Questions and Answers of Environmental Economics

Consider a firm whose cost function is given by c(x)=c·x2/2.The output price is fixed and denoted by p. Emissions are proportional to output according to e=α0·x. The firm is subject to an emission
Consider a firm that produces output at constant marginal cost c>0, and emissions are proportional to output so that e=αx, where x is output, and e is emissions. The output price is normalized
Consider the model from section 12.1, where the countries’ utility functions are:(a) Determine the efficient allocations.(b) Determine the unilateral optimal emission choices (i.e. the emissions
Repeat exercise 12.1, but now usefor the domestic utility function, and a corresponding expression for the foreign utility function.(a) What are the maximum consumption levels for z and
Consider utility functions:with α, β > 0 and 0 x with 0 f = Exf f with 0 f Repeat exercise 12.1Consider the model from section 12.1, where the countries’ utility functions
Consider the model of section 12.4.1. Show that if the foreign country maintains its emission tax, domestically emission taxes and tradable permits are equivalent.Data from section 12.4.1 As a step
Extend the model from section 12.4 by assuming that there are J (not necessarily symmetric) domestic and Jf (not necessarily symmetric) foreign firms.(a) Derive the unilaterally optimal emission tax
Consider the model with mobile capital sketched in section 12.4.3.(a) Set up the equation system that characterizes the international competitive equilibrium for the commodity and the capital
Consider the model from section 12.4.4.(a) Derive the second-best optimal combination of an emission tax and import tariff (export tax) for the case when there is no transboundary
Consider the inter-temporal leakage problem from section 12.6.3. Assume the extraction cost depend on the remaining stock – i.e. in the second period the extraction cost function is given by T (e2,
Consider the discrete time model with two (and then three) periods.(a) For linear marginal abatement cost -C'(E)= a-bE and linear marginal damage D'(S)=d.S calculate the optimal emission path.(b)
Consider the pollution model with linear marginal abatement cost -C'(E)=a-bE and constant marginal damage D'(S)= d.(a) Determine the steady state.(b) Solve for the optimal feedback strategy.(c)
Consider a parameterized damage function D(S,n) where n is a damage parameter shifting up the damage and the marginal damage so that Dn (S,n) > 0 and Dsn (S,n) > 0(a) Investigate how emissions and
Consider a pollution accumulation problem with two pollutants where E1 and E2 denote emissions and S1 and S2 the stocks of pollution for the two pollutants. The abatement cost functions of the two
Consider evaluating the welfare effect of a change in an environmental quantity q. Recall that CV and EV have different implied property right implications and, depending on the direction of change,
In section 14.2.2 we showed that for consumer surplus to be a unique, money-metric measure of utility change for price increases or decreases, the marginal utility of income must be constant with
Consider a demand equation of the form:where p is price and y is income. Suppose we have estimated the parameters of this equation using market data on prices and quantities, so that α=2, β=0.65,
Consider the following three incomplete demand system specifications for goods indexed j=1,…,J:Using the results derived in von Haefen (2002), for each system state:(a) the parameter restrictions
In section 14.4 we presented the “substitutability” argument as one of several candidate explanations for the persistently observed gap between willingness to pay and willingness to accept.
Which of the following utility functions are consistent with weak complementarity?a. b. c. d. e. U(x,z,q) =YxIn(x-8(q) + 0)+In z, 4,0>0, 8(q)>0
Show that the indirect utility function given in Eq. (15.21) is consistent with the Willig condition by demonstrating that Eq. (15.14) holds. (first use V(•) to derive θ q(•), and then state the
Consider a demand equation for a private good x of the formwhere p is price, y is income, and q is a quasi-fixed quality attribute of x. Suppose we have estimated the parameters of this equation and
Consider the substitutes model in which utility is U(H,z) and the production technology is H=f(x,q). Assume the baseline price of the private input x is p=$10 and that the baseline level of the
A useful feature of the conditional logit model with a specification including a full set of alternative specific constants is that:where sj is the proportion of times in the data that alternative j
Using the home heating data, complete the following.(a) Estimate a model that includes only the installation and operating cost variables, and check that you are able to replicate the estimates
The chapter made extensive use of empirical examples from the Iowa lakes project. Using these examples complete the following:(a) Summarize the range of welfare estimates for similar scenarios from
Empirical practice in the recreation demand literature continues to rely on fraction-of-the-wage-rate assumptions to account for the opportunity cost of travel time. Using papers referenced in the
This exercise is based on data describing recreation visits to 17 beaches in the American state of North Carolina by a sample of residents from the eastern part of the state. The dataset
This exercise is based on a subset of the data analyzed by Murdock (2006), and describes 2,404 trip outcomes to 100 angling destinations in the American state of Wisconsin. The data set WI_100 is
Familiarize yourself with the database by examining summary statistics, data plots, and basic regressions. In particular, use ordinary least squares to estimate the parameters of the baseline
The Wake County database contains a variable lakedist, which measures the distance (in hundreds of meters) from the property to the nearest lake.Consider using this variable to proxy the value of
Consider the Hanemann and Cameron specifications shown in examples 19.3 and 19.4.(a) For the full dataset, summarize the proportion of people who vote “yes” in the referendum for each of the
The survey included a follow-on choice (double bound), whereby individuals responded to a second bid. The bid was lower if the first vote was “no,”and higher if the first vote was “yes.” For
In Phaneuf et al. (2013), the authors use a discrete choice experiment to measure the value of remediating the Lower Buffalo River in Buffalo, New York, which was classified as an Area of Concern
In their survey of stated preference validity, Kling et al. (2012) note that past literature using “home grown” values tended to find evidence of hypothetical bias. However, more recent studies
We saw that there are several ways to measure the value of mortality risk reductions. Search the recent empirical literature to locate three different studies measuring the VSL: a wage hedonic, a
Consider the following indirect utility functions for the states “alive” (A) and “dead” (D), where m is non-labor income and w is the wage:Let ρ denote the person’s risk of a job-related
The data file evans_wage is available on the website, along with descriptions of the included variables. In contains information on hourly wages for a sample of individuals, along with variables
Consider an environmental policy that provides no benefits in the first ten years after implementation, but costs $10,000 per year. In years 11 through 40 the benefits are $30,000 per year, while the
A 2008 symposium in Review of Environmental Economics and Policy (volume 2, issue 1) contains a collection of articles debating elements of climate change policy. Much of the discussion in the papers
Three of the better-known IAMs for climate change policy are DICE (William Nordhaus), FUND (Richard Tol), and PAGE (Chris Hope). Greenstone et al. (2013) and the references contained therein (see in
There are several online databases of non-market values that are used for benefit transfers. A good example is the Recreation Use Values database, maintained by Randy Rosenberger.(a) Examine the
Consider now a structural benefits transfer approach for valuing aspects of freshwater recreation. Using the example specification beginning in Eq. (22.1), search for studies that will help you
Define Pareto efficiency.
Explain the four conditions that must hold for the existence of a well-defined property rights system, and address why all four matter.
Why do economists promote the idea of creating markets for environmental protection?
What is a public good and why are public goods considered a market failure?
Explain the idea behind the phrase the 'tragedy of the commons'.
Explain why moral hazard and adverse selection are market failures?
How can government help solve the problems of hidden information?
Explain how Pigovian taxes work to control pollution.
How do tradable pollution permits work in theory and in practice?
Why do economists use WTP as a measure of the value someone places on an environmental good or ecosystem service?
What determines how WTP for a particular change in environmental quality (e.g. a fall in air pollution) may vary across people?
Several studies have shown that WTP differs substantially from WTA for a given change in environmental quality. Why might this be? Does it matter, from a policy analysis viewpoint?
What is meant by the economic value of an ecosystem service? How could changes in pressures on an ecosystem (such as an estuary or a forest) produce a change in ecosystem service values? What would
Explain how you would undertake a cost-benefit analysis of a planned new nuclear power station. Why might the choice of discount rate be particularly crucial to the net
What are the main differences between stated- and revealed-preference methods of environmental valuation?
List the three main problem areas of contingent valuation as you see it; and explain how researchers could try to minimize the impacts of these problems on estimates of environmental benefits that
Explain how you would undertake (i) a choice experiment and (ii) a travel-cost study of the benefits of improved management of a national park. What information could such studies generate that would
What is benefits transfer', and how and when should it be undertaken? How accurate could we expect such transferred valued to be?
What degree of reliance can we place on estimates of environmental value derived from the methods described in this chapter? Are some methods more robust or more valid than others?
Explain how you would estimate the change in ecosystem service values from a decision to conserve an area of coastal mangrove wetlands, rather than allowing a new harbour development to proceed.
What role does the discount rate play in environmental valuation?
Is a zero-risk society possible?
Explain the pros and cons of using rational choice theory to help think about how to manage risks to human and environmental health.
How might private self-protection and self-insurance affect the demand for governmental reduction in risks to life and limb?
How does expected utility differ from expected values? Why does this difference matter for policy?
If people reverse their preferences for risky events, should the government incorporate or ignore their behaviour when making public policy?
Explain how one might measure the value of statistical life.
What do we mean by economic growth? Why do economies grow? In principle, what are the main implications of such growth for the environment?
What did the early, Classical economists such as Ricardo and Mill have to say about the links between economic growth and natural resources? Why did economics become known as the 'dismal science?
What are the theoretical explanations for the environmental Kuznets curve, and why is empirical evidence on the existence of such a relationship so mixed?
Explain the main differences between weak and strong sustainability, and why these matter for government policy on sustainable development.
What economic indicators of weak sustainability exist, and how much do we know about the robustness of these indicators in practice or in theory?
Why are the predictions of the prisoner's dilemma so important to natural resource management?
Distinguish between an open-access fishery and a common-property fishery. Would you expect overfishing to be worse when there are fifty firms sharing a fishery or two firms sharing a fishery?
Why is Elinor Ostrom more optimistic about the world's commons than Garrett Harding?
Why was the Montreal Protocol successful in reducing CFCs, whilst the Kyoto Protocol has failed to even get all the countries to agree?
With reference to co-operative game theory, why might coalitions be unstable in relation to producer groups (e.g. a fishers' organization) sharing a natural resource?
You have been invited to take part in a debate with the proposal that 'Globalization is Bad for the Environment'. What would your three main points be if you were to argue for the proposal? Which
Distinguish between the pollution haven hypothesis and the Porter hypothesis in relation to trade and the environment.
When is it justifiable to use trade tariffs and trade quotas as a substitute for domestic environmental policy?
Distinguish between the scale effect and the composition effect of trade liberalization.
What is the link between trade and the environmental Kuznets curve?
Describe the major economic benefits of reducing climate change risk.
Describe the key drivers that will either increase or decrease the costs of climate policy around the globe.
Suppose that you are asked to put a price on carbon emissions. Explain why you prefer a global carbon tax or a global cap-and-trade system.
How does the idea of a 'fat tail' extreme event affect the economics of climate change?
Explain the challenges that countries face when considering how to coordinate over an international environmental agreement such as the Kyoto Protocol.
What are the main drivers of forest loss in Brazil and the Ivory Coast?
When should a natural forest never be cleared?
Why should the developed countries consider compensating the poor nations to stop deforestation?
Why are non-timber forest products often not taken into account when governments decide to allocate logging concessions?
Is there any evidence for an environmental Kuznets curve for forestry?
What are the main types and sources of water pollution? Why might the source of the problem matter for policy design?
What problems would a regulator face in using a system of pollution taxes to improve water quality in a river, where the main problem is point-source discharges from factories and sewage treatment
How could economic instruments be used to reduce pollution from non-point sources in an estuary? In what way does the nature of the pollution source impose additional policy design problems for the
How could you use (i) choice experiments and (ii) hedonic pricing to estimate the benefits of an improvement in river-water quality in an urban area?
What are the problems of undertaking a cost-benefit analysis of a planned improvement in coastal water quality through improvements in sewage treatment?

Showing 600 - 700 of 1133