Forests and water in South America

South America is experiencing rapid change in forest cover, of both native and planted forest. Forest cover loss is primarily attributable to fire, logging, and conversion of native forest to agriculture, pasture, and forest plantations, and types of change vary within and among the many diverse types of forests in South America. Major changes in forest cover and growing policy concerns underscore an urgent need for research on sustainable forest management and water ecosystem services in South America. Differences in land ownership and management objectives create trade‐offs between wood production and water ecosystem services from forests. Work is needed to quantify how forest change and management affect ecosystem services, such as wood production versus water provision. Current scientific understanding of forest management effects on water ecosystem services in South America has important limitations, including a scarcity of long‐term records and few long‐term integrated watershed studies. Industry, government, universities, and local communities should collaborate on integrated applied studies of forests and water. Data archiving and publically available data are required. The creation of national networks and a multi‐country South America network to identify and implement common water research protocols, share results, and explore their implications would promote common and well‐supported policies. Hydrologists working in South America are well placed to tackle the challenges and opportunities for collaborative research that will maintain the intrinsic values and water ecosystem services provided by South America's forests.     

Why does emissions trading under the EU Emissions Trading System (ETS) not affect firms’ competitiveness? Empirical findings from the literature

Environmental policies may have important consequences for firms’ competitiveness or profitability. For the European Union Emissions Trading System (EU ETS) the empirical literature documents that significant emissions reductions have resulted from it. Surprisingly, however, the literature shows that there have been hardly any concurrent negative effects on firms’ competitiveness during the first two phases of the scheme (2005–2012). We show that the main explanations for the absence of negative impacts on competitiveness are a large over-allocation of emissions allowances leading to a price drop and the ability of firms to pass costs onto consumers in some sectors. Cost pass-through combined with free allocation, in turn, partly generated windfall profits. In addition, the relatively low importance of energy costs indicated by their average share in the budgets of most manufacturing industries may have limited the impact of the EU ETS. Finally, small but significant stimulating effects on innovation have been found so far. Several factors suggest that over-allocation is likely to remain substantial in the upcoming periods of the scheme. Therefore, we expect to see no negative competitiveness effects from the EU ETS in Phases III and IV (2013–2030).

Key policy insights

• Empirical literature on the EU ETS shows that there have been hardly any effects on firms’ competitiveness or profitability.

• One main explanation is a large over-allocation of emissions allowances leading to a price drop. This reduced incentives for innovation.

• Moreover, firms were able to pass costs on to consumers in some sectors which partly generated windfall profits.

• Innovation effects have so far been small but positive.

• We expect to see no negative competitiveness effects on regulated firms in the near future suggesting that no further reliefs for regulated firms are required.

     

The accidental enterprise: Ethical consumption as commerce

Ethical consumption is routinely promoted as a form of individualised responsibility taking whereby citizen-consumers consciously engage in morally/politically directed purchasing decisions. This has been heavily critiqued as a neoliberal reduction of civic engagement to market choice. It has also been contested by way of a shift to problematizing the consumer as moral agent; where attention is drawn instead to networks of agential entities - advocacy organisations, certifying bodies, marketing discourses, retail spaces, packages, household routines, and so on - that configure consumption alternatives as practice and performance. In reflecting on these concerns, this paper qualitatively explores the enterprising (rather than consumer enactment) of the ethical. Drawing on a multifaceted, three-year study of alternative consumption in Australia, the paper attends to the framing of ethical enterprise through business language, to the often ambivalent deployment of various commercial models and marketing strategies in the doing of ethical business, and to how a contestatory commerce is being imagined, especially in terms of its relations to a politics of social and economic change and to a commercial mainstream. Informed by work on markets as pragmatically assembled and on the economy as multiple, emphasis is placed throughout this article on ethical enterprise as a space of political ambiguity and as a gesture towards an alternative commerce that displaces an understanding of ethical consumption as resting on the actions of the virtuous consumer.     

Explaining the stickiness of supply chain relations in the Brazilian soybean trade

The global trade of agricultural commodities has profound social-ecological impacts, from potentially increasing food availability and agricultural efficiency, to displacing local communities, and to incentivizing environmental destruction. Supply chain stickiness, understood as the stability in trading relationships between supply chain actors, moderates the impacts of agricultural commodity production and the possibilities for supply-chain interventions. However, what factors determine stickiness, that is, how and why farmers, traders, food processors, and consumer countries, develop and maintain trading relationships with specific producing regions, remains unclear. Here, we use data on the Brazilian soy supply chain, a mixed methods approach based on extensive actor-based fieldwork, and an explanatory regression model, to identify and explore the factors that influence stickiness between places of production and supply chain actors. We find four groups of factors to be important: economic incentives, institutional enablers and constraints, social and power dimensions, and biophysical and technological conditions. Among the factors we explore, surplus capacity in soy processing infrastructure, (i.e., crushing and storage facilities) is important in increasing stickiness, as is export-oriented production. Conversely, volatility in market demand expressed by farm-gate soy prices and lower land-tenure security are key factors reducing stickiness. Importantly, we uncover heterogeneity and context-specificity in the factors determining stickiness, suggesting tailored supply-chain interventions are beneficial. Understanding supply chain stickiness does not, in itself, provide silver-bullet solutions to stopping deforestation, but it is a crucial prerequisite to understanding the relationships between supply chain actors and producing regions, identifying entry points for supply chain sustainability interventions, assessing the effectiveness of such interventions, forecasting the restructuring of trade flows, and considering sourcing patterns of supply chain actors in territorial planning.     

河北省贸易隐含二氧化碳排放及其影响因素研究

针对全球气候变化而引发国家间减排责任的争吵,需要各国从生产和消费的角度来认识二氧化碳排放,国家内部区域之间减排责任的分担也应该从生产和消费两个角度加以认识。为此,本文利用投入产出分析方法和EEBT(双边贸易隐含排放)核算方法核算河北省的二氧化碳排放,发现河北省生产型二氧化碳排放远大于其消费型二氧化碳排放,其中国内流出/流入引发的二氧化碳排放量较大。在利用SDA(结构分解分析法)分析影响贸易隐含二氧化碳排放变化因素时,发现行业二氧化碳排放强度变化对隐含二氧化碳排放具有积极影响,而国民经济行业之间技术经济关系的变化对隐含二氧化碳排放具有消极影响。因此,河北省在利用技术手段降低行业二氧化碳排放强度的同时,还要筛选关键性部门加以重点管理。同时,河北省贸易隐含二氧化碳排放及其影响因素变化对国家制定区域减排责任也有较强参考价值。     

Economic and political drivers of environmental impact shifting between countries

There is mounting evidence that major improvements in environmental quality in high-income countries over the past decades may have been achieved to a large degree through relocation of environmental impacts of consumption to other, usually poorer countries. While political and academic debates on appropriate policy interventions to address this challenge are gaining ground, we still know rather little about the drivers of international environmental impact shifting, other than international trade flows per se. We address this issue by focusing on the effects of economic inequality and political factors. We argue that income inequality between and within countries as well as variation in political institutions, environmental clauses in preferential trade agreements (PTAs), and participation in international environmental treaties could be important drivers or mitigators of environmental impact shifting between countries. We use novel panel data on five types of environmental impact flows between country dyads (187 countries, 1990–2015) to assess these arguments. We find that richer countries and countries with higher domestic economic equality tend to be the “outsourcers”, and poorer, domestically more unequal countries the “insourcers” of environmental impacts. Discrepancies in democracy levels aggravate the outsourcing from more equal to more unequal societies. In turn, environmental clauses in PTAs have a mitigating effect on environmental impact shifting, but participation in international environmental agreements has no such effect. Our findings highlight the need for green economy policies that reduce environmental footprints of consumption not only within high-income democracies, but also make their global supply chains more sustainable.     

The effectiveness of the EU Emissions Trading Scheme

How effective is the EU Emissions Trading Scheme (EU ETS) in promoting emissions reduction for compliance with the Kyoto Protocol commitment? A theoretical benchmark is determined in order to assess the stringency of the ETS cap and to evaluate whether emissions allowances have been over-allocated. This analysis clarifies how the emissions reduction effort has been divided between ETS and non-ETS sectors, highlighting the extent to which Member States effectively rely on the ETS to comply with their Kyoto commitments. Finally, inefficiencies relating to the over-allocation of allowances are analysed; namely cross-subsidization from non-ETS to ETS sectors, national subsidies to the ETS sectors, and distortion of competition.     

A case for introducing an explicit carbon price into China's export tax

In recent years, export value-added tax (VAT) refund rebate and export tax (EVRRET) measures have been adopted for energy-intensive products in China. They are proclaimed to be climate policy, yet there is no explicit and unique carbon cost set on export, and the implicit export carbon tax rates vary dramatically across sectors and over different periods. A method is provided to introduce an explicit and unique carbon cost into the current EVRRET. By setting a comparable carbon cost (US$20/tCO₂ and US$30/tCO₂) for eight major energy-intensive sectors to which the EVRRET is widely applied, it derives the corresponding ad valorem average rate for each sector. The introduction of a carbon cost into export VAT refund rebate policy would not increase the current export VAT refund rebate rate (except for the chemical sector), but would simply define a ceiling. However, the same introduction into the export tax policy would lead to an overall increase in sectoral export tax rates. In terms of competitiveness and World Trade Organisation concerns, the better option for introducing a carbon cost into Chinese exports would be through reforming export VAT refund rebate policy.     

Real challenges behind the EU–China PV trade dispute settlement

This article addresses the implications and remaining challenges behind the seemingly happy ending of the recent EU–China trade dispute on solar products. First, the EU's choice of a specific trade defence measure – anti-dumping – was based on shaky arguments. Second, further trade disputes on green goods are very likely, in particular because China is increasingly implementing domestic support policies on green sectors, bringing down Chinese export prices. Third, trade defence measures could be adopted as an expensive option. Alternatively to this, the EU and China could consider setting up constructive and preventive mechanisms in order to stabilize trade and broaden their economic relationship.

Policy relevance

In July 2013 the EU accepted an undertaking by Chinese solar wafer, cell, and module manufacturers to fix minimum import prices for their products, along with a volume cap to be imposed on Chinese solar exports to the EU. In spite of the seemingly happy end of a trade dispute between the two major players in the renewables sector, we show that the possibility of trade disputes over low-carbon products in the near future cannot be ruled out. Drawing on the China–EU photovoltaic ‘dumping case', we highlight some weaknesses in the EU's choice to resort to anti-dumping measures and emphasize the urgent need to invent new forms of trade dialogues between the EU and China as first-choice trade dispute settlement policies.     

A load-based CO2 cap in the power sector

Oregon's governor has proposed a load-based cap and trade programme that limits carbon dioxide (CO₂) emissions to 10% below 1990 levels by 2020. A load-based programme is different from the source-based European Union Emissions Trading Scheme (EU ETS), as it regulates emissions sources, located outside the state, that serve Oregon's electricity load. This article describes the stakeholder process that developed the legislative proposal for the load-based cap. The Oregon Clean Energy Planning Model©, a modified capacity expansion model of annual load resource balances, is used to estimate programme costs. The net present value of the climate policy to Oregon ranges from a $518 million benefit to a $414 million cost under various load growth scenarios. Programme benefits are possible under low and medium load growth because the societal returns of energy efficiency exceed its cost over the life of the programme. CO₂ allowance prices in 2017–2020 are estimated in the medium case at approximately $21 per tonne. Low energy efficiency deployment could raise allowance costs to $36, while an aggressive efficiency programme could reduce them to $13.50. Competition for Northwest renewable resources could increase allowance prices in final phase to $37, indicating the interdependence in programme design among state climate policies.