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[en] The external cost of energy can be defined as 'the cost not included in the energy market price', such as air pollution, noise, etc. Within the evaluation of the external cost of nuclear energy, the estimation of the external cost of severe accident is one of the major topics to be addressed. For the evaluation of the external cost of severe accident, the effect of risk aversion of the public against the severe accident must be addressed, because people are more concerned about low probability - high consequence events than about high probability - low consequence events having the same mean damage. It is generally recognized that there is a discrepancy between the social acceptability of the risk and the average monetary value which corresponds in principle to the compensation of the consequences for each individual of the population affected by the accident. In this paper, the CVM (Contingent Valuation Method) is used to integrate the risk aversion in the external costs of nuclear severe accidents in Korea
[en] Due to few comparative studies, explanations for differences in adaptation mainstreaming between sectors remain widely unclear. The article analyzes how adaptation mainstreaming was approached during the development of the Swiss National Adaptation Strategy and to what extent adaptation objectives were mainstreamed into sectoral policies. The analysis reveals that in Switzerland, adaptation objectives are integrated more substantially into sectoral policies when they overlap with primary sectoral objectives but generally backing by organizational and procedural measures is lacking. The results suggest a similar pattern for adaptation mainstreaming as for EPI: While policy frameworks such as strategies are adopted rather easily, a move towards more binding measures that interfere with sectoral policy-making and the existing institutional structure is much more challenging. In contrast to environmental concerns, climate change impacts are expected to be considered more substantially resulting in a more substantive mainstreaming of adaptation objectives and measures on a sectoral level. As these measures might negatively affect other sectors, the main challenge of adaptation mainstreaming is to consistently address the cross-cutting nature of adaption and to establish procedures to coordinate sectoral measures in order to avoid such negative externalities.
[en] The economics of death and dying highlighted that environmental factors negatively influence healthcare sustainability. Therefore, this study conducted a system-based literature review to identify the negative externality of environmental damages on global healthcare reforms. Based on 42 peer-reviewed papers in the field of healthcare reforms and 12 papers in the field of environmental hazards, we identified 25 factors associated with death and dying and 15 factors associated with health-related damages across the world respectively. We noted that environmental factors are largely responsible to affect healthcare sustainability reforms by associating with the number of healthcare diseases pertaining to air pollutants. The study suggests healthcare practitioners and environmentalists to devise long-term sustainable healthcare policies by limiting highly toxic air pollutants through technology-embodied green healthcare infrastructure to attained efficient global healthcare recovery.
[en] Existing energy policy frameworks revolving around the acceleration of deployment of renewable energy technology can be broadly classified as the quantity vs. price approach. With this brief viewpoint, this paper suggests another perspective of viewing these instruments in terms of a more fundamental basis: whether the deployment in capacity is in terms of a cost minimization approach or a network externality approach. We suggest that the generic price or feed in tariff (FIT) approach in subsidizing renewable electricity generation and associated income would create a bandwagon or self-propagation effect among users rendering the renewable energy technology spreads like a software or information technology. Our objective is to raise awareness of this technology dynamics oriented perspective in renewable deployment supplementing the conventional installation subsidies perspective. We hope that it would inspire more empirical works and studies relating to the policy implications of this viewpoint. (author)
[en] This paper studies the dynamics of a two-sector economy (with a natural resource-dependent sector and an industrial sector) characterized by free inter-sectoral labor mobility and heterogeneity of agents (workers and entrepreneurs). In such a context, we analyze the effects of the deterioration of natural resources, caused by the production activity of both sectors, on inter-sectoral movements of the labor force (structural changes), on ecological dynamics and on the revenues of workers and entrepreneurs. As in the seminal work by Matsuyama (1992), we obtain that a low productivity of labor in the resource-dependent sector can fuel the industrialization process. However, differently from Matsuyama, in our model the industrialization process may give rise to a reduction in workers’ revenues if the contribution to environmental depletion of the industrial sector, per unit of product, is higher than that of the resource-dependent one.
[en] Highlights: ► We extend a model of binary choices with externalities to include more alternatives. ► Introducing one more option affects the complexity of the dynamics. ► We find bifurcation structures which where impossible to observe in binary choices. ► A ternary choice cannot simply be considered as a binary choice plus one. - Abstract: Several recent contributions formalize and analyze binary choices games with externalities as those described by Schelling. Nevertheless, in the real world choices are not always binary, and players have often to decide among more than two alternatives. These kinds of interactions are examined in game theory where, starting from the well known rock-paper-scissor game, several other kinds of strategic interactions involving more than two choices are examined. In this paper we investigate how the dynamics evolve introducing one more option in binary choice games with externalities. The dynamics we obtain are always in a stable regime, that is, the structurally stable dynamics are only attracting cycles, but of any possible positive integer as period. We show that, depending on the structure of the game, the dynamics can be quite different from those existing when considering binary choices. The bifurcation structure, due to border collisions, is explained, showing the existence of so-called big-bang bifurcation points.
[en] We examine the effect of uncertainty concerning remaining supplies of conventional crude oil and its production path on: the date alternative fuels will be needed, the quantity of alternative fuels needed, and how this uncertainty affects firms' willingness to provide alternatives in a timely fashion. Despite large uncertainties about the quantity of oil that remains and its production path, the start date for replacements is likely to fall within a twenty-two year period that is narrower and earlier than previous estimates. The twenty-two year window represents considerable uncertainty about the date of the peak and this uncertainty creates an asymmetry in the strategy that maximizes the welfare of firms relative to total social welfare, which works against the market's ability to generate a smooth transition from oil to alternative fuels. The timeliness of this transition is critical - the production paths generated here suggest that 10 million barrels per day or more of alternative fuels will be needed within a decade of the peak in production of conventional crude oil. (author)
[en] Uncertainty surrounds the choice of instruments that internalise fossil-fuel pollution at the local, regional and global level. This work outlines the considerable growth in the Western Australian (WA) energy sector and explores the available options and potential hazards of using specific instruments to internalise externalities. These core options are discussed with respect to liberalising energy markets, providing private investment certainty, and imparting commentary on the developments and consequences of reform in the WA context. As a large energy exporter, providing certainty for the WA energy sector investment and the community is necessary to maintain the current prosperity. Remarkably, in the decades of market reform progress, the absence of one essential element is evident: economic externalities. Policymakers are under increasing pressure to understand economic reform, new energy markets and the multifaceted repercussions they entail. With modern energy reform sitting squarely within the milieu of more efficient governments and climate policy, there are clear economic advantages to internalising negative and positive externalities and other market distortions during energy market developments. Ignoring market failures when commercialising government-owned energy utilities in de-regulated and competitive markets invites continued ad-hoc government interference that generates investment uncertainty in addition to a perplexed electorate. (author)
[en] Because of its fluctuating nature, the feed-in of renewable energy sources into low-voltage distribution grids complicates the balancing of demand and supply. This carries the risk of grid instabilities causing damage to electronic devices and power outages, which eventually lead to deadweight losses. In principle, the problems arising from fluctuating feed-in can be solved by increasing demand elasticity or decoupling generation and consumption; for the first, an advanced metering infrastructure and, for the second, decentralized electricity storage are considered core enablers. However, to date, the diffusion of these future smart grids’ core components is low. The present study provides new insights for understanding and overcoming diffusion barriers. For this purpose, a qualitative research approach was chosen. The most important stakeholders as well as related private costs and benefits are identified. The findings show that both of these smart grid components are widely considered beneficial to society by experts. However, because the numerous private benefits are widely distributed among distinct players, socially desired investments are hampered by positive externalities. The importance of well-designed and consistent regulatory and legal frameworks that provide economic incentives to involved stakeholders is highlighted in the results. - Highlights: ► Smart meters and decentralized storages are important components of smart grids. ► Both components are widely seen as beneficial to society. ► Identification of the most important stakeholders and their investment incentives. ► Omission of societal desirable actions due to positive externalities. ► Measures to foster diffusion of smart grid key components.
[en] Highlights: • Literature survey: An extensive review of the studies of household fuel use in developing countries. • Microeconomic theory requires considering a broad set of decisions beyond fuel use, and sometimes the consequences of missing markets. • A better account of observed and unobserved context and household heterogeneities and over time is necessary. • The main included factors are generally: income, age and education of the household head, and the fuel prices. • The main excluded factors are generally: non-fuel prices, agricultural activities and access to energy sources. - Abstract: Owing to recent concerns about the negative externalities of traditional fuel use on the environment and health, the issue of the household fuel transition in developing countries, from dirty fuels towards clean fuels, is receiving growing research attention. This paper provides an up-to-date survey of the economic literature on household fuel use in these countries. We first present the conceptual and theoretical frameworks. Then we discuss the empirical results that show the wide range of factors that drive the household fuel transition and can be understood better by linking them with theory.