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All Past Seminars | Climate Economics | Climate Science | Environmental EconomicsEnvironmental Economics
Adapting to New Information when Driving Environmental Innovation: Lessons from California Vehicle Policies
November 5, 2009, 9:30 to 11:00 am
Margaret Taylor (Goldman School of Public Policy; University of California,at Berkeley)
Abstract: Locking emissions targets into a long-term regulatory program, such as a cap-and-trade program (CTP) for carbon mitigation, poses certain tradeoffs to policy-makers interested in promoting the invention and adoption of new environmental (or "clean") technologies. On the one hand, long-term targets provide a degree of certainty that investments in clean technologies today will pay off at some point in the future, regardless of the value of emissions allowances in the short term. On the other hand, a future could be imagined in which new information could significantly shift the calculus of the benefits and costs of the original targets and the directions in environmental innovation which these targets had inspired. A variety of studies have highlighted issues regarding the accuracy and credibility of technology projections in the context of “technology-forcing regulation,” given profit motivations and information asymmetry between technology developers and the public sector. But the implications for innovation of periodic government actions that adapt to technological realities and potentials over a long time period have been unexplored, in part because of the dearth of program examples. The most significant of the few existing examples is probably the long-running California Low-Emission Vehicle (LEV) program and its subordinate Zero-Emission Vehicle (ZEV) program. This paper explores the inventive activity and innovative outcomes that occurred in conjunction with the LEV/ZEV program and the potential implications of the results for adaptive technology-forcing environmental policy. Specifically, the paper considers cost, performance, and patenting data for four relevant vehicle technologies – automotive emissions controls (AEC), battery-electric vehicles (BEV), hybrid-electric vehicles (HEV), and polymer-electrolyte fuel-cell vehicles (FCV).
The VSL for Children and Adults: Evidence from Conjoint Choice Experiments in Milan, Italy, and in the Czech Republic
October 1, 2009, 10:30 am
Anna Alberini (Department of Agricultural and Resource Economics, University of Maryland)
Abstract: The speaker will present the results of conjoint choice experiments designed to estimate child and adult VSL in contexts appropriate for environmental policy analyses. Our survey was self-administered by parents at two centralized facilities in Milan, Italy, and in the major cities and a handful of smaller towns in the Czech Republic.
In Italy, Child VSL is €4.6 million, and adult VSL is €4.0. These figures are not statistically different from one another. The VSL does vary systematically with the cause of death. It is higher when the cause of death is cancer than for respiratory illnesses and road-traffic accidents, with cancer premia of 30% and 53%, respectively. The cancer premium is especially pronounced for adults. The responses to the choice questions are internally valid, and show that the VSL depends on cause of death, whether the risk reduction is private or delivered by a public program, dread, perceived exposure, and sensitivity to the specified cause of death.
Agricultural Law and Livestock Operations: Implications of the Law for Environmental Protection
August 31, 2009, 9:30 to 10:30 am
Janie Simms Hipp (U.S. Department of Agriculture)
Abstract: Janie Hipp, formerly with the National Center for Agricultural Law at the University of Arkansas and now with the USDA Risk Management Agency, will talk about how recent legal developments pertaining to livestock industry and its industrial structure may affect EPA efforts to reduce the environmental impact of the livestock industry, especially confined animal feeding operations (CAFOS).
The Definition and Choice of Environmental Commodities for Non-market Valuation
August 26, 2009, 1:30 pm
Jim Boyd & Alan Krupnick, (Resources for the Future)
Abstract: Economic analyses of nature must somehow define the “environmental commodities” to which values are attached. This paper articulates a set of principles to guide the choice and interpretation of non-market commodities. The presenters will describe how complex natural systems can be decomposed consistent with what can be called “ecological production theory.” Ecological production theory – like conventional production theory – distinguishes between biophysical inputs, process, and outputs. They will argue that a systems approach to the decomposition and presentation of natural commodities can inform and possibly improve the validity of non-market environmental valuation studies. They will raise concerns about the interpretation, usefulness, and accuracy of benefit estimates derived without reference to ecological production theory. They also will discuss ongoing work with EPA's Office of Research and Development relating to the measurement of ecological endpoints and policy-relevant ecological production functions, and ways in which their hypotheses can be tested.
Benefit Transfer from Multiple Contingent Experiments: A Flexible Two-Step Model Combining Individual Choice Data with Community Characteristics
August 18, 2009, 1:00 to 2:30 pm
Klaus Moeltner (University of Nevada, Reno)
Abstract: This study proposes a new approach to utilize information from existing choice experiments to predict policy outcomes for a transfer setting. Recognizing the difficulties from pooling raw data from experiments with different designs and sub-populations we first re-estimate all underlying Random Utility Models individually, and then combine them in a second stage process to form a weighted mixture density for the generation of policy-relevant welfare estimates. Using data from recent choice experiments on farmland preservation we illustrate that our strategy is more robust to transfer inaccuracies than single-site approaches. The specification of "intelligent" mixture weights will be a fruitful ground for future research in the area of Benefit Transfer.
The Pure Characteristics Approach to Travel Cost Models and Implementation of Benefit Transfers
May 14, 2009, 10:00 to 11:30 am
Christopher Parmeter (Virginia Tech)
Abstract: Standard travel cost models rely on a priori assumptions about the distribution of preferences. The resulting estimates reflect uncertainty relating to unobserved characteristics and unobserved preferences on observed characteristics. Currently, few methods have challenged the distributional assumptions applied in empirical settings. This paper argues that the pure characteristics approach, applied to travel cost models provides bounds on benefit estimates that reflect uncertainty on unobserved preferences on unobserved characteristics. Thus, this method is a semiparametric alternative to traditional travel cost models. The ability to relax distributional assumptions on both unobserved characteristics and preferences may provide bounds that are tighter than traditional confidence intervals, improving the quality of policy analysis.
The authors extend the existing pure characteristics methodology to the case where different people face different prices (travel costs). The new estimator uses the additional information in the variation in prices to relax the need for independence between observed and unobserved characteristics of the object of choice. The variation in prices acts as a type of instrument. It provides a new way to deal with endogeneity in recreation demand applications that is less data intensive than the combined stated / revealed preference approach proposed by von Haefen and Phaneuf (JEEM, forthcoming). Additionally, by identifying bounds on welfare measures, rather than point estimates, the PCM provides a way to explicitly address uncertainty when conducting benefit transfers—one of EPA’s guidelines. Thus, this work fills in two gaps in the literature. First, it provides a theoretically sound approach to estimating travel cost models without the use of distributional assumptions. Second, it accounts for preference uncertainty in benefit transfers, which have hindered past methodologies.
Convergent Validity of Revealed and Stated Recreation Behavior with Quality Change: A Comparison of Multiple and Single Site Demands
November 20, 2008 (2:00 to 3:30 pm)
John Whitehead (Appalachian State University)
Abstract: The speaker and his co-authors consider the convergent validity of several demand models using beach recreation data. Two models employ multiple site data, the linked site-selection and trip frequency demand model and the Kuhn-Tucker demand system model. They exploit the effect of the existing variation in beach width on trip choices to analyze a 100 foot increase in beach width. They compare these models to a single site model where we jointly estimate revealed and stated preference data focusing on a hypothetical scenario that directly considers a 100 foot increase in beach width. In each case they develop estimates of the increased number of beach trips with an increase in beach width and the value of beach width. The trip estimates from each of the three models are similar and convergent valid. The convergent validity statistical test on willingness to pay suggests that the estimates converge between these models. However, the difference in magnitude is large.
The paper on which this presentation is based can be found here. 
Decentralization and Water Pollution Spillovers: Evidence from the Re-drawing of County Boundaries in Brazil
October 23, 2008
Mushfiq Mobarak (Yale University, School of Management)
Abstract: The presenter will examine the effect of political decentralization on pollution spillovers across jurisdictional boundaries. Upstream water use has spillover effects on downstream jurisdictions, and greater decentralization (i.e. a larger number of political jurisdictions managing the same river) may exacerbate these spillovers, as upstream communities have fewer incentives to restrain their members from polluting the river at the border. The presenter will use GIS to combine a panel dataset of 9,000 water quality measures collected at 321 monitoring stations across Brazil with maps of the evolving boundaries of the 5500 Brazilian counties to study (a) whether water quality degrades across jurisdictional boundaries due to increases in pollution close a river’s exit point out of a jurisdiction, and (b) what the net effect of a decentralization initiative on water quality is, once the opposing impacts of inter-jurisdictional pollution spillovers and increased local government budgets for cleaning up the water are taken into account. The researchers took advantage of the fact that Brazil changes county boundaries at every election cycle, so that the same river segment may cross different numbers of counties in different years. The presenter finds evidence of strategic enforcement of water pollution regulations; there is a significant increase in pollution close to the river’s exit point from the upstream county, and conversely a significant decrease in pollution when the measure is taken farther downstream from the point of entrance. Pollution increases by 2.3% for every kilometer closer a river gets to the exiting border, but in the stretch within 5 kilometers of the border this increase jumps to 18.6% per kilometer. Thus the greatest polluting activity appears to be very close to the exiting border. The researchers' theoretical model coupled with the empirical results are strongly suggestive that these results are evidence of strategic spillovers rather than spurious correlation between county splits and pollution stemming from changing population density. Even in the presence of such negative externalities, the net effect of decentralization on water quality is essentially zero, since some other beneficial by-products of decentralization (in particular, increased local government budgets) offsets the negative pollution spillover effects.
The paper on which this presentation is based can be found here. (PDF, 456 kb)
Impact of Switching Production to Bioenergy Crops: The Switchgrass Example
November 1, 2007 (2pm)
Scott McDonald (University of Sheffield), Sherman Robinson (University of Sussex) and Karen Thierfelder (U.S. Naval Academy)
Abstract: This paper reports the results from simulations that evaluate the general equilibrium effects of substituting switchgrass, a biomass, for crude oil in USA petroleum production. The new production process is less efficient and USA GDP declines slightly. As switchgrass production expands, USA agriculture contracts and the world price of cereals increases. The world price of crude oil falls as USA import demand declines. The net effect of the price and income changes is a general decline in economic welfare. Moreover, the declines in welfare are proportionately greater for developing countries who produce small quantities of agricultural commodities whose prices increase.