Gunnar S. Eskeland

Determinants of Diarrheal Disease in Jakarta

In this report, the authors develop and estimate a model of household defensive behavior and illness. Using cross-section data from a household survey in Jakarta, they observe defensive behavior (washing hands after using the toilet) consistent with expectations: defensive effort intensifies with exposure to contamination, and with income and education. Variables associated with the cost of defensive behavior - such as interruptions in the water supply - reduce defensive behavior. The data suggest that wealthier households are no less vulnerable to illness. The water sources that supply the wealthy (the water company and private wells) are disrupted more often, interfering with their defensive behavior. There is also evidence, although weak, to support findings by van der Slice and Briscoe (1993): that pathogens within a household are less harmful to household members than are pathogens originating from other households. Given the opportunity and knowledge, individuals try to modify the effect of contamination on the incidence of diarrhea. But diarrheas inccidence is also affected by decisions and problems outside the realm of the household, including the performance of the water company.

Climate Change and Residential Electricity Demand in Europe

Temperature influences our notion of comfort and thus the ways we equip, heat, and cool our homes in part reflect this. This paper views electricity use in part as a phenomenon of adaptation to changes in weather and provides estimates of climate change impacts on electricity consumption in Europe. Constructing a data set on weather across a panel of European countries, we employ a concept of comfort which relates electricity consumption to outdoor temperatures, to estimate the parameters of electricity demand. The results suggest that random weather variations have a statistically significant impact on residential electricity demand. With climatic changes, Northern Europeans will reduce their heating demand and Southern Europeans will increase their cooling demand. On average, the results suggest that climate change will reduce European energy demand. But the magnitude of this net benefit is small, and likely less important than other changes such as income.

Adaptation decision-making in the Nordic countries : assessing the potential for joint action

Abstract In a global context, the outlook for the Nordic region is relatively favourable, given its relatively stronger resiliency to climate change impacts in comparison to many other geo-political regions of the world. Overall, the projected climatic changes include increases in mean temperatures and in precipitation, although regional variations can be significant. The countries’ robust institutions and economies give them a strong capacity to adapt to these changes. Still, the need for adaptation to the changing climate has been and still is substantial, and in most of the region, there has been progress on the issue. This paper explores the potential for Nordic cooperation on adaptation; specifically, for the development of a regional adaptation strategy. In particular, it addresses two questions (1) What is the current state of adaptation in the Nordic countries? and (2) What are the potential benefits and weaknesses of a Nordic strategy for adaptation? In order to answer these two questions, this paper examines reviews the current national adaptation policies of each Nordic country and discusses the challenges facing a Nordic strategy and finally assesses the potential for common Nordic adaptation policy and further cooperation.

Externalities and Production Efficiency

The author brings together two of governments primary challenges: environmental protection, and taxation to generate revenues. If negative externalities can be reduced not only by changes in consumption patterns, but also by making each activity cleaner (abatement efforts), how shall inducements to various approaches be combined? If negative externalities are caused by agents as different as consumers, producers, and government, how does optimal policy combine inducements to reduce pollution? Intuitively it seems right to tax emissions neutrally, based on marginal damages - no matter which activity pollutes, or whether the polluter is rich or poor, consumer or producer, private or public. The author provides a theoretical basis for such simplicity. Three assumptions are critical to his analysis: 1) Returns to scale do not influence the traditional problem of revenue generation. 2) consumers have equal access to pollution abatement opportunities (but he also relaxes this assumption). 3) Planners can differentiate policy instruments (emission taxes or abatement standards) by polluting good, and by whether the polluter is a consumer, producer, or government, but they cannot differentiate such instruments (or commodity taxes) by personal characteristics, or make them non-linear in individual emissions. Among the authors findings and conclusions: Abatement efforts and consumption adjustments at all stages are optimally stimulated by a uniform emission tax, levied simply where emissions occur. It simplifies things that the optimal abatement is independent of whether the car is used by government, firms, or households - for weddings, or for work. It also simplifies implementation, that the stimulus to abatement at one stage (say, the factory) is independent of whether it yields emission reductions from the factory, or form others (say, from car owners who by the factorys products). Finally, ministers of finance and of the environment should coordinate efforts, but they need not engage in each others business. The minister of environment need not know which commodities are elastic in demand, and thus would bear a low commodity tax. The finance minister need not know which commodities or agents pollute or who pays emissions taxes.

Missing in Action? Speed Optimization and Slow Steaming in Maritime Shipping

This paper analyzes the claim, made by both academics and by industry insiders, that vessels speed up under conditions of high freight rates and low bunker prices. The rationale for the claim is that a ship should move slowly when high bunker prices make energy cost savings great and when the low reight rates give little temptation to rush for the next transport job. The analysis is based on the theoretical model for speed optimization by Ronen (1982) applied to AIS1 data on actual speeds of all VLCCs2 leaving from the Persian Gulf to main destinations in Japan, South Korea, China from 2006 to 2012. We find some support for the theory, however with elasticities, both for freight rates and bunker prices, of smaller magnitude than expected. We also find that speed optimizing behaviour is much more pronounced on backhaul trips than on laden trips and that the speed on trips to Japan is almost completely insensitive to changes in freight rates and bunker prices. Our conclusion is that there is a potential for gains from more adoption of slow steaming.

Leadership in Climate Policy: Is There a Case for Early Unilateral Unconditional Emission Reductions?

One may misread economic theory on climate policy to provide a warning against unilateral mitigation. While important lessons are drawn from ‘global problems require global solutions’, these say little about what to do in a phase before or without a global agreement - or with weak ones. In the literature on cooperation and leadership in provision of public goods, early provision may stimulate provision from others. A key to leadership is signaling; an early mover has private information and is motivated in part by knowing that others will follow. Others will follow if they understand that the early mover demonstrates that emission reductions are feasible and adoptable. Our analysis finds that early movers will be cognizant of what they need to demonstrate, and they will be concerned about and act on carbon leakage. Leadership can be deterred by concerns for free riding, but this is more likely for a country or coalition that is large in terms of emissions and face others who are both large and vulnerable to climate change. We suggest leadership is possible early in this century: numbers indicate that few – if any - need find themselves deterred from early action of some sort.

Greening the Vehicle Fleet: Evidence from Norway’s CO2 Differentiated Registration Tax

Fiscal policies are used to improve vehicle fuel efficiency and reduce CO2 emissions in the transport sector. Years of forceful reform in Norway may be seen as informative. From 2007, Norway has linked its new vehicle registration tax to CO2 intensities, later adapting it into a feebate form. We exploit a detailed dataset of new vehicle registrations, using fixed effects and instrumental variables in our econometric analysis. We find that the CO2 differentiated registration tax contributes significantly to shifting purchases towards low-emitting cars. A 1000NOK tax increase (about 120USD) is associated with a reduction of 1.13% - 1.58% in vehicle registrations, and the responsiveness in car choice to fuel costs is of the same magnitude. The estimated effect of the tax explains the majority (79%) of the reduction in average CO2 intensity in the new car fleet 2006 through 2011. A point estimate of the elasticity of the CO2 intensity with respect to the CO2 price is minus 0.06, whereas the elasticity with respect to (resulting) car prices is about minus 0.5. An intuitive model with ‘all’ car types losing demand to low-emitting types applies fairly well: low-emitting segments gain in share and do not get CO2 leaner, while high-emitting segments lose in share and become CO2 leaner. Moves between nine segments and within those segments are equally important.

Air Pollution and Congestion in Bangkok: Developing Analytical Tools, and Implications

In a congested city with air pollution like Bangkok, there are gains to analyzing and addressing them in coordination. Higher speed, tremendously valuable in itself for firms and households, also reduce the costs of air quality improvements.