Duane Chapman

Economic growth, trade and energy: implications for the environmental Kuznets curve

Abstract The environmental Kuznets curve (EKC) hypothesis asserts that pollution follows an inverted-U path with respect to economic growth. The EKC has been explained in terms of structural changes in the composition of economic output and increased environmental regulation at higher income levels. While some authors have incorporated the impact of trade policy orientation on the EKC, the impact of the actual movement between countries of goods that embody pollution has not been considered. This paper attempts to econometrically quantify the effect using pooled cross-country and time-series data. The EKC hypothesis is examined with respect to commercial energy consumption, the source of many serious environmental problems. It was found that while both industrializing and industrialized countries have added to their energy requirements by exporting manufactured goods, the growth has been substantially higher in the former. At the same time, industrialized countries have been able to reduce their energy requirements by importing manufactured goods. Exports of manufactured goods by industrialized countries has thus been an important factor in generating the upward sloping portion of the EKC and imports by industrialized countries have contributed to the downward slope.

A dynamic approach to the Environmental Kuznets Curve hypothesis

Abstract The Environmental Kuznets Curve (EKC) hypothesis states that pollution levels increase as a country develops, but begin to decrease as rising incomes pass beyond a turning point. In EKC analyses, the relationship between environmental degradation and income is usually expressed as a quadratic function with the turning point occurring at a maximum pollution level. Other explanatory variables have been included in these models, but income regularly has had the most significant effect on indicators of environmental quality. One variable consistently omitted in these relationships is the price of energy. This paper analyzes previous models to illustrate the importance of prices in these models and then includes prices in an econometric EKC framework testing energy/income and CO2/income relationships. These long-run price/income models find that income is no longer the most relevant indicator of environmental quality or energy demand. Indeed, we find no significant evidence for the existence of an EKC within the range of current incomes for energy in the presence of price and trade variables.

Solar power and climate change policy in developing countries

Solar energy is one option for reducing future greenhouse gas emissions. Offsetting 50% of all future growth in thermal electricity generation by photovoltaics (PVs) would reduce annual global carbon dioxide emission from projected increased levels by 10% in 20 years and 32% in 50 years. Several projects are under way worldwide to demonstrate the feasibility of PV systems. This paper examines the economic competitiveness of PV systems and concludes that even after including externality costs, without significant technological breakthroughs, the economics of PV applications are unlikely to allow for an unsubsidized, widespread adoption of this technology in the near future. Further, if the goal of PV transfer programmes is to limit future greenhouse gas emissions, there are larger and cheaper opportunities available in industrialized countries to achieve reductions. Alternative measures for ensuring a market for photovoltaics, hence providing manufacturers with opportunities to improve the current technology, include mandating that utilities install a certain quantity of solar technologies by a certain date. Finally, moving towards a renewable energy future that includes PV systems requires a sustained R&D programme that will lead to improvements in panel and other system efficiencies.

Economic considerations of privately owned parks

Abstract Privately owned parks continue to proliferate worldwide. Their rapid expansion represents an important yet little understood private sector incursion into an activity long dominated by governments. This paper examines economic issues surrounding establishment and operation of privately owned natural areas. We interviewed owners of 68 private parks in Costa Rica to learn more about reserves’ underlying economics. Key findings include: (1) private parks require an expanded definition of optimal reserve size — one in which quality of protection takes precedence over quantity of land protected; (2) profit was a powerful motivator behind private reserve operation, even though many owners did not rely on their reserves for revenue generation; and (3) an important non-market value of private parks was the high bequest value owners placed on them. Last, we identify key information gaps that resource economists can help fill regarding this increasingly popular conservation tool. The analysis contributes to our understanding of private reserves on both theoretical and empirical levels. It should be of interest wherever biodiversity remains threatened, wherever new conservation partners are being sought, and wherever private reserves are being established, which includes most of the industrialized and developing world.

Timber harvest adjacency economies, hunting, species protection, and old growth value: seeking the dynamic optimum

Spatial forest management models recognize that nontimber benefits cat1 be influenced by the status of adjacent land. For instance, contiguous old growth provides habitat, aesthetic value, and environmental services. Conversely, edge areas provide forage and cover habitat for game and non-game wildlife. However, adjacency externalities are not limited to nontimber concerns. Larger harvest areas generate average cost savings as fixed harvesting costs are spread across greater acreage, a problem excluded from most literature on optimal harvesting. Hence, it is typical that economies and diseconomies of adjacency in harvesting occur simultaneously. This complicates the determination of optimal ecosystem management behavior, which recognizes timber, aesthetic, wildlife protection, and hunting values. This paper conceptually portrays economies of adjacency in competing objectives using multiple management strategies.

Electricity demand growth and the energy crisis

The research reported by D. Chapman, T. Tyrrell, and T. Mount [Science 178, 703 (1972)] was sponsored by the National Science Foundation Program of Research Applied to National Needs.

Photovoltaic technology: Markets, economics, and rural development

Abstract Photovoltaic (PV) electricity has been widely supported as a remote energy source for developing countries. In response, the production and shipment of PV modules in developed nations has steadily increased through the past decade, often marketed through the auspices of technology transfer and financed by international development aid. This paper investigates the motives, economics, and development implications of PVs in rural electrification, drawing on field research in the Dominican Republic. The implications of subsidizing a PV market rather than investing in further PV research and development are explored.

Management of National Parks in Developing Countries: A Proposal for an International Park Service

Acknowledgement to colleagues: a senior wilderness guide in a major African park; Will Reidhead, World Wide Fund for Nature; and Christopher Barrett at Cornell University, for their thoughtful comments, suggestions, and criticisms. Presented at the Seattle meeting of the Western Economics Association International, June 29-July 3, 2002. Opinions and any possible errors of fact are the sole responsibility of the author.

World oil: Hotelling depletion or accelerating use?

In theoretical Hotelling-type models of resource depletion, oil use declines monotonically over time to depletion. However, world oil use has been increasing for several years. Can theory and reality be reconciled? The answer is affirmative, if theory is modified to accommodate outward-shifting demand functions that are rising in response to growth in world population and income. Under this assumption, a Hotelling depletion model projects a 50-year period of increasing world oil use before the decline to exhaustion. This holds for both competitive and monopolistic regimes.Hotelling theory has been criticized by Adelman and others, in part because of the unreality of the theoretical projections. By combining the modified Hotelling theory with U.S. Geological Survey resource estimates, the numerical projections seem congruent with Adelmans near-term expectations.Finally, a backstop technology, such as renewable biomass ethanol, introduces a new dimension. Assuming a

Crying No Wolf: Why Economists Don't Worry about Climate Change, andShould

2-per-gallon cost for the ethanol, the modified Hotelling theory projects accelerating use of conventional oil until depletion or substitution.Consequently, it does not seem unreasonable to believe that a finite, limited resource of conventional oil is consistent with growing use for several decades. A projected exhaustion in 100 years is consisten with increasing use for 50 years.