Carmen Arguedas, AERNA Newsletter Editor
Dear AERNA colleagues and friends,
I am very pleased to present the contents of the forth issue of our AERNA Newsletter (January 2016), wishing you a very healthy and successful new year 2016!
The recently celebrated Convention on Climate Change in Paris (COP21) constitutes, for some scholars, a turning point on the world efforts to fight against climate change. In this issue of the Newsletter, both our president, Antoni Riera, and AERNA members Alberto Ansuategi and Ibon Galarraga, give their personal views on the whole process. (read more ⇓)
The section on Institutional Highlights starts with the mentioned introductory letter from our president, and follows with information about the upcoming AERNA Conference, which will be hosted by the University of Aveiro on September 2016. As you all know, AERNA conferences take place once every two years, and we are very much looking forward to our next scientific meeting, which will be the seventh in the history of our association. The section finishes with the conclusions on the First AERNA Workshop on Game Theory and the Environment, which was held in Madrid on last September 2015, and where several AERNA members presented their research.
In the Research Highlights section, you will find three very interesting articles. The first one, coauthored by José Luis Oviedo, Pablo Campos and Lynn Huntsinger, discusses forest valuation focusing on both the public and the private dimensions of environmental services attributed to forests. The latter aspect is particularly relevant in the case of the Mediterranean oak. The second article, written by Francisco J. André and Luis Miguel de Castro, describes how some well stablished results on emission trading in perfectly competitive environments change under market power considerations, both in the emissions and output markets. Some of these results can be found in the PhD dissertation by Luis Miguel de Castro, which has been recently defended at Universidad Complutense de Madrid. Finally, the third note has been created by Maria Antonieta Cunha-e-Sá. There, she presents some research guidelines on the economic valuation of marine and costal ecosystem services applied to the area of Peniche-Nazaré (Portugal), as part of a joint research project of the Nova School of Business and Economics and the University of Aveiro.
As mentioned before, Alberto Ansuategi and Ibon Galarraga present their personal view on the COP21 in the Newsletter’s Policy Commentary section. There, they point out the main achievements and failures of the Paris Agreement.
The Newsletter follows with usual information about job opportunities and upcoming events. The Institutional Members section closes the Newsletter.
I wish to highlight that everyone in AERNA is very welcomed to write brief notes on Environmental and Resource Economics problems for our Newsletter. I particularly invite contributions from PhD students and young scholars in our field, as a means of increasing their visibility. Everyone in the Association can participate, so please, send me your proposals for the next issue before June 1, 2016 at email@example.com
I want to finish this introduction by thanking all the authors of this issue for their availability and effort in providing interesting contents, and also Esther Blanco and Iván González for their great help on designing and maintaining the Newsletter look.
Antoni Riera, President of AERNA
At the Paris climate conference (COP21) in December 2015, 195 countries adopted the first-ever universal, legally binding global climate deal. The agreement sets out a global action plan to put the world on track to avoid dangerous climate change by limiting global warming to well below 2°C above pre-industrial levels.
This is undoubtedly a turning point in the policy against climate change but it must be acknowledged that the agreement does not specify emissions of greenhouse gases that each country should cut nor the associated macroeconomic costs. (read more ⇓)
There are many uncertainties about the future growth in emissions with respect to technological changes or changes in the patterns of production and consumption. What is certain, however, is that reducing emissions will have a medium to long term cost. Thus, although there is a broad consensus on the possibility of reducing between 5 and 7 million tons of CO2 (10-15% of global emissions) at zero cost in sectors such as construction, transport management waste, we should not forget that limiting the increase to 2°C requires cutting emissions and reducing CO2 concentrations significantly. In fact some experts put the necessary reduction by more than 30% from current levels.
So, keeping CO2 concentrations in the atmosphere between 445 and 710 ppm (parts per million) until 2030 is estimated to have a cost equivalent to a reduction of global GDP of around 3%, reaching 5.5 % if these levels are maintained until 2050.
With these estimated costs on economic growth, the immediate question is: What is the motivation to act? The answer lies precisely in the costs of not doing so. In fact, if we do not act against climate change, the growth of concentrations could cause a temperature rise of 4°C, which has a negative impact on the production sectors. This, together with the costs of building infrastructure for adaptation, is estimated to entail a loss of between 5 and 20% of world GDP. Clearly, then, the cost of inaction outweighs the cost of tackling the problem.
Accepting then, that we should act and that the agreement COP21 is a step forward, it should not be ignored that any agenda that seeks to fulfill the ambitious target agreed at the COP21 requires measuring its economic implications in detail and analyzing the resulting costs and benefits for specific sectors and the whole economy. More importantly, the agenda should be set by how these costs and benefits are distributed across sectors, regions and countries. Only in this way will appropriate incentives, optimal instruments and efficient measures be developed, capable of overcoming the difficulties inherent in the fact that in the fight against climate change there are many players involved ; bargaining power is distributed unevenly among countries and relevant stakeholders; trading costs are high relative to expected benefits; the expected gains and losses differ between countries and regions; the degree of uncertainty about the resulting aggregate and individual costs and benefits is high; the costs of controlling CO2 emissions are distributed unevenly among countries and regions; etc.
Given this evidence, it is easy to conclude, then, that climate change is a typical example in which the maxim "everything affects everything" is fulfilled, which, as a rule, prevents countries from acting for the common good or, in other words, protecting the Earth's climate. It is feared that the actions necessary to combat climate change will cause an excessive reduction in growth while incurring obviously high mitigation costs.
For this reason, governments have agreed to strengthen societies' ability to deal with the impacts of climate change and provide continued and enhanced international support for adaptation. The agreement also recognizes the importance of averting, minimizing and addressing loss and damage associated with the adverse effects of climate change and acknowledges the need to cooperate and enhance understanding, action and support in different areas, such as early warning systems, emergency preparedness and risk insurance.
Margarita Robaina, President of the Organizing Committee
The University of Aveiro, Portugal, and in particular the Department of Economics, Management, Industrial Engineering and Tourism (DEGEIT) are pleased to host the VII Congress of the Spanish-Portuguese Association of Resource and Environmental Economics (AERNA), from September 5th to 7th, 2016. The conference will be organized with collaboration of the Portuguese Association of Energy Economics (APEEN). (read more ⇓)
Aveiro is a Portuguese city located between Porto and Coimbra, straddling the "ria" Aveiro and the river Vouga, a few kilometers from the Atlantic Ocean. The city is often called the "Portuguese Venice" because is bathed through canals, bridges, and painted boats called moliceiros. The real charm of Aveiro lies in its coast, with its fantastic sandy beaches as São Jacinto, Barra and Costa Nova and in its Salinas, a vast area dedicated to the production of salt. In addition, food lovers will find many good restaurants with amazing fish and seafood dishes and shouldn’t forget to experiment one the Portuguese best delicacy called Ovos Moles.
The University of Aveiro, a young university (1973), is a pioneer in its educational offer and has a leading role in the Portuguese university system due to the quality of its infrastructure, research and faculty. It is also considered an open museum of Portuguese contemporary architecture.
The organizing committee, an experienced and dynamic group in the field of Energy, Environment and Natural Resources Economics, is composed by five Professors of DEGEIT (Margarita Robaina, Anabela Botelho, Marta Ferreira Dias, Mara Madaleno and Victor Moutinho), one professor of ESTGA (Daniel Magueta) and one Professor of the Department of Environment and Planning (Carlos Borrego) of the University of Aveiro. The conference has a rich scientific committee, whose chairs are professors Catarina Roseta-Palma and Antoni Riera Font.
The conference webpage is www.ua.pt/degei/aerna2016/page/20650?ref=ID0EKCA. Some important dates are the Call for papers, from 7th January to 1st March and communication of acceptance, 2nd April. The final version of the program will be available on the conference website on June, 30th, 2016.
It will be an honor to host another event bringing together Spanish and Portuguese researchers in the field of Environmental Economics and Natural Resources, which will allow the exchange of experiences, ideas and enhances the creation of networks and research groups. We hope to give the participants an excellent stay at the University and the city of Aveiro, both for the richness of the scientific program, of which keynotes, we will announce soon on the website, but also for the social program that we are organizing. As usual AERNA will give a prize for the Best Published Paper and for the Best Presentation.
We are looking forward to meeting you in Aveiro.
Alejandro Caparrós, Coordinator of the Working Group on Game Theory and Environmental and Resource Economics
The AERNA Working Group on Game Theory and Environmental and Resource Economics celebrated its first Workshop in Madrid on September 7-8, 2015. The Workshop brought together papers on environmental and resource economics problems that use Game Theory tools. The workshop took place at Universidad Autónoma de Madrid, and was co-organized by the Department of Economic Analysis of the Universidad Autónoma de Madrid and the Institute for Public Goods and Policies (IPP) of the Consejo Superior de Investigaciones Científicas (CSIC). (read more ⇓)
The following eight papers were presented at the workshop:
Jose Luis Oviedo (CSIC), Pablo Campos (CSIC), and Lynn Huntsinger (University of California-Berkeley)
Forests provide public goods and services (usually non-marketed) that should be made explicit in any analysis attempting to model the management of these multiple use ecosystems (Samuelson, 1976). However, the absence of directly observable market prices can motivate failures in the provision of forest public products. To overcome this, non-market valuation methods provide tools to estimate values for these products. Although not free of criticism (Hausmann, 2012), these methods have shown significant progress experimentally over the years (Kling et al., 2012) and under certain conditions have been shown to estimate values deriving from truthful preferences (Carson and Groves, 2007). (read more ⇓)
In the scientific literature, the focus of forest non-market valuation has particularly been given to public environmental services; that is, to those consumed by the general public (e.g., landscape conservation, biodiversity preservation and free-access recreation). However, in the particular case of Mediterranean oak woodlands and forests, there is a significant body of literature highlighting the importance that these environmental services have for private landowners (Campos et al., 2013). This has two main implications for income accounting and forest management models.
First, the consumption of environmental services or amenities by landowners has an influence on land market prices; but once the land is owned there is not a direct market transaction for this consumption. While the woodland market price incorporates the future consumption of amenities, the value of the annual benefits is likely to be omitted as it is not directly observable. Second, it is expected that woodland management is shaped according to landowner preferences for the consumption of these amenities. Therefore, not considering them in the analysis could take the researcher to misleading models and policy design.
Recent research on the economics of oak woodlands of southern Spain and California (two similar Mediterranean-climate regions with different institutional settings) has applied the contingent valuation method to estimate the income value of the environmental amenities consumed by landowners (Campos et al., 2009; Oviedo et al., 2012 and 2015). These studies estimated the maximum annual monetary income that the landowner is willing to pay (to give up) before selling the land and investing the money in an alternative non-agrarian investment. Landowner willingness to pay for the consumption of amenities ranges from an average of €165/ha in California to an average of €387/ha in southern Spain. One explanation for the observed differences is the shorter supply of oak woodland ranches in Spain as compared to California. This pushes up land market prices and therefore the value of amenity consumption.
Further, Oviedo et al. (2015) present six case studies to estimate landowner income that incorporates the production and costs associated with both market commodities and landowner private amenities. The results show that private amenities contribute in an average year about a 4% of the total real profitability of an oak woodland ranch, while the contribution of commodities is more variable, ranging from negative to 2%.
This private-public dimension of Mediterranean woodlands undermines the concept of a dichotomy between forests considered as pure commodities versus as providers of public (non-market) services. In the Mediterranean oak woodlands of Spain and California, both public and landowner preferences for these services should have an important role when setting conservation and management goals. The former because public goods are of increasing importance in the policy agenda; the latter because it is difficult to understand the drivers of an ecosystem without considering the preferences of those who own and manage them.
Two main challenges remain in this research field. On one hand, it is not clear how landowner consumption of amenities affects the provision of forest commodities and other public environmental services. Further research is needed to explore ways to meet the social compromise of joint provision of these private and public products. On the other hand, the importance of land environmental services to landowners has now been investigated in Mediterranean-type forests. The discussed approach is potentially extendible to other forest or agricultural ecosystems in a context without a potential change to urban land uses.
Campos, P., Huntsinger, L., Oviedo, J.L., Starrs, P.F., Díaz, M., Standiford, R., Montero, G. 2013. Mediterranean Oak Woodland Working Landscapes. Dehesas of Spain and Ranchlands of California. Landscape Series, Vol. 16. Springer, Dordrecht. 508 p.
Campos, P., Oviedo, J.L., Caparrós, A., Huntsinger L, Coelho I. 2009. Contingent valuation of woodland owners private amenities in Spain, Portugal and California. Rangeland Ecology & Management 62(3): 240-252.
Carson, R.T., Groves, T. 2007. Incentive and Information Properties of Preference Questions. Environmental and Resource Economics 37(1): 181-210.
Hausman, J. 2012. Contingent Valuation: From Dubious to Hopeless. Journal of Economic Perspectives 26(4): 43-56.
Kling, C.L., Phaneuf D.J., Zhao, J. 2012. From Exxon to BP: Has Some Number Become Better Than No Number? Journal of Economic Perspectives 26(4): 3-26.
Oviedo, J.L., Huntsinger, L., Campos, P. 2015. Landowner Total Income from Oak Woodland Working Landscapes in Spain and California. Proceedings of the 7th California Oak Symposium: Managing Oak Woodlands in a Dynamic World. Gen. Tech. Rep. PSW-GTR-251. Berkeley, CA (USA). Department of Agriculture, Forest Service, Pacific Southwest Research Station: pp. 189-198.
Misiolek, W. S. and Elder, H. W. (1989) “Exclusionary Manipulation of Markets for Pollution Rights”. Journal of Environmental Economics and Management 16: 156-166.
Oviedo, J.L., Huntsinger, L., Campos, P., Caparrós A. 2012. Income value of private amenities assessed in California oak woodlands. California Agriculture 66(3): 91-96.
Samuelson, P.A. 1976. Economics of forestry in an evolving society. Economic Inquiry 14: 466-492.
Francisco José André and Luis Miguel de Castro, Universidad Complutense de Madrid
Cap and trade (CAT) programs are probably the most important policy instrument to fight climate change. In Europe this topic has gained more interest since the creation of the European Union Emission Trading System (EU ETS). (read more ⇓)
One of the central results in the literature shows that, under perfect competition, a CAT system allows to reduce pollution at the least cost. Hahn (84) seminal paper stated that, if a dominant firm exists in the permit market, the resulting equilibrium is not efficient any more and the efficiency loss depends on the initial allocation of permits. The dominant firm will manipulate the price of permits (upwards if it is a seller and downwards if it is a buyer) unless the initial allocation equals the cost-effective one, which requires a perfectly informed regulator.
Hahn and followers abstract from the output market structure. Since the majority of emissions regulated under existing and planned programs (notably the EU ETS) come from industries that are highly concentrated like electricity, cement or refining, it is not realistic to assume perfect competition and accordingly new research lines are analyzing the strategic behavior of oligopolistic firms operating in industrial sectors, to understand the connection between both markets (output and permits).
This literature has shown that firms subjected to a CAT system can enjoy scarcity rents, and cost-effectiveness could be affected by rent seeking behavior when the corresponding output market is oligopolistic even if the permit market is competitive. It has also been argued that this type of behavior might be responsible for the high prices of permits observed during the first phase of the EU ETS. Ehrhart, Hoppe and Löschel (2008) show that oligopolistic firms may have incentives to inflate the permit price of permits in order to push the output price up and, under certain circumstances, such a strategy can increase profits. André and de Castro (2015) identify the different sources of scarcity rents to determine if such rents can generate incentives for the firms to collude in order to manipulate the permit price. They show that such incentives tend to disappear under Stackelberg competition in the output market. However, incentives for collusion appear if there is an initial free allocation of permits, which is an argument against grandfathering and in favor of auctioning. This effect is increasing with the amount of permits allocated to the leader. In de Castro (2015, chapter 2) it is shown how market power in the product market affects the permit price when it is endogenous. The main result is that the quantities abated and the permit price decrease (at a decreasing rate) as the product market becomes less competitive.
Some papers consider market power in both permit and output markets. Misiolek & Elder (1989) concluded that a dominant firm can manipulate the permit market to drive up the fringe firm’s cost in the product market. Hintermann (2011) shows that a firm with market power in both the permit and the product market will manipulate both prices so as to increase its profits at the cost of consumers and taxpayers and overall efficiency cannot be achieved by means of permit allocation alone.
In de Castro (2015, chapter 4) we consider a double Stackelberg stetting with different leaders, one in each market, and find out that the output leader produces more and makes more profits than the permit leader under a symmetric allocation of free permits but as soon as the permit market leader is receiving more permits, both firms’ output tend to equalize first and it comes to a point where the output leader produces less and makes less profits than the permit leader. If the same firm leads both markets, it always produces more than the follower regardless the initial allocation of permits, although the follower can still make a higher profit if its allocation of permits is large enough as compared to the leader’s. These results reinforce the idea that the initial permit allocation is crucial for the efficiency of the system.Alvarez and André (2015) compare auctioning and grandfathering under market power and private information in the permit market and conclude that auctioning tends to be more cost-effective when the firms’ abatement cost functions are sufficiently different from one another, especially if the dominant firm has higher abatement costs that the followers.
Álvarez, F. and André, F.J. (2014) “Auctioning Versus Grandfathering in Cap-and-Trade Systems with Market Power and Incomplete Information”. Environmental and Resource Economics 62: 873-906.
Álvarez, F., André, F. J., and Castro, L.M. de (2015) “Scarcity Climate Rents in Emissions Permit Markets with Oligopoly Competition”. MPRA_paper_67812.
Castro, L.M. de (2015) “Incentive-based Policies on Climate Change: Taxes and Tradable Emission Permits”. Doctoral Dissertation. Universidad Complutense de Madrid.
Ehrhart, K. M., Hoppe, C., and Löschel, R. (2008) “Abuse of EU Emissions Trading for Tacit Collusion”. Environmental and Resource Economics 41: 347-361.
Hahn, R. W. (1984) “Market Power and Transferable Property Rights”. The Quarterly Journal of Economics: 753-765.
Hintermann, B. (2011) “Market Power, Permit Allocation and Efficiency in Emission Permit Markets”. Environmental and Resource Economics 49: 327-349.
Misiolek, W. S. and Elder, H. W. (1989) “Exclusionary Manipulation of Markets for Pollution Rights”. Journal of Environmental Economics and Management 16: 156-166.
Maria Antonieta Cunha-e-Sá, Nova School of Business and Economics
The Peniche-Nazaré study site is located in the West Coast of Portugal and is characterized by a variety of marine ecosystems, which provide many ecosystem services, supporting the most important local economic activities. In particular, the Marine Protected Area of Berlengas Archipelago and the Nazaré Canyon are located in the study site. The fishing sector plays a crucial role in the local economy. Peniche and Nazaré are old fishing communities dedicated to harvesting small pelagic species, in particular, sardines, chub-mackerel, and horse-mackerel. However, while the local economy is facing the threat of an increasingly depleted stock of sardines, the most important species harvested, the site is now a popular touristic destination related to surf. (read more ⇓)
Therefore, significant undergoing economic and ecosystem changes are taking place, representing major societal challenges, and requiring the adaptation of local communities. By assessing and quantifying some of those impacts, we aim to contribute to provide guidance for policy purposes.
In this newsletter, we only address the cases of (i) the sustainable management of the Ibero- Atlantic sardine fishery and (ii) the search for a trademark related to the giant waves to attract increasing touristic demand to Nazaré.
(i) The Iberian-Atlantic stock of sardine is distributed along the continental shelf. However, since 2006, there is evidence that the southern part of the Iberian-Atlantic sardine stock, which is shared by Portugal and Spain, is decreasing significantly due to persistent low recruitment. The highly depleted stock is putting at risk fisheries in the region, with negative consequences to the local economy given the dependence of those communities on that activity. To deal with this problem a sardine fishery management plan was established for the period 2012-2015. This plan defined annual quotas for Portugal and Spain according to a harvest control rule, whose main goal was the recovery of the stock to levels above 307 kt by 2015. However, since recent assessments reveal that the current stock is still at low historical levels, the expected definition of very low quota levels will impose high costs on the fishing sector, contributing to an increasing hostility of fishermen toward the current policy. It is in this context that a new regulatory framework will have to be defined. This new regulatory framework should therefore rely not only on solid ecological tools but also should explicitly take into account sustainability issues and the interests of the main stakeholders. Building upon Tahvonen et al. (2013), we contribute to such effort by developing a bio-economic model for the Ibero-Atlantic Sardine Fishery, thus allowing for comparison between harvesting paths resulting from different current/future regulations. In addition, the model will also be used to accommodate for different precautionary objectives for the sardine stock, providing extraction paths that explicitly take into account both economic and ecological objectives.
(ii) This study estimates the economic impact of the media campaign launched in 2010 in Nazaré that made big waves of Praia do Norte visible to the world. Using data on domestic and international tourist arrivals in Nazaré for 2004-2014, we apply counterfactual analysis to construct different control scenarios, thus, not affected by the policy intervention (media campaign). Depending on the scenario, the total estimated impact of the “Big Waves” (big waves and three-year media campaign) for 2011-2014 ranges, on average, between 27.8% and 41% of the total revenue of hotel establishments. This impact in the tourism sector is approximately equivalent to one quarter of the value added of the fishing sector in the region. Thus, the investment in the media campaign has provided the required “informational infrastructure” that made possible the recognition of the value of big waves with significant impact on the local economy.
* This research work is part of an interdisciplinary project with University of Aveiro (CESAM) sponsored by the Gulbenkian Foundation (Gulbenkian Ocean´s Initiative, www.gulbenkian.pt/oceans) and it is expected to contribute to MCES valuations. Besides the two studies described it also includes a survey to assess stakeholders’ perceptions on the value of MCES at the study site, the estimation of the economic potential value of offshore renewable energy sources in the area classified with high natural potential, and, finally, a risk assessment analysis of human pressures on habitats’ potential to deliver ecosystem services at the study site.
Tahvonen, O., Quaas, M., Schmidt, J. & Voss, R.. (2013). Optimal harvesting of an age-structured schooling fishery. Environmental and Resource Economics 54, pp 21-39.
Alberto Ansuategi (University of the Basque Country) and Ibon Galarraga (Basque Centre for Climate Change)
The so-called Paris Agreement signed on December 12th can be seen as the culmination of more than two decades of international attempts under the United Nations (UN) to forge collective action on climate change. There is widespread consensus that the Agreement has been a diplomatic success. Following limited participation in the Kyoto Protocol (1997) and the lack of agreement in Copenhagen (2009), the UN climate talks in Paris have ended with a deal that has exceeded expectations. (read more ⇓)
Climate change is probably the most complicated problem ever tackled by international negotiations. Thus, bringing a multi-polar world around one table to make an ambitious and robust climate agreement has required a huge diplomatic effort. France’s longstanding traditions of diplomacy have been up to the task. The figures are impressive. Leaders of 150 nations, along with 40,000 delegates from 195 countries attended the 21st Session of the Conference of Parties (COP21) in Paris. By the end of Paris talks, 186 of the 195 members of the United Nations Framework Convention on Climate Change (UNFCCC), representing 96% of global emissions, submitted national mitigation voluntary targets and actions. Finally, the 195 members came to an agreement on a document, re-drafted multiple times over the two weeks of the COP21, containing the ambitious goal of limiting temperature rise “well below” 2°C above pre-industrial levels with special mention to the possibility to aim for 1.5°C. This is why so many analysts, journalists and political leaders around the world are hailing this agreement as “landmark” and “groundbreaking”.
At the same time we cannot deny that when we look at what the deal actually entails, the 30-pages document produced in Paris can leave a bittersweet taste in our mouths. In what follows we will try to abstract from the most ground-breaking part of the COP21 (the fact that everyone finally made a deal) and will focus on both the achievements and the issues that have been left out in the agreement.
Three are the main achievements of the Paris Agreement we would like to highlight: an improved coverage compared to previous attempts, the ratchet mechanism it incorporates, and the signal it sends to both the business sector and society in general.
First, the new hybrid international climate policy architecture that combines bottom-up elements in the form of the so-called Intended Nationally Determined Contributions (INDCs) with top-down elements for oversight and coordination has made it possible to involve almost all countries in taking measures to reduce emissions. Many analysts and experts argue that these compromises fall short of the goal of limiting temperature change to 2ºC, nor to say the more ambitious target of 1.5ºC. They are right, since these compromises could only cut anticipated temperature increases to about 2.7-3ºC. But we should remember that this new approach has made it possible to get large developing countries on board sharing mitigation effort, a necessary condition to fight climate change if we take into account that growth in emissions since the Kyoto Protocol came into force in 2005 takes place entirely in countries like China, India, Brazil, South Africa, Indonesia and Mexico.
Second, the agreement incorporates a ratchet built on five-year cycles of assessment and a schedule for revisiting country commitments. This mechanism serves two key functions: first, establishing how far a country's actions have moved global emissions toward the 2˚C pathway; and, second, providing a process to increase, over time, the ambition of the climate targets set by countries. This can of course act as a trigger peer pressure for countries not complying with the commitments.
Third, the agreement is a signal to businesses, investors and society in general that the era of carbon reduction has arrived. It will spur banks and investment funds to shift their loan and stock portfolios from fossil fuels to renewable energy industries. Utilities themselves will have to reduce their reliance on coal and more aggressively adopt renewable sources of energy. Besides, The Paris climate agreement also takes away one of climate sceptics’ favourite arguments for inaction: that the global warming issue is not settled as a matter of empirical science. The 40,000 delegates from 195 countries represented at the COP21 were not there to debate whether climate change existed, or how severe it was; they were there to debate the most efficient and equitable ways to fight it.
With regard to the main failures of the Paris Agreement we would also mention three: the efficiency losses associated to a fragmented climate regime, the lack of credibility of purely voluntary commitments and the unresolved question of who should pay and how much should they give to poorer countries to cut emissions and adapt to climate change.
First, the vast majority of economists would recommend carbon pricing to make sure that the social cost of carbon is reflected in the individual consumer's decision. However, carbon pricing will be less effective if it's not universally applied, potentially leading to carbon leakage to countries with looser environmental rules. The Paris Agreement confirms that the international climate governance will be fragmented in nature and this will make more difficult and expensive to curve global carbon emissions. Of course, efforts to link carbon pricing systems worldwide can ameliorate this problem.
Second, the INDCs are voluntary/unbinding commitments, and as such the incentives to breach them are directly proportional to their ambition. Perhaps the peer pressure mentioned earlier will limit these undesirable incentives.
Third, a cop-out necessary to have the support of the United States was that of including binding financial commitments. The Paris Agreement therefore does not go beyond upholding the target of 100 billion dollars a year of mobilized international climate finance from 2020 to 2025, and specifying that it will then review that collective target upwards.
The Paris Agreement provides a solid foundation for substantial progress on climate change. Even if the limits that current INDCs place on future greenhouse gas emissions are too weak to ensure that the agreed 2ºC limit on warming will not be breached, these national pledges may form the basis of a virtuous circle of ambition. Successful implementation of the pledged emission reductions will be crucial for this virtuous circle to take place. Political leaders must create a clear expectation for the energy and other sectors on low-carbon development. Fragmentation of the climate regime will also be another factor that will seriously jeopardize the achievement of the climate stabilization goal. Thus, approaches to comparing mitigation effort will also be essential to enable linkage (that is, the transfer of mitigation-effort units from one UNFCCC Party to another) hence reduce the aggregate cost of mitigation in the new regime. Finally, it is also very important to make substantial progress on fairness and transparency in climate finance.
The European Job Market for Environmental and Resource Economists aims to offer the two sides of the market - institutions with open positions and candidates looking for a job - both a virtual and a physical place to meet and look for the best match. Candidates, universities, public and private institutions, and corporations are invited to apply to participate in the Job Market.
For additional information, consult www.eaere.org
Econ Job Market (EJM) is a nonprofit organization that facilitates the flow of information in the economics job market by providing a secure central repository for the files of job-market candidates (including papers, reference letters, and other materials) accessed on line. EJM is run by a group of academic economists who mostly volunteer their time and effort.
For additional information, consult www.econjobmarket.org
The Workshop constitutes an opportunity to bring agro-food and environmental economists together to review the state-of-the-art on valuation methods as well as future challenges. This VI Workshop consolidates the scope adopted in previous editions with the aim of becoming a forum in which scientists dealing with valuation methods periodically meet to discuss both empirical and methodological questions of different methodologies.
Submissions are invited on applications in food economics and consumer behaviour, agricultural and food policies, environmental economics, comparisons of reliability of alternative valuation methods, methodological issues (e.g. respondents’ prior knowledge and involvement, heterogeneity, risk and uncertainty), and modelling tools for generated data.
Submitted paper proposals (around two pages, single space and standard Arial 11 point type) should include at least the motivation and the methodological framework plus an outline of main results. Please, name your file with the last name of the first author. All documents should be submitted electronically in PDF format (name-abstract.pdf) to the following electronic address: firstname.lastname@example.org. Please note that if the same authors send more than one manuscript, the index number must be used as follows: name1.pdf, name2.pdf. Be sure to review the PDF file you have created before sending it to check that text and formulas (if any) have transferred correctly.
Deadline for paper proposal submission: March 15th, 2016.
Proposals will be evaluated by two referees following a standard double-blind process. Referees will be suggested by the Steering Committee. Authors from accepted proposals will be notified by April 29th, 2016 (a maximum number between 30 and 40 proposals will be accepted).
Authors from accepted proposals will be requested to send the full paper by June, 10th, 2016. In the notification letter the Organizing Committee will provide guidelines for paper submission.
Steering committee: Maria Loureiro (Universidad de Santiago de Compostela), Eirik Romstad (Norwegian University of Life Sciences), Norway), Mario Soliño (Forest Research Centre CIFOR - INIA), Jayson Lusk (Oklahoma State University), José M. Gil (CREDA-UPC-IRTA), and Rudy Nayga (University of Arkansas)
Organizing committee: Elsa Varela, José M. Gil and Leticia de Gaudio (CREDA-UPC-IRTA).
The Fifth AERE Summer Conference will be held June 9 - 11, 2016, at the Beaver Run Conference Center in Breckenridge, Colorado—a wonderful venue.
Co-chairs of the Organizing Committee: Harrison Fell (Colorado School of Mines) and Dan Kaffine (University of Colorado, Boulder).
Specific information about the conference can be found on the AERE web page, www.aere.org
The 22nd edition of the Annual Conference of the European Association of Environmental and Resource Economists is organized by the Swiss Federal Institute of Technology (ETH) in Zurich and EAERE.
Plenary speakers: Matti Liski (Aalto University), Rohini Pande (Harvard University) and Pietro Peretto (Duke University)
Co-chairs of the Scientific Program Committee are Lucas Bretschger and Karen Pittel.
Deadline for paper submissions: January 31, 2016.
For additional information, consult the conference webpage www.eaere2016.ethz.ch
The Atlantic Workshop on Energy and Environmental Economics (AWEEE) is a biennial scientific meeting organized by Economics for Energy with the collaboration of CEPE (ETH) and the University of Münster (CAWM). It takes place in the island of A Toxa, in the Northwestern Spanish area of Galicia.The workshop has become an important outlet for the discussion and debate on state-of-the-art research on energy and environmental issues, with a limited number of participants who come from all around the world. The AWEEE combines keynote lectures on specific topics by prestigious academics with the presentation of research by invited speakers and by other participants through an open call for papers.
In its seventh edition the workshop will include keynote lectures by Karen Palmer (Resources for the Future) and Rick van der Ploeg (University of Oxford) and invited presentations and paper discussions by Antonio Bento (University of Southern California), Christoph Böhringer (University of Oldenburg), Marco Casari (University of Bologna), José M. Labeaga (UNED-Madrid), Juan-Pablo Montero (PUC Chile) and Michael-Pollitt (University of Cambridge).
Deadline for paper submissions: 17 April 2016
Decision on paper: 1 May 2016
Workshop: 27 and 28 June 2016
The University of Aveiro will host the 7th edition of the conference of AERNA.
Detailed information has been provided in the Institutional Highlights section of this issue of the Newsletter. Also consult the conference webpage www.ua.pt/degei/aerna2016/page/20650?ref=ID0EKCA.
Deadline for submissions: 1 March 2016.
Researchers from the respective Groups of Environmental and Resource Economics from IPP-CSIC, UCM, UPM and CIFOR-INIA organize since 2010 a series of seminars about Environmental and Resource Economics in Madrid (Madrid Environmental Economics Seminars, MEES). The seminars are organized approximately once each two months around two presentations, with rotating venues at UPM, UCM, IPP-CSIC and CIFOR-INIA. Usually, one presentation is given by a PhD student and the other one is given by a senior researcher, although there can be exceptions to this rule depending on the circumstances. PhD students are especially encouraged to participate, since this can constitute an excellent opportunity to present their work previous to their Dissertation defense. Participation by foreign students and researchers is also encouraged.
The specific dates and venues of future seminars will be announced in advanced at the MEES web page https://sites.google.com/site/madenvecosem/mees.
Recent speakers have included, among others, Giles Atkinson (London School of Economics), Pablo Campos (IPP-CSIC), Alejandro Caparrós (IPP-CSIC), Pere Mir (Universidad de Lleida), Elena Ojea (BC3), Diego Broz, (FCF-UNaM), Sergio Álvarez Gallego (ETSI Montes-UPM), Jesús Barreal (Universidade de Santiago de Compostela), Michael Finus (Universidad de Bath) and Luis Miguel de Castro (UCM).
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The BC3 is a Research Centre based in the Basque Country which aims to contribute to long term research on the causes and consequences of climate change in order to foster the creation of knowledge in this multidisciplinary science.
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The Complutense University of Madrid (UCM) is an institution with a long history and broad social recognition. UCM aspires to be among the foremost universities in Europe, and a reference centre for Latin America.
Public and private institutions are invited to support the Association to further its aims by joining AERNA as institutional members. Incomes from institutional membership fees are used exclusively and completely to further the aims of the Association.
Consult our fees, and join us!