February 28, 2007
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FROM VOLUME 9, NUMBER 5, MAY 1996
"Environmental Taxes: Is There a Double Dividend?" R.D.
Morgenstern, Environment, 38(3), 16-20, 32-34, Apr. 1996.
Explores new research on environmental taxes and examines recent experience
implementing them in industrial countries. Reviews the evolution of thought on
the issue, including the "double dividend" concept: such taxes can
achieve environmental goals and at the same time reduce existing taxes on labor
and capital. New research challenges this concept, because it shows that
environmental taxes have their own distortions on the economy. Concludes that
environmental taxes remain an attractive policy instrument even though there is
no "free lunch" in environmental protection.
"Is There a Role for Benefit-Cost Analysis in Environmental, Health
and Safety Regulation?" K.J. Arrow (Dept. Econ., Stanford Univ., Stanford
CA 94305), J.L. Cropper et al., Science, 272(5259), 221-222,
Apr. 12, 1996.
Benefit-cost analysis has a potentially important role in regulatory
decision-making, although it should not be the sole basis for such
decision-making. Offers eight principles on the appropriate use of benefit-cost
"The Berlin Mandate: The Costs of Meeting Post-2000 Targets and
Timetables," A. Manne (Stanford Univ., Stanford CA 94305), R. Richels, Energy
Policy, 24(3), 205-210, Mar. 1996.
The Berlin Mandate of the climate convention requires developed countries to
set post-2000 targets and timetables for emissions, and several proposals are
now on the table. This economic analysis shows that costs can be substantially
reduced through international cooperation (making reductions where it is
cheapest to do so) and flexible timing (making reductions when it is
cheapest to do so). For instance, to achieve the same effect as the current
AOSIS proposal, overall costs could be reduced by well over one-half. Policy
gridlock may result from insistence on actions which are clearly inefficient
from an economic perspective.
"Valuing the Impact of CO2 Emissions," C. Hope (Judge Inst. of
Mgmt. Studies, Univ. Cambridge, U.K.), P. Maul, ibid., 211-219, Mar.
Various studies have suggested widely differing costs for the impact of CO2
emissions. This paper compares models based on two very different approaches,
the PAGE and Intera models, which both treat uncertainty seriously, but from
different viewpoints. Application of the models shows that what initially appear
to be divergent estimates of the marginal impact of CO2 emissions can be
reconciled. Discusses which marginal costs are appropriate for different policy
decisions. The results have immediate policy relevance for the setting of
"Net National Emissions, CO2 Taxation and the Role of Forestry,"
O. Tahvonen (Acad. Finland, Univ. Oulu, Linnanmaa 90570, Oulu, Finland), Resour.
& Energy Econ., 17(4), 307-315, Dec. 1995.
Under any international agreement on emission taxes or markets for emission
permits, there is the question of how different countries should control forest
harvesting and the use of wood at the national level. Common arguments suggest
that if forests are harvested at a sustainable level, the wood-based CO2
emissions need not be taxed. This analysis, using a dynamic general equilibrium
model, shows that the reverse is true.
Correspondence in recent issues of Science between S.F. Singer
and others concerning the IPCC second assessment. (See News article on the IPCC,
Global Climate Change Digest, April 1996.)
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