Simulation analysis of the EU ELV/RoHS directives based on an applied general equilibrium model with Melitz-type trade specification

This paper explores the potential usefulness of an AGE model with the Melitz-type trade specification to assess economic effects of technical regulations, taking the case of the EU ELV/RoHS directives as an example. Simulation experiments reveal that: (1) raising the fixed exporting cost to make sales in the EU market brings results that exports of the targeted commodities (motor vehicles and parts for ELV and electronic equipment for RoHS) to the EU from outside regions/countries expand while the domestic trade in the EU shrinks when the importer's preference for variety (PfV) is not strong; (2) if the PfV is not strong, policy changes that may bring reduction in the number of firms enable survived producers with high productivity to expand production to be large-scale mass producers fully enjoying the fruit of economies of scale; and (3) When the strength of the importer's PfV is changed from zero to unity, there is the value that totally changes simulation results and their interpretations.

Diffusion of photovoltaic in Germany: policy vs. consumers

In some countries photovoltaic (PV) technology has already achieved a stage of development at which it can compete with conventional electricity sources. Germany provides a good illustration of this where PV market has reached a mature stage. As a manifest of this, the German government has recently reduced subsidies for households and industry by decreasing the feed in tariff for PV. This development raises fundamental questions: could the PV industry survive? Will consumers be motivated to continue to adopt PV when feed-in tariff diminish? The point of departure for the relevant literature on diffusion of PV has been on the effect of subsidies but little attention has paid to consumer motives when the policy support is scaled down. This paper introduces an in-depth analysis on understanding the consumer motives for adopting photovoltaic applications. Anchored in an extensive exploratory case study on PV consumers and PV system providers, this study aims to provide an encompassing explanation of diffusion of PV by revealing the link between consumer motives and the impact of policy.

Modelling the relationship between urban environment and travel behaviour: policy and indicators

Due to the necessity to undertake activities, every year people increase their standards of travelling (distance and time). Urban sprawl development plays an important role in these "enlargements". Thus, governments invest money in an exhaustiva search for solutions to high levels of congestion and car-trips. The complex relationship between urban environment and travel behaviour has been studied in a number of cases. Thus, the objective of this paper is to answer the important question of which land-use attributes influence which dimensions of travel behaviour, and to verify to what extent specific urban planning measures affect the individual decision process, by exhaustiva statistical and systematic tests. This paper found that a crucial issue in the analysis of the relationship between the built environment and travel behaviour is the definition of indicators. As such, we recommend a feasible list of indicators to analyze this relationship.

Does high speed rail compete fairly with other transportation modes? Madrid-Barcelona case study

Transportation modes produce many external costs such as congestion, accidents, and environmental impacts (pollution, noise and so on). From the microeconomic theory it is well known that in order to maximize social welfare, transportation modes should internalize the marginal costs they produce. Allocative efficiency is achieved when all transportation modes are priced at their social marginal cost. The objective of this research is to evaluate to what extent different passenger transport modes internalize their social marginal costs. This analysis is important since it affects the competitiveness of the different transport modes for a given OD pair. The case study analyzed is the corridor Madrid-Barcelona in Spain and the different transport modes have been considered (cars, buses, high-speed train and air). The research calculates the marginal social cost per user for each transportation mode, and it compares it with the average fare—allowing for the effect of discriminatory taxes—currently paid by the users. The external costs are calculated according to the guidelines established by the European Union. The gap between the marginal social cost and the price paid by users will provide the extra cost per passenger that each transport mode should have to pay for internalizing the external cost it produces. The research shows that external costs already produced by road and air transport modes are much higher than those produced by rail. However, the results show that road transport already internalizes every external costs it produces because users pay high fuel taxes. In other words, although rail transportation produces lower external costs, road transportation pays more than it should on the basis of the social marginal costs. The results of this work might be of help for Europ ean policy actions to be undertaken in the future.

Implications of agricultural production, policy and land use changes on water resource assessment

Una gestión más eficiente y equitativa del agua a escala de cuenca no se puede centrar exclusivamente en el recurso hídrico en sí, sino también en otras políticas y disciplinas científicas. Existe un consenso creciente de que, además de la consideración de las cambiantes condiciones climáticas, es necesaria una integración de ámbitos de investigación tales como la agronomía, planificación del territorio y ciencias políticas y económicas a fin de satisfacer de manera sostenible las demandas de agua por parte de la sociedad y del medio natural. La Política Agrícola Común (PAC) es el principal motor de cambio en las tendencias de paisajes rurales y sistemas agrícolas, pero el deterioro del medio ambiente es ahora una de las principales preocupaciones. Uno de los cambios más relevantes se ha producido con la expansión e intensificación del olivar en España, principalmente con nuevas zonas de regadío o la conversión de olivares de secano a sistemas en regadío. Por otra parte, el cambio de las condiciones climáticas podría ejercer un papel importante en las tendencias negativas de las aportaciones a los ríos, pero no queda claro el papel que podrían estar jugando los cambios de uso de suelo y cobertura vegetal sobre las tendencias negativas de caudal observadas. Esta tesis tiene como objetivo mejorar el conocimiento de los efectos de la producción agrícola, política agraria y cambios de uso de suelo y cobertura vegetal sobre las condiciones de calidad del agua, respuesta hidrológica y apropiación del agua por parte de la sociedad. En primer lugar, el estudio determina las tendencias existentes de nitratos y sólidos en suspensión en las aguas superficiales de la cuenca del río Guadalquivir durante el periodo de 1998 a 2009. Desde una perspectiva de política agraria, la investigación trata de evaluar mediante un análisis de datos de panel las principales variables, incluyendo la reforma de la PAC de 2003, que están teniendo una influencia en ambos indicadores de calidad. En segundo lugar, la apropiación del agua y el nivel de contaminación por nitratos debido a la producción del aceite de oliva en España se determinan con una evaluación de la huella hídrica (HH), teniendo en cuenta una variabilidad espacial y temporal a largo de las provincias españolas y entre 1997 y 2008. Por último, la tesis analiza los efectos de los cambios de uso de suelo y cobertura vegetal sobre las tendencias negativas observadas en la zona alta del Turia, cabecera de la cuenca del río Júcar, durante el periodo 1973-2008 mediante una modelización ecohidrológica. En la cuenca del Guadalquivir cerca del 20% de las estaciones de monitoreo muestran tendencias significativas, lineales o cuadráticas, para cada indicador de calidad de agua. La mayoría de las tendencias significativas en nitratos están aumentando, y la mayoría de tendencias cuadráticas muestran un patrón en forma de U. Los modelos de regresión de datos de panel muestran que las variables más importantes que empeoran ambos indicadores de calidad del agua son la intensificación de biomasa y las exportaciones de ambos indicadores de calidad procedentes de aguas arriba. En regiones en las que el abandono agrícola y/o desintensificación han tenido lugar han mejorado las condiciones de calidad del agua. Para los nitratos, el desacoplamiento de las subvenciones a la agricultura y la reducción de la cuantía de las subvenciones a tierras de regadío subyacen en la reducción observada de la concentración de nitratos. Las medidas de modernización de regadíos y el establecimiento de zonas vulnerables a nitratos reducen la concentración en subcuencas que muestran una tendencia creciente de nitratos. Sin embargo, el efecto de las exportaciones de nitratos procedente de aguas arriba, la intensificación de la biomasa y los precios de los cultivos presentan un mayor peso, explicando la tendencia creciente observada de nitratos. Para los sólidos en suspensión, no queda de forma evidente si el proceso de desacoplamiento ha influido negativa o positivamente. Sin embargo, los mayores valores de las ayudas agrarias aún ligadas a la producción, en particular en zonas de regadío, conllevan un aumento de las tasas de erosión. Aunque la cuenca del Guadalquivir ha aumentado la producción agrícola y la eficiencia del uso del agua, el problema de las altas tasas de erosión aún no ha sido mitigado adecuadamente. El estudio de la huella hídrica (HH) revela que en 1 L de aceite de oliva español más del 99,5% de la HH está relacionado con la producción de la aceituna, mientras que menos del 0,5% se debe a otros componentes, es decir, a la botella, tapón y etiqueta. Durante el período estudiado, la HH verde en secano y en regadío representa alrededor del 72% y 12%, respectivamente, del total de la HH. Las HHs azul y gris representan 6% y 10%, respectivamente. La producción de aceitunas se concentra en regiones con una HH menor por unidad de producto. La producción de aceite de oliva ha aumentado su productividad del agua durante 1997-2008, incentivado por los crecientes precios del aceite, como también lo ha hecho la cantidad de exportaciones de agua virtual. De hecho, las mayores zonas productoras presentan una eficiencia alta del uso y de productividad del agua, así como un menor potencial de contaminación por nitratos. Pero en estas zonas se ve a la vez reflejado un aumento de presión sobre los recursos hídricos locales. El aumento de extracciones de agua subterránea relacionadas con las exportaciones de aceite de oliva podría añadir una mayor presión a la ya estresada cuenca del Guadalquivir, mostrando la necesidad de equilibrar las fuerzas del mercado con los recursos locales disponibles. Los cambios de uso de suelo y cobertura vegetal juegan un papel importante en el balance del agua de la cuenca alta del Turia, pero no son el principal motor que sustenta la reducción observada de caudal. El aumento de la temperatura es el principal factor que explica las mayores tasas de evapotranspiración y la reducción de caudales. Sin embargo, los cambios de uso de suelo y el cambio climático han tenido un efecto compensatorio en la respuesta hidrológica. Por un lado, el caudal se ha visto afectado negativamente por el aumento de la temperatura, mientras que los cambios de uso de suelo y cobertura vegetal han compensado positivamente con una reducción de las tasas de evapotranspiración, gracias a los procesos de disminución de la densidad de matorral y de degradación forestal. El estudio proporciona una visión que fortalece la interdisciplinariedad entre la planificación hidrológica y territorial, destacando la necesidad de incluir las implicaciones de los cambios de uso de suelo y cobertura vegetal en futuros planes hidrológicos. Estos hallazgos son valiosos para la gestión de la cuenca del río Turia, y el enfoque empleado es útil para la determinación del peso de los cambios de uso de suelo y cobertura vegetal en la respuesta hidrológica en otras regiones. ABSTRACT Achieving a more efficient and equitable water management at catchment scale does not only rely on the water resource itself, but also on other policies and scientific knowledge. There is a growing consensus that, in addition to consideration of changing climate conditions, integration with research areas such as agronomy, land use planning and economics and political science is required to meet sustainably the societal and environmental water demands. The Common Agricultural Policy (CAP) is a main driver for trends in rural landscapes and agricultural systems, but environmental deterioration is now a principal concern. One of the most relevant changes has occurred with the expansion and intensification of olive orchards in Spain, taking place mainly with new irrigated areas or with the conversion from rainfed to irrigated systems. Moreover, changing climate conditions might exert a major role on water yield trends, but it remains unclear the role that ongoing land use and land cover changes (LULCC) might have on observed river flow trends. This thesis aims to improve the understanding of the effects of agricultural production, policies and LULCC on water quality conditions, hydrological response and human water appropriation. Firstly, the study determines the existing trends for nitrates and suspended solids in the Guadalquivir river basin’s surface waters (south Spain) during the period from 1998 to 2009. From a policy perspective, the research tries to assess with panel data analysis the main drivers, including the 2003 CAP reform, which are having an influence on both water quality indicators. Secondly, water appropriation and nitrate pollution level originating from the production of olive oil in Spain is determined with a water footprint (WF) assessment, considering a spatial temporal variability across the Spanish provinces and from 1997 to 2008 years. Finally, the thesis analyzes the effects of the LULCC on the observed negative trends over the period 1973-2008 in the Upper Turia basin, headwaters of the Júcar river demarcation (east Spain), with ecohydrological modeling. In the Guadalquivir river basin about 20% of monitoring stations show significant trends, linear or quadratic, for each water quality indicator. Most significant trends of nitrates are augmenting than decreasing, and most significant quadratic terms of both indicators exhibit U-shaped patterns. The panel data models show that the most important drivers that are worsening nitrates and suspended solids in the basin are biomass intensification and exports of both water quality indicators from upland regions. In regions that agricultural abandonment and/or de-intensification have taken place the water quality conditions have improved. For nitrates, the decoupling of agricultural subsidies and the reduction of the amount of subsidies to irrigated land underlie the observed reduction of nitrates concentration. Measures of irrigation modernization and establishment of vulnerable zones to nitrates ameliorate the concentration of nitrates in subbasins showing an increasing trend. However, the effect of nitrates load from upland areas, intensification of biomass and crop prices present a greater weight leading to the final increasing trend in this subbasins group, where annual crops dominate. For suspended solids, there is no clear evidence that decoupling process have influenced negatively or positively. Nevertheless, greater values of subsidies still linked to production, particularly in irrigated regions, lead to increasing erosion rates. Although agricultural production has augmented in the basin and water efficiency in the agricultural sector has improved, the issue of high erosion rates has not yet been properly faced. The water footprint (WF) assessment reveals that for 1 L Spanish olive oil more than 99.5% of the WF is related to the olive fruit production, whereas less than 0.5% is due to other components i.e. bottle, cap and label. Over the studied period, the green WF in rainfed and irrigated systems represents about 72% and 12%, respectively, of the total WF. Blue and grey WFs represent 6% and 10%, respectively. The olive production is concentrated in regions with the smallest WF per unit of product. The olive oil production has increased its apparent water productivity from 1997 to 2008 incentivized by growing trade prices, but also did the amount of virtual water exports. In fact, the largest producing areas present high water use efficiency per product and apparent water productivity as well as less nitrates pollution potential, but this enhances the pressure on the available water resources. Increasing groundwater abstractions related to olive oil exports may add further pressure to the already stressed Guadalquivir basin. This shows the need to balance the market forces with the available local resources. Concerning the effects of LULCC on the Upper Turia basin’s streamflow, LULCC play a significant role on the water balance, but it is not the main driver underpinning the observed reduction on Turia's streamflow. Increasing mean temperature is the main factor supporting larger evapotranspiration rates and streamflow reduction. In fact, LULCC and climate change have had an offsetting effect on the streamflow generation during the study period. While streamflow has been negatively affected by increasing temperature, ongoing LULCC have positively compensated with reduced evapotranspiration rates, thanks to mainly shrubland clearing and forest degradation processes. The research provides insight for strengthening the interdisciplinarity between hydrological and spatial planning, highlighting the need to include the implications of LULCC in future hydrological plans. These findings are valuable for the management of the Turia river basin, as well as a useful approach for the determination of the weight of LULCC on the hydrological response in other regions.

Diffusion of photovoltaic in Germany: roles of policy, system suppliers and adopters

In some countries photovoltaic (PV) technology is at a stage of development at which it can compete with conventional electricity sources. A case in point is Germany where PV market has reached a mature stage. As a manifest of this, the German government has recently reduced the feed-in-tariff, which had been the strongest driver of PV diffusion. This development raises a fundamental question: Why would potential adopters be motivated to adopt PV when feed-in tariff diminishes? The point of departure for the literature on diffusion of PV has been on the effect of subsidies but little attention has paid to adopter motives when the policy support is scaled down. This paper presents an in-depth analysis of the adopter motives for photovoltaic applications. Anchored in an extensive exploratory case study we provide an encompassing explanation of roles of policy, adopters and system suppliers on diffusion of PV.

Income, energy expenditure and housing in Madrid: retrofitting policy implications

Fuel poverty can be defined as ‘the inability to afford adequate warmth in the home’ and it is the result of the combination of three factors: low household income, lack of energy efficiency and high energy bills. Within this context, the present research is aimed at characterizing, for the first time, the housing stock of fuel-poor households in the Autonomous Region of Madrid. Fuel poverty incidence was established and households were divided into six different groups according to their relative position regarding fuel and monetary poverty. The housing stock of each group is characterized and those households most in need are identified. These results enable energy retrofitting priorities to be established, focusing on the needs of the different household groups and accounting for their housing stock characteristics. This allows Spanish energy retrofitting policies to be assessed for their capability of tackling fuel poverty and makes it possible to suggest some improvements.

Fuel poverty analysis in three spanish autonomous regions. Some retrofitting policy considerations

A person is to be regarded as living ‘in fuel poverty’ if he is a member of a household living on a lower income in a home which cannot be kept warm at a reasonable cost. This situation is mainly triggered by three factors: low household income, lack of energy efficiency and high energy invoices. Some European countries have already made some advantages towards officially defining fuel poverty in their countries. Nevertheless, in Spain only some research has been done and an official definition of the term is yet to come. This research explores the relation among households’ income, energy expenditure and housing stock in three autonomous regions in Spain in order to evaluate the housing stock of the fuel poor as well as to identify those households more in need. The results of the research allow establishing energy retrofitting priorities of existing housing stock as well as identifying current retrofitting policies limitations on order to tackle fuel poverty.

An Analysis of National Park Service Policy Regarding Management of White-Tailed Deer at Mammoth Cave National Park, Kentucky

The population of white-tailed deer (Odocoileus virginianus) occupying Mammoth Cave National Park, Kentucky is unknown. The population is uncontrolled, unmanaged, and suspected to be high. When uncontrolled, white-tailed deer tend to overpopulate and inflict negative impacts to vegetation through increased herbivory. The goal of this project is to demonstrate that the status of white-tailed deer at Mammoth Cave merits a policy formulation, and to provide suggestions as to what such a policy should contain. Three similar national parks have previously developed policies to manage white-tailed deer. These policies are analyzed, and common elements are identified that can transpose into a comparable policy at Mammoth Cave. Recommendations for a white-tailed deer management policy at Mammoth Cave National Park are given.

Raiders of the Lost Art: Strategy-Making in Europe. Security Policy Brief No. 40, November 2012

Have Europeans lost the art of making grand strategy? In a reflection process initiated by Sweden, Poland, Italy and Spain, they are invited to rediscover it and draft a “European Global Strategy”. This policy brief argues that what the EU needs most is a short set of priorities for collective action, to be reassessed for each term of the High Representative.

The world innovation landscape: Asia rising? Bruegel Policy Contribution 2013/02, February 2013

Highlights • Research and development spending has risen rapidly in Asia, particularly in China, which is now the world’s second R&D spender behind the United States.The increase in Korean and Chinese patent applications has been even more rapid, but Chinese patenting for exploitation on the main markets for innovation(the European Union, Japan and the US) is still marginal. • Asia's increased innovation spending is most prominently related to information and communication technologies. Overall, the Chinese and Korean economies are still not specialised in knowledge-intensive goods and services.Furthermore, China in particular is not (so far) capturing much value from its role as a manufacturer and exporter of high-tech goods; China remains mostly an assembler of goods, the value of which is created elsewhere. • It would be wrong to ignore China's innovation potential on the basis of its current performance. Its clear innovation ambitions are likely to drive its future growth. • Europe is struggling much more than the US to retain its place at the global innovation table. The EU should use Asia’s capacity building in innovation as an opportunity for value capture.

Can Europe recover without credit? Bruegel Policy Contribution 2013/03, 15 February 2013

• Data from 135 countries covering five decades suggests that creditless recoveries, in which the stock of real credit does not return to the pre-crisis level for three years after the GDP trough, are not rare and are characterised by remarkable real GDP growth rates: 4.7 percent per year in middle-income countries and 3.2 percent per year in high-income countries. • However, the implications of these historical episodes for the current European situation are limited, for two main reasons: • First, creditless recoveries are much less common in high-income countries, than in low-income countries which are financially undeveloped. European economies heavily depend on bank loans and research suggests that loan supply played a major role in the recent weak credit performance of Europe. There are reasons to believe that, despite various efforts, normal lending has not yet been restored.Limited loan supply could be disruptive for the European economic recovery andthere has been only a minor substitution of bank loans with debt securities. • Second, creditless recoveries were associated with significant real exchange rate depreciation, which has hardly occurred so far in most of Europe. This stylised fact suggests that it might be difficult to re-establish economic growth in the absence of sizeable real exchange rate depreciation, if credit growth does not return.

Europe's growth problem (and what to do about it). Bruegel Policy Brief 2013/03, April 2013

The issue: The European Union's pre-crisis growth performance was disappointing enough, but the performance has been even more dismal since the onset of the crisis. Weak growth is undermining private and public deleveraging,and is fuelling continued banking fragility. Persistently high unemployment is eroding skills, discouraging labour market participation and undermining the EU’s long-term growth potential. Low overall growth is making it much tougher for the hard-hit economies in southern Europe to recover competitiveness and regain control of their public finances. Stagnation would reduce the attractiveness of Europe for investment. Under these conditions, Europe's social models are bound to prove unsustainable. Policy Challenge: The European Union's weak long-term growth potential and unsatisfactory recovery from the crisis represent a major policy challenge. Over and above the structural reform agenda, which vitally important, bold policy action is needed. The priority is to get bank credit going. Banking problems need to be assessed properly and bank resolution and recapitalisation should be pursued. Second, fostering the reallocation of factors to the most productive firms and the sectors that contribute to aggregate rebalancing is vital. Addressing intra-euro area competitiveness divergence is essential to support growth in southern Europe. Third, the speed of fiscal adjustment needs to be appropriate and EU funds should be front loaded to countries in deep recession, while the European Investment Bank should increase investment.

Do European Union fines deter price-fixing? Bruegel Policy Brief 2013/04, May 2013

The issue: Anti-cartel enforcement is the least controversial of competition policy themes. Agreements to restrict competition such as price fixing or market sharing have obvious negative effects on welfare. Within the European Union, however, industry representatives have increasingly voiced concern that the European Commission applies a too-strict fining policy to enforce anti-cartel law, particularly since the introduction of new guidelines on fines in 2006. Fines are said to be too high, disproportionate and liable to introduce distortions into the market, ultimately leading to higher prices for consumers. It is often argued that more lenient approaches should be followed in crisis times. Policy challenge: High fines for cartel activity could entail costs for society and might be difficult to implement. Nevertheless, there is no case for reducing current levels of EU anti-cartel fines. Fine levels already take the economic crisis into account, and the net present value of fines might prove to be too low to discourage collusion. We estimate that fines might even be not high enough to offset the additional profits yielded by collusion. Fines should be complemented with other measures to increase deterrence, in particular personal sanctions targeting company officers who are responsible for leading the company to commit infringements. In the short term, pressure on decision makers could be increased by reducing the expected duration of investigations.

Banking system soundness is the key to more SME financing. Bruegel Policy Contribution 2013/10, July 2013

The SME access-to-finance problem is not universal in the European Union and there are reasons for the fall in credit aggregates and higher SME lending rates in southern Europe. Possible market failures, high unemployment and externalities justify making greater and easier access to finance for SMEs a top priority. Previous European initiatives were able to support only a tiny fraction of Europe’s SMEs; merely stepping-up these programmes is unlikely to result in a breakthrough. Without repairing bank balance sheets and resuming economic growth, initiatives to help SMEs get access to finance will have limited success. The European Central Bank can foster bank recapitalisation by performing in the toughest possible way the asset quality review before it takes over the single supervisory role. Of the possible initiatives for fostering SME access to finance, a properly designed scheme for targeted central bank lending seems to be the best complement to the banking clean-up, but other options, such as increased European Investment Bank lending and the promotion of securitisation of SME loans, should also be explored.