Environmental Objectives, Cost Efficiency, and Multivariate Stochastic Control

This paper is concerned with the cost efficiency in achieving the Swedish national air quality objectives under uncertainty. To realize an ecologically sustainable society, the parliament has approved a set of interim and long-term pollution reduction targets. However, there are considerable quantification uncertainties on the effectiveness of the proposed pollution reduction measures. In this paper, we develop a multivariate stochastic control framework to deal with the cost efficiency problem with multiple pollutants. Based on the cost and technological data collected by several national authorities, we explore the implications of alternative probabilistic constraints. It is found that a composite probabilistic constraint induces considerably lower abatement cost than separable probabilistic restrictions. The trend is reinforced by the presence of positive correlations between reductions in the multiple pollutants.

To what extent are EU steel companies susceptible to competitive loss due to climate policy?

In recognition of their competitive vulnerability, a set of special rules have been devised for managing sectors such as steel and cement within the EU ETS. These rules basically seek to set sector specific performance benchmarks and reward top performers. However, the steel sector as a whole will receive the vast majority of its allowances for free in Phase III. Perceptions of competitive vulnerability have been largely based on inherently hypothetical analyses which rely heavily on counterfactual scenario and abatement cost estimates often provided by firms themselves. This paper diverges from these approaches by providing a qualitative assessment of the two key reasons underpinning the competitive vulnerability argument of the EU Steel Companies based on interviews and case study involving the three largest producers of steel within the EU – AcerlorMittal, Corus, and ThyssenKrupp. We find that these arguments provide only partial and weak justifications for competitive loss and discriminatory treatment in the EUETS. This strategy is difficult to counter by governments due to information asymmetry; and it appears to have proved very successful insofar as it has helped the industry to achieve free allocation in Phases I-III of EU ETS by playing up the risk of carbon leakage.

Exploring strategic farming choices to respond to mitigation and adaptation to climate change

Las alteraciones del sistema climático debido al aumento de concentraciones de gases de efecto invernadero (GEI) en la atmósfera, tendrán implicaciones importantes para la agricultura, el medio ambiente y la sociedad. La agricultura es una fuente importante de emisiones de gases de efecto invernadero (globalmente contribuye al 12% del total de GEI), y al mismo tiempo puede ser parte de la solución para mitigar las emisiones y adaptarse al cambio climático. Las acciones frente al desafío del cambio climático deben priorizar estrategias de adaptación y mitigación en la agricultura dentro de la agenda para el desarrollo de políticas. La agricultura es por tanto crucial para la conservación y el uso sostenible de los recursos naturales, que ya están sometidos a impactos del cambio climático, al mismo tiempo que debe suministrar alimentos para una población creciente. Por tanto, es necesaria una coordinación entre las actuales estrategias de política climática y agrícola. El concepto de agricultura climáticamente inteligente ha surgido para integrar todos estos servicios de la producción agraria. Al evaluar opciones para reducir las amenazas del cambio climático para la agricultura y el medio ambiente, surgen dos preguntas de investigación: • ¿Qué información es necesaria para definir prácticas agrarias inteligentes? • ¿Qué factores influyen en la implementación de las prácticas agrarias inteligentes? Esta Tesis trata de proporcionar información relevante sobre estas cuestiones generales con el fin de apoyar el desarrollo de la política climática. Se centra en sistemas agrícolas Mediterráneos. Esta Tesis integra diferentes métodos y herramientas para evaluar las alternativas de gestión agrícola y políticas con potencial para responder a las necesidades de mitigación y adaptación al cambio climático. La investigación incluye enfoques cuantitativos y cualitativos e integra variables agronómicas, de clima y socioeconómicas a escala local y regional. La investigación aporta una recopilación de datos sobre evidencia experimental existente, y un estudio integrado sobre el comportamiento de los agricultores y las posibles alternativas de cambio (por ejemplo, la tecnología, la gestión agrícola y la política climática). Los casos de estudio de esta Tesis - el humedal de Doñana (S España) y la región de Aragón (NE España) - permiten ilustrar dos sistemas Mediterráneos representativos, donde el uso intensivo de la agricultura y las condiciones semiáridas son ya una preocupación. Por este motivo, la adopción de estrategias de mitigación y adaptación puede desempeñar un papel muy importante a la hora de encontrar un equilibrio entre la equidad, la seguridad económica y el medio ambiente en los escenarios de cambio climático. La metodología multidisciplinar de esta tesis incluye una amplia gama de enfoques y métodos para la recopilación y el análisis de datos. La toma de datos se apoya en la revisión bibliográfica de evidencia experimental, bases de datos públicas nacionales e internacionales y datos primarios recopilados mediante entrevistas semi-estructuradas con los grupos de interés (administraciones públicas, responsables políticos, asesores agrícolas, científicos y agricultores) y encuestas con agricultores. Los métodos de análisis incluyen: meta-análisis, modelos de gestión de recursos hídricos (modelo WAAPA), análisis multicriterio para la toma de decisiones, métodos estadísticos (modelos de regresión logística y de Poisson) y herramientas para el desarrollo de políticas basadas en la ciencia. El meta-análisis identifica los umbrales críticos de temperatura que repercuten en el crecimiento y el desarrollo de los tres cultivos principales para la seguridad alimentaria (arroz, maíz y trigo). El modelo WAAPA evalúa el efecto del cambio climático en la gestión del agua para la agricultura de acuerdo a diferentes alternativas políticas y escenarios climáticos. El análisis multicriterio evalúa la viabilidad de las prácticas agrícolas de mitigación en dos escenarios climáticos de acuerdo a la percepción de diferentes expertos. Los métodos estadísticos analizan los determinantes y las barreras para la adopción de prácticas agrícolas de mitigación. Las herramientas para el desarrollo de políticas basadas en la ciencia muestran el potencial y el coste para reducir GEI mediante las prácticas agrícolas. En general, los resultados de esta Tesis proporcionan información sobre la adaptación y la mitigación del cambio climático a nivel de explotación para desarrollar una política climática más integrada y ayudar a los agricultores en la toma de decisiones. Los resultados muestran las temperaturas umbral y la respuesta del arroz, el maíz y el trigo a temperaturas extremas, siendo estos valores de gran utilidad para futuros estudios de impacto y adaptación. Los resultados obtenidos también aportan una serie de estrategias flexibles para la adaptación y la mitigación a escala local, proporcionando a su vez una mejor comprensión sobre las barreras y los incentivos para su adopción. La capacidad de mejorar la disponibilidad de agua y el potencial y el coste de reducción de GEI se han estimado para estas estrategias en los casos de estudio. Estos resultados podrían ayudar en el desarrollo de planes locales de adaptación y políticas regionales de mitigación, especialmente en las regiones Mediterráneas. ABSTRACT Alterations in the climatic system due to increased atmospheric concentrations of greenhouse gas emissions (GHG) are expected to have important implications for agriculture, the environment and society. Agriculture is an important source of GHG emissions (12 % of global anthropogenic GHG), but it is also part of the solution to mitigate emissions and to adapt to climate change. Responses to face the challenge of climate change should place agricultural adaptation and mitigation strategies at the heart of the climate change agenda. Agriculture is crucial for the conservation and sustainable use of natural resources, which already stand under pressure due to climate change impacts, increased population, pollution and fragmented and uncoordinated climate policy strategies. The concept of climate smart agriculture has emerged to encompass all these issues as a whole. When assessing choices aimed at reducing threats to agriculture and the environment under climate change, two research questions arise: • What information defines smart farming choices? • What drives the implementation of smart farming choices? This Thesis aims to provide information on these broad questions in order to support climate policy development focusing in some Mediterranean agricultural systems. This Thesis integrates methods and tools to evaluate potential farming and policy choices to respond to mitigation and adaptation to climate change. The assessment involves both quantitative and qualitative approaches and integrates agronomic, climate and socioeconomic variables at local and regional scale. The assessment includes the collection of data on previous experimental evidence, and the integration of farmer behaviour and policy choices (e.g., technology, agricultural management and climate policy). The case study areas -- the Doñana coastal wetland (S Spain) and the Aragón region (NE Spain) – illustrate two representative Mediterranean regions where the intensive use of agriculture and the semi-arid conditions are already a concern. Thus the adoption of mitigation and adaptation measures can play a significant role for reaching a balance among equity, economic security and the environment under climate change scenarios. The multidisciplinary methodology of this Thesis includes a wide range of approaches for collecting and analysing data. The data collection process include revision of existing experimental evidence, public databases and the contribution of primary data gathering by semi-structured interviews with relevant stakeholders (i.e., public administrations, policy makers, agricultural advisors, scientist and farmers among others) and surveys given to farmers. The analytical methods include meta-analysis, water availability models (WAAPA model), decision making analysis (MCA, multi-criteria analysis), statistical approaches (Logistic and Poisson regression models) and science-base policy tools (MACC, marginal abatement cost curves and SOC abatement wedges). The meta-analysis identifies the critical temperature thresholds which impact on the growth and development of three major crops (i.e., rice, maize and wheat). The WAAPA model assesses the effect of climate change for agricultural water management under different policy choices and climate scenarios. The multi-criteria analysis evaluates the feasibility of mitigation farming practices under two climate scenarios according to the expert views. The statistical approaches analyses the drivers and the barriers for the adoption of mitigation farming practices. The science-base policy tools illustrate the mitigation potential and cost effectiveness of the farming practices. Overall, the results of this Thesis provide information to adapt to, and mitigate of, climate change at farm level to support the development of a comprehensive climate policy and to assist farmers. The findings show the key temperature thresholds and response to extreme temperature effects for rice, maize and wheat, so such responses can be included into crop impact and adaptation models. A portfolio of flexible adaptation and mitigation choices at local scale are identified. The results also provide a better understanding of the stakeholders oppose or support to adopt the choices which could be used to incorporate in local adaptation plans and mitigation regional policy. The findings include estimations for the farming and policy choices on the capacity to improve water supply reliability, abatement potential and cost-effective in Mediterranean regions.

Auctioning versus grandfathering in cap-and-trade systems with market power and incomplete information

We compare auctioning and grandfathering as allocation mechanisms of emission permits when there is a secondary market with market power and firms have private information on their own abatement technologies. Based on real-life cases such as the EU ETS, we consider a multi-unit, multi-bid uniform auction. At the auction, each firm anticipates its role in the secondary market, either as a leader or a follower. This role affects each firms’ valuation of the permits (which are not common across firms) as well as their bidding strategies and it precludes the auction from generating a cost-effective allocation of permits, as it occurs in simpler auction models. Auctioning tends to be more cost-effective than grandfathering when the firms’ abatement cost functions are sufficiently different from one another, especially if the follower has lower abatement costs than the leader and the dispersion of the marginal costs is large enough.

Incentive based policies on climate change: taxes and tradable emssions permits

The reduction of Greenhouse Gases (GHG) plays a central role in the environmental policies considered by countries for implementation not only at its own level but also at supranational levels. This thesis is dedicated to investigate some aspects of two of the most relevant climate change policies. The first part is dedicated to emission permit markets and the second part to optimal carbon taxes. On emission permit markets we explore the strategic behavior of oligopolistic firms operating in polluting industrial sectors that are regulated by cap and trade systems. Our aim is to identify how market power influences the main results obtained under perfect competition assumptions and to understand how actions taken in one market affects the outcome of the other related market. A partial equilibrium model is developed for this purpose with specific abatement cost functions. In Chapter 2 we use the model to explain some of the most relevant literature results. In Chapter 3 the model is used to analyze different oligopolistic structures in the product market under the assumption of competitive permits market. There are two significant findings. Firstly, under the assumption of a Stackelberg oligopoly, firms have no incentives for lobbying in order to manipulate permit prices up, as they have under Cournot competition...

Restoring degraded land.

2015

Cost-effective measures for diffuse load abatement in forestry

Abstract

Efficiency in Managing the Environment and the Opportunity Cost of Pollution Abatement

Using the directional distance function we study a cross section of 110 countries to examine the efficiency of management of the tradeoffs between pollution and income. The DEA model is reformulated to permit 'reverse disposability' of the bad output. Further, we interpret the optimal solution of the multiplier form of the DEA model as an iso-inefficiency line. This permits us to measure the shadow cost of the bad output for a country that is in the interior, rather than on the frontier of the production possibilities set. We also compare the relative environmental performance of countries in terms of emission intensity adjusted for technical efficiency. Only 10% of the countries are found to be on the frontier. Also, there is considerable inter-country variation in the imputed opportunity cost of CO2 reduction. Further, differences in technical efficiency contribute substantially to differences in the observed levels of CO2 intensity.

A simulation study on the abatement of CO2 emissions by de-absorption with monoethanolamine

Because of the adverse effect of CO2 from fossil fuel combustion on the earth's ecosystems, the most cost-effective method for CO2 capture is an important area of research. The predominant process for CO2 capture currently employed by industry is chemical absorption in amine solutions. A dynamic model for the de-absorption process was developed with monoethanolamine (MEA) solution. Henry's law was used for modelling the vapour phase equilibrium of the CO2, and fugacity ratios calculated by the Peng-Robinson equation of state (EOS) were used for H2O, MEA, N-2 and O-2. Chemical reactions between CO2 and MEA were included in the model along with the enhancement factor for chemical absorption. Liquid and vapour energy balances were developed to calculate the liquid and vapour temperature, respectively.

Environomics - A Financial Estimate of Environmental Pollution Control and Abatement Schemes in Eloor-Edayar Industrial Belt

The present study consists of nine chapters including the introductory chapter. Chapter II makes a brief review of environmental literature and examines various measures adopted at the global level to protect the environment. The environmental problems often transgress national sovereignity and geographical boundaries. Therefore, attempts must be made at the national and international levels to protect the environment, the resources of which are the common property of mankind. The protection of the national environment from the ancient till the present forms the content of Chapter III. These chapters together provide a background to understand the issues analysed in the subsequent chapters. Carefully worked out theoretical framework is a pre-requisite for the successful study of a complex subject. Some of the theoretical issues of ‘environomics’ are examined in Chapter IV. The theoretical issues involved in estimating the costs and benefits of environmental protection constitute the theme of Chapter V. The state of environment in Eloor-Edayar Industrial belt andthe impact analysis of pollution of the area are discussed in Chapter VI and VII respectively. Chapter VIII makes the financial estimate of environmental protection of the project And finally, Chapter IX presents the findings of the study

A cost-efficiency and health benefit approach to improve urban air quality

When ambient air quality standards established in the EU Directive 2008/50/EC are exceeded, Member States are obliged to develop and implement Air Quality Plans (AQP) to improve air quality and health. Notwithstanding the achievements in emission reductions and air quality improvement, additional efforts need to be undertaken to improve air quality in a sustainable way - i.e. through a cost-efficiency approach. This work was developed in the scope of the recently concluded MAPLIA project "Moving from Air Pollution to Local Integrated Assessment", and focuses on the definition and assessment of emission abatement measures and their associated costs, air quality and health impacts and benefits by means of air quality modelling tools, health impact functions and cost-efficiency analysis. The MAPLIA system was applied to the Grande Porto urban area (Portugal), addressing PM10 and NOx as the most important pollutants in the region. Four different measures to reduce PM10 and NOx emissions were defined and characterized in terms of emissions and implementation costs, and combined into 15 emission scenarios, simulated by the TAPM air quality modelling tool. Air pollutant concentration fields were then used to estimate health benefits in terms of avoided costs (external costs), using dose-response health impact functions. Results revealed that, among the 15 scenarios analysed, the scenario including all 4 measures lead to a total net benefit of 0.3M€·y(-1). The largest net benefit is obtained for the scenario considering the conversion of 50% of open fire places into heat recovery wood stoves. Although the implementation costs of this measure are high, the benefits outweigh the costs. Research outcomes confirm that the MAPLIA system is useful for policy decision support on air quality improvement strategies, and could be applied to other urban areas where AQP need to be implemented and monitored.

Short-term triple therapy with azithromycin for Helicobacter pylori eradication: Low cost, high compliance, but low efficacy

Background: The Brazilian consensus recommends a short-term treatment course with clarithromycin, amoxicillin and proton-pump inhibitor for the eradication of Helicobacter pylori ( H. pylori). This treatment course has good efficacy, but cannot be afforded by a large part of the population. Azithromycin, amoxicillin and omeprazole are subsidized, for several aims, by the Brazilian federal government. Therefore, a short-term treatment course that uses these drugs is a low-cost one, but its efficacy regarding the bacterium eradication is yet to be demonstrated. The study's purpose was to verify the efficacy of H. pylori eradication in infected patients who presented peptic ulcer disease, using the association of azithromycin, amoxicillin and omeprazole. Methods: Sixty patients with peptic ulcer diagnosed by upper digestive endoscopy and H. pylori infection documented by rapid urease test, histological analysis and urea breath test were treated for six days with a combination of azithromycin 500 mg and omeprazole 20 mg, in a single daily dose, associated with amoxicillin 500 mg 3 times a day. The eradication control was carried out 12 weeks after the treatment by means of the same diagnostic tests. The eradication rates were calculated with 95% confidence interval. Results: The eradication rate was 38% per intention to treat and 41% per protocol. Few adverse effects were observed and treatment compliance was high. Conclusion: Despite its low cost and high compliance, the low eradication rate does not allow the recommendation of the triple therapy with azithromycin as an adequate treatment for H. pylori infection.

Cost risk benefit analysis to support chemoprophylaxis policy for travellers to malaria endemic countries

Background: In a number of malaria endemic regions, tourists and travellers face a declining risk of travel associated malaria, in part due to successful malaria control. Many millions of visitors to these regions are recommended, via national and international policy, to use chemoprophylaxis which has a well recognized morbidity profile. To evaluate whether current malaria chemo-prophylactic policy for travellers is cost effective when adjusted for endemic transmission risk and duration of exposure. a framework, based on partial cost-benefit analysis was used Methods: Using a three component model combining a probability component, a cost component and a malaria risk component, the study estimated health costs avoided through use of chemoprophylaxis and costs of disease prevention (including adverse events and pre-travel advice for visits to five popular high and low malaria endemic regions) and malaria transmission risk using imported malaria cases and numbers of travellers to malarious countries. By calculating the minimal threshold malaria risk below which the economic costs of chemoprophylaxis are greater than the avoided health costs we were able to identify the point at which chemoprophylaxis would be economically rational. Results: The threshold incidence at which malaria chemoprophylaxis policy becomes cost effective for UK travellers is an accumulated risk of 1.13% assuming a given set of cost parameters. The period a travellers need to remain exposed to achieve this accumulated risk varied from 30 to more than 365 days, depending on the regions intensity of malaria transmission. Conclusions: The cost-benefit analysis identified that chemoprophylaxis use was not a cost-effective policy for travellers to Thailand or the Amazon region of Brazil, but was cost-effective for travel to West Africa and for those staying longer than 45 days in India and Indonesia.

Cost-effectiveness analysis of PCR for the rapid diagnosis of pulmonary tuberculosis

Background: Tuberculosis is one of the most prominent health problems in the world, causing 1.75 million deaths each year. Rapid clinical diagnosis is important in patients who have comorbidities such as Human Immunodeficiency Virus (HIV) infection. Direct microscopy has low sensitivity and culture takes 3 to 6 weeks [1-3]. Therefore, new tools for TB diagnosis are necessary, especially in health settings with a high prevalence of HIV/TB co-infection. Methods: In a public reference TB/HIV hospital in Brazil, we compared the cost-effectiveness of diagnostic strategies for diagnosis of pulmonary TB: Acid fast bacilli smear microscopy by Ziehl-Neelsen staining (AFB smear) plus culture and AFB smear plus colorimetric test (PCR dot-blot). From May 2003 to May 2004, sputum was collected consecutively from PTB suspects attending the Parthenon Reference Hospital. Sputum samples were examined by AFB smear, culture, and PCR dot-blot. The gold standard was a positive culture combined with the definition of clinical PTB. Cost analysis included health services and patient costs. Results: The AFB smear plus PCR dot-blot require the lowest laboratory investment for equipment (US$ 20,000). The total screening costs are 3.8 times for AFB smear plus culture versus for AFB smear plus PCR dot blot costs (US$ 5,635,760 versus US$ 1,498, 660). Costs per correctly diagnosed case were US$ 50,773 and US$ 13,749 for AFB smear plus culture and AFB smear plus PCR dot-blot, respectively. AFB smear plus PCR dot-blot was more cost-effective than AFB smear plus culture, when the cost of treating all correctly diagnosed cases was considered. The cost of returning patients, which are not treated due to a negative result, to the health service, was higher in AFB smear plus culture than for AFB smear plus PCR dot-blot, US$ 374,778,045 and US$ 110,849,055, respectively. Conclusion: AFB smear associated with PCR dot-blot associated has the potential to be a cost-effective tool in the fight against PTB for patients attended in the TB/HIV reference hospital.