Onno Kuik

In search of indicators of sustainable development

1. Indicators of sustainable development: an overview.- 2. Towards sustainable development indicators.- 3. Note on the correction of national income for environmental losses.- 4. GNP and sustainable income measures: some problems and a way out.- 5. Natural Resource Accounting: State of the art and perspectives for the assessment of trends in sustainable development.- 6. The predictive meaning of sustainability indicators.- 7. The AMOEBA approach as a useful tool for establishing sustainable development?.- 8. Towards sustainability: indicators of environmental quality.- 9. Contours of an integrated environmental index for application in land-use zoning.- Notes on the contributors.- List of workshop participants.

Carbon Leakage With International Technology Spillovers

In this paper we study the effect of international technology spillovers on carbon leakage. We first develop and analyse two simple competing models for carbon leakage. The first model represents the pollution haven hypothesis. It focuses on the international competition between firms that produce energy-intensive goods. The second model highlights the role of a globally integrated carbon-energy market. We calculate formulas for the leakage rates in both models and, through meta-analysis, show that the second model captures best the major mechanisms reported in the CGE literature on carbon leakage. We extend this model with endogenous energy-saving technology and international technology spillovers. This feature is shown to decrease carbon leakage. We build-in the endogenous energy-saving technology in a large CGE model and verify that the results from the formal model carry over. Carbon leakage becomes negative for moderate levels of international technology spillover.

Emissions trading and competitiveness: pros and cons of relative and absolute schemes

Emissions trading is a hot issue. At national as well as supranational levels, proposals for introduction of emissions trading schemes have been made. This paper assesses alternative emissions trading schemes at domestic level: (1) schemes where the total level of emissions is fixed (absolute cap-and-trade), (2) schemes where the allowable level of emissions per firm is related to some firm-specific indicator (relative cap-and-trade), and (3) mixed schemes which combine elements of the above alternatives. We present a quantitative assessment of these alternatives for climate change policy in the Netherlands. It is concluded that while relative cap-and-trade would avoid negative effects on competitiveness, it would not reduce emissions at the lowest costs. Besides, the addition of a trade system to existing relative standards does not result in additional emission reduction; it should be combined with other policy measures, such as energy taxes, in order to realise further reduction. Absolute cap-and-trade leads to efficient emissions reduction, but, implemented at the national level, its overall macroeconomic costs may be significant. The mixed scheme has as drawback that it treats firms unequal, which leads to high administrative costs. We conclude that none of the trading schemes is an advisable instrument for domestic climate policy.

Indicators of sustainable development: an overview

“Is this country’s or that region’s economic performance more sustainable in 1991 than it was in 1981?”. Finding measuring rods to answer questions like this one, was, according to Opschoor and Reijnders (Chapter 2), the loosely formulated objective of the workshops that were organized in the fall of 1989 and early 1990 by the Institute for Environmental Studies of the Free University of Amsterdam at the request of the Netherlands’ National Institute of Public Health and Environmental Protection (RIVM). The papers presented at these workshops, which were attended by both scientists and policy-makers, form the core of this publication. In this introductory chapter we try to put the different contributions into perspective and highlight some of the topics that were discussed at the workshops.

Post-2012 climate policy dilemmas: a review of proposals

This article assesses a wide range of alternative proposals for post-2012 international climate policy regimes. We believe that these proposals will serve as a basis for debates about how to configure post-2012 climate policy. The article characterizes and assesses the policy proposals along the lines of five key policy dilemmas. We argue that (1) many proposals have ideas on how to reduce emissions, but fewer have a solution on how to stimulate technical innovation; (2) many proposals formulate climate policy in isolation, while there are fewer proposals that try to mainstream climate policies in other policy areas; (3) many proposals advocate market-based solutions, while fewer realize that there are certain drawbacks to this solution especially at the international level; (4) most proposals have a preference for a UN-based regime, while a more fragmented regime, based on regional and sectoral arrangements may be emerging; and (5) most proposals have ideas about mitigation, but not many have creative ideas on how to integrate mitigation with adaptation.

Climate Change Policies, Energy Security and Carbon Dependency Trade-offs for the European Union in the Longer Term

Energy policy in the European Union (EU) faces two major challenges. The first challenge is posed by EUs commitment to reduce greenhouse gas emissions to the atmosphere in the context of the international agreement on climate change. The second challenge is to keep ensuring European security of energy supply, while its dependency on external sources of energy is projected to increase. In this paper, two long-term alternative climate change policy scenarios for Europe are examined. In the first scenario, EU reduces carbon dioxide emissions by domestic measures; in the second scenario EU maximizes cooperation with the countries of the former Soviet Union (FSU). Impacts on carbon flows between the EU and FSU and on the external energy dependency of the EU are assessed with an applied general equilibrium model, GTAP-E, whose set of energy commodities is expanded with combustible biomass as a renewable and carbon-neutral energy commodity. The results show that there is a trade-off between economic efficiency, energy security and carbon dependency for the EU. The FSU would unambiguously prefer cooperation.

The Kyoto Regime, Changing Patterns of International Trade and Carbon Leakage

A group of industrialized countries and countries with economies in transition have agreed to reduce their emissions of greenhouse gases under the Kyoto Protocol. Energy- en carbon-intensive industries in these countries fear that policies to implements these reduction targets will harm their competitiveness, endanger employment and will not improve the global environment, because of carbon leakage. Various studies have analyzed competitiveness and carbon leakage. Of the many factors that potentially affect competitiveness and carbon leakage, changes in import tariffs have received little attention in the literature. Yet we know that, at least until 2005, tariffs and other trade barriers will be subject to the gradual implementation of the Uruguay Round agreements on trade liberalization. This paper presents quantitative estimates of the impacts of the implementation of the Kyoto agreements on carbon leakage with and without the full implementation of the Uruguay Round import tariff reductions. We find that the implementation of the Uruguay Round increases the rate of carbon leakage. This is caused by impacts on the world energy markets, reducing the price of energy commodities for developing countries. There is no evidence, however, that the tariff reductions increase industrial relocation. To the contrary, the Uruguay Round tariff reductions strengthen the competitive advantage of Northern CO2-intensive industries in comparison to a CO2 reduction scenario without trade liberalization.

A multi-criteria optimisation of scenarios for the protection of water resources in Europe: Support to the EU Blueprint to Safeguard Europe’s Waters

A modelling environment has been developed to assess optimum combinations of water retention measures, water savings measures, and nutrient reduction measures for continental Europe. This modelling environment consists of linking the agricultural CAPRI model, the LUMP land use model, the LISFLOOD water quantity model, the EPIC water quality model, the LISQUAL combined water quantity, quality and hydro-economic model, and a multi-criteria optimisation routine. Simulations have been carried out to assess the effects of water retention measures, water savings measures, and nutrient reduction measures on several hydro-chemical indicators, such as the Water Exploitation Index, Environmental Flow indicators, N and P concentrations in rivers, the 50-year return period river discharge as an indicator for flooding, and economic losses due to water scarcity for the agricultural sector, the industrial sector, and the public sector. Also, potential flood damage of a 100-year return period flood has been used as an indicator.

Scaling up Ecosystem Services Values: Methodology, Applicability and a Case Study

The approach of using existing data on economic values of local ecosystem services for an assessment of these values at a larger geographical scale can be called “scaling up”. In a scaling-up exercise, economic values from a particular study site are transferred to another geographical setting, for instance to the regional, national or global scale. This paper proposes a methodology for scaling up ecosystem service values to a European level, assesses the availability of data for conducting this method, and illustrates the procedure with a case study on wetland values. The proposed methodology makes use of meta-analysis to produce a value function that is subsequently applied to individual European wetland sites. Site-specific, study-specific and context-specific variables are used to define a price vector that captures differences between sites and over time. The proposed method is shown to be practicable and to produce reasonably reliable aggregate value estimates.

Assessing the value of Earth Observation for managing coral reefs: An example from the Great Barrier Reef

The Integrated Global Observing Strategy (IGOS, 2003) argues that further investments in Earth Observation information are required to improve coral reef protection worldwide. The IGOS Strategy does not specify what levels of investments are needed nor does it quantify the benefits associated with better-protected reefs. Evaluating costs and benefits is important for determining optimal investment levels and for convincing policy-makers that investments are required indeed. Few studies have quantitatively assessed the economic benefits of Earth Observation information or evaluated the economic value of information for environmental management. This paper uses an expert elicitation approach based on Bayesian Decision Theory to estimate the possible contribution of global Earth Observation to the management of the Great Barrier Reef. The Great Barrier Reef including its lagoon is a World Heritage Area affected by anthropogenic changes in land-use as well as climate change resulting in increased flows of sediments, nutrients and carbon to the GBR lagoon. Since European settlement, nutrient and sediment loads having increased 5-10 times and the change in water quality is causing damages to the reef. Earth Observation information from ocean and coastal color satellite sensors can provide spatially and temporally dense information on sediment flows. We hypothesize that Earth Observation improves decision-making by enabling better-targeted run-off reduction measures and we assess the benefits (cost savings) of this improved targeting by optimizing run-off reductions under different states of the world. The analysis suggests that the benefits of Earth Observation can indeed be substantial, depending on the perceived accuracy of the information and on the prior beliefs of decision-makers. The results indicate that increasing informational accuracy is the most effective way for developers of Earth Observation information to increase the added value of Earth Observation for managing coral reefs.