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result(s) for
"Ruijs, Arjan"
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Climate Change and the Stability of Water Allocation Agreements
We analyse agreements on river water allocation between riparian countries. Besides being efficient, water allocation agreements need to be stable in order to be effective in increasing the efficiency of water use. In this paper we assess the stability of water allocation agreements using a game theoretic model. We consider the effects of climate change and the choice of a sharing rule on stability. Our results show that a decrease in mean river flow decreases the stability of an agreement, while an increased variance can have a positive or a negative effect on stability. An agreement where the downstream country is allocated a fixed amount of water has the lowest stability compared to other sharing rules. These results hold for both constant and flexible non-water transfers.
Journal Article
Natural capital accounting for better policy
A growing number of countries is setting up natural capital accounts (NCA) based on the system of environmental-economic accounting (SEEA); however, actually using them for better policy making turns out to be complex. This paper synthesises lessons on the institutional mainstreaming of the SEEA and its use in improving policy decisions affecting natural capital. It draws on discussions held at two Policy Forums organised by the World Bank Wealth Accounting and Valuation of Ecosystem Services program and the United Nations Statistical Division. Practical examples of how the SEEA helps to improve policy making are explored. Emerging from the Forums were ten principles for making NCA fit for policy. These principles promote a comprehensive NCA organisation, a purposeful use of accounts, trustworthy methods and institutionalisation of NCA mechanisms in government. To put these principles into practice, six strategies are outlined: (1) assure credibility of the accounts; (2) align supply and demand for NCA; (3) assure high level support for NCA; (4) encourage cooperation between institutions so NCA and policy are mutually constructive; (5) provide evidence that natural capital is economically important and; (6) assure policyrelevant communication of NCA results.
Journal Article
Quantifying the Non-Use Value of Biodiversity in Cost–Benefit Analysis: The Dutch Biodiversity Points
Biodiversity points are a quantitative measure for biodiversity. For over a decade, biodiversity points are being applied in the Netherlands for measuring the impact of roads, enclosure dams, and other water management projects on the non-use value of biodiversity. Biodiversity points are quite similar to the quality-adjusted life years used for cost-effectiveness analysis of healthcare treatments. Biodiversity points can be calculated by multiplying the size of the ecotope (e.g., number of hectare), the ecological quality of the ecotope (0–100 %), and the ecological scarcity of each type of ecotope. For many infrastructure projects, the impact on the non-use value of biodiversity can be a principal purpose or a major co-benefit or trade-off, for example, for a park, a fish sluice, a road, an ecoduct, an enclosure dam, or a marine protected area. Biodiversity points are a simple, transparent, and standardized way to aggregate and quantify the qualitative or ordinal assessments by ecological experts. For measuring the non-use value of biodiversity, they are also more informative than valuation by revealed or stated preferences methods. This paper provides the first overview of the application of this method in the Dutch practice of cost–benefit analysis. It also discusses its merits and limitations. The calculation and use of biodiversity points are illustrated by four case studies.
Journal Article
Welfare and Distribution Effects of Water Pricing Policies
In this paper, distribution and welfare effects of changes in block price systems are evaluated. A method is discussed to determine, for a Marshallian demand function, equivalent variation in case of a block price system. The method is applied to compare, for the Metropolitan Region of São Paulo, alternative pricing policies on the basis of their demand, welfare and distribution effects of changing water prices. Results show that there is a trade off between average welfare and income distribution. A pro-poor price system may result in lower average welfare than a flat price system, but in higher individual welfare for the poor. Moreover, there is a trade off between revenues for the water company and income distribution. Even though pro-poor price systems may not be as good for average welfare as flat price systems, their direct effects on poverty are important. Introducing pro-poor price systems, however, may have financial consequences for the water companies.
Journal Article
Opportunity Cost Estimation of Ecosystem Services
Land-use changes rank among the most significant drivers of change in ecosystem services worldwide. The enhancement of important services such as biodiversity and carbon sequestration requires modifications in land-use that can lead to the decline in other ecosystems services. Targeting the most suitable areas for particular land-uses based on comparative advantages requires opportunity cost information across large regions. This is a demanding task because the input–output relations are ill-defined and determined by spatially heterogeneous operational and environmental conditions. To address this methodological challenge, this paper presents a two-stage semiparametric technique that enables multi-dimensional production possibility frontiers to be estimated from data provided by biophysical models. Specific advantages of the proposed frontier approach are its flexibility with regard to assumptions on the convexity of the production possibility set and its freedom from any separability assumptions for the input–output space and the space of the heterogeneous background variables. The method is illustrated for a case study of 18 Central and Eastern European countries. Results show that opportunity costs of changes in ecosystem services provision differ substantially between regions. Those areas having already relatively high levels of carbon sequestration have a comparative advantage in sequestering carbon. Opportunity costs of biodiversity are generally positively related with the level of biodiversity up to a turning point after which they are negatively related. To illustrate the policy consequences of the observed economies and diseconomies of scope we compare two management regimes to illustrate the potential gains from smart land management.
Journal Article
Sharing the load? Floods, droughts, and managing international rivers
Rivers can be both givers of life and takers of life. Investments that provide protection against flooding are often beneficial during normal or low flows. Investments such as storage reservoirs are long lived, separating construction and management operations. With international rivers, the absence of enforcement mechanisms may preclude infrastructure collaboration. Where physical infrastructure is in an upstream nation, downstream impacts may be ignored after the structure has been completed. Using a game theoretic model, it is shown that downstream cooperation may only be rational when flooding is the primary downstream impact. A stylized arid developing region and humid developed region are compared. Potential gains from collaboration are greatest in arid regions, but may be difficult to achieve. There may be little scope for capturing the gains from basin level management if economic integration does not extend beyond water issues.
Journal Article
Chasing the Spillovers: Locating Protected Areas in a Trans-Boundary Fishery
Marine protected areas (MPAs) can positively impact upon marine biodiversity and fisheries returns. Increased fish densities inside MPAs can positively affect catches outside these areas. We examine MPA placement in a transboundary fishery when nations are, and are not, cooperative. We apply a differential game using a bioeconomic model to analyze behavior in MPA placement and effects on effort and biomass in two nations if both nations implement an MPA. Absence of cooperation can result in a prisoners dilemma in MPA placement. Strategic interactions lead to a divergence between socially or ecologically optimal MPAs and those chosen by national governments. (JEL: Q22)
Journal Article
Modeling Farmers' Response to Uncertain Rainfall in Burkina Faso: A Stochastic Programming Approach
Farmers on the Central Plateau of Burkina Faso in West Africa cultivate under precarious conditions. Rainfall variability is extremely high in this area and accounts for much of the uncertainty surrounding the farmers' decision-making process. Strategies to cope with these risks are typically dynamic. Sequential decision making is one of the most important ways to cope with risk due to uncertain rainfall. In this paper, a stochastic programming model is presented to describe farmers' sequential decisions in reaction to rainfall. The model describes farmers' strategies of production, consumption, selling, purchasing, and storage from the start of the growing season until one year after the harvest period. This dynamic model better describes farmers' strategies than do static models that are usually applied. This study draws important policy conclusions regarding reorientation of research programs and illustrates how operations research techniques can be usefully applied to study grass root problems in developing countries.
Journal Article
Lessons from 15 Years of Experience with the Dutch Tax Allowance for Energy Investments for Firms
Since 1997, the Netherlands has had a tax allowance scheme that was introduced to promote investments in energy-saving technologies and sustainable energy production. This so-called Energy Investment Tax Allowance (ETA in Dutch) reduces up-front investment costs for firms investing in the newest energy-saving and sustainable energy technologies. The basic design of the ETA has remained the same over the past 15 years. Firms investing in technologies listed in the annually updated 'Energy List' may deduct some of the investment costs from their taxable profits in the year of the investment. The Energy List contains generic technologies that meet a certain energy-saving standard or a selection of novel, but proven, technologies with a higher energy-saving potential than conventional technologies. Therefore, the list itself is also likely to have an attention value that may contribute to reduce information failures in the market for technology adoption.
Journal Article