Papers by Richard S J Tol
Journal of Air Transport Management, 2008
We use a model of domestic and international tourist numbers and flows to estimate the impact of ... more We use a model of domestic and international tourist numbers and flows to estimate the impact of the EU-US Open Skies agreement that is to take effect in March 2008. The Open Aviation Area will result in increased competition between transatlantic carriers and consequently falls in the cost of flights, therefore we look at the change in visitor numbers from the US into the EU and corresponding CO 2 emissions. We find that passenger numbers arriving from the US to the EU will increase by approximately 1% and 14% depending on the magnitude of the price reductions. This increase in passenger numbers does not however result in a corresponding rise in emissions as arrivals into other countries from the US fall by a comparable amount. The number of tourist arrivals from the US to countries outside of the EU will fall and overall emissions would then increase by a maximum of 0.7%. If we assume that domestic holidays and foreign holidays are close substitutes these effects are strengthened and US passengers switch from domestic trips to foreign destinations as airfares converge.
Economic Modelling, 2009
This study uses country-level panel data on consumption in Ireland and seven other OECD countries... more This study uses country-level panel data on consumption in Ireland and seven other OECD countries to examine the evolution of Irish consumption patterns as Ireland underwent rapid macroeconomic growth. Consumption levels obviously increased due to substantially higher incomes, but it is less clear how the shares of different types of goods purchased have changed or whether Ireland's consumption mix has converged with that of other high-income countries. Rankings based on a simple distance measure of consumption similarity suggest that Ireland moved from a "low-income" pattern similar to Portugal or Greece to a "high-income" pattern like that of Canada between 1995 and 2003. Using static and dynamic Almost Ideal Demand System models, we first estimate long-and short-run Irish price and income elasticities for nine categories of commodities between 1976 and 2003. These results provide evidence of substantial habit formation in aggregate consumption. We then estimate a long-run crosscountry model covering six aggregate commodity groups between 1975 and 2003. The analysis shows that Ireland's demand parameters remain more similar to those of Greece than to higher-income OECD countries in the sample. Although Ireland has overtaken most other OECD countries in per capita income, it is still converging to a higher-income consumption pattern. We foresee further convergence of Irish expenditure patterns towards a pattern typical of high-income countries.
Climate Change 2014 Impacts, Adaptation, and Vulnerability
RePEc: Research Papers in Economics, 2018
Financial support by the CEC DG Research and Innovation through the RISES-AM project (grant no. 6... more Financial support by the CEC DG Research and Innovation through the RISES-AM project (grant no. 603396) is gratefully acknowledged. At the Department of Economics at Sussex, we would like to thank to many of the members of faculty and PhD students for their valuable comments and suggestions. Among many, we expressly thank Peter Dolton and Alexander Moradi for their valuable contribution, feedback and constructive discussion.
Risk Management in Commodity Markets, 2012
Economic efficiency has long been a gold standard for evaluating policies. In the context of clim... more Economic efficiency has long been a gold standard for evaluating policies. In the context of climate change, the search for efficient solutions to the policy problem has evolved into using elaborate, regionally disaggregated integrated assessment models to judge the relative expected benefits and costs of various policy options across a wide range of possible futures. In many cases, studies in what is fundamentally a utilityoptimising design, use Monte Carlo simulations to set expected marginal benefits equal to expected marginal cost. This is why calculations of the social cost of carbon (SCC) have become so popular. This approach has, of course, been criticized because many of the potential impacts of climate change (particularly non-market impacts and low-probability but high consequence ramifications of abrupt climate change) cannot easily be quantified in economic terms. This has lead to arguments in favor of taking a precautionary approach to climate policy-defining the boundaries of "tolerable" climate impacts and working from there. In this context, policy designers ask the economists to calculate only the paths that avoid the proscribed boundaries of climate change at minimum expected cost. 1 1 Because tolerable boundaries are typically defined in terms of temperature limits and because temperature change depends, to a first approximation, on cumulative emissions over long periods of time, the appropriate economic response can be visualized by solving for an initial shadow price for carbon (and other warming gases) with the expectation that it would increase over time at an endogenously determined rate of interest. 2 Evidence of this obsession can be found in the most recent report of Working Group 1 to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Note, for example, their removal of potential contributions of Greenland Ice Sheet melting and collapse of the West Antarctic Ice Sheet from sea level rise estimates. Even though these contributions were included in the estimates published in the Third Assessment Report, they were deleted in the Fourth because there was no model based scientific consensus of what is going on ([IPCC (2007a)]. In the logic of the Dismal Theorem, this makes the ice sheets more policy relevant, not less.
SSRN Electronic Journal, 2007
211 estimates of the social cost of carbon are included in a meta-analysis. The results confirm t... more 211 estimates of the social cost of carbon are included in a meta-analysis. The results confirm that a lower discount rate implies a higher estimate; and that higher estimates are found in the gray literature. It is also found that there is a downward trend in the economic impact estimates of the climate; that the Stern Review's estimates of the social cost of carbon is an outlier; and that the right tail of the distribution is fat. There is a fair chance that the annual climate liability exceeds the annual income of many people. .
SSRN Electronic Journal, 2006
Water resources are unevenly spread in China. Especially the basins of the Yellow, Hui and Hai ri... more Water resources are unevenly spread in China. Especially the basins of the Yellow, Hui and Hai rivers in the North are rather dry. To increase the supply of water in these basins, the South-to-North Water Transfer project (SNWT) was launched. Using a computable general equilibrium model this study estimates the impact of the project on the economy of China and the rest of the world. We contrast three alternative groups of scenarios. All are directly concerned with the South-to-North water transfer project to increase water supply. In the first group of scenarios additional supply implies productivity gains. We call it the "non-market" solution. The second group of scenarios is called "market solution". The market price for water adjusts such that supply and demand are equated again. In the third group of simulations the economic implications of China's capital investment in infrastructure for the water South-North water transfer project is analyzed. Finally, the investment is combined with the increased capacity of water. If an increase in water supply in China leads to an increase in productivity of their waterintensive goods and services (non-market solution) this would result in a huge positive welfare effect from increased production and export. The effect on China's welfare would still be positive, if a market for water would exist (market solution), but the world as a whole would lose. The negative effect for the rest of the world is largely explained by a deterioration of its terms-of-trade. Well functioning water markets in China are unlikely to exist.
Energy & Environment, 2007
We review the explosion of commentary that has followed the release of the Stern Review: The Econ... more We review the explosion of commentary that has followed the release of the Stern Review: The Economics of Climate Change, and agree with most of what has been written. The Review is right when it argues on economic grounds for immediate intervention to reduce emissions of greenhouse gases, but we feel that it is right for the wrong reasons. A persuasive case can be made that climate risks are real and increasingly threatening. If follows that some sort of policy will be required, and the least cost approach necessarily involves starting now. Since policy implemented in 2007 will not “solve” the climate problem, near term interventions can be designed to begin the process by working to avoid locking in high carbon investments and providing adequate incentives for carbon sequestration. We argue that both objectives can be achieved without undue economic harm in the near term by pricing carbon at something on the order of $15 per ton as long as it is understood that the price will incr...
SSRN Electronic Journal, 2007
Analyzing the risks of anthropogenic climate change requires sound probabilistic projections of C... more Analyzing the risks of anthropogenic climate change requires sound probabilistic projections of CO 2 emissions. Previous projections have broken important new ground, but many rely on out-of-range projections, are limited to the 21 st century, or provide only implicit probabilistic information. Here we take a step towards resolving these problems by assimilating globally aggregated observations of population size, economic output, and CO 2 emissions over the last three centuries into a simple economic model. We use this model to derive probabilistic projections of business-as-usual CO 2 emissions to the year 2150. We demonstrate how the common practice to limit the calibration timescale to decades can result in biased and overconfident projections. The range of several CO 2 emission scenarios (e.g., from the Special Report on Emission Scenarios) misses potentially important tails of our projected probability density function. Studies that have interpreted the range of CO 2 emission scenarios as an approximation for the full forcing uncertainty may well be biased towards overconfident climate change projections.
The h-index is a recent but already quite popular way of measuring research quality and quantity.... more The h-index is a recent but already quite popular way of measuring research quality and quantity. However, it discounts highly-cited papers. The g-index corrects for this, but it is sensitivity to the number of never-cited papers. Besides, h- or g-index-based rankings have a large number of ties. Therefore, this paper introduces two new indices, and tests their performance for the 100 most prolific economists. A researcher has a t-number (f-number) of t (f) if t (f) is the largest number for which it holds that she has t (f) publications for which the geometric (harmonic) average number of citations is at least t (f). The new indices overcome the shortcomings of the old indices.
Regional Environmental Change, 2007
We downscale the results of a global tourism simulation model at a national resolution to a regio... more We downscale the results of a global tourism simulation model at a national resolution to a regional resolution. We use this to investigate the impact of climate change on the regions of Germany, Ireland and the UK. Because of climate change, tourists from all three countries would spend more holidays in the home country. In all three countries, climate change would first reduce the number of international arrivals-as Western European international tourist demand falls-but later increase numbers-as tourism demand from increasingly rich tropical countries grows. In Ireland and the UK, the regional pattern of demand shifts is similar to the international one: tourism shifts north. In Germany, the opposite pattern is observed as the continental interior warms faster than the coast: tourism shifts south.
Mitigation and Adaptation Strategies for Global Change, 2010
Using the FUND model, an impact assessment is conducted over the 21st century for rises in sea le... more Using the FUND model, an impact assessment is conducted over the 21st century for rises in sea level of up to 2-m/century and a range of socioeconomic scenarios downscaled to the national level, including the four SRES (IPCC Special Report on Emissions Scenarios) storylines. Unlike a traditional impact assessment, this analysis considers impacts after balancing the costs of retreat with the costs of protection, including the effects of coastal squeeze. While the costs of sea-level rise increase with greater rise due to growing damage and protection costs, the model suggests that an optimum response in a benefit-cost sense remains widespread protection of developed coastal areas, as identified in earlier analyses. The socioeconomic scenarios are also important in terms of influencing these costs. In terms of the four components of costs considered in FUND, protection dominates, with substantial costs from wetland loss under some scenarios. The regional distribution of costs shows that a few regions experience most of the costs, especially East Asia, North America, Europe and South Asia. Importantly, this analysis suggests that protection is much more likely and rational than is widely assumed, even with a large rise in sea level. This is underpinned by the strong economic growth in all the SRES scenarios: without this growth, the benefits of protection are significantly reduced. It should also be noted that some important limitations to the analysis are discussed, which collectively suggest that protection may not be as widespread as suggested in the FUND results.
Journal of the American Society for Information Science and Technology, 2009
The Matthew effect has that recognition is bestowed on researchers of already high repute. If rec... more The Matthew effect has that recognition is bestowed on researchers of already high repute. If recognition is measured by citations, this means that often‐cited papers or authors are cited more often. I use the statistical theory of the growth of firms to test whether the fame of papers and authors indeed exhibits increasing returns to scale, and confirm this hypothesis for the 100 most prolific economists.
Journal of Public Economic Theory, 2009
The stability of International Environmental Agreements (IEA) is analyzed by using game theory. T... more The stability of International Environmental Agreements (IEA) is analyzed by using game theory. The integrated assessment model FUND provides the cost‐benefit payoff functions of pollution abatement for sixteen different world regions. The farsighted stability concept of Chwe (1994) is used and solved by combinatorial algorithms. Farsighted stability assumes perfect foresight of the players and predicts which coalitions can be formed when players are farsighted. All farsightedly stable coalitions are found, and their improvement to environment and welfare is considerable. The farsightedly stable coalitions are refined further to preferred farsightedly stable coalitions, which are coalitions where the majority of coalition members reach higher profits in comparison with any other farsightedly stable coalitions. Farsightedly stable coalitions contribute more to the improvement of environment and welfare in comparison to D'Aspremont et al.'s (1983) stable ones. Considering mult...
Journal of Informetrics, 2008
A rational, successive g-index is proposed, and applied to economics departments in Ireland. The ... more A rational, successive g-index is proposed, and applied to economics departments in Ireland. The successive g-index has greater discriminatory power than the successive hindex, and the rational index performs better still. The rational, successive g-index is also more robust to difference in department size.
Journal of Hydrology, 2010
Water problems are typically studied at the farm-level, the river-catchment-level or the country-... more Water problems are typically studied at the farm-level, the river-catchment-level or the country-level. About 70% of irrigation water is used for agriculture, and agricultural products are traded internationally. A full understanding of water use is impossible without understanding the international market for food and related products, such as textiles. Based on the global general equilibrium model GTAP-W, we offer a method for investigating the role of green (rain) and blue (irrigation) water resources in agriculture and within the context of international trade. Since problems related to groundwater availability are getting more severe in the future, we analyze the impact of different water use options for 2025 where data is readily available. We run two alternative scenarios. The first, called water crisis scenario, explores a deterioration of current trends and policies in the water sector. The second scenario, called sustainable water use scenario, assumes an improvement in policies and trends in the water sector and eliminates groundwater overdraft worldwide, increasing water allocation for the environment. In both scenarios, welfare gains or losses are not only associated with changes in agricultural water consumption. Under the water crisis scenario, welfare not only rises for regions where water consumption increases (China, South East Asia and the USA). Welfare gains are considerable for Japan and South Korea, Southeast Asia and Western Europe as well. These regions benefit from higher irrigated production and lower food prices. Alternatively, under the sustainable water use scenario, welfare losses not only affect regions where overdrafting is occurring. Welfare decreases in other regions as well. These results indicate that, for water use, there is a clear trade-off between economic welfare and environmental sustainability.
Journal of Environmental Economics and Management, 2010
Estimates of the marginal damage costs of carbon dioxide emissions require the aggregation of mon... more Estimates of the marginal damage costs of carbon dioxide emissions require the aggregation of monetised impacts of climate change over people with different incomes and in different jurisdictions. Implicitly or explicitly, such estimates assume a social welfare function and hence a particular attitude towards equity and justice. We show that previous approaches to equity weighing are inappropriate from a national decision maker's point of view, because domestic impacts are not valued at domestic values. We propose four alternatives (sovereignty, altruism, good neighbour, and compensation) with different views on concern for and liability towards foreigners. The four alternatives imply radically estimates of the social cost of carbon and hence the optimal intensity of climate policy.
Environmental Modeling & Assessment, 2008
In this paper, the global agricultural land use model Kleines Land Use Model is coupled to an ext... more In this paper, the global agricultural land use model Kleines Land Use Model is coupled to an extended version of the computable general equilibrium model (CGE) Global Trade Analysis Project in order to consistently assess the integrated impacts of climate change on global cropland allocation and its implication for economic development. The methodology is innovative as it introduces dynamic economic land-use decisions based also on the biophysical aspects of land into a state-of-the-art CGE; it further allows the projection of resulting changes in cropland patterns on a spatially more explicit level. A convergence test and illustrative future simulations underpin the robustness and potentials of the coupled system. Reference simulations with the uncoupled models emphasise the impact and relevance of the coupling; the results of coupled and uncoupled simulations can differ by several hundred percent.
Energy Policy, 2009
Using a simple model designed for transparency but nonetheless calibrated to support the much-quo... more Using a simple model designed for transparency but nonetheless calibrated to support the much-quoted damage estimates of the Stern Review of the Economics of Climate Change, we demonstrate significant sensitivity of those results to assumptions about the pure rate of time preference, the time horizon, and the rates of risk and equity aversion used to compute certainty-and equity-equivalent annuities. Most importantly, we demonstrate enormous sensitivity to presumed constant regional vulnerability and underlying assumptions about adaptive capacity. Manipulation of any of these parameters one at a time across reasonable ranges can diminish damage estimates by as much as 84% or, in the case of extending the time horizon with the Review's low discount rate, increase damage estimates by 900%. We also confirm the usual result that limiting atmospheric concentrations to specific benchmarks above 400 ppm cannot eliminate all damages. Nonetheless, we applaud the Stern Review author team for reconfirming that the climate problem can be approached productively as an economic problem whose solutions can be explored with the tools of decision analysis.
Ecological Economics, 2008
The High Aswan Dam converted a variable and uncertain flow of river water into a predictable and ... more The High Aswan Dam converted a variable and uncertain flow of river water into a predictable and controllable flow. We use a computable general equilibrium model of the Egyptian economy to estimate the economic impact of the High Aswan Dam. We compare the 1997 economy as it was to the 1997 economy as it would have been for 72 historical, pre-dam water flows. The steady water flow increased transport productivity, while the seasonal shift in water supply allowed for a shift towards more valuable summer crops. These static effects are worth LE 4.9 billion. Investments in transport and agriculture increased as a consequence. Assuming that Egypt is a small open economy, this is worth another LE 1.1 billion. The risk premium on the reduced variability is estimated to be LE 1.1 billion for a modest risk aversion, and perhaps LE 4.4 billion for a high risk aversion. The total gain of LE 7.1 billion equals 2.7% of GDP.
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Papers by Richard S J Tol