Water problems are typically studied at the level of the river catchment. About 70% of all water ... more Water problems are typically studied at the level of the river catchment. About 70% of all 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. The water embedded in commodities is called virtual water. Based on a general equilibrium model, we offer a method for investigating the role of water resources and water scarcity in the context of international trade. We run five alternative scenarios, analysing the effects of water scarcity due to reduced availability of groundwater. This can be a consequence of physical constraints, and of policies curbing water demand. Four scenarios are based on a "market solution", where water owners can capitalize their water rent or taxes are recycled. In the fifth "non-market" scenario, this is not the case; supply restrictions imply productivity losses. Restrictions in water supply would shift trade patterns of agriculture and virtual water. These shifts are larger if the restriction is larger, and if the use of water in production is more rigid. Welfare losses are substantially larger in the non-market situation. Water-constrained agricultural producers lose, but unconstrained agricultural produces gain; industry gains as well. As a result, there are regional winners and losers from water supply constraints. Because of the current distortions of agricultural markets, water supply constraints could improve allocative efficiency; this welfare gain may more than offset the welfare losses due to the resource constraint.
ABSTRACT Injecting sulfate aerosols into the stratosphere could quickly offset global warming cau... more ABSTRACT Injecting sulfate aerosols into the stratosphere could quickly offset global warming caused by anthropogenic greenhouse gas emissions. Because the technology would have global side effects, it raises not only technological but also political, ethical, and social concerns. Therefore, research on sulfate injection should be accompanied by a global debate that incorporates public perceptions and concerns into the development and governance of the technology. Our paper provides insight into public perceptions and explores their underlying patterns using a survey conducted in Germany. The data reveal a differentiated picture. Laboratory research on sulfate injection is broadly approved, whereas field research is much less approved. Immediate deployment is largely rejected. The acceptance of the technology is associated with the belief that climate change is a serious problem and that humans will eventually be able to control nature. It is also determined by the levels of trust in scientists and firms. Among the strongest objections against the technology is the belief that humans should not manipulate nature in the way injecting sulfate would. The actual public perceptions of sulfate injection will, however, evolve along with the ongoing debate between the public, experts, and policymakers.
One problem in international climate policy is the refusal of large developing countries to accep... more One problem in international climate policy is the refusal of large developing countries to accept emission reduction targets. Brazil, China and India together account for about 20% of today’s CO2 emissions. We analyse the case in which there is no international agreement on emission reduction targets, but countries do have domestic targets, and trade permits across borders. We contrast two
This paper introduces the concept of homogeneous non-causality in heterogeneous panels. This conc... more This paper introduces the concept of homogeneous non-causality in heterogeneous panels. This concept is used to examine a panel of data for evidence of a causal relationship between GDP and carbon emissions. The technique is compared to the standard test for homogeneous non-causality in homogeneous panels and heterogeneous non-causality in heterogeneous panels. In North America, Asia and Oceania the homogeneous
Economic analysis of emission permit markets, and particularly of the initial permit allocation, ... more Economic analysis of emission permit markets, and particularly of the initial permit allocation, have concentrated largely on static approaches. This is somewhat unsatisfactory as the allocation method in subsequent commitment periods may influence the behaviour of the market participants in the current period. For instance, some advocate a system of "rolling grandfathering", in which later period allocations would be based on the actual (rather than allotted) emissions in earlier periods. Alternatively, emission permits can be allocated on the basis of the distance between actual and desired emission intensities in previous periods. This paper analyses the dynamic aspects of allocating greenhouse gas emission rights for different approaches using multi-player/two-period models. We show that different future allocation approaches create different strategic incentives at present, and that the permit market may partially or completely offset these incentives. We also demonstrate under what circumstances dynamic allocation rules create incentives to (lobby for) accelerating or decelerating emission reduction paths. Allowing for intertemporal transfer of abatement activities (banking and borrowing), the net present costs can be reduced. However, whether banking or borrowing is beneficial for a company depends not only on their own abatement costs and that of other companies trading permits on the market, but also on the allocation mechanism implemented.
To investigate the link between rising global temperature and global energy use, we estimate an e... more To investigate the link between rising global temperature and global energy use, we estimate an energy demand model that is driven by temperature changes, prices and income. The estimation is based on an unbalanced panel of 157 countries over three decades. We limit the analysis to the residential sector and distinguish four different fuel types (oil, natural gas, coal and electricity). Compared to previous papers, we have a better geographical coverage and consider non-linearities in the impact of temperature on energy demand as well as temperature-income interactions. We find that oil, gas and electricity use are driven by a non-linear heating effect: Energy use not only decreases with rising temperatures due to a reduced demand for energy for heating purposes, but the speed of that decrease declines with rising temperature levels. Furthermore we find evidence that the temperature elasticity of energy use is affected by the level of temperature as well as the level of income
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 po...
Economic analyses of emission permit trading have mainly looked into the cost effectiveness and c... more Economic analyses of emission permit trading have mainly looked into the cost effectiveness and cost saving potential of international permit trading compared to a pure national trading system. Little attention has been drawn to the environmental effectiveness of international trade in greenhouse gas emission permits. Less environmental ambitiousness caused by relatively low emission reduction targets in some countries might lower the permit price on the international market, but might also reduce environmental effectiveness.
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.
Based on predicted changes in the magnitude and distribution of global precipitation, temperature... more Based on predicted changes in the magnitude and distribution of global precipitation, temperature and river flow under the IPCC SRES A1B and A2 scenarios, this study assesses the potential impacts of climate change and CO2 fertilization on global agriculture. The analysis uses the new version of the GTAP-W model, which distinguishes between rainfed and irrigated agriculture and implements water as
ABSTRACT This study examines the potential effects of ocean acidification on countries and fisher... more ABSTRACT This study examines the potential effects of ocean acidification on countries and fisheries of the Mediterranean Sea. The implications for seafood security and supply are evaluated by examining the sensitivity of the Mediterranean to ocean acidification at chemical, biological, and macro-economic levels. The limited information available on impacts of ocean acidification on harvested (industrial, recreational, and artisanal fishing) and cultured species (aquaculture) prevents any biological impact assessment. However, it appears that non-developed nations around the Mediterranean, particularly those for which fisheries are increasing, yet rely heavily on artisanal fleets, are most greatly exposed to socioeconomic consequences from ocean acidification.
Water is scarce in many countries. One instrument to improve the allocation of a scarce resource ... more Water is scarce in many countries. One instrument to improve the allocation of a scarce resource is (efficient) pricing or taxation. However, water is implicitly traded on international markets, particularly through food and textiles, so that impacts of water taxes cannot be studied in isolation, but require an analysis of international trade implications. We include water as a production factor in a multi-region, multi-sector computable general equilibrium model (GTAP), to assess a series of water tax policies. We find that water taxes reduce water use, and lead to shifts in production, consumption, and international trade patterns. Countries that do not levy water taxes are nonetheless affected by other countries' taxes. Taxes on agricultural water use drive most of the economic and welfare impacts. Reductions in water use (welfare losses) are less (more) than linear in the price of water. The results are sensitive to the assumed ability to substitute other production factors for water. A water tax on production would have different effects on water use, production and trade patterns, and the size and distribution of welfare losses than would a water tax on final consumption.
... E-Mail: [email protected] 2 Department of Economics, Christian-Albrechts-Universi... more ... E-Mail: [email protected] 2 Department of Economics, Christian-Albrechts-University of Kiel, Olshausenstrasse 40, 24118 Kiel, Germany 3 Economic and Social Research Institute, Whitaker Square, Sir John Rogerson's Quay, Dublin 2, ...
Water problems are typically studied at the level of the river catchment. About 70% of all water ... more Water problems are typically studied at the level of the river catchment. About 70% of all 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. The water embedded in commodities is called virtual water. Based on a general equilibrium model, we offer a method for investigating the role of water resources and water scarcity in the context of international trade. We run five alternative scenarios, analysing the effects of water scarcity due to reduced availability of groundwater. This can be a consequence of physical constraints, and of policies curbing water demand. Four scenarios are based on a "market solution", where water owners can capitalize their water rent or taxes are recycled. In the fifth "non-market" scenario, this is not the case; supply restrictions imply productivity losses. Restrictions in water supply would shift trade patterns of agriculture and virtual water. These shifts are larger if the restriction is larger, and if the use of water in production is more rigid. Welfare losses are substantially larger in the non-market situation. Water-constrained agricultural producers lose, but unconstrained agricultural produces gain; industry gains as well. As a result, there are regional winners and losers from water supply constraints. Because of the current distortions of agricultural markets, water supply constraints could improve allocative efficiency; this welfare gain may more than offset the welfare losses due to the resource constraint.
... legal constraints. Christine Bertram a , Corresponding Author Contact Information , E-mail Th... more ... legal constraints. Christine Bertram a , Corresponding Author Contact Information , E-mail The Corresponding Author , Anna Krätschell b , Killian O'Brien c , Warner Brückmann b , Alexander Proelss d , Katrin Rehdanz a , e. a, ...
This study uses the hedonic approach to measure the amenity value of climate in Germany. Unlike i... more This study uses the hedonic approach to measure the amenity value of climate in Germany. Unlike in earlier research separate hedonic wage rate and house price regressions are estimated for relatively small geographic areas and formal tests undertaken to determine whether the coefficients describing the impact of climate variables are homogenous over these areas. The evidence suggests that households in Germany are compensated for climate amenities mainly through hedonic housing markets. Given that climate is largely unproductive to industry and few industries spend more on land than labor this is consistent with what theory would predict. Overall households regard higher January temperatures as an amenity but higher July temperatures as a disamenity.
Despite large uncertainties in the fertilization efficiency, natural iron fertilization studies a... more Despite large uncertainties in the fertilization efficiency, natural iron fertilization studies and some of the purposeful iron enrichment studies have demonstrated that Southern Ocean iron fertilization can lead to a significant export of carbon from the sea surface to the ocean interior. From an economic perspective the potential of OIF is far from negligible in relation to other abatement options. Comparing the range of cost estimates to the range of estimates for forestation projects they are in the same order of magnitude, but OIF could provide more carbon credits even if high discount rates are used to account for potential leakage and non-permanence. However, the uncertainty about undesired adverse effects of purposeful iron fertilization on marine ecosystems and biogeochemistry has led to attempts to ban commercial and, to some extent, scientific experiments aimed at a better understanding of the processes involved, effectively precluding further consideration of this mitigation option. As regards the perspective of public international law, the pertinent agreements dealing with the protection of the marine environment indicate that OIF is to be considered as lawful if and to the extent to which it represents legitimate scientific research. In this respect, the precautionary principle can be used to balance the risks arising out of scientific OIF activities for the marine environment with the potential advantages relevant to the objectives of the climate change regime. As scientific OIF experiments involve only comparatively small negative impacts within a limited marine area, further scientific research must be permitted to explore the carbon sequestration potential of OIF in order to either reject this concept or integrate it into the flexible mechanisms contained in the Kyoto Protocol.
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.
Water problems are typically studied at the level of the river catchment. About 70% of all water ... more Water problems are typically studied at the level of the river catchment. About 70% of all 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. The water embedded in commodities is called virtual water. Based on a general equilibrium model, we offer a method for investigating the role of water resources and water scarcity in the context of international trade. We run five alternative scenarios, analysing the effects of water scarcity due to reduced availability of groundwater. This can be a consequence of physical constraints, and of policies curbing water demand. Four scenarios are based on a "market solution", where water owners can capitalize their water rent or taxes are recycled. In the fifth "non-market" scenario, this is not the case; supply restrictions imply productivity losses. Restrictions in water supply would shift trade patterns of agriculture and virtual water. These shifts are larger if the restriction is larger, and if the use of water in production is more rigid. Welfare losses are substantially larger in the non-market situation. Water-constrained agricultural producers lose, but unconstrained agricultural produces gain; industry gains as well. As a result, there are regional winners and losers from water supply constraints. Because of the current distortions of agricultural markets, water supply constraints could improve allocative efficiency; this welfare gain may more than offset the welfare losses due to the resource constraint.
ABSTRACT Injecting sulfate aerosols into the stratosphere could quickly offset global warming cau... more ABSTRACT Injecting sulfate aerosols into the stratosphere could quickly offset global warming caused by anthropogenic greenhouse gas emissions. Because the technology would have global side effects, it raises not only technological but also political, ethical, and social concerns. Therefore, research on sulfate injection should be accompanied by a global debate that incorporates public perceptions and concerns into the development and governance of the technology. Our paper provides insight into public perceptions and explores their underlying patterns using a survey conducted in Germany. The data reveal a differentiated picture. Laboratory research on sulfate injection is broadly approved, whereas field research is much less approved. Immediate deployment is largely rejected. The acceptance of the technology is associated with the belief that climate change is a serious problem and that humans will eventually be able to control nature. It is also determined by the levels of trust in scientists and firms. Among the strongest objections against the technology is the belief that humans should not manipulate nature in the way injecting sulfate would. The actual public perceptions of sulfate injection will, however, evolve along with the ongoing debate between the public, experts, and policymakers.
One problem in international climate policy is the refusal of large developing countries to accep... more One problem in international climate policy is the refusal of large developing countries to accept emission reduction targets. Brazil, China and India together account for about 20% of today’s CO2 emissions. We analyse the case in which there is no international agreement on emission reduction targets, but countries do have domestic targets, and trade permits across borders. We contrast two
This paper introduces the concept of homogeneous non-causality in heterogeneous panels. This conc... more This paper introduces the concept of homogeneous non-causality in heterogeneous panels. This concept is used to examine a panel of data for evidence of a causal relationship between GDP and carbon emissions. The technique is compared to the standard test for homogeneous non-causality in homogeneous panels and heterogeneous non-causality in heterogeneous panels. In North America, Asia and Oceania the homogeneous
Economic analysis of emission permit markets, and particularly of the initial permit allocation, ... more Economic analysis of emission permit markets, and particularly of the initial permit allocation, have concentrated largely on static approaches. This is somewhat unsatisfactory as the allocation method in subsequent commitment periods may influence the behaviour of the market participants in the current period. For instance, some advocate a system of "rolling grandfathering", in which later period allocations would be based on the actual (rather than allotted) emissions in earlier periods. Alternatively, emission permits can be allocated on the basis of the distance between actual and desired emission intensities in previous periods. This paper analyses the dynamic aspects of allocating greenhouse gas emission rights for different approaches using multi-player/two-period models. We show that different future allocation approaches create different strategic incentives at present, and that the permit market may partially or completely offset these incentives. We also demonstrate under what circumstances dynamic allocation rules create incentives to (lobby for) accelerating or decelerating emission reduction paths. Allowing for intertemporal transfer of abatement activities (banking and borrowing), the net present costs can be reduced. However, whether banking or borrowing is beneficial for a company depends not only on their own abatement costs and that of other companies trading permits on the market, but also on the allocation mechanism implemented.
To investigate the link between rising global temperature and global energy use, we estimate an e... more To investigate the link between rising global temperature and global energy use, we estimate an energy demand model that is driven by temperature changes, prices and income. The estimation is based on an unbalanced panel of 157 countries over three decades. We limit the analysis to the residential sector and distinguish four different fuel types (oil, natural gas, coal and electricity). Compared to previous papers, we have a better geographical coverage and consider non-linearities in the impact of temperature on energy demand as well as temperature-income interactions. We find that oil, gas and electricity use are driven by a non-linear heating effect: Energy use not only decreases with rising temperatures due to a reduced demand for energy for heating purposes, but the speed of that decrease declines with rising temperature levels. Furthermore we find evidence that the temperature elasticity of energy use is affected by the level of temperature as well as the level of income
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 po...
Economic analyses of emission permit trading have mainly looked into the cost effectiveness and c... more Economic analyses of emission permit trading have mainly looked into the cost effectiveness and cost saving potential of international permit trading compared to a pure national trading system. Little attention has been drawn to the environmental effectiveness of international trade in greenhouse gas emission permits. Less environmental ambitiousness caused by relatively low emission reduction targets in some countries might lower the permit price on the international market, but might also reduce environmental effectiveness.
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.
Based on predicted changes in the magnitude and distribution of global precipitation, temperature... more Based on predicted changes in the magnitude and distribution of global precipitation, temperature and river flow under the IPCC SRES A1B and A2 scenarios, this study assesses the potential impacts of climate change and CO2 fertilization on global agriculture. The analysis uses the new version of the GTAP-W model, which distinguishes between rainfed and irrigated agriculture and implements water as
ABSTRACT This study examines the potential effects of ocean acidification on countries and fisher... more ABSTRACT This study examines the potential effects of ocean acidification on countries and fisheries of the Mediterranean Sea. The implications for seafood security and supply are evaluated by examining the sensitivity of the Mediterranean to ocean acidification at chemical, biological, and macro-economic levels. The limited information available on impacts of ocean acidification on harvested (industrial, recreational, and artisanal fishing) and cultured species (aquaculture) prevents any biological impact assessment. However, it appears that non-developed nations around the Mediterranean, particularly those for which fisheries are increasing, yet rely heavily on artisanal fleets, are most greatly exposed to socioeconomic consequences from ocean acidification.
Water is scarce in many countries. One instrument to improve the allocation of a scarce resource ... more Water is scarce in many countries. One instrument to improve the allocation of a scarce resource is (efficient) pricing or taxation. However, water is implicitly traded on international markets, particularly through food and textiles, so that impacts of water taxes cannot be studied in isolation, but require an analysis of international trade implications. We include water as a production factor in a multi-region, multi-sector computable general equilibrium model (GTAP), to assess a series of water tax policies. We find that water taxes reduce water use, and lead to shifts in production, consumption, and international trade patterns. Countries that do not levy water taxes are nonetheless affected by other countries' taxes. Taxes on agricultural water use drive most of the economic and welfare impacts. Reductions in water use (welfare losses) are less (more) than linear in the price of water. The results are sensitive to the assumed ability to substitute other production factors for water. A water tax on production would have different effects on water use, production and trade patterns, and the size and distribution of welfare losses than would a water tax on final consumption.
... E-Mail: [email protected] 2 Department of Economics, Christian-Albrechts-Universi... more ... E-Mail: [email protected] 2 Department of Economics, Christian-Albrechts-University of Kiel, Olshausenstrasse 40, 24118 Kiel, Germany 3 Economic and Social Research Institute, Whitaker Square, Sir John Rogerson's Quay, Dublin 2, ...
Water problems are typically studied at the level of the river catchment. About 70% of all water ... more Water problems are typically studied at the level of the river catchment. About 70% of all 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. The water embedded in commodities is called virtual water. Based on a general equilibrium model, we offer a method for investigating the role of water resources and water scarcity in the context of international trade. We run five alternative scenarios, analysing the effects of water scarcity due to reduced availability of groundwater. This can be a consequence of physical constraints, and of policies curbing water demand. Four scenarios are based on a "market solution", where water owners can capitalize their water rent or taxes are recycled. In the fifth "non-market" scenario, this is not the case; supply restrictions imply productivity losses. Restrictions in water supply would shift trade patterns of agriculture and virtual water. These shifts are larger if the restriction is larger, and if the use of water in production is more rigid. Welfare losses are substantially larger in the non-market situation. Water-constrained agricultural producers lose, but unconstrained agricultural produces gain; industry gains as well. As a result, there are regional winners and losers from water supply constraints. Because of the current distortions of agricultural markets, water supply constraints could improve allocative efficiency; this welfare gain may more than offset the welfare losses due to the resource constraint.
... legal constraints. Christine Bertram a , Corresponding Author Contact Information , E-mail Th... more ... legal constraints. Christine Bertram a , Corresponding Author Contact Information , E-mail The Corresponding Author , Anna Krätschell b , Killian O'Brien c , Warner Brückmann b , Alexander Proelss d , Katrin Rehdanz a , e. a, ...
This study uses the hedonic approach to measure the amenity value of climate in Germany. Unlike i... more This study uses the hedonic approach to measure the amenity value of climate in Germany. Unlike in earlier research separate hedonic wage rate and house price regressions are estimated for relatively small geographic areas and formal tests undertaken to determine whether the coefficients describing the impact of climate variables are homogenous over these areas. The evidence suggests that households in Germany are compensated for climate amenities mainly through hedonic housing markets. Given that climate is largely unproductive to industry and few industries spend more on land than labor this is consistent with what theory would predict. Overall households regard higher January temperatures as an amenity but higher July temperatures as a disamenity.
Despite large uncertainties in the fertilization efficiency, natural iron fertilization studies a... more Despite large uncertainties in the fertilization efficiency, natural iron fertilization studies and some of the purposeful iron enrichment studies have demonstrated that Southern Ocean iron fertilization can lead to a significant export of carbon from the sea surface to the ocean interior. From an economic perspective the potential of OIF is far from negligible in relation to other abatement options. Comparing the range of cost estimates to the range of estimates for forestation projects they are in the same order of magnitude, but OIF could provide more carbon credits even if high discount rates are used to account for potential leakage and non-permanence. However, the uncertainty about undesired adverse effects of purposeful iron fertilization on marine ecosystems and biogeochemistry has led to attempts to ban commercial and, to some extent, scientific experiments aimed at a better understanding of the processes involved, effectively precluding further consideration of this mitigation option. As regards the perspective of public international law, the pertinent agreements dealing with the protection of the marine environment indicate that OIF is to be considered as lawful if and to the extent to which it represents legitimate scientific research. In this respect, the precautionary principle can be used to balance the risks arising out of scientific OIF activities for the marine environment with the potential advantages relevant to the objectives of the climate change regime. As scientific OIF experiments involve only comparatively small negative impacts within a limited marine area, further scientific research must be permitted to explore the carbon sequestration potential of OIF in order to either reject this concept or integrate it into the flexible mechanisms contained in the Kyoto Protocol.
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.
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Papers by Katrin Rehdanz