Michael Getzner

Determinants of CO2 emissions in a small open economy

Abstract The aim of the paper is to explore the relationship between economic development and carbon dioxide (CO2) emissions for a small open and industrialized country, Austria. We test whether an Environmental Kuznets Curve relationship also holds for a single country rather than concentrating on panel or cross-section data for a set of countries. A cubic (i.e. N-shaped) relationship between GDP and CO2 emissions is found to fit the data most appropriately for the period 1960–1999, and a structural break is identified in the mid-seventies due to the oil price shock. Furthermore, two variables are additionally significant: import shares reflecting the well-known pollution haven hypothesis, and the share of the tertiary (service) sector of total production (GDP) accounting for structural changes in the economy. Emission projections derived from this single country specification support the widely held opinion that significant policy changes are asked for when implementing the Kyoto Protocol in order to bring about a downturn in future carbon emissions.

Development and Dematerialization: An International Study

Economic development and growth depend on growing levels of resource use, and result in environmental impacts from large scale resource extraction and emissions of waste. In this study, we examine the resource dependency of economic activities over the past several decades for a set of countries comprising developing, emerging and mature industrialized economies. Rather than a single universal industrial development pathway, we find a diversity of economic dependencies on material use, made evident through cluster analysis. We conduct tests for relative and absolute decoupling of the economy from material use, and compare these with similar tests for decoupling from carbon emissions, both for single countries and country groupings using panel analysis. We show that, over the longer term, emerging and developing countries tend to have significantly larger material-economic coupling than mature industrialized economies (although this effect may be enhanced by trade patterns), but that the contrary is true for short-term coupling. Moreover, we demonstrate that absolute dematerialization limits economic growth rates, while the successful industrialization of developing countries inevitably requires a strong material component. Alternative development priorities are thus urgently needed both for mature and emerging economies: reducing absolute consumption levels for the former, and avoiding the trap of resource-intensive economic and human development for the latter.

Politico-Economic Determinants of Public Debt Growth: A Case Study for Austria

Based on a number of economic andparticularly politico-economic arguments,we examine the reasons for the growth ofthe central governments debt in Austriausing time series data for the period 1960 to 1999. Starting with an empiricaltest of Bohns theory of sustainability offiscal policy, which is based on Barrostax-smoothing model, we extend the model toaccount for several politico-economicvariables suggested by public choicetheories. Keynesian stabilization policyobjectives, influences of ideology andpolitical parties, the form of governmentand the political business cycle are testedregarding their ability to explain thegrowth of public debt in Austria. There issome empirical evidence for systematicinfluence of government behavior inaccordance with recent public choicetheories. However, it seems that the mostimportant influence on Austrian fiscalpolicy is the unemployment rate, which has asignificant influence on the decisions madeby policy-makers. Concluding, we brieflydiscuss the implications of these resultsfor the prospects of reducing public debtin Austria in the near future.

Conservation policy and the regional economy: the regional economic impact of Natura 2000 conservation sites in Austria.

Summary The European Union programme Natura 2000 aims at the creation of a network of Natura 2000 conservation areas in all EU member countries. Conservation areas are chosen on scientific evidence. Public expenditure for the realisation of the European initiative Natura 2000, in Austria, can broadly be estimated to amount to 75 million Euro (range 30 million Euro to 115 million Euro) for their establishment as one-off expenditure, while annual expenditure might amount to 10 million Euro (range 8 million Euro to 13 million Euro) for the conservation and maintenance of around 160 conservation areas. Significant positive regional economic effects such as value added and employment can be connected to such public expenditure. By the example of four selected model regions in Austria (Waldviertel, Steinfeld, Verwall, Karwendel), it can be demonstrated that the establishment of Natura 2000 conservation areas leads to at least small positive economic implications (local and regional value added, increased employment) which means that regions can benefit from the establishment of a Natura 2000 protection area. However, in single cases of land use conflicts, there might also be negative economic effects. The main regional development opportunities are in the fields of tourism as well as (to a smaller extent) in agriculture, forestry, hunting and fisheries. Such opportunities do not only depend solely on the establishment of a protected area, the realisation of a Natura 2000 site can initialize and support the regional economic development. The most essential recommendation for conservation policy is that instruments for information, compensation and financial support have to be expanded and adapted to the great importance of the Natura 2000 program and its agenda.

On the Sustainability of Austrian Budgetary Policies

The question whether fiscal policies are sustainable in the long run has received much attention in the international political agenda. In this paper, we investigate whether Austrian fiscal policy has been sustainable during the last four decades. We apply several econometric approaches to test for the sustainability of fiscal policies. The results are ambiguous. For the period of 1960–1974, we find evidence for sustainable fiscal policies. For the period 1975–1999, the results indicate that Austrian fiscal policy was not sustainable in the long run. If Austrian policy-makers do not change their budgetary policy in the future, the long-term budget constraint of the state will be violated.

Governance and management strategies in national parks: implications for sustainable regional development

This paper examines two European national parks (Jostedalsbreen, Norway; Hohe Tauern, Austria) and explores the connection between management strategies and regional sustainable development. The paper shows that contextual factors play an important role in the designing management organisation. Park management is adapted to specific conservation policies: the Austrian management is suited to “high use pressure – full range” areas, while the Norwegian model fits the lower pressure and high mountain conservation approach with very limited use demands. The complex management structure in Austria is a result of national and regional structures; the Norwegian model comes from national sector policy approaches.

Weak and strong sustainability indicators and regional environmental resources

Weak sustainability indicators often suffer from their unrealistic and inadequate assumption of substitutability between natural capital and man‐made capital. Defining sustainable development in these terms is almost trivial; measurement problems as well as methodological and sociological issues may be considered as major flaws of operationalizing weak sustainability indicators. On the other hand, strong sustainability indicators rely on physical measures. This ecological economics approach concedes that the economy is embedded in matter and energy flows ultimately limited by solar energy input and the Earth’s capability to produce renewable resources and to cope with emissions of all kinds. Drawing on the example of regional environmental resources, ground‐water in Austria, some thoughts on strong regional sustainability indicators are presented.

Cleaner production, employment effects and socio-economic development

Employment effects of clean technologies - i.e. integrated environmental technologies as probably one of the core contributions of firms to an environmentally sound development - have not yet been extensively explored. Production theory leads to the conclusion that the technological relationships between the firms inputs are of crucial importance. On the one hand, the demand for labour may be tightly bound to the use of natural resources (complementary relation). On the other hand, it can be shown that clean technologies can reduce the number of jobs in a firm even if the amount of resources used in the production process and the number of jobs are not bound together. As clean technologies often lead to a more rationalised production process, these technologies reduce the demand for labour, too. Empirical findings of a survey involving 41 Austrian firms that implemented clean technologies indicate that firms neither reduce nor expand the number of jobs significantly. In many cases, rationalisation takes place, but they are used to extend the firms market share and secure their economic position. The main qualitative employment effects are improved health and security, increased qualification and motivation of workers.

NATURAL RESOURCES, LIVELIHOODS, AND RESERVE MANAGEMENT: A CASE STUDY FROM SUNDARBANS MANGROVE FORESTS, BANGLADESH

The Sundarbans Reserved Forest, and its surrounding buffer zone, is one of the most diverse and richest areas of natural resource in Bangladesh. It is a part of the largest mangrove forest in the world, with an area of about 10,000 km², of which 6,000 km² are in Bangladesh and about 4,000 km² are part of India: it has been recognized as an internationally important World Heritage and Ramsar site. The mangroves provide substantial ecosystem services supporting the livelihood of local communities. This paper describes the diverse uses of these natural resources and aims to evaluate the contribution of ecosystem services to the livelihood of residents. The results indicate that residents depend on ecosystem services in two ways. First, local households earn cash income by selling ecosystem products, such as fihoney, and nipa palm, at local markets. Second, the use of natural resources provides substantial subsistence such as food, fresh water, and timber. However, residents’ income may be signifi cantly increased by improved resource management, including reducing local authority corruption and improvements in law enforcement. Our paper concludes with a range of recommendations for enhancing residents’ standard of living while conserving natural resources.

Quantitative and qualitative employment impacts of environmental innovations

The paper deals with the impact on the quantity and quality of work in companies that adopted clean technologies and environmental innovations (direct effects). Furthermore, indirect effects in companies supplying waste management services and resources are considered as well, in total indicating the potential employment impacts of a more sustainable production system. From the analyses carried out, some general conclusions suggesting a shift towards more sustainable production and environmental innovations can be drawn. Neutral or slightly positive quantitative effects on employment are to be expected, while, at the same time, significant environmental improvements can be achieved by means of environmental protection measures. A noticeable improvement in job quality, desirable from the point of view of social sustainability, is one of the major advantages of clean technologies. Discussing policy issues, the paper concludes that the integration of environmental and social issues into other policy fields, as a major commitment of the European Union economic policy, is far from being substantially provided for.