Suchergebnisse

Formulation and estimation of a correctly specified abatement cost function would be central to policy formulation regarding imposing taxes or user-fees as well as of sharing social cost in the presence of environmental pollution. Often in research, the output of an abatement activity for water pollution appears to us not to have been clearly specified. This activity is very distinct from whatever is the actual product of the plant. We propose in this paper that the output is only and exclusively the reduction in the level of the pollutant in the outflow from the plant and illustrate this with primary data for small-scale factories in Nandesari Industrial Estate in Gujarat, India. The cost function estimates provide evidence of significant scale economies and high marginal abatement cost in wastewater treatment by small-scale factories.

A consensus is forming among experts that the best way to achieve emissions' reduction in the near and mid-term is increasing the demand-side energy efficiency—this is especially true in developing countries where the potential for demand reduction is significant and achievable at relatively lower cost. Enhanced energy efficiency also reduces energy costs and can result in a financial benefit to end-users, if the life-cycle value of energy savings offsets the upfront cost of implementing the measure. At the same time, reducing energy demand translates into lower pull for fossil fuel import and supply/distribution capacity expansion. An ideal candidate for the implementation of demand-side energy efficiency measures is the building sector, since it contributes to a large extent to the total amount of greenhouse gases (GHGs) emitted worldwide. In most developing countries, the contribution of the building sector to the total national GHG emissions is significantly higher than the worldwide average. This is in part due to the lower level of industrial activity. Other drivers of the high emissions of the building sector are the inefficiency of the envelope and technical systems of the existing buildings, as well as harsh climatic conditions requiring the use of energy intensive air-conditioning equipment. The United Arab Emirates (UAE) currently have the highest ecological footprint per capita in the world. The Emirate of Abu Dhabi, the focus of this study, can be expected to have a footprint that is even higher, being the largest economy and the major oil producer among the seven Emirates. In addition to the environmental consequences of unrestrained energy consumption, the fact that energy prices are heavily subsidized in Abu Dhabi results in a significant financial burden for the government. In the UAE and the Emirate of Abu Dhabi, the air-conditioning load in buildings is the ideal target for demand-side management because it constitutes more than 60% of the total energy consumption. However, many sources of uncertainty still remain. How should we assess the life-cycle cost/benefit of candidate demand-side interventions? Which ones to choose in order to maximize national utility? This study will start to answer those questions by using a detailed engineering model of a typical Abu Dhabi building as specified by the Emirate's Urban Planning Council. Using the model building as a baseline, we then proceed to evaluate the energy impact of different retrofits through numerical simulation. We present a novel Marginal Abatement Cost Curve (MACC) for the Emirate of Abu Dhabi focusing exclusively on demand-side measures having an impact on the air-conditioning load. A surprising number of the abatement levers analyzed in this study exhibit a positive net present value (NPV), if the cost-reflective price of electricity is used for the life-cycle assessment.

Conventional wisdom argues that environmental policy is less costly if environmental policy induces the development of cleaner technologies. In contrast to this argument, we show that the cost of environmental policy (a reduction in emissions) may be larger with induced technical change than without. To explain this apparent paradox, we analyze three main issues. The first key issue is whether the new technology increases or reduces the marginal cost of abatement. While most analyses in environmental economics consider it natural that marginal abatement costs fall as new technology is developed, we argue that technological change may instead increase the productivity of polluting inputs, and thus marginal abatement costs. The second issue is whether environmental policy increases or decreases total investment and innovation. Even when stricter environmental policy induces some pollution-saving technological change, it may do so at the cost of a reduced overall rate of innovation, which crowds out production and consumption, and thus makes environmental policy more costly. Finally, the presence of additional distortions drive wedges between the social and private valuation of investment and pollution that may provide incentives for induced technological change with welfare-deteriorating effects.

In the environmental economics literature the standard approach of modeling nonlinear production and abatement processes is to treat waste emissions "simply as another factor of production" (Cropper and Oates 1992). That approach doesn't map the materials flow involved completely and hides, moreover, the exact links between production, residuals generation and abatement. This paper shows that production functions with emissions treated as inputs can be reconstructed as a subsystem of a comprehensive production-cum-abatement technology that is in line with the materials-balance principle. In a simple economy with full regard of the materials flow it also explores the consequences for allocative efficiency and efficiency-restoring taxation of multiple and interdependent residuals generated in the transformation processes of production, abatement and consumption. Finally, the paper demonstrates that efficiency may require setting the emissions tax rate above or below conventionally defined marginal abatement cost if the residual subject to abatement is not the only residual causing pollution.

The impact of environmental abatement costs on the size distribution of manufacturing establishments in pollution‐intensive industries is analyzed. Utilizing both state‐ and industry‐specific measures of environmental regulation, a new and important interaction is discovered: Establishment size increases with state environmental abatement costs, but only in industries during periods of relatively high (national) pollution abatement intensity. Increased state environmental stringency during times when similar industries located in other states are not undertaking sufficient abatement expenditures leads to a decrease in establishment size. (JEL L11, L51, R38)

Economic analysis has been central to the development of greenhouse abatement policy in Australia. Current Australian policy is to remain outside the Kyoto Protocol, while still attempting to meet the emission targets established under the Protocol. Australia's failure to ratify the Protocol has incurred international criticism; it is therefore appropriate to examine the validity of the economic analysis used to support this policy position. This paper reviews approaches to economic analysis that have been prominent in the greenhouse policy debate in Australia, including computable general equilibrium modelling, bottom-up energy sector modelling and policy specific cost benefit analysis. Alternative approaches that have received less attention in Australia are also reviewed. Flaws in existing economic analyses include a failure to consider the net cost to society of greenhouse abatement measures, a tendency to exclude abatement benefits, inadequate consideration of ethical and moral issues, a lack of accessibility and the assumption that economic systems are in an optimal equilibrium state. In response to these flaws, an alternative approach to economic analysis termed 'integrated abatement planning' is developed. Integrated abatement planning draws on the principles of least cost planning and integrated resource planning to identify least cost greenhouse abatement measures. A primary tool is the marginal abatement cost curve, which plots abatement measures according to their total abatement over a specified time period and the marginal cost of abatement. The approach is based on an explicit ethical position that values inter-generational and intra-generational equity. Integrated abatement planning is intended as a simple, practical approach that can be used by policy makers to explore the balance between long- and short-term objectives, to test the impact of varying assumptions, and to identify a robust set of measures for meeting politically determined greenhouse reduction targets. It draws on evolutionary economic theory, notably the insight that selected policies will always be sub-optimal but will provide opportunities for learning and continual improvement of policy. Integrated abatement planning offers a way to move beyond arguments about whether greenhouse abatement is required and to focus, more productively, on the best ways to achieve abatement.