative Game Theory, Simulation Models, Uncertainty Classification-JEL: C61, C71, C78 Creation-Date: 200711 Template-Type: ReDIF-Paper 1.0 Number: 2007.102 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-102.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.102 Title: An Economic Model for Bioprospecting Contracts Author-Name: Paulo A.L.D. Nunes Author-X-Name-First: Paulo A.L.D. Author-X-Name-Last: Nunes Author-WorkPlace-Name: University of Venice and Fondazione Eni Enrico Mattei Author-Name: Helen Ding Author-X-Name-First: Helen Author-X-Name-Last: Ding Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Laura Onofri Author-X-Name-First: Laura Author-X-Name-Last: Onofri Author-WorkPlace-Name: University of Venice Abstract: This paper explores the use of a micro-economic model to analyse the provisions and parties of bioprospecting contracts. It focuses on the pharmaceutical industry as the representative biodiversity buyer, presenting an original theoretical framework that explains the main contract characteristics or stylised facts. Against this background, it considers the main contractors involved in these private contracts, i.e. biodiversity sellers and biodiversity buyers, analysing both the magnitude and distribution of the respective payoffs. Particular attention is devoted to the different, mixed impacts of bioprospecting contracts and patenting on social welfare. The positive welfare impacts delivered by bioprospecting contracts are associated with the potential discovery of a new drug product, i.e. productivity gains, non-monetary benefit-sharing or transfers and royalty revenues. The negative welfare impact results from the legal creation of a monopoly and the related well-known effect on the consumer surplus. Finally, the potential redistribution effects are limited, and a potential enforcement of this objective may jeopardise the desirability of the contracts since this action would lead to a significant increase in the transaction costs. Keywords: Bioprospecting Contract, Genetic Resource, Biodiversity Buyer, Biodiversity Seller, Patenting, Welfare Analysis, Benefit Sharing Classification-JEL: D21, D23, D61, L14, Q57 Creation-Date: 200711 Template-Type: ReDIF-Paper 1.0 Number: 2007.103 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-103.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.103 Title: A Robust Multivariate Long Run Analysis of European Electricity Prices Author-Name: Matteo Pelagatti Author-X-Name-First: Matteo Author-X-Name-Last: Pelagatti Author-WorkPlace-Name: University of Milan-Bicocca Author-Name: Bruno Bosco Author-X-Name-First: Bruno Author-X-Name-Last: Bosco Author-WorkPlace-Name: Università degli Studi di Milano-Bicocca Author-Name: Lucia Parisio Author-X-Name-First: Lucia Author-X-Name-Last: Parisio Author-WorkPlace-Name: Università degli Studi di Milano-Bicocca Author-Name: Fabio Baldi Author-X-Name-First: Fabio Author-X-Name-Last: Baldi Author-WorkPlace-Name: Università degli Studi di Milano-Bicocca and Ref. Ricerche per l’economia e la finanza Abstract: This paper analyses the interdependencies existing in wholesale European electricity prices. The results of a multivariate long run dynamic analysis of weekly median prices reveal the presence of a strong although not perfect integration among some neighboring markets considered in the sample and the existence of common long-term dynamics of electricity prices and gas prices but not oil prices. The existence of long-term dynamics among gas prices and electricity prices may prove to be important for long-term hedging operations to be conducted even in markets where there are no electricity derivatives. Keywords: European Electricity Prices, Cointegration, Interdependencies, Equilibrium Correction Model, Oil Prices Classification-JEL: C15, C32, D44, L94, Q40 Creation-Date: 200711 Template-Type: ReDIF-Paper 1.0 Number: 2007.104 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-104.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.104 Title: Environmentally-Oriented Innovative Strategies and Firm Performances in Services. Micro-Evidence from Italy Author-Name: Massimiliano Mazzanti Author-X-Name-First: Massimiliano Author-X-Name-Last: Mazzanti Author-WorkPlace-Name: University of Ferrara and CERIS-CNR Author-Name: Giulio Cainelli Author-X-Name-First: Giulio Author-X-Name-Last: Cainelli Author-WorkPlace-Name: University of Bari and CERIS-CNR Author-Name: Roberto Zoboli Author-X-Name-First: Roberto Author-X-Name-Last: Zoboli Author-WorkPlace-Name: Catholic University of Milan and CERIS-CNR Abstract: This paper aims at analysing the role of the environment in innovative strategies based on firm economic performance indicators such as employment, turnover, and labour productivity growth. We exploit a unique dataset of 773 Italian service firms with 20 or more employees comprising 1993-1995 CIS II data on firm innovation strategic motivations and 1995-1998 data on employment, turnover, and labour productivity from the System of the Enterprise Account (SEA). We specify a Gibrat-like empirical model in which the covariates include firm strategies (innovation and environmental), and a set of other explanatory variables and controls. Our econometric findings show a negative link between environmental motivations and growth in employment and turnover and a consequent not significant effect on labour productivity growth. The effect on employment is partly in line with past evidence and may derive from efficiency improvements (dematerialization processes) which also impact on efficiency by reducing workforce number. It is plausible that the net effect derives from the absence of low skilled employment and a creation of high skilled jobs, as a consequence of increased environmental awareness. The effect on turnover shows a negative impact from environmental innovation strategy, implying either a short-medium effect, possibly balanced in the long run by net benefits in terms of higher added value, or a real negative impact, which may be contingent on the observed period, when environmental strategies where not at the heart of strategic management policies. However, productivity-related effects (the core of performance indicators) are not significant. Mainstream hypotheses related to eventual negative impacts are thus not confirmed, although Porter-like effects and virtuous circles between environmentally strategies and performance do not seem to be present. Keywords: Services, Firm Environmental Strategies, Firm Growth, CIS Survey, Innovation Classification-JEL: C23, D21, O32, Q55 Creation-Date: 200712 Template-Type: ReDIF-Paper 1.0 Number: 2007.105 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2007-105.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2007.105 Title: The Clean Development Mechanism and the International Diffusion of Technologies: An Empirical Study Author-Name: Matthieu Glachant Author-X-Name-First: Matthieu Author-X-Name-Last: Glachant Author-WorkPlace-Name: CERNA École des mines de Paris Author-Name: Antoine Dechezleprêtre Author-X-Name-First: Antoine Author-X-Name-Last: Dechezleprêtre Author-WorkPlace-Name: CERNA École des mines de Paris Author-Name: Yann Ménière Author-X-Name-First: Yann Author-X-Name-Last: Ménière Author-WorkPlace-Name: CERNA École des mines de Paris Abstract: The Clean Development Mechanism (CDM) is expected to stimulate the North-South transfer of climate-friendly technologies. This paper provides an assessment of the technology transfers that take place through the CDM using a unique data set of 644 registered projects. It provides a detailed description of the transfers (frequency, type, by sector, by host country, etc.). It also includes an econometric analysis of their drivers. We show that transfer likeliness increases with the size of the projects. The transfer probability is 50% higher in projects implemented in a subsidiary of Annex 1 companies while the presence of an official credit buyer has a lower – albeit positive – impact. The analysis also yields interesting results on how technological capabilities of the host country influence technology diffusion in the CDM. Keywords: Kyoto Protocol, Clean Development Mechanism, International Technology Transfer Classification-JEL: Q5, Q55 Creation-Date: 200712