• the Erik Kempe Award in Environmental and Resource Economics, which is made possible by the generous support of the Kempe Foundation, in co-operation with the University of Umea. Previous award-winning papers have been judged to make important contributions to environmental and resource economics. We believe that this year’s Erik Kempe Award will be as meritorious as it has been in the past.
• our Outstanding Awards, recognising those who have devoted themselves productively and systematically to both communicating and enriching environmental economics (European Lifetime Achievement Award in Environmental Economics) and Practitioners in the policy or business arena who have made signal contributions in the application of economic ideas (European Practitioner Achievement Award in Applying Environmental Economics).

These awards are meant to encourage environmental and resource economists in Europe. The prizes that have been awarded to date testify to the strength of European expertise in our field of study. We encourage you to attend the Awards Ceremony scheduled for June 30th.

In this issue we are publishing our second Letter from the Regions, this time on Africa, by Rashid Hassan. His article reports on the capacity-building activities currently underway in Africa. They are designed to contribute to our understanding of natural resources and environmental management problems in the context of endemic poverty in Sub-Saharian Africa. Our Association intends to contribute to those activities by raising funds to create travel grants to young scholars in developing countries to attend our annual Conference and Summer Schools. A key source of funds is our Membership Fee.

We would like to thank both individuals and institutions who made their contribution to this by joining our Association. In particular, I would like to express our warmest gratitude to our Institutional Members, listed in this Newsletter. I urge EAERE individual Members to contribute also by asking their institutions to become members. It is a very economic way to support academic excellence in environmental and resource economics, in Europe and beyond.

Thanks to the efforts of our Honorary President Frank Convery and our vice-President and Newsletter editor Barbara Buchner, and to Herman Vollebergh, we are inaugurating in this Issue of our Newsletter an ad hoc series of 'Policy Commentaries', written so as to be accessible to a wide audience. I am also pleased to announce that Ger Klaassen of the European Commission has kindly agreed to be our EAERE Policy Advisor. Dr. Klaassen will create a bridge for us to the policy process in Europe.

I look forward to meeting you all in Rome at our annual conference, and in particular at the annual general assembly taking place on the 2nd of July: it will be a nice opportunity to exchange views and to hear your suggestions regarding the activities of our association.
With all good wishes,

Partha Dasgupta
University of Cambridge and University of Manchester
EAERE President

We accepted 650 papers with presenters from different countries and covering all the topics in environmental and natural resource economics. The distribution of the papers among topics is not even. Climate Change, Energy and Experimental Economics, for example, are densely populated. We are now proceeding to organize the numerous parallel sessions (18 if all presenters register), poster sessions and special sessions.

The full conference program will be finalized in a few weeks but some features can be anticipated. Next to the standard parallel sessions there will be a certain number of special sessions organized by distinguished scholars and renowned institutions. Bateman, Brower/Vainio, Convery/Hanemann, Markandya, Mason, Pan, Millock, Nunes, being the names while EC DG Environment, EC DG Climate Action, EEA, IAEE, ISTAT, OECD, World Bank are the institutions. Moreover, there will be two policy sessions, thanks to Fondazione Eni Enrico Mattei, the Tilburg Sustainability Center, and IPCC.

As a testimony of our enduring gratitude to the late David Pearce for his invaluable contribution to the establishment of environmental economics as an important branch of general economics and to enhance his memory, Erik Maskin will give the David Pearce Lecture. In addition, not to be underrated as it contributes to the spreading of research in environmental and resource economics, the EAERE traditional awards ceremony will take place. Sir Partha Dasgupta will confer the Erik Kempe Award and the EAERE Outstanding Achievement Awards. Finally, the conference will host the fourth European Job Market for Environmental and Resource Economists. We would like to draw attention to such event, in view of the growing sensitivity towards environmental issues in combination with the ongoing crisis, boosting the greening of the economy. Institutions with open positions and candidates are invited to take part in this initiative.

Coming to the innovative features of EAERE 2011, with which we are pleased, let us mention in turn:

• PhD sessions: we received around 150 papers submitted to sessions devoted to PhD students. While we chose to organize just a few (say 3 or 4) PhD sessions and therefore to reallocate the other accepted papers to standard parallel sessions, we interpret this figure as a success of the initiative.
• Kindergarten: around 50 participants asked for a kindergarten facility so far!
• CO2 offset: our idea of planting trees for the purpose has been rewarded by more than one hundred participants who already paid for it. We thank them all.

Finally we would like to remind you that the Faculty of Economics of the University of Rome Tor Vergata, which is the venue of the conference, lies on the outskirts of the city and it takes around one hour to get there from the city centre where most of your hotels are and where both social events will take place. We can honestly promise you that such inconvenience will be well worthwhile!
Please consult the website for the most recent information on the details of the program: http://www.eaere2011.org
We are looking forward to meet you in the ‘Eternal City’.

Laura Castellucci
Alessio D’Amato
Local Organizing Commitee, EAERE 2011

 

FULL INSTITUTIONAL MEMBERS 2011

• Basque Centre for Climate Change - BC3
• Centre for Environmental and Resource Economics - CERE
• Cyprus Universtiy of Technology - CUT-EMA
• Frisch Centre
• Fondazione Eni Enrico Mattei - FEEM
• Stockholm Resilience Centre
• TEN Center - Thematic Environemtnal Networks Venice International University
• The Beijer Institute of Ecological Economics
• Tilburg University Sustainability Center - TSC
• Toulouse Sciences Economiques (INRA, Université Toulouse 1) - LERNA
• VU University Amsterdam, Institute for Environmental Studies (IVM), Department of Environmental Economics

UNIVERSITY INSTITUTIONAL MEMBERS 2011

• Centre d'Economie de la Sorbonne - CES
• Centre for Research on Energy and Environmental Economis and Policy (IEFE) - University Bocconi
• Faculty of Agriculture at the University of Catania (UNICT)
• Centre inteuniversitaire de recherche en économie quantitative (CIREQ)
• University of Gothenburg, Department of Economics, Environmental Economics Unit
• University of Southern Denmark - SDU
• Wageningen University

 

In the 1970s, American physiologist Ancel Keys explained to the world the diet he dubbed “Mediterranean” based on balanced consumption of natural foods (olive oil, fruit, grains, legumes, etc.), thanks to which death rates from heart disease were shown to be lower than with saturated fat-rich diets typical of Northern Europe. In 1992, the US Department of Agriculture developed and released the first Food Pyramid which concisely and efficaciously explained how to adopt a nutritionally-balanced diet.

Today, the Barilla Center for Food & Nutrition is offering the Food Pyramid in a double version, positioning foods not only following the criteria nutritional science has long recommended on the basis of their positive impact on health, but also in terms of their impact on the environment. The result is a “Double Pyramid”: the familiar Food Pyramid and an Environmental-Food Pyramid. The latter, placed alongside the Food Pyramid, is shown upside-down: foods with higher environmental impact are at the top and those with reduced impact are on the bottom.

The Food Pyramid presents the various food groups in a graduated order. At the base of the Pyramid are foods of vegetal origin (characteristic of the Mediterranean diet), rich in nutrients (vitamins, minerals and water) and protective compounds (fiber and bioactive compounds of vegetal origin), and with lower energy density. Gradually moving up, are those foods with higher energy density (highly present in the North American diet) which should be consumed less frequently.

The Environmental Pyramid was constructed on the basis of the environmental impact associated with each food estimated on the basis of the Life Cycle Assessment (LCA), an objective method for evaluating energy and environmental impact for a given process (whether an activity or product). More specifically, process assessment underscores the extent to which the main environmental impacts are seen in the generation of greenhouse gas (Carbon Footprint), consumption of water resources (Water Footprint) and “land use” or the number of land or maritime plots necessary to regenerate the resources consumed and absorb the waste produced by human settlements or a single human activity (Ecological Footprint).

In order to provide a more complete and effective communications tool, only the Ecological Footprint was used as a reference index in creating the Environmental Pyramid. The result is an upside-down Pyramid graduated in terms of environmental impact: on the top are foods with higher impact, while on the bottom are those with minor impact.

This “Double Pyramid” illustrates that – in general – those foods with higher recommended consumption levels, are also those with lower environmental impact. Contrarily, those foods with lower recommended consumption levels are also those with higher environmental impact. In other words, this newly-elaborated version of the Food Pyramid shows the coincidence, in a unified model, between two different but highly-relevant goals: health and environmental protection.

This work, far from being conclusive, aims to encourage the publication of further studies on the measurement of environmental impacts of food, which will be considered in future editions of this document. The objective is to increase the coverage of statistical data and examine the influence that may have some factors, such as, for example, geographical origin or food preservation.

Note: The Barilla Center for Food & Nutrition (BCFN) is a think tank with a multi-disciplinary approach whose goal is to gather the most authoritative thinking on an international level regarding issues linked to the world of food and nutrition. Its areas of study and analysis include culture, the environment, health and the economy, and - within these areas - it intends proposing solutions to take on the food challenges to be faced over the coming years.
The complete paper on the BCFN Double Pyramid can be downloaded at
http://www.barillacfn.com/uploads/file/72/1277905159_PositionPaper_BarillaCFN_Double-Pyramid.pdf

The record of economic growth and development in SSA however has been disappointing as indicators of improvements in social development and economic wellbeing remain lagging far behind rest of the developing world. The region remains home for the world’s lowest per capita income; highest poverty, illiteracy and social underdevelopment; dismal record of human health and prevalence of diseases; lack of access to basic needs and personal security. This is in spite of the fact that the natural resource base has been excessively liquidated and degraded from over extraction, mismanagement of revenues in over consumption and low investment levels and thus shrinking real wealth in SSA at higher rates than rest of developing world (WB, 2010; Arrow et al., 2004).

The poor economic performance of SSA has been attributed to poor macroeconomic management and policies, bad governance, low saving and investment levels, weak modern economic institutions (markets, credit, information), and civil strife. Collier (2007) added geography in terms of the nature and spatial distribution of physical and human resources to the set of factors behind Africa’s growth failure. One distinctive geographic feature of SSA is the high proportion of its 800 million people living in the slow growing, land-locked resource scarce countries, contributing as little as 1% to overall growth. This is the place where SSA faces the toughest challenge for poverty reduction. Moreover, the typical SSA country is also characterized by a small size but ethnically more diverse populations and both are sources of bad governance, mismanagement of resource rents and civil conflict risks (Collier, 2007). This has been the blight of many resource rich countries in SSA where a Dutch disease or curse of the mineral rich phenomena occurred and serious problems of civil conflict leading to massive capital and skill flight outside the region. It is estimated that more than 36% of Africa’s wealth was held abroad in 2004 (Collier, 2007).

The fact that economic performance and governance have recently improved in many parts of SSA is a cause for hope. But, the region is also predicted to bear the brunt of climate change (CC) adversities. The same structural, technological and institutional weaknesses and high poverty hindering economic development in the region are reasons for the high vulnerability of SSA to CC (Hassan, 2010; WB 2009). While SSA is not expected to meet emission targets in the near future (being the source of less than 2% of current global emissions), the challenge of improving the adaptive capacity of key sectors and large segments of the population is massive. One major source of vulnerability to CC for SSA is the high reliance on natural resources extraction and rainfed agriculture (land-based resources) for income and livelihood of large populations. This specifically poses the question of how to achieve a green revolution similar to that of Asia with less than 4% of cultivated land under irrigation, compared to more than 40% in Asia? SSA however is endowed with huge water resources that are largely untapped. Accelerating economic growth and development is the best adaptation strategy. To achieve the above coupled adaptation and fundamental development objectives current levels of energy consumption and emissions (where 80% from biomass) in SSA are bound to increase substantially. There is however good potential for SSA to participate in global mitigation efforts by embarking on low carbon growth path with considerable assistance from the industrialized north on technology transfer, financing carbon credit options.

To contribute to dealing with all above natural resources and environmental management and poverty reduction challenges in SSA, the Centre for Environmental Economics and Policy Analysis in Africa (CEEPA) at the University of Pretoria has been supporting capacity building in this field in the region over the past 12 years. CEEPA has been managing and coordinating several capacity strengthening activities, networks and research projects in SSA funded by various donors including Sida-Sweden, USAID, Canadian IDRC, The Rockefeller Foundation, GEF, UNEP in collaboration with several regional and international experts and agencies such as the Beijer Institute of Ecological Economics, Stockholm Resilience Centre, WB Environment Department, AERC, Columbia Earth Institute, and many CGIAR centers among others. CEEPA capacity strengthening programs provide funding, technical backstopping and professional mentoring in support of research, training, dissemination and networking activities and workshops. These cover PhD scholarships, Post-Doctoral and Visiting Fellowships, research grants and other degree and non-degree training in the field of environmental economics and policy. For more information about these programs, please visit our website at http://www.ceepa.co.za/

CEEPA’s research and training activities focus on priority research areas identified above in themes spanning natural resource and environmental accounting, natural resources management and environmental policy (focusing on land, forest, water and energy resources), the economics and policy of CC impact and adaptation, economics and policy of ecosystems management. Several hundreds of resource managers, policy makers and researchers in SSA have received short training on above aspects and a large number of Africans from the region have benefited from master and doctoral degrees’ scholarships over the past decade all are currently working with several national, regional and international agencies in the region. A good number of African scholars and international fellows benefited from CEEPA’s post-doctoral and visiting fellowships’ program assisting and collaborating with a number of African universities and research institutions in the region. Through funding research grants, post-graduate research and collaborative studies in the field CEEPA staff, students and collaborators produced a large number of research products and widely published in regional and international professional journals including several books on above research themes of focus (visit CEEPA’s website for more information on publications).

References
Arrow, K., Dasgupta, P., Goulder, L., Daily, G., Ehrlich, P., Heal, G., Levin, S., Maler, K-G., Schneider, D., Starret, D. and Walker, B., 2004. Are we consuming too much?, Journal of Economic Perspectives, 18: 147- 172;
Collier, P., van der Ploeg, F. and Venables, A. 2009. Managing resource revenues in developing economies, Centre for the Study of African Economies, University of Oxford, Oxford;
Collier, P., 2007. Poverty reduction in Africa, Centre for the Study of African Economies, University of Oxford, Oxford;
Hassan, R, 2010. The double challenge of adapting to climate change while accelerating development in SSA, Env & Dev. Economics, 15: 661-685;
WB (World Bank), 2009. World Bank development Report on: Development and Climate Change, WB, Washington DC;
WB (World Bank), 2010. The changing wealth of nations, WB, Washington DC;

 

A less ambitious pathway could lock in carbon intensive investments. This results in higher carbon prices later onwards and significantly higher overall costs over the entire period 2020 to 2050. Meeting an 80% reduction in 2050 will require additional investments of around 1.5% of the EU GDP per annum (on average) on top of current overall investments of 19% of GDP. The strategy will reduce the EU's fuel costs by €175 to 320 billion per year (on average).

Investing in the low carbon economy stimulates a gradual, structural change in the economy and can create additional new jobs (in net terms) in the short and medium term. On the long term job creation will depend on the ability of the EU to lead in terms of the development of new, low carbon technologies. The strategy would also have co-benefits. Air quality would improve and the costs of controlling traditional air pollution would be €10 billion lower in 2030. The benefits of reduced mortality due better air quality are estimated at up to €17 billion/year in 2030.

 

Complaints about ivory tower contributions are commonplace. Someone with a policy background who goes to some theory sessions at our European Association of Environmental and Resource Economists (EAERE) Annual Conference will probably have this feeling. For them, it is (too) hard to see the relevance of existence proofs of equilibria or bifurcation models. Or what to think of a paper that once more questions the difference between quantity and price instruments in environmental policy. Although personally I do see the usefulness of these sessions, I also think that the ivory tower does exist as well. Having one leg in economic science and another leg in policy advice, the gap between academia and day to day policy making is huge indeed.

Surprisingly, however, there also exist similar huge gaps within both communities.
This became very clear to me when I was involved in advising the Dutch government on budget cuts and tax policies aimed at reducing the rising budget deficits due to the Keynesian policies in response to the financial crisis last year. The previous government asked 20 committees with high level bureaucrats to prepare budget cuts in all areas. One of the committees looked for options in the climate and energy policy area. In this committee a heavy debate emerged between policy advisers who took their insights from simple textbook economics (mainly coming from the Finance department and Ministry of Economic Affairs), while other policy advisers (mainly coming from Ministry of the Environment) argued that the world is more complex and the theory of n-th best – as Bob Hahn used to call it – is unavoidable. The latter even claimed that policies that do not acknowledge this complexity may easily become the enemy of good policy. Apparently, some policy makers in the Dutch government favour simple, straightforward applications of textbook economics, whereas others belief simplism may threaten effective policies. The same controversy can be observed among academic economists. I remember that the other Hahn, i.e. Frank, and one of the real masters in General Equilibrium Theory, once declared that the fundamental theorems of welfare economics provide wonderful insight, but not in the real world, and for that reason better should be kept away from students.

Apparently gaps exist everywhere when it comes to the link between environmental and resource economists from academia on the one hand and policy makers on the other hand. This also serves to justify the introduction of a new initiative of the European Association of Environmental and Resource Economists (EAERE) to bring the world of environmental and resource policy closer to the world of academia in Europe. Traveling between both worlds all the time, this makes good sense to me. This goal is essentially lined up with my own motivation when I switched career and started my current job at the Netherlands Environmental Assessment Agency. It was my main aim to help improve the understanding within the institute, and therefore within Dutch Environmental Policy as well, of why things often do not go as one would like them to go. Indeed, economics often provokes people with good intentions and path breaking new world views, but essentially offers a very useful and coherent way of thinking about the same issues but without all the normative lumber. However, I also discovered that economists themselves also easily slip into advice with little evidence from the real world.

What issues would we like to cover in this series? The new series seeks to fuel mediation by seeking contributions from all sides. In this new series of commentaries, we welcome commentary on policy issues from all stakeholders in the field. The interesting stakeholders in the world of ideas of environmental economists and policy makers are:

• politicians who translate general public preferences into policy initiatives;
• bureaucrats who are keen on new ideas and also often follow their own agenda fueled by their own contacts (among them academic economists);
• academic economists who interact with both groups but also sometimes follow their own ‘fashions’ (and what they often call ‘insights’);
• intermediaries or information managers working at national and international strategic policy institutes like OECD and IEA;
• economists working at NGOs and other interest groups including representatives from industry and environmental interest groups.

All could contribute, reflecting personal as well as institutional insights on important day to day as well as longer term policy issues.

Any topic is admissible as long as it has something to do with urgent policy issues in the environmental and resource field, and is not libelous Current issues which provoke lively debate in policy circles these days include:

• What is the relevance or legitimacy of ‘green growth’?
• How to implement green growth strategies both at the international and national level?
• How to design resource efficiency policy?
• How to stimulate eco-innovations through international policy coordination,
• How to revise air quality regulation (NEC) in the face of more stringent climate change policy?
• What are the interactions between and implications of multiple environmental and energy policies?
• How to finance the needed change to put the world on a low-carbon growth pathway?
• Is environmental taxation a useful instrument to reduce budget deficits?
• What level of discount rate should be applied in cost-benefit analysis in the face of long run uncertain outcomes?
• What do we know about the effectiveness of environmental policy instruments?

We would also welcome reflective contributions like:

• Is there a useful role for cost-benefit analysis in the field of ecosystem services?
• How could the gap between academia and policy makers be filled?

Contributions should not exceed 1000 words, and can be much shorter. They can be at your own initiative as well as by invitation. Please contact me if you have suggestions as regards topics, contributors or to submit reflection.
Contact details: Herman Vollebergh, PBL Netherlands Environmental Assessment Agency, Tel: office (+31)302742626; home (+31)104473345; mobile (+31)06-55736920; email: vollebergh@ese.eur.nl)

 

National Information Center for Climate Change in Israel
The University of Haifa, in conjunction with Tel Aviv University, the Technion (Israel Institute of Technology), and the Samuel Neaman Institute for Advanced Research, has won the Environmental Protection Ministry's tender to set up a National Information Center for Climate Change, to be established at the University of Haifa consonant with the directives from and financed by Israel's Ministry of Environmental Protection.The new Center will serve as the focal point for all of the country's state-of-the-art knowledge concerning climate change, its regional and local impacts and the optimal ways of addressing them. As such it will be able to capitalize on the longstanding expertise of the leading scientists that make up the core of the Center's staff. The Center will integrate the scientific knowledge and will help disseminate the accumulated information to countries whose environmental features are similar to those of Israel and who can profit from the Israeli studies.
The Center will be headed by Professor Emeritus Mordechai Shechter (who was recently appointed as Founding Dean of the School of Sustainability at the Interdisciplinary Center – IDC – Herzliya), assisted by Dr. Ofira Ayalon, who also serves as Director of the University's Natural Resource and Environmental Research Center (NRERC), and heads the Environmental Research Unit at Neaman Institute. The Center will focus on the following six areas:

• Climate, led by Prof. Haim Kutiel of the Department of Geography and Environmental Studies, University of Haifa;
• Water, led by Prof. Emer. Nurit Kliot of the Department of Geography and Environmental Studies, University of Haifa;
• Economic Aspects, led by Prof Mordechai Shechter (IDC and UH) and Dr. Ruslana Palatnik of the NRERC;
• Public Health, led by Prof. Manfred Green, Head of the School of Public Health, University of Haifa;
• Biodiversity, led by Prof. Marcelo Sternberg of the Department of Molecular Biology and Ecology of Plants, Tel-Aviv University
• Urban Planning and Green Buildings, led by Dr. Guedi Capeluto, of the Faculty of Architecture and Town Planning, Technion
• Geo-strategy, led by Prof. Emer. Arnon Soffer of the Department of Geography and Environmental Studies, University of Haifa.

EAERE president Sir. Partha Dasgupta is appointed IHDP (International Human Dimensions Programme on Global Environmental Change) Scientific Committee Chair
Bonn, 6 April 2011. IHDP is pleased to announce the appointment of Sir Partha Dasgupta as the new chair of its Scientific Committee, succeeding Oran Young, who served from 2006 to 2010. Professor Dasgupta, Frank Ramsey Professor of Economics at the University of Cambridge, takes on this position at a felicitous moment within a rapidly evolving global environmental change landscape. Read more about his long and distinguished career in working at the frontiers of social sciences and the value his leadership will contribute to IHDP.

EAERE President Sir. Partha Dasgupta wins Zayed International Prize for the Environment
Sir Partha Dasgupta, the Frank Ramsey Professor of Economics at Cambridge University in the United Kingdom and one of the most outstanding environmental economists of his generation has won the $300,000 Zayed International Prize for Scientific and Technological achievements in the environment. Sir Dasgupta is one of the leading economists in the UK making the link between sustainability and economics in many ways well before such work was fashionable or fully understood. Professor Dasgupta coined the term “inclusive wealth” to spotlight the way conventional measures of wealth - primarily GDP - fail to capture natural capital or environmental assets. A statement from the Award committee said that the Jury decided that his achievements fulfill the objectives of the Zayed Prize, in line with the philosophy of the late Sheikh Zayed and the vision of the H.H. the founder and Patron, and are worth the award.