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The key topic of this paper is to explain the above average increase of local waste charges in Germany, in addition the special importance of local within national environmental policies. The jump of waste charges, especially since 1990, has originated in the changed institutional setting of waste management, for its part a result of increasing waste material. It includes an expansion of waste management services (for instance, waste treatment, waste disposal), higher technical demands referring to waste disposal (waste incineration, waste disposal sites) and excess capacity of municipal incinerators resulting from a higher percentage of waste recycling. In addition to financing disposal and treatment, waste charges shall also give financial incentives to waste avoidance considering the social costs of waste management (for instance, pollutants of waste incineration) ("ecological waste charges"). The authors recommend to apply new approaches to collect charges, that give rise to waste avoidance and recycling. On this economic and legal basis three comparing case studies concerning waste management and waste charges are carried out (city and district of Augsburg and district of Aichach-Friedberg).

This paper provides a broad overview of recent trends in solid waste and recycling, related public policy issues, and the economics literature devoted to these topics. Public attention to solid waste and recycling has increased dramatically over the past decade both in the United States and in Europe. In response, economists have developed models to help policy makers choose the efficient mix of policy levers to regulate solid waste and recycling activities. Economists have also employed different kinds of data to estimate the factors that contribute to the generation of residential solid waste and recycling and to estimate the effectiveness of many of the policy options employed.

In this paper we analyze the optimal management of a joint ownership fishery exploitation model where agents use different fishing gears. As opposed to other works, we consider a model in which the fishing technology affects resource's growth not only through the harvest function, but also through the natural growth rate of the resource. The main objective is to capture the evidence that some fishing gears alter the habitat of the resource, and may alter the natural growth rate of the resource. The main result we obtain is that, when the natural growth of the resource is altered by the fishing technology, the optimal stock is not independent of how harvest quotas are distributed among the agents. Thus, in this context, a fishing policy that determines, first, the optimum stock and, secondly, decides on how to distribute the harvest among the different agents will not be efficient.

Congress may soon restrict joint and several liability for cleanup of contaminated sites under Superfund. We explore whether this change would discourage settlements and is therefore likely to increase the program's already high litigation costs. Recent theoretical research by Kornhauser and Revesz finds that joint and several liability may either encourage or discourage settlement, depending upon the correlation of outcomes at trial across defendants. We extend their two-defendant model to a richer framework with N defendants. This extension allows us to test the theoretical model empirically using data on Superfund litigation. We find that joint and several liability does not discourage settlements and may even encourage them. Our results support the model's predictions about the effects of several variables, such as the degree of correlation in trial outcomes.

This paper analyses the efficient management of nonpoint source pollution (NPS) under limited pollution control budget and incomplete information inherent in NPS pollution. By incorporating information acquisition into a pollution control model, it focuses on the tradeoff between data collection and treatment efforts and derives conditions under which (i) a favourable change in the state of treatment cost at one site may lead to an increase in treatment level at another site, (ii) a higher data collection cost induces more data collection, and (iii) an increase in information productivity leads to an increase in the level of data collection. A numerical simulation of the model illustrates how in managing NPS pollution the value of information acquisition depends on the degree of heterogeneity of polluting sites.

We estimate a structural model of OECD countries in which GDP and CO2 emissions are endogenous. We use the estimated model to simulate the price of tradable CO2 permits and the efficiency gains from trade. Our estimated prices are high, relative to previous estimates, and the efficiency gains are substantial. We also find, contrary to previous literature, that higher income is associated with reduced emissions.

Environmental policy instruments have an impact on the incentives to invest in environmental R&D and this link should deserve careful consideration when introducing new instruments. Some authors argue that environmental taxes and tradable permits have rather comparable impacts on environmental R&D but we think that only very specific conditions do lead to this kind of conclusion. If we broaden the perspective by integrating elements from the Industrial Organisation literature and depart for Pigouvian settings, a market-driven approach would link the incentive to invest in new technologies to the market potential offered by the policy instruments. If taxes turn out to be very expensive for the polluting or emitting industries, we can assume that these targeted firms would be more interested to invest in new - emission reducing - technologies than in cases where the chosen policy instrument will lead to a very limited cost. We therefore developed a dynamic model that enables to compare the incentives on environmental R&D resulting from taxes, emission trading, voluntary approaches and subsidising environmental R&D. We do not claim to capture all relevant market interactions, but our findings confirm the intuition that environmental taxes have a clearly different impact on environmental R&D compared to emission trading.

International climate protection investments (Joint Implementation and Clean Development Mechanism projects) are burdened with problems of contract enforcement, which prevent the realisation of efficiency gains associated with these investments. The paper analyses this problem from the perspective of non-cooperative game theory and proposes two different solutions to the co-operation problem. The first analyses the potential role of national environmental authorities in facilitating credible commitment of the project host operating under its jurisdiction. It is argued that the threat of punishing the project host if he breaches the contract may serve this purpose. The effective level of punishment is derived. The second option involves strategic delegation of contract implementation to a third party operating under the same jurisdiction as the project host. Again, the paper explores the conditions that ensure incentive-compatibility. Both options are based on the idea that the project sponsor may commit himself credibly by becoming a Stackelberg leader.

The double-dividend argument (as used in political debates) addresses worries that a green tax may lead to higher unemployment when wages are inflexible. As protection against this possibility, it is proposed to use the green-tax proceeds to reduce the total tax burden of labor. Ideally, this protects the environment and reduces unemployment (double dividend). However, even if the main cause of unemployment is a minimum wage, an additional efficiency-wage component (which explains certain stylized facts) can dominate employment effects. In the worst case, this leads to a "double loss," which is impossible under pure minimum-wage unemployment.

Ecolabel award schemes have become increasingly popular. Their rationale is to enable (concerned) consumers to identify "green" products. By so doing, ecolabelling should stimulate environmental innovation, and induce firms to reduce the supply of conventional (polluting) products. Our analysis however points out that the two phenomena are not necessarily correlated. Through a dynamic model of investment decisions, the paper outlines the situations under which ecolabelling could induce perverse effects (increased invesrment in conventional technologies), and examines whether setting quantitative restrictions on the issuing of labels could constitute an antidote.

Water is the sector most comprehensively covered in European Union’s environmental policy. An initial wave of directives accounting for public health protection and for harmonisation of environmental rules in the common market was followed by a call for a policy reform to address more properly realistic objectives, often conflicting in practical interpretation, such as environmental protection, subsidiarity and deregulation. The present paper discusses the evolution of EU water policy and examines critically how the various issues and objectives are brought together in the new EU water framework directive. The complex interplay of institutional and non-governmental actors in the formulation of European water policy is analysed, while finally its implications for the development and the ultimate character of the new, reformulated EU water policy are discussed.

The paper inquires whether a public eco-label mitigatesadverse selection, where an ecologically superior (green) product variant is underprovided. A model, integrating entry into a perfectly competitive, vertically differentiated industry and rationally expected quality structure (REQS) under asymmetric information, provides conditions for the label, serving as screening device, to increase green supply and curb pooling. Perverse reactions entail decreasing green supply, enhanced pooling, or increasing non-green supply. It is shown that the common single crossing property disregards the impact of changes in REQS on absolute profitability and may misdiagnose firms' incentives to attain the label. if labelling causes market expansion, pollution may increase even if substitution towards the green variant occurs. However, this only happens if both variants are environmentally sensitive in a well-defined sense.

In this paper we reexamine the issue of allocating a natural resource 'material' that is extracted, used for producing a consumption good, recycled, and that may cause environmental damage when it is finally landfilled without prior waste treatment. The 'material' explicity enters the analytisis as a factor of production and is then embodied in the output. That is, the embodied material per unit of output (material content) forms, as a matter of product design, an intrinsic attribute of the consumption good and of the solid waste left over after consumption. Since the technologies of both waste treatment and recycling depend on that material content, an issue of green product design arisis (Consumers are assumed to be indifferent with respect to the material content of the consumption good). Our main focus is on clarifying how three different market schemes affect the allocation of embodied material: (i) Lindahl markets, (ii) indirect markets for material content as suggested by Fullerton and Wu (1998) in a similar context, and (iii) markets for embodied material. While the Lindahl markets serve as a theoretical benchmark only, the central message is that - under some serious restrictions regarding technology and the number of agents - each of the markets schemes (ii) and (iii) has the capacity of allocating the material (content) efficiently, provided that the environmental externality is appropriately relevant. It remains an open question, however, which of the market schemes, if any, is empirically relevant. This is also shown in which way the allocation is distorted when the above mentioned material-related markets fail to be active.

Under the assumption of imperfect competition in a durable good industry, the present paper investigates the efficient regulation of solid waste which causes environmental damage at the end of the product's life. It turns out that the second-best waste tax falls short of the marginal environmental damage if the producers rent their products but may also exceed the marginal damage if the producers sell their products. If in the sales case the industry is regulated with waste taxes and stock subsudies then the first-best tax-subsidy scheme also contains a waste tax which deviates from the marginal damage, in general. Under monopoly this tax unambiguously exceeds the marginal damage. Furthermore, the analysis provides a further reason why the Swan independence result generally doesn't hold in rental markets.

Although market-based environmental measures like uniform CO2 taxes reach a given standard at minimal cost, they do not prevail in real world policies. An efficiency oriented environmental policy fails, as it involves a redistribution of pollution rights, resulting in a strong and generally effective opposition of the groups that forego economic rents. The present paper analyzes the trade-off between efficiency and political feasibility of several CO2 tax and reimbursement schemes, using a computable general equilibrium model of Switzerland. The simulation results indicate that a policy combining a uniform CO2 tax with differentiated labor subsidies preventing intersectoral redistribution is a better solution for the tradeoff than the presently existing tax schemes in various countries.

This paper analyzes the effects of a stricter environmental policy on macroe-conomic performance and welfare in a two-sector intertemporal optimizing model. The direct application of pollution as a productive and flow argument to both the instantaneous utility function and production function is the main difference from the previous literature. Utilizing this model, we perform both long-run steady state and short-run transitional analysis as well as welfare analysis. In the long-run analysis, both capital stock and the amount of labor supply are lowered, but the consumptions of two goods are ambiguous. In the short-run transitional dynamics, the temporary policy shock results in permanent effects and the effects of anticipated policy change are dampened. The interesting outcome in the welfare analysis is that the stricter environmental policy may improve the agent's welfare, which is contrast to the generally accepted negative welfare effect in the previous works.

We model green markets in which purchasers, either firms or consumers, have higher willingness-to-pay for less polluting goods. The effectiveness of pollution reduction policies is examined in a duopoly setting. We show that duopolists' strategic behaviour may increase pollution levels. Maximum emission standards, commonly used in green markets, improve the environmental features of products. Nonetheless, overall pollution levels will rise because government regulation also affects market shares and boots firms' sales. Consequently, social welfare may be reduced. We also explore the effects of technological subsidies and product charges, including differentiation of charges.

This paper extends Wirl and Dockner¿s (1995) model designed to analyze the long-term bilateral interdependence between a resource exporting cartel and a coalition of resource importing country governments. Firstly, depletion effects are introduced into the analysis of the intertemporal properties of a pigouvian tax. Secondly, the feedback Stackelberg equilibria are computed. The results show that the dynamics of the tax depends critically on the level of the marginal environmental damage. Moreover, they also show that the tax defined by the Markov-perfect Nash equilibrium is a neutral pigouvian tax in the sense that it only corrects the market inefficiency caused by the stock externality. However, for the feedback Stackelberg equilibrium the tax is advantageous for the importing countries since the strategic pigouvian taxation reduces the market power of the cartel. Este trabajo propone una extensión del modelo de Wirl y Dockner (1995) diseñado para analizar lainterdependencia bilateral a largo plazo entre un cartel exportador de un recurso y una coalición depaíses importadores. En primer lugar, se incorporan los efectos agotamiento al análisis de laspropiedades intertemporales de un impuesto pigouviano. En segundo lugar, se calculan los equilibriosfeedback de Stackelberg. Los resultados muestran que la dinámica del impuesto dependecriticamente del nivel del daño medioambiental marginal. Además, también demuestran que elimpuesto definido por el equilibrio de Nash perfecto de Markov es un impuesto pigouviano neutral en elsentido que sólo corrige la ineficiencia causada por la externalidad del stock. Sin embargo, para elequilibrio feedback de Stackelberg el impuesto es ventajoso para los países importadores ya que laimposición pigouviana estratégica reduce el poder de mercado del cartel.

This paper attempts to look at the effectiveness of public provision of pollution information in providing incentives for firms to control pollution. This is achieved by examining the effect of release of pollution information on the market value of firms. The paper conducts a value event study using the U.S Environmental Protection Agency's Toxic Release Inventory Program as the basis for its analysis. We conclude that there are significant negative abnormal returns on the day of the release of the pollution information for all the seven releases put together. But, there are no significant negative abnormal returns for each of the seven releases when we incorporate the contemporaneous correlation of the returns and inter-temporal correlation of the estimated abnormal returns. In addition, this negative effect peters away as the length of the event period is extended to include the four days after the release of the information as well.

We model green markets in which purchasers, either firms or consumers, have higher willingness-to-pay for less polluting goods. The effectiveness of pollution reduction policies is examined in a duopoly setting. We show that duopolists´ strategic behaviour may increase pollution levels. Maximum emission standards, commonly used in green markets, improve the environmental features of products. Nonetheless, overall pollution levels will rise because government regulation also affects market shares and boosts firms´ sales. Consequently, social welfare may be reduced. We also explore the effects of technological subsidies and product charges, including differentiation of charges.

Quarantine policy reviews are becoming more sophisticated following the Uruguay Round’s Agreement on Sanitary and Phytosanitary (SPS) Measures and, in Australia’s case, following also the 1996 Nairn Report. Yet they still focus primarily on the effects of restrictions just on import-competing producers. A fuller analysis that includes the consumers demonstrates that even if imported diseases were to wipe out a local industry, the gains to consumers may outweigh the losses to import-competing producers from removing a ban on imports. This paper provides the simplest partial-equilibrium framework for thinking more about the economics of quarantine policy measures. An empirical analysis of Australia’s ban on imports of bananas, used to illustrate the methodology, suggests a move to free trade may well cause a major contraction of banana growing in Australia but the economic welfare gains to consumers are almost certain to far outweigh the losses to producers. The paper concludes by arguing that there is a need for a comprehensive economic review of Australia’s myriad quarantine restrictions.

The paper analyzes international environmental agreements that incorporate transfers from a group of industrialized countries to developing countries in a situation of asymmetric information. The framework of the analysis is a static model of transboundary pollution in which information on abatement costs is public, but information on abatement benefits is private. The properties of cooperative solutions for separating and pooling equilibria are analyzed. It is shown under which circumstances it is not optimal for the donors to compensate recipients for their net incremental abatement costs, but where instead it is profitable for both parties to apply the gross incremental cost concept. The paper discusses the implications of the results for projects to protect global environmental resources within the concept of 'joint implementation.

This paper explores water pricing policy in Tegucigalpa, the capital of Honduras, in a political economy perspective. I argue that current water prices are too low and significantly below long-run marginal cost, and demonstrate that water prices must be raised significantly over the next ten years for projected demands and supplies to be in balance. I also argue that low water prices has a number of adverse allocational and distributional consequences. I then go on to discuss various (external and internal) actors' stakes in maintaining or changing the current water pricing regime, and discuss some potential mechanisms by which more efficient prices can be implemented.

This paper demonstrates that voluntary agreements between a regulator and an industry can be Pareto superior to environmental taxes. Further, such agreements may differ from direct regulation in a non-trivial way. The first-best optimum may be included in the set of possible agreements, even if it is not attainable using tax instruments. There is no uncertainty or asymmetric information in the model. However, it is assumed that some emissions are observable, but not verifiable. This may be interpreted as a situation where precise formal specification of the pollutant is infeasible.

In many markets governments set minimum quality standards while some sellers choose to compete on the basis of quality by exceeding them. Such ‘high-quality’ strategies often win public acclaim, especially when ‘environmental friendliness’ is the dimension along which firms are differentiated. We analyse this phenomenon using a duopoly model of vertical product differentiation. A minimum quality standard leads both the high-quality and the low-quality firm to increase product qualities, lower prices, and increase quantities sold. As a result, total welfare increases. Industry profits fall, however, because reduced quality differentiation intensifies price competition. If the high-quality firm can commit to a quality level before regulations are promulgated, it induces the regulator to weaken its standards, and welfare falls.

Soil cleaning-up operations have become a priority in most western countries. In the Netherlands, in particular, a systematic effort to restore the environmental quality of polluted sites has started in the early eighties. The cornerstone of the Dutch legislation is that of restoring soil multifunctionality, which allows the cleaned site to be used for any purpose, without functional constraints. In more than ten years of application, this approach has shown some weak points. First, the costs of cleaning-up may be extremely high. Many companies tend to delay as much as possible the operations, either to delay expenditures or to wait for the development of more effective cleaning-up technologies. Second, many cleaning-up techniques achieve very good results in terms of soil quality, but result into a transfer of pollution to other environmental media (for instance, air and water) and require an intensive use of scarce resources (for instance, energy, groundwater and space). Third, in many instances the site has a unique destination, an industrial site for instance, and cleaning-up beyond the level strictly necessary is very cost-inefficient. These considerations have lead to the development of a new approaches for soil cleaning-up and to the development of methodologies and instruments for addressing effectiveness and efficiency in soil remediation. The paper shows a Decision Support System which assists the planning of cleaning-up operations on the basis of: (1) their effectiveness in reducing the risks for the specific needs of the site; (2) their capacity of minimising the negative influences on the environment and on the depletion of scarce resources; (3) the possibility of minimising the costs of operation and of timing the cleaning-up investments. The paper focuses on the environmental quality part, showing how the negative influences of cleaning-up operations can be taken into

This paper analyses policy measures within a two sector endogenously growing economy with pollution. Pollution is either generated by production or by the use of physical capital in production, and can be reduced by public abatement activities. In this generalized Uzawa-Lucas model, the effects of fiscal policy are derived for all core variables and ratios. In addition, the optimal taxation rules are derived. If a pollution tax is not available it turns out that a first best solution may be reached by use of factor income taxation. Additionally, the effects and the possibility of environmental policy are complemented for a small open economy.

The Porter hypothesis suggests a double dividend in the sense that environmental policy improves both environment and competitiveness. The suggestion received strong criticism from economists mainly driven by the idea that if opportunities for higher competitiveness exist firms do not have to be triggered by an extra cost. Therefore, the trade-off for the government between environmental and other targets remains. In this paper a model is developed which confirms the last point but which also draws the attention to some general mechanisms that relax the trade-off considerably. Downsizing and especially modernization of firms subject to environmental policy will increase average productivity and will have positive effects on the marginal decrease of profits and environmental damage. Concluding, a double dividend can generally not be expected but the trade-off is not so grim as is often suggested.

This paper employs an overlapping-generations model to explore the impact of public abatement on private investment and the intergenerational distribution of welfare. Whereas public abatement benefits the oldest generations in terms of non-environmental welfare, future generations gain most in terms of environment welfare. The overall benefits tend to be smallest for generations born at the time of the unanticipated policy shock. Public debt policy, however, can be employed to ensure that welfare gains are distributed more equally across the various generations. Such a policy implies that natural capital crowds-out man-made capital.

This paper analyses the impacts of trade and trade policy on tropical deforestation. Distinctions are made between the different costs and benefits pertaining to forest use, their distribution and natural vis-à-vis industrial forest features. It is emphasized that forest management is determined by the incentives that confront the relevant actors, and their interdependent behavior. International trade is not a major cause of deforestation, and barriers to log exports worsen the situation. While trade liberalization and consumer action are argued to have a potential for favorable impacts through pressure for institutional reform, a socially optimal management of the tropical forests requires that presently non-commercial values be taken into account. As producer countries face considerable difficulties in exploiting biological diversity, compensation for absorption of CO2, e.g., in a market for tradable carbon rights, stands out as the best opportunity to narrow the gap between private and social benefits. While problems such as those associated with moral hazard would have to be overcome, such a scheme should seek to correct the present policy and market failures spurring deforestation and favoring industrial rather than natural forest features.

This paper is concerned with the problem of combining a non-linear income tax with an indirect externality correcting tax. The analysis is performed in a model economy with two types of individuals and two types of consumption goods. The government wants to redistribute from the more able individuals to the less able, and also to correct for the externality arising from the total consumption of the dirty good. It turns out that the optimal tax structure depends on the complementarity or substitutability between the dirty good and leisure. The second-best externality correcting tax can be interpreted as consisting of a redistributive and an environmental component. Consequently, the dirt tax can be lower or higher than the first-best Pigouvian tax.

This paper tests whether differences across states in pollution regulation affect the location of manufacturing activity in the U.S. Plant-level data from the Census Bureau's Longitudinal Research Database is used to identify new plant births in each state over the 1963-1987 period. This is combined with several measures of state regulatory intensity, including business pollution abatement spending, regulatory enforcement activity, congressional pro-environment voting, and an index of state environmental laws. A significant connection is found: states with more stringent environmental regulation have fewer new manufacturing plants. These results persist across a variety of econometric specifications, and the strongest regulatory coefficients are similar in magnitude to thos4e on other factors expected to influence location, such as unionization rates. However, a subsample of high-pollution industries, which might have been expected to show much larger impacts, gets similar coefficients. This raises the possibility that differences between states other than environmental regulation might be influencing the results.

We began this project interested in collecting real-world' insight about how environmental regulation affects the paper industry. Based on conversations with people in the industry and visits to paper mills, we formulated several hypotheses related to technology choice in new mills and the investment decision for existing plants. We tested these hypotheses using technology choice data for 686 paper mills and annual investment data for 116 mills. Technology choice is influenced by environmental regulation. New mills in states with strict environmental regulations are less likely to employ the more polluting technologies involving pulping. Differences between air and water pollution regulations also emerge, with the dirtiest technology in each medium avoiding those states with the strictest regulations. The magnitudes of the impacts are sizable, with a one standard deviation increase in stringency associated with several percentage point reductions in the probability of choosing a dirty technology. State regulatory stringency and plant technology have little or no effect on annual investment spending at existing plants. However, pollution abatement investment is significantly related to productive (non-abatement) investment. Plants with high abatement investment spend less on productive capital. The magnitude of the impact corresponds to nearly complete crowding out of productive investment by abatement investment. Examining investment timing, we find that abatement and productive investment tend to be concentrated in the same years, consistent with the high cost of shutting down a paper mill for renovations.

This paper estimates the impact of a user fee and a curbside recycling program on garbage and recycling amounts, allowing for the possibility of endogenous policy choices. Previous estimates of the effects of these policies could be biased if unobserved variables such as local preference for the environment jointly impact the probability of implementing these policies and the levels of garbage and recycling collected in the community. A simple sequential model of local policymaking is estimated using original data gathered from a large cross-section of communities with user fees, combined with an even larger cross-section of towns without user fees but with and without curbside recycling programs. The combined data set is larger and more comprehensive than any used in previous studies. Without correction for endogenous policy, the price per unit of garbage collection has a negative effect on garbage and a positive cross-price effect on recycling. When we correct for endogenous policy, then the effect of the user fee on garbage increases, and the significance of the cross-price effect on recycling disappears.

Environmental issues have received a prominent place in transport policies of most European countries. The coordination of such policies however, is fraught with many difficulties. The increasing freight flows after the European integration are a source of concern, but have not yet led to straightforward and effective environmental strategies. The paper focuses on the Trans Alpine freight transport systems in the light of the future integration of single national transport systems into the European transport network. The environmental, social and institutional peculiarities of this ‘region’ have favoured—in the past—the development of strong nationally-oriented policies, partly in contrast with the goals promoted by the European Union. The present analysis aims to highlight opportunities, and limits inherent, in the implementation of various infrastructure projects oriented towards a drastic change of the Alpine transport systems structure. The Alpine countries, viz. Austria and Switzerland, play a central role in the promotion of environmental benign modes of transport of goods, with a clear focus on rail. The route choice and modal split of freight flows in Europe are taking place simultaneously. In this paper the results of European freight flow models (based on logit analysis and neural networks) will be presented. An important exercise is then to assess the consequences of various types of eco-taxes on road transport in Europe. In this context, several policy scenarios will be dealt with.

Dieser Aufsatz gibt einen Überblick über die Optionen nationaler Umweltpolitikgestaltung, sofern ein Land von nationalen oder grenzüberschreitenden Umweltproblemen betroffen und zudem mit anderen Ländern wirtschaftlich eng verflochten ist. Für rein nationale Umweltprobleme wird der Einfluß zusätzlicher, außenwirtschaftlicher Verzerrungen durch Zölle oder Kapitalsteuern untersucht. Die Analyse beurteilt auch die Möglichkeiten für eine doppelte Dividende aus einer ökologischen Steuerreform. Grenzüberschreitende Umweltexternalitäten lassen sich ohne supranationale Hoheitsgewalt lediglich durch zwischenstaatliche Kooperation oder unilaterale Umweltpolitik internalisieren. Für Umwelt abkommen werden verschiedene Vertragsinstrumente im Hinblick auf Internalisierungsziel und Anreizkompatibilität analysiert, für unilaterale Politiken die Möglichkeiten einer indirekten Internalisierung sowie strategische Aspekte.

Endogenous firm location is analyzed in a discrete two-region-two-firm model of product differentiation. In a non-cooperative game, two regional governments first decide on the imposition (or lifting) of domestic production standards; firms then choose technology (clean or polluting), location and price. Equilibrium quality and location structure are determined analytically. The existence of consumers willing to pay a premium on clean production methods, and the possibility of inter-firm pollution alleviate the tendency of firms to delocate into the region with the weaker regulation; then, a deregulatory race to the bottom is less likely.

The paper explores the prospects for international environmental cooperation in a context of limited enforcement, if we allow for side-payments between countries and sequential moves in the implementation of the agreement. The framework of the analysis is a static model of heterogenous countries formulated in terms of costs and benefits of emission abatements. Taking the noncooperative Nash equilibrium as starting-point for negotiations, a mechanism is analysed that uses self-financed transfers as an instrument to create and enforce an international environmental agreement. Two kinds of side-payments are considered: transfers that are self-financed but otherwise unrestricted, and transfers that are restricted to compensations for cost-effectiveness of abatements. Numerical simulations for the different scenarios considered illustrate the gains from cooperation that can be achieved with this mechanism.

This paper analyses tax policy measures within a two sector endogenously growing economy with elastic labour supply. Pollution is modelled as a side product of physical capital stock used as a primary production factor in the final good sector. The framework allows to analyse consequences of isolated tax changes or of a revenue neutral environmental tax reform for economic growth. Although pollution does not affect directly production processes, it can be shown that a higher pollution tax or a revenue neutral environmental tax reform boosts economic growth, whereas a tax on capital, consumption or labour reduces the long term growth rate of the economy.

The paper examines the significance, opportunities and ways of biodiversity preservation and sustainable use of natural resources in the central region of the mountain of Rhodopes in Bulgaria.The proposed integrated model of recommendations embraces the following issues: preservation of rare, in danger of extinction and protected plant and animal species and their habitats; implementation of approved environmentally friendly practices in plant growing and animal husbandry; sustainable use of forest, hunting and fishing resources; knowledge, capacity building and motivation in applying measures for sustainable development.In fact that model is composed of many components and considers a number of important aspects. Its application will contribute to the sustainable use of natural resources and preserved biodiversity for future generations.

When government needs more revenue than is available from a pollution tax rate equal to marginal environmental damage, our intuition tells us to raise the tax on the clean good above zero and to raise the tax on the dirty good above that first-best Pigouvian rate. Yet new results suggest that the second-best pollution tax is below the Pigouvian rate. This note reconciles these views by pointing out that these new results use a labor tax to acquire additional revenue, and that the labor tax is equivalent to a uniform tax on both clean and dirty goods. Thus, depending on the normalization, the total tax on the dirty good can be above the Pigouvian rate. These recent results are meant to show that the difference between the tax on the dirty good and the tax on the clean good is less than the Pigouvian rate. Any one tax rate can be set to zero as a conceptual matter, but implementation of some taxes might be easier than others as a practical matter.

On February 17, 1981, the President issued Executive Order 12291 mandating that regulatory agencies must prepare regulatory impact analyses (RIAs) on all major regulations. Before taking action, the agencies must send all RIAs and proposed regulations to the Office of Management and Budget (OMB) for review. These guidelines discuss the analytical techniques that may be used and the information to be developed by the U.S. Environmental Protection Agency when (l) stating the need for the proposed regulatory action; (2) examining alternative approaches to the problem; (3) quantifying benefits and costs and valuing them in dollar terms (where feasible); and (4) evaluating the findings on benefits, costs, and distributional effects. This document provides guidance for preparing Regulatory Impact Analyses. It includes four appendices and one supplement in addition to the main document.

In this paper we analyze the connection between ecological dumping and environmental capital flight which in the literature is presented in three versions: capital flees in order to ecologically dump, firms flee and thus ecologically dump, and capital flees because governments ecologically dump. We find that 'ecological dumping' describes an ill posed problem: it has little to do with dumping and need not have any impact on the environment. Looking at the existing literature we find that although 'capital flight' is a misnomer, too, there are real problems dealt with under this heading. Nevertheless, because of their emotive and misleading undertone, we should better give up both notions.

This paper investigates the effects of local regulatory effort on ground level ozone air quality and on industrial location. Local regulatory effort varies by annual air quality attainment status and by state attitudes towards the environment. A switch from attainment to non-attainment status induces greater regulatory effort in a county, leading to an improvement in air quality. Air quality readings for ground level ozone improve by 3-8% depending on the exact air quality measure, following a switch to non-attainment status. Pro-environment states, which ceteris paribus, spend relatively more on pollution abatement also have cleaner air. A 1% increase in typical annual state pollution abatement expenditures leads to about a .04% improvement in local ozone readings. Heavily polluting industries show a tendency to move to counties with a record of clean air, where they are less likely to be hassled. A county switching to having a three-year record of attainment experiences a 7-9% growth in the number of heavily polluting establishments. This implies polluting industries are spreading out geographically moving from non- attainment (polluted) areas to attainment (initially less polluted) areas. Finally, for ozone, localities may improve the annual hourly extreme value reading used to measure officially local air quality, without improving measures (mean, medians, medians of daily maximum) of more typical ozone conditions. This occurs by spreading out economic activity over the day to dampen peaks of ozone inducing activity and subsequent daily ozone peaks.

This paper analyses second-best optimal environmental policies in the presence of a double dividend. Using a partial equilibrium model, the paper first reconfirms the well-known result that the existence of a double dividend (in its weak form) favours environmental policy instruments which - yielding the same improvement in environmental quality - maximise its tax revenues. Additional revenues can be used to reduce the distortion of the rest of the tax system. Without uncertainty, environmental taxes and auctioned permit schemes are equally appropriate. In the presence of uncertainty, however, the efficient choice of taxes or permits depends on the relative magnitudes of the marginal environmental damages and the marginal benefits from consuming a polluting good. In the second part, the paper, therefore, analyses the effect of a double dividend on the optimal choice of instruments in the presence of uncertainty. It shows that, although the revenue capacity effect generates additional welfare effects, the first-best choice rule between price and quantity regulation (Weitzman 1974) remains valid in a world with distortionary taxation.

Via een materiaal-produkt keten benadering worden interacties tussen materialen- en produktstromen voor een bepaalde dienst of service bekeken met als doel het verminderen van milieudruk door het inzetten van (economische) instrumenten. Deze benadering bekijkt de stromen economisch, fysiek en milieukundig waarbij rekening gehouden wordt met verschil­lende typen van substitutie en hergebruik. Er wordt een overzicht gegeven van verschillende manieren waarop materiaal- en produktstromen gemodelleerd kunnen worden, en twee toegepaste modellen worden besproken voor de materiaal-produkt keten van dakgoten.

This note responds to Deirdre McCloskey's 2002 critique of the Earth Charter by arguing that the concepts of sustainability, intergenerational equity and political democracy are essential to an understanding of that international manifesto.

In a semi-arid water scarce country like South Africa, the efficient use of limited water resources and measures to extend the service value of these resources is a prerequisite for achieving sustainable development. The conventional supply-sided management approach to water supply causes increased wastewater generation with accompanied increased pollution loads requiring higher levels of mitigation environmental pollution. Where disposal of wastewater treatment effluent takes place in rivers and natural water bodies, the lack of adequate natural compensating capacity of such water bodies typically result in severe ecological damage of the aquatic environment. With a shift of emphasis to a sustainable demand side management approach (as opposed to a supply side one), the avoidance of water wastage and high wastewater generation represents both resource conservation and environmental protection friendly approaches and contribute to overall sustainability. The integrated nature of water supply and wastewater management systems require an approach that considers these systems holistically. A new paradigm for water management is therefore needed to ensure that the issues of waste disposal and pollution are dealt with in a sustainable manner taking into account the emerging objectives of modern society for resource conservation and environmental protection.A balance therefore has to be found between the uses of additional fresh water resources as a means of satisfying en ever increasing water demand on the one hand and alternative unconventional resource exploration and employment, without the risk of depletion of natural available fresh water resource flow, irreversible harm to the environment and social and economic constraints.This paper explores wastewater and grey water reuse as unconventional resources in a qualitative manner within this balancing equation. It further proposes a methodology for deriving monetary indicator values for wastewater reuse by internalising negative environmental impacts. This is achieved through application of Lagrangian optimisation of the treatment plant production function (output distance function) for deriving marginal prices of contaminant removal and resulting avoided pollution.

Wastewater management has been seen primarily as a technical and economic issue but it is now recognised that these are some of the elements in an array of other factors that affect sustainability of wastewater systems. Literature studies point out that municipal authorities have a general and long-standing tradition of using indicators in monitoring performance, reviewing progress and reporting the state of the environment as part of the regulatory enacted compliance. However, they have neglected other critical aspects of use of these indicators such as their input into the planning and decision making process. This research advocates for the use of sustainable indicators in a context based planning approach and the utilisation of Multi Criteria Decision Aid (MCDA) in a two step approach for comparative analysis and assessment of the sustainability of wastewater systems. The overall objective was to develop a methodology for wastewater systems selection and to produce a practical planning tool to aid in decision making for municipalities. Another objective was to provide recommendations for wastewater and sanitation management improvement in the case study area. The methodology consisted of comprehensive literature review, case study analysis, a review of the Decision Support Systems (DSS) in use and the development of the DSS for Gauteng Province. The full spectrum of viable wastewater or sanitation options was incorporated into the DSS. From the sustainability assessments carried out using Multi criteria decision analysis, one result showed that varying degrees of sustainability are obtainable with each treatment technology involved and decentralised technologies appear more sustainable. Based on the local context and indicators used in this research, the DSS results suggest that land treatment systems, stabilisation ponds and ecological treatment methods are more sustainable. One major finding from literature is that no technology is inherently sustainable on its own but is a function of the local context specifics. Since there is so much variation in social and economic needs within the areas; the overall results imply that a differential wastewater management approach should be employed with tailor made solutions resulting for each municipality or certain areas within a municipality.