Resource and Environmental Economics
Fall 2019, ETH D-MTEC, Prof. Lucas Bretschger
Fall 2019, ETH D-MTEC, Prof. Lucas Bretschger
Fichier Détails
| Cartes-fiches | 51 |
|---|---|
| Langue | English |
| Catégorie | Gestion d'entreprise |
| Niveau | Université |
| Crée / Actualisé | 10.01.2020 / 09.02.2020 |
| Lien de web |
https://card2brain.ch/box/20200110_resource_and_environmental_economics
|
| Intégrer |
<iframe src="https://card2brain.ch/box/20200110_resource_and_environmental_economics/embed" width="780" height="150" scrolling="no" frameborder="0"></iframe>
|
Environmental Performance Index
- Multidimensional index with focus on ecology
- 2 main objectives, both weighted 50%:
- environmental health & ecosystem vitality
- natural resource management - fixed target setting for all indicators --> target achievement measured
Problem: even though focus on ecology, most indicators are connected to wealth & income (air pollution, drinking water quality, child mortality)
Index of Sustainable Economic Welfare (ISEW)
Socio-economic indicator
ISEW = personal consumption
+ welfare improving contributions
- inequality index
- defensive expenditures
Problem: unnecessary, as it is an economic indicator intended to replace GDP
Ecological Footprint (EF)
Coonverts resource usage by consumption and waste into total necessary area of land and water in order to compare
Problem: countries with high area per population ratio are generally better off
Race to the bottom
If one country lowers environmental standards in order to boost its economy, others will follow to react to the competitive advantage of the former country.
Environmental standards will sink to the level of the country with the lowest standards
Counter arguments:
- environmental policies often lead to positive externalities
- environmental protection is often only a fraction of production costs
- einvornmental taxes are revenue to the government
Effects of climate change
- Rise of sea level (50cm until 2100 predicted)
- Extreme weather phenomenon
- Health effects (increasing suffering from tropical diseases like Malaria)
- Reduction of wheat harvest in most tropical and subtropical regions
- Energy consumption due to air-conditioning
Basic climate economic model
- Stock S(t) gets depleted over time (not fully)
- Aggregate pollution P(S) increases with increasing stock depletion
- Damage D(P) increases with increasing aggregate pollution and time
Kyoto Protocol (1997)
- Entered into force 2005
- Annex I countries reduce GHG emissions until 2012 by an avg. of 5.2% below 1990 levels
- Countries of a state-community are regarded as single country (EU)
- Joint implementation: Annex I countries can pay for reduction in other Annex I countries and can get credit for this
- Clean development mechanism: Annex I countries can pay for reductions in developing countries, but only for projects that would not be imple mented otherwise
Difficulties:
- Free-riding
- Uncertainty about costs & benefits from non-abatement
- Efficiency of Clean development mechanism
Missed to include all major emitters in a meaningful way
Paris Agreement on Climate Change (2015)
- Signed by 195 countries
- Entered into force in November 2016 (55 countries accounting for 55% of global GHG emissions needed to ratify)
- Goal: keep temperature rise below 2°C compared to pre-industrialization
Aggreement tried to solve efficiency and equity problem of the Kyoto Protocol, by...
- reaching temperature targets at lowest economic cost
- fairly share burden between countries
Crucial aspects of climate policies
- Efficiency: achieve target at lowest economic cost --> apply uniform carbon price or emission trading system
- Equity: fair burden sharing --> acceptance of agreement, raise ambitious to reach efficient target
Common but differentiated responsibilities (CDR)
Responsibilities are shared by all, but everyone needs to compensate in an individual way
Equity principles to share burden fairly and equaly
- Ability to pay: countires with larger economic capacity should contribute more
- Policy cost sharing: countries with low implementing costs should contribute more
- Merit principle: the bigger the effort of a country, the more it should be rewarded
- Comparing like with like: emissions in times of plenty alternative energy sources are weighted differently from emissions at times with few alternatives
