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In: Working paper series in economics 220
In: Working paper series in economics No. 34
In: UFZ-Diskussionspapiere 4/2005
Based on a case study on Bombay, we argue that urban infrastructure, like the sewage system and the municipal waste collection, is an important instrument for urban environmental policy. We develop a spatial general equilibrium model of a monocentric city, where infrastructure serves as a public means of abating pollution. Analyzing the optimal supply of pollution-reducing infrastructure, we conclude that it has to be geographically differentiated, even if pollution is homogenous. In a city with a growing population the provision of infrastructure has to be changed throughout the city, not only in newly inhabited areas. Urban environmental policies, based on Pigouvian taxes and pollution-reducing infrastructure, are mutually dependent. In two settings of public or private infrastructure, we show that fiscal environmental policies have to be spatially differentiated, and that income transfers are necessary in order to implement the first best allocation as a residential market equilibrium.
In: Environment and development economics, Band 12, Heft 2, S. 213
ISSN: 1469-4395
In: Environmental and resource economics, Band 71, Heft 2, S. 529-549
ISSN: 1573-1502
In: CESifo Working Paper Series No. 6524
SSRN
Working paper
In: Environmental and resource economics, Band 67, Heft 2, S. 321-350
ISSN: 1573-1502
In: Environmental and resource economics, Band 63, Heft 1, S. 79-93
ISSN: 1573-1502
In: Environmental and resource economics, Band 54, Heft 2, S. 293-310
ISSN: 1573-1502
In: CESifo Working Paper Series No. 4044
SSRN
Working paper
In: Ecological Economics, Forthcoming
SSRN
In: Environment and development economics, Band 15, Heft 1, S. 1-19
ISSN: 1469-4395
ABSTRACTWe analyze the external effects that arise in the decisions of firms on polluting emissions and in the decisions of parents on the number of births in an optimal control model with three stock variables representing population, economic capital, and pollution. We distinguish two different types of households, which represent opposite ends of a spectrum of potential familial structures: 'dynastic households', in which the family sticks together forever and 'micro-households', in which children leave their parent's household immediately after birth. We show that the decision of parents on the number of births involves an externality that is qualitatively different for both types of familial structure. Hence, population policy should be different, according to the type of household. A first best result may be obtained in the case of dynastic households if an appropriate tax on the household size is applied, or, in the case of micro-households, if an appropriate tax on children is applied.
Agro-biodiversity can provide natural insurance to risk-averse farmers by reducing the variance of crop yield, and to society at large by reducing the uncertainty in the provision of public-good ecosystem services such as e.g. CO2 storage. We analyze the choice of agro-biodiversity by risk-averse farmers who have access to financial insurance, and study the implications for agri-environmental policy design when on-farm agro-biodiversity generates a positive risk externality. While increasing environmental risk leads private farmers to increase their level of on-farm agro-biodiversity, the level of agro-biodiversity in the laissez-faire equilibrium remains inefficiently low. We show how either one of two agri-environmental policy instruments can cure this risk-related market failure: an ex-ante Pigouvian subsidy on on-farm agro-biodiversity and an ex-post compensation payment for the actual provision of public environmental benefits. In the absence of regulation, welfare may increase rather than decrease with increasing environmental risk, if the agroecosystems is characterized by a high natural insurance function, low costs and large external benefits of agro-biodiversity.
BASE
In: The B.E. journal of economic analysis & policy, Band 7, Heft 1
ISSN: 1935-1682
Abstract
We study how local environmental pollution affects spatial patterns of economic activities when workers can migrate. Based on a New Economic Geography model, we analytically characterize the stability conditions for three different types of equilibria: symmetric spreading, partial and full agglomeration. We show that the extent of agglomeration crucially depends on the damages caused by local pollution. We thereby provide a unified framework for discussing different relationships between the extent of agglomeration and trade freeness that have been found in the literature.