Mourato, Susana; Atkinson, Giles
Hamilton, Kirk; Bolt, Katharine
If natural resource prices follow exogenous paths, then future resource price changes must be reflected in current measures of resource depletion, as shown by Vincent et al. (1997). This result is extended to the measurement of income and saving in a small resource exporting economy. A precise formula for net (genuine) saving is derived when resource prices grow exogenously at the international inter- est rate. Empirical results are presented for over 100 countries and a dozen resource commodities, using historical real price trends to forecast future prices. Reductions in saving in excess of 1% of GNI are observed for over...
Link, P. Michael; Tol, Richard S.J.
Climate change can lead to a substantial reduction of the strength of the thermohaline circulation in the world oceans. This is often thought to have severe consequences particularly on the North Atlantic region and Northern and Western Europe. The integrated assessment model FUND is used to estimate the extent of these impacts. The results indicate that, owing to a slower warming (rather than cooling) of the regions most affected by a thermohaline circulation collapse, climate change induced damages in these regions would be smaller in case of a shutdown of the thermohaline circulation. However, even with a thermohaline circulation collapse,...
In recent years considerable attention has been paid to the notion of ‘market creation’ for the conservation of environmental assets. Market creation establishes a market in the external benefit or cost in question (e.g. biodiversity or pollution reduction) and leaves the relevant parties to adjust their behaviour accordingly. While most attention has been paid to market creation through tradable permits and taxes (the ‘polluter-pays’), it is less easy to secure a perspective on ‘beneficiary-pays’ initiatives. Both polluter-pays and beneficiary-pays initiatives are examples of modified Coaseian bargains in which governments intervene in the bargains to lower transactions costs, establish property rights,...
Ready, Richard; Navrud, Stale; Day, Brett; Dubourg, Richard; Machado, Fernando; Mourato, Susana; Spanninks, Frank; Vázquez Rodriquez, Maria Xosé
Contingent valuation is being increasingly used to value episodes of ill health caused by environmental pollution. In contrast to studies that have used contingent valuation to value other types of non-market goods, health episode valuation studies have tended to 1) value several ill health episodes or symptoms in the same survey, and 2) be vague in the survey instrument about the cause of the ill health, how it would be avoided or how the improvement would be paid for. The resulting values are then combined with exposure-response functions to generate economic estimates of health damages from pollution. This study tests...
Whittington, Dale; Lauria, Donald T.; Prabhu, Vimalanand; Cook, Joe
This paper examines whether the benefits of the Melamchi water supply project in Nepal are likely to exceed its costs, assuming that high-quality municipal water services can be delivered to households and firms in the urbanized part of the Kathmandu Valley. Monte Carlo simulations are used to explore the sensitivity of the net present value and economic internal rate of return calculations to a wide range of assumptions and input parameters.We find that extreme assumptions are not required to generate large differences in economic feasibility; quite plausible differences in the values of some key parameters can lead to large differences...