ISBN: 3540421742
TITLE: Internationalization of the Economy an Environmental Options
AUTHOR: Welfens
TOC:

Introduction 1
Paul J.J. Welfens
Part I
Internationalization, Trade, FDI and the Environment 5
A. Long-range Transboundary Air Pollution: Problem and Policy Options in Europe 7
Markus Amann
1. Introduction 7
2. The Convention on Long-range Transboundary Air Pollution 7
3. Air Pollution Control in the European Union 8
4. The 'Effect-based' Approach for Differentiating Emission Control Requirements 9
5. National Emission Ceilings in a Multi-pollutant/Multi-effect Context 10
6. Conclusions 17
References 19
Comments on: Longe-Range Transboundary Air Pollution: Problems and Policy Options in Europe 21
Reimund Schwarze
B. Environmental Regulation, Multinational Companies and International Competitiveness 25
Alistair Ulph and Laura Valentini
1. Introduction 25
2. What does Economic Analysis Tell Us About Claims 1 - 5? 26
2.1 The Simplest Possible Model 27
2.2 Allowing for Multi-National Production 29
2.3 Allowing for Many Firms 30
2.4 Multiple Firms and Plants 33
2.5 Agglomeration Effects 34
2.6 Time Structure Revisited 36
2.7 Summary 37
3. Empirical Studies 39
4. Policy Implications 43
5. Conclusions 49
References 55
Comments on: Environmental Regulation, Multinational Companies and International Competitiveness 59
Tom Jones and Joaquim Oliveira Martins
1. Introduction 59
2. Globalization and Environment: A Framework For Analysis 60
3. Trade Issues 62
4. Foreign Investment Issues 64
5. International Co-operation Issues 67
6. Conclusions 71
References 77
C. Economic Globalization, FDI, Environment and Employment 79
Rolf-Ulrich Sprenger
1. Introduction 79
2. Globalization: Main Features and Driving Forces 80
2.1 Definition 80
2.2 Feature and Driving Forces of Globalization 81
2.3 Key Trends in Foreign Direct Investment 82
3. FDI and Employment 86
3.1 Analytical Framework 86
3.1.1 Employment Effects of FDI Outflows 86
3.1.2 Employment Effects of FDI Inflows 88
3.1.3 Evaluating the Total Effects of FDI on Employment 89
3.2 FDI and Employment - Empirical Evidence 90
3.2.1 Employment Effects of FDI Outflows 90
3.2.2 Employment Impacts of FDI Inflows in OECD Countries 92
3.2.3 Conclusions - FDI and Employment 98
3.3 FDI and Environment 100
3.3.1 Analytical Framework 100
3.3.2 Empirical Evidence - FDI and Environment 103
3.3.2.1 Environmental Effects of FDI in the Home Country 103
3.3.2.2 Environmental Effects of FDI in Host Countries 104
3.3.2.3 Transboundary Environmental Effects of FDI 111
4. First Conclusions 115
References 117
Comments on: Economic Globalization, FDI, Environment and Employment 121
Michael Rauscher
References 124
D. Trade Neutrality of National Environmental Policy: Some Theoretical Considerations and Simulation Results for Switzerland 125
Gebhard Kirchgssner
1. Introduction 125
2. Possibilities for Trade-Neutrality of Indirect Taxes 127
3. Some Theoretical Considerations 130
3.1 Minimal Tax Revenue Subject to a Given Environmental Standard 131
3.2 Leakage Effects 134
4. Simulation Results for Switzerland 136
4.1 Description of the Model 137
4.2 Simulation Results 141
5. Summary and Concluding Remarks 145
Appendix D1: A Small Theoretical Model of Optimal Tax Revenue 147
Appendix D2: Sectoral Disaggregation 149
References 150
Comments on: Trade Neutrality of National Environmental Policy: Some Theoretical Considerations and Simulation Results for Switzerland 153
Rdiger Pethig
1. The Problem 153
2. Trade Neutrality 153
3. The Cost of Exempting Energy-intensive Tradables 154
4. Emission Reduction by Raising as Little Tax Revenue as Possible 155
5. Differentiation of Carbon Tax Rates to Limit Carbon Leakage Effects 157
6. Simulation Results for Switzerland 157
References 159
E. World Economic Impacts of the Kyoto Protocol 161
Christoph Bhringer and Thomas F. Rutherford
1. Introduction 161
2. Analytical Framework 161
2.1 Model Characteristics 161
2.2 Parametrization 164
3. The Kyoto Protocol: Abatement Scenario and Computational Results 166
3.1 Abatement Scenario 166
3.2 Quantitative Results 169
4. Concluding Remarks 176
References 178
Comments on: The Kyoto Protocol - Domestic Policy Impacts and International Spill-Overs 181
Ronnie Schb
1. Introduction 181
2. Carbon Tax is a Tax on Exhaustible Resources 182
3. Environmental Taxes in the Presence of Involuntary Unemployment 184
4. Summing Up 187
References 189
F. Panel Discussion: Sustainability and New Economic Policy Options 191
Klaus Conrad
Sustainability and New Economic Policy Options: The Example of International Emissions Trading 193
Carsten Helm
Towards an Ecological Economic Policy 197
Friedrich Hinterberger
Part II
Environmental Policy Options in a Globalized World
G. The Economics of the Kyoto Protocol 205
Franz Hackl and Gerald J. Pruckner
1. Introduction 205
2. A Short History of Climate Policy 206
2.1 The Pre-Kyoto Era 206
2.2 The Kyoto Protocol 207
2.2.1 Emission Trading and Joint Implementation 208
2.2.2 Clean Development Mechanism 208
2.2.3 Bubbles and Umbrellas 208
3. An Economic Model for Global Climate Change 210
3.1 Marginal Damage (Benefit of Abatement) 210
3.2 Marginal Costs 211
3.3 Data 212
4. Empirical Results 213
4.1 Global versus National Public Good Effect 213
4.2 The Simulation of Kyoto Scenarios 216
5. Summary and Concluding Remarks 220
References 222
Comments on: The Economics of the Kyoto Protocol 223
Jrgen Jerger
1. Introduction 223
2. Suboptimality at the National Level? 224
3. Small Differences Between Pareto and Nash Optimality? 225
4. Back to National Policies in GHG Abatement? 227
H. Innovation-Augmented Ecological Tax Reform: Theory, Model Simulation and New Policy Implications 229
Bernd Meyer and Paul J.J. Welfens
1. Introduction 229
2. Theory of Ecological Tax Reform 232
2.1 Basic Theory 232
2.2 Crucial Issues 233
2.3 Innovation-Augmented Tax Reform 235
3. The Policy Framework in Germany and the EU 236
3.1 EU Proposals and Germany's Ecological Tax Reform 236
3.2 Modelling an Innovation-Augmented Ecological Tax Reform 247
3.3 The Simulation Results for the Standard Case and the Innovation Augmented Reform 249
3.4 Some Caveats 252
4. Policy Implications 252
References 266
Greening the National Accounts - Approach and Policy Use 269
Peter Bartelmus
1. Rationale: Accounting for Sustainability 269
1.1 Measuring Sustainability - An Emerging Dichotomy 269
1.2 Capital Maintenance - The Door to Environmental Accounting 271
2. Approach: Extending the System Boundaries 274
2.1 Asset, Production and Consumption Boundaries 274
2.2 Accounting Identities and Environmentally Adjusted Aggregates 276
2.3 Pricing the Priceless: Methods and Limits of Monetary Valuation 280
3. Policy Uses of Green Accounting 283
3.1 Diagnosis: Is Growth Sustainable? 284
3.2 Policy Formulation: Steering by 'eco-nomic' Variables 285
3.2.1 Natural Wealth Maintenance: Enhancing the Sustainability of Economic Growth 287
3.2.2 Accounting for Accountability: Prompting Cost Internalization 288
3.2.3 Monitoring Policy Response: Environmental Protection Expenditures 290
3.3 Physical Accounting - A Tool of Environmental Management 291
4. Outlook: Beyond Accounting - From Valuation to Evaluation 293
References 295
J. Do Environmental Taxes and Standards Induce Innovation? 301
Jens Hemmelskamp and Fabio Leone
1. Introduction 301
2. Innovation Effects of Environmental Standards and Environmental Taxes 303
2.1 Environmental Standards and Innovation 303
2.2 The Effect of Environmental Taxes on Innovation 305
3. Linking Environmental Economics and Innovation Research 307
4. Empirical Analysis of the Impact of Taxes and Standards on Innovation 308
4.1 Data Problems 308
4.2 The Hypotheses of the Empirical Analysis 310
4.3 Constructing a Regulatory Indicator 311
4.4 Company Innovation Goals As Exogenous Variables 313
4.5 The Basic Model 315
4.6 Results From the Econometric Models 315
5. Conclusion and Further Research 319
References 323
Comments on: Environmental Innovation 327
Hans-Peter Weikard
References 330
CO_2 - Taxes, Growth, Labor Market Effects and Structural Change - An Empirical Analysis 331
Bernd Meyer
1. Introduction 331
2. The Model 332
2.1 A First Characterization 332
2.2 The Philosophy of the Model 333
2.3 The Structure of the Model 334
3. The Scenarios 336
3.1 The Business-As-Usual-Scenario and Its Results 336
3.2 The Eco-Tax-Scenario 337
4. Results of Carbon Tax Simulations: The Meaning of Different Compensation Strategies 338
5. Eco Taxes and the Reduction of Employers' Social Contribution 340
5.1 The Macroeconomic Results 340
5.2 The Effects on Prices and Energy Demand 343
5.3 The Effects on Production and Employment 344
5.4 The Burden for Private Households 348
6. Conclusions 349
References 351
Environmental Problems in the Single EU Market: Developments, Theory and New Policy Options 353
Paul J.J. Welfens and Rainer Hillebrand
1. Introduction: The Environmental Performance in the European Union 353
2. EU Environmental Policy After Amsterdam 355
3. Theory of Efficient Internalization of Environmental Problems 360
3.1 The Question of an Efficient Competency Allocation 361
3.2 Energy Generation and Transboundary Pollution 363
3.3 Transportation Problems 368
4. Towards New Policy Options 376
4.1 Problems of Efficient Standard-Setting and Self-Regulation 376
4.2 Modified Ecological Tax Reforms at the National Level 378
5. Perspectives and Conclusions 379
Appendix 381
References 386
Comments on: Towards New Policy Options in EU Environmental Policy 389
Bemd Hansjrgens
1. Introduction 389
2. The Division of Environmental Functions Between EU and Member States 390
3. New Policy Options Through Instrument Choice 391
References 394
M. Economic Growth and Environmental Problems in China 397
Yushi Mao
1. Executive Summary 397
2. General Picture of China's Natural Environment 397
3. The Transition From Planned Economy to Market Economy and its Environmental Impact 401
4. The Success and Failure of Environmental Policy in China 406
References 413
Comments on: Economic Growth and Environmental
Problems in China 415
Jutta Ludwig
1. Executive Summary 415
2. Introduction 416
3. From Planned Economy to Market Economy in the Chinese Water Sector 416
3.1 Improvement of Agricultural Water Savings 417
3.2 Domestic Water Use 417
3.3 Reduction in Water Demand 419
3.4 Demand-Side-Management to Finance Water Efficiency 421
4. Water Prices and Water Tariff Structures as an Instrument of Sustainable Water Management 422
4.1 Chinese Water Prices in Comparison 422
4.2 Effects of Pricing on Water Demand 425
5. Water Management and International Cooperation 426
5.1 Waste Water Treatment 427
5.2 Eco Efficiency for the Chinese Water Sector 428
References 430
List of Figures 433
List of Tables 437
List of Contributors 441
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