Because the effectiveness of payment for ecosystem services (PES) programs depends on landowners’ engagement, understanding the relationship between the type of payment and participation is a key issue. This paper reports on a choice experiment that quantifies landowners’ preferences for cash and educational in-kind payment. The main results indicate a positive correlation between participation in a PES contract and the magnitude of the cash payment, while participation seems uncorrelated with the magnitude of the educational in-kind payment. In addition, we investigate the mix of payment types and heterogeneity in preferences, which can help policymakers design strategies to increase participation.
One method to reduce greenhouse gas emissions is to subsidize emissions-reducing activities. The question is how to allocate such subsidies. Allocation through auctions is an emerging mechanism. In a controlled experimental market setting, this paper compares the effects of a variety of auction mechanisms for allocating subsidies for carbon emissions reduction in China. Besides the conventional auction mechanisms, this discussion paper place particular focus on testing the actual performance of the auction mechanism proposed by Erik Maskin (2011). The authors find that, while the Maskin auction mechanism spends the most from a fixed subsidy budget and leads to the largest emissions reduction, its per-unit emissions reduction cost is higher than that of discriminatory and uniform-price auction mechanisms. Both the Maskin and uniform-price auctions outperform discriminatory auctions in price discovery. Furthermore, from the government’s perspective, the Maskin auctions exhibit the strongest improvement tendency with repeated auctions.
Uncertainty about the future is an important determinant of well-being, especially in developing countries where financial markets and other market failures result in ineffective insurance mechanisms. However, separating the effects of future uncertainty from realised events, and then measuring the impact of uncertainty on utility, presents a number of empirical challenges. This paper aims to address these issues and provides supporting evidence to show that increased climate variability (a proxy for future income uncertainty) reduces farmers’ subjective well-being, consistent with the theory of optimal expectations (Brunnermeier & Parker, 2005 AER), using panel data from rural Ethiopia and a new data set containing daily atmospheric parameters. The magnitude of our result indicates that a one standard deviation (7%) increase in climate variability has an equivalent effect on life satisfaction to a two standard deviation (1-2%) decrease in consumption. This effect is one of the largest determinants of life satisfaction in rural Ethiopia.
Committee on Environmental Policy (CEP) invited the United Nations Economic Commission for Europe (ECE) and UNEP secretariats, in close consultation with relevant stakeholders, including ministries, business and civil society, to prepare an updated report on progress and future prospects in greening the economy in the pan-European region and to include in the report additional chapters on the identification of priorities for greening the economy in the region and possible modalities and options to achieve that (ECE/CEP/2013/2, para. 116 (g) (iii)). The present report attempts to respond to the CEP request and aims at facilitating discussion by CEP. CEP will be invited to consider the issue of greening the economy in the region, including further steps and actions necessary to advance it.
Long-lived infrastructure is inherently exposed to climate risks through its longevity, irreversibility and high initial capital cost. Major transport infrastructure is often designed for a lifetime measured in many decades and may be operational in a future climate that will be significantly different to the historical climate commonly used for planning and design. This policy brief focuses on port infrastructure in sub-Saharan Africa. It investigates the climate change risks, the use of climate services in decision-making and makes recommendations for actions to enhance the resilience of port infrastructure. It summarises a more comprehensive paper prepared to support the scoping phase of the Future Climate for Africa (FCFA) programme for the ports sector.