Knut H. Alfsen

The cost of soil erosion in Nicaragua

The cost of soil erosion is not so much dependent on the physical amount of soil lost as determined by the economic effects of these losses. Soil erosion has both onsite and offsite effects. Loss of soil productivity is the main onsite effect, while enhanced productivity of downstream land, sedimentation and eutrophication of waterways and reservoirs are common offsite effects. In this paper we consider only the onsite effects of erosion. The loss of agricultural productivity is, however, studied within a broader economic framework than usual. By incorporating the direct economic effects of soil loss into a general equilibrium model, it is possible to shed light on some of the many interlinkages between agricultural activity and other parts of the economy which are important for determining the social cost of soil erosion. Based on model simulations, we find that soil erosion represents a considerable drag on the Nicaraguan economy, but that the burden of soil erosion depends on conditions and policies in non-agricultural markets such as the labour market. Furthermore, the sharing of the burden is not always to the disadvantage of the peasants. While uncertainties in data and modelling prevent us from drawing strong conclusions, the present study underlines the importance of considering the overall economic environment when policy proposals for mitigating excessive soil erosion is formulated.

Soil degradation and economic development in Ghana

Soil erosion and soil mining are important environmental problems in many developing countries and may represent a considerable drag on economic development. The cost of soil degradation depends, however, not only on the productivity effects it has on agricultural growth, but also on how the agricultural sectors are linked to the rest of the economy. This article describes an integrated economy–soil-productivity model for Ghana, and through several simulated scenarios we calculate the drag on the Ghanaian economy of soil mining and erosion, and illustrate the effects of different policies aiming at a reduction in these environmental problems.

Impacts of an EC carbon/energy tax and deregulating thermal power supply on CO2, SO2 and NOx emissions

Emission of CO2, SO2 and NOx are all closely linked to the burning of fossil fuels. Here we report on simulations done by linking a Sectoral European Energy Model (SEEM), covering energy demand in nine Western European countries, with the emission-transport-deposition model RAINS developed by IIASA. The study analyses emissions of CO2, SO2 and NOx, deposition of sulphur and nitrogen and the extent of areas where the critical load for sulphur is exceeded in year 2000 under four different energy scenarios. Two different sets of future behavioural patterns for the thermal electric power production sector are considered. In one regime, called the plan-efficient regime, the sector is assumed to follow official plans with regard to investment in new capacity. In the other regime, called the cost-efficient regime, the thermal power sector is assumed to behave in a cost minimizing manner. The effects of the proposed EC carbon/energy tax are studied under both regimes, giving rise to altogether four scenarios.In both regimes the effect of the EC tax is to reduce emissions by between 6 and 10 per cent in year 2000 relative to the scenarios without the tax. A change of regime, from the regulated, plan-efficient regime to the market-based, cost-efficient regime, will, by itself, reduce emissions of CO2 and NOx by approximately 3 per cent, while SO2 emissions are reduced by 13 per cent. The EC tax will reduce sulphur deposition by more than 5 per cent in the nine model countries under the plan-efficient regime. A change of regime further reduces the total deposition by 9 per cent. The area where depositions exceed the critical load is reduced by approximately 6 per cent in year 2000 by the tax in both regimes. Changing from the plan-efficient to the cost-efficient regime has a similar impact.Although the emission reductions due to the EC tax may seem modest, they are shown to have a sizeable effect on the technological abatement costs of reaching targets like those prescribed in the Sofia protocol on the stabilisation of NOx emissions, and the Helsinki protocol on SO2 emission reductions. This is part of what can be considered to be secondary benefits of the EC carbon/energy tax.

The use of PPP or MER in the construction of emission scenarios is more than a question of "metrics"

Abstract The Intergovernmental Panel on Climate Change (IPCC)s Special Report on Emissions Scenarios (SRES, IPCC, 2000) has been a matter of debate since Ian Castles and David Henderson claimed that the scenarios were based on unsound economics, giving rise to improbably high emission growth. A main point in their critique was that the scenario-makers converted national gross domestic product (GDP) data to a common measure using market exchange rates (MER) rather than purchasing power parity (PPP) rates. The IPCC responded to the critique by claiming that the use of PPP- or MER-based measures is just a question of ‘metrics’, as important as the ‘switch from degrees Celsius to Fahrenheit’. This paper addresses both the critique from Castles and Henderson and the response from the IPCC. It builds on our earlier argument that the use of MER-based measures, although misleading in some respects, probably has not given rise to seriously exaggerated emission forecasts because comparing regional income levels by the use of MER has two types of implications that draw in different directions and effectively neutralize one another. Nevertheless, we argue that the choice between MER and PPP in the construction of emission scenarios is far more than just a question of metrics. Finally, we discuss whether the SRES scenario with the lowest cumulative emissions is a reasonable lower limit with respect to global emission growth.

Future emissions to air in Norway: Forecasts based on the macroeconomic Model MSG-4E

219 Environmental problems, and in particular air pollution, are linked to economic activities. General economic equilibrium models are therefore adequate tools in forecasting future emissions to air, and in analysing effects and costs associated with control measures. Due to uncertain forecasts, care must be taken in interpreting the results. Rather than giving the exact number of tons emitted in a future year, the forecasts serve as indicators on whether or not expected economic development is likely to produce unacceptably high stresses on the environment. If regulatory measures are introduced as a consequence of such signals, the forecasts, hopefully, tum out to be wrong. Thus, it is important that emission forecasts are updated as an integral part of the general planning process.