IAERE Newsletter

In this issue

» Presidential Address » Editorial » Research highlights: 2018 Nobel Prize in Economic Sciences » Student’s research: Economic growth and the forest development path: A re-assessment of the Environmental Kuznets Curve Deforestation » Announcements from IAERE » Updates from Institutional members: Climathon Venice 2018: How to reduce, recycle and reuse waste in Venice? » Publications from members » Announcements » Events » Job Ads

PRESIDENTIAL ADDRESS

Simone Borghesi, IAERE President On behalf of the Italian Association of Environmental and Resource Economists that I have the privilege to chair, I would like to congratulate Professor Nordhaus for the Nobel Prize recently awarded by the Royal Swedish Academy of Sciences. This well-deserved award is a clear recognition not only of the incredible personal work of Prof. Nordhaus but also of the increasing importance that environmental economics has gained in modern economics and in the global political debate. As such, this award is a remarkable incentive for all of us - and in particular for the young generation of environmental economists that are so numerous and active in our Association- to keep working hard in search of deeper knowledge and understanding of the topics that are the object of our research.

In the document that contains the motivation for the Nobel Prize, the Committee of the Royal Swedish Academy of Sciences has explicitly mentioned some contributions from Italian colleagues (Bosetti, Carraro, Galeotti, Massetti, Moretto, Tavoni e Vergalli) who have contributed to develop the literature. I would like to take this opportunity to congratulate all of them for this personal achievement. Among them there are two past Presidents of IAERE and one President-elect plus the current Italian President of EAERE. This is a clear sign of the great work that our Association has done in the past and will certainly keep doing in the future.

Simone Borghesi
IAERE President
FSR Climate - European University Institute | University of Siena
Italy

Dear IAERE community,

I am delighted to introduce you to the 11th IAERE Newsletter! I would also like to thank Monica Eberle and Martina Gambaro for their help in preparing this issue and of course the IAERE community for all your contributions.

The Newsletter is an essential tool for sharing information regarding research, events, career, and training opportunities within the Italian Environmental Economists community. I encourage the IAERE members to increase their use of the newsletter for both dissemination and communication purposes. The newsletter depends on your cooperation for content and effectiveness.

As you know, Professor William Nordhaus has been awarded the Nobel Prize in Economic Sciences integrating climate change into long-run macroeconomic analysis. While Professor Paul Romer has been recognized for demonstrating that knowledge can function as a driver of long-term economic growth and that growth is generated by internal rather than external factors. Their pioneering contributions provide us with fundamental insights into the causes and consequences of technological innovation and climate change. The contributions of Professor Nordhaus and Professor Romer is an apt reminder that left alone - markets will produce too much pollution and too few innovations.

Professor Valentina Bosetti (Universita' Bocconi, CMCC, & EIEE) writes a commentary on this year’s Nobel prize in our Research Highlights section while Nicola Caravaggio (PhD candidate, Università degli Studi Roma Tre) writes on his ongoing work on re-assessment of the Environmental Kuznets Curve with a focus on deforestation.

The Newsletter is intended to provide greater visibility to our work, it is my wish that we use the information provided for fostering collaboration as well as dissemination.

You will find a trove of information on recent publication, updates and announcements on events and conferences, and current job openings. Happy reading!

Sincerely,
Shouro Dasgupta
IAERE Newsletter Editor
Università Ca' Foscari Venezia | Fondazione Centro Euro-Mediterraneo sui Cambiamenti Climatici
Italy

Valentina Bosetti, Full Professor, Universita' Bocconi - Senior Scientist, EIEE

The 2018 Nobel prize in economics was awarded to two US scholars who have found a way to integrate innovation and sustainability into traditional macroeconomic models. Yale economist William Nordhaus, from Yale University, “has pioneered a framework for understanding how the economy and climate of our planet are mutually dependent on each other”. While Paul Romer, professor of economics at the Stern School of Business in New York, “has given us new tools for understanding how long-run technological change is determined in a market economy”
In addition to a deserved recognition for two great scientists, this Nobel is an ode to the potential of macroeconomics for still being able to help tackle the current and future problems. Although mainstream macroeconomic science has often been criticized for being self-referential and abstract, this award is an invitation to reinterpret it and apply it to the real world. The prize given to Nordhaus and Romer finally shows how the economy, the planet’s health, and sustainability are closely linked to each other, and cannot be looked at in isolation. A vision that is not yet fully considered in economics textbooks and mainstream economic theories.
The Nobel Prize in Economic Sciences was announced on the same day that the IPCC released the much-awaited report on ‘Global Warming of 1.5 °C’, underlining the extreme urgency of acting decisively to reduce emissions and limit the impacts of climate change. “The report is an important reminder about the dangers we face and the things that need to be done, said Nordhaus. The policies are lagging far behind science and what needs to be done. %5B...%5D We have a fair amount of progress on public awareness. Actually, the governments are lagging behind the people”.

Economic growth and the forest development path
A re-assessment of the Environmental Kuznets Curve Deforestation

The relationship between society’s development and the role of forests requires special attention in order to gather pertinent policy implications aimed to achieve the global goal of zero deforestation. Observing the history of Western countries and their forest cover area, Mather (1992) speculated for a possible Forest Transition hypothesis (FT) where countries switch from a negative to a positive forest cover change. In the same year, the World Development Report (WB, 1992) asserted how economic growth and the environment are not negatively related but able to go hand-in-hand, at least after a certain level of income per capita. This assertion represented the ground-floor for the overspread of the so-called Environmental Kuznets Curve (EKC) which hypothesizes an inverted U-shape relation between economic growth and environmental degradation. However, among the broad literature which characterizes the EKC, deforestation hosts a relatively small role with conflictual results representing an unresolved issue in forest economics (Hyde, 2014). Therefore, my research attempts to provide an answer for this issue starting from the Forest Development Path (FDP) proposed by Hyde (2012), a competing land use model between agricultural and forest land among three phases of economic development.
I showed how these three theories can be reconciled within a unique broad perspective. Along phases I and II of the FDP deforestation rises and forest cover decreases with increasing rates. During phase III, however, the peak of the EKC is reached and then forest depletion advances with decreasing rates up to the level of zero deforestation, or rather the turning point of the FT. Furthermore, it is reasonable to expect even another turning point for this EKC corresponding to the peak of reforestation rates since it is impossible to expect a continuous increasing reforestation process. Therefore, this theorized EKC for deforestation (EKCd) assumes an N-shape where the first half lies in the positive quadrant (deforestation) while the second, after the FT, in the negative one (reforestation).
The empirical section focused on a cross-country analysis of 114 countries clustered between low-, middle-, and high-income economies. Since the general lack of reliable forest cover data with long time-span, I reconstructed the data extending that was provided by the last Forest Resource Assessment of FAO (2015). Therefore, I performed a panel fixed effect model to test the possible existence of co-integration and then a tendency to a long-run equilibrium between deforestation rates and GDP per capita. First results show how middle-income economies reaches the turning point around 200 US$ and the FT at around 5,600 US$ while the turning point for the high-income group is equal to 9,600 US$ and the FT to 1,450 US$. Concerning the low-income group, the resulted U-shape suggests how these countries are facing an increasing phase of deforestations rates. I attempted to perform the analysis even for regional groups and climatic areas and preliminary results seems to evidence reverse U-shape relationship especially for tropical and arid areas while a U-shape for temperate areas. However, when some additional control variables are included in the analysis, while the functional form is preserved, TPs tend to change. Eventually, since the model suffers to some econometrics flaws, I am now re-analyzing the models with more enhanced methodologies such as pooled mean group estimation and CS-ARDL (Pesaran et al., 1999; Chudik and Pesaran, 2015).

References
Chudik, A. and Pesaran, M. H. (2015), "Common correlated effects estimation of heterogeneous dynamic panel data models with weakly exogenous regressors", Journal of Econometrics, 188(2):393–420.
FAO (2015), Global Forest Resources Assessment 2015. Food and Agriculture Organization of the United Nations. Accessible from: http://www.fao.org/forest-resources-assessment/en/
Hyde,W. F. (2012), The global economics of forestry. Routledge, New York.
Hyde, W. F. (2014). "Twelve unresolved issues in forest economics and policy: and two crucial recommendations for forest policy analysis". In Kant, S. and Avalapalati, J. R. R., editors, Handbook of Forest Resource Economics, chapter 6, pages 538–552, Routledge, New York.
Mather, A. S. (1992). "The forest transition", Area, 24(4):367–379.
Pesaran, M. H., Shin, Y., and Smith, R. P. (1999). "Pooled mean group estimation of dynamic heterogeneous panels", Journal of the American Statistical Association, 94(446):621–634.
WB (1992). World development report 1992: development and the environment. The World Bank, Oxford University Press, New York.

Call for Paper: Seventh IAERE Annual Conference
Udine, 7-8 February 2019 - Deadline for paper submissions: 15 Nov 2018

IAERE is glad to announce its Seventh Annual Conference, to be held at the University of Udine on February 7th-8th, 2019. The call for papers is now open and submissions on all relevant topics related to Environmental and Natural Resource Economics are warmly invited.
As in previous editions, the 2019 IAERE Conference maintains a balanced interest on both theoretical and applied research, with a marked interest in policy implications.
Presentations both in English and in Italian will be possible, depending on the audience. Young researchers and PhD students who wish to attend are most welcome.

PAPER SUBMISSION
Extended abstracts (1.000-1.500 words) or full papers should be submitted by November 15th, 2018.
Submitted contributions are expected to be work in progress, at a reasonably advanced stage but still unpublished. Only .pdf files in English are accepted. All submissions will undergo the regular peer review process. Each author can submit a maximum of two co-authored works (and/or only one single-authored paper).
In any case, each conference participant can present only one paper. Notification of submission acceptance in oral or poster sessions is expected by January 7th, 2019.

IAERE YOUNG ENVIRONMENTAL ECONOMIST AWARD
During the Conference, the Association is granting its IAERE Young Environmental Economist Award, a recognition given to the best paper presented by a young economist at the Association’s Annual Conference. The Award aims to reward new ideas addressing key environmental and resource economic issues at the national, European and global scale. Both theoretical and empirical papers will be considered without any restriction of topics. Eligible candidates should be less than 33 years of age and no more than five years past a PhD defence should they have a PhD. Only full papers submissions will be considered: submitters of extended abstracts are not eligible for this award. Priority will be given to papers written by single author or multiple authors complying with the age requirement. There is a monetary reward of €1,000 for the presenter of the winning paper. The Selection Committee comprises the Conference Programme Committee and the IAERE Council, and is co-chaired by the IAERE President and the chair of the Conference Programme Committee. All eligible presenters can submit their candidacy to the Award at the paper submission process.

KEYNOTE SPEAKERS
- Stefan Ambec, INRA (France)
- Phoebe Koundouri, International Centre for Research on the Environment and the Economy ICRE8 and Athens University of Economics and Business (Greece)

SPECIAL SESSION
Special sessions generally offer a forum for focused discussion in new areas or on innovative applications of established approaches.
The IAERE 2019 Conference will host two organized special sessions:
- "Industry and the Environment", organized in collaboration with the Italian Association of Industrial Economics and Policy (Società Italiana di Economia e Politica Industriale, SIEPI).
- "Agriculture and Environment", organized in collaboration with the Italian Association of Agriculture and Applied Economics (Associazione Italiana di Economia Agraria e Applicata - AIEAA), the Appraisal and Territorial Economy Research Center (Centro Studi di Estimo e di Economia Territoriale - Ce.S.E.T.), the Italian Society of Agricultural Economics (Società Italiana di Economia Agraria - SIDEA) and the Italian Society of Agri-food Economics (Società Italiana di Economia Agroalimentare - SIEA).
Papers presented in these special sessions will undergo the standard review and selection process.

ORGANISING COMMITTEE
Antonio Massarutto (chair, University of Udine)
Francesco Marangon (vice chair, University of Udine)
Simone Borghesi (University of Siena)
Matteo Carzedda (University of Udine)
Marinella Favot (University of Udine)
Massimiliano Mazzanti (University of Ferrara)
Anna Montini (University of Bologna)
Roberto Roson (Ca' Foscari University of Venice)
Lucia Rotaris (University of Trieste)
Stefania Troiano (University of Udine)

PROGRAMME COMMITTEE
Antonio Massarutto (chair, University of Udine)
Francesco Marangon (vice chair, University of Udine)
Andrea Bigano (Euro-Mediterranean Center on Climate Change - CMCC)
Simone Borghesi (University of Siena)
Valentina Bosetti (Ettore Bocconi Department of Economics)
Silvana Dalmazzone (University of Torino)
Alessio D'Amato (Univerity of Rome "Tor Vergata")
Fabio Eboli (Italian Ministry of the Environment, Land and Sea - SOGESID Technical Assistance Unit)
Alberto Majocchi (University of Pavia)
Giovanni Marin (University of Urbino "Carlo Bo")
Massimiliano Mazzanti (University of Ferrara)
C. Dionisio Pérez-Blanco (University of Salamanca)
Aldo Ravazzi Douvan (Italian Ministry of Environment, Land and Sea - DG Sustainable Development & International Affairs - TA Sogesid - OCSE-WPEP - Green Budget Europe)
Sergio Vergalli (University of Brescia)
Mariangela Zoli (University of Rome "Tor Vergata")

IMPORTANT DATES
15 November 2018: deadline for paper/long abstract submission
7 January 2019: notifications of paper/long abstract acceptance
14 January 2019: deadline for registration for inclusion in the Programme
7-8 February 2019: Conference.

IAERE is delighted to announce the candidates running in the 2019 Elections, taking place at the General Assembly of Members to be held within the Seventh Annual Conference in Udine.
IAERE members are invited to vote for the following positions:
– President: the elected candidate will be entrusted with the mandate of the President-Elect for the 2020-2021 period, the mandate for the President for the 2022-2023 period, as well as the mandate of the Past President for 2024-2025.
– Two Ordinary Council Members for the period 2020-2023.

IAERE is grateful to Anna Montini, Marzio Galeotti e Roberto Zoboli - members of the Nominating Committee - for the important service they have provided to our Association, and to all the candidates for their enthusiasm in accepting to take part in the elections.

3rd IAERE School (Bologna, September 24-28, 2018)

The Third IAERE School took place in Bologna on September 24-28, 2018.
The School topic was "Experimental Methods in Environmental and Resource Economics". The School was organised in cooperation with the Department of Economics of the University of Bologna.
IAERE is most grateful to Marco CASARI for his excellent work as coordinator of the School, and to the outstanding faculty members who accepted to participate in the School: Maria BIGONI (University of Bologna, Italy), Valentina BOSETTI (Ettore Bocconi Department of Economics, Italy), Giovanna D'ADDA (University of Milan, Italy), Timo GOESCHL (University of Heidelberg, Germany), Peter MARTINSSON (University of Gothenburg, Sweden), Luca TASCHINI (University of Verona, Italy and Gratham Research Institute in Climate Change and the Environment, LSE, UK), Alessandro TAVONI (The London School of Economics and Political Science – Gratham Research Institute in Climate Change and the Environment, UK).
23 participants have actively taken part to the School. Participants came from 8 different countries from Europe and beyond, confirming the international vocation of our School.

The third edition of Climathon Venice took place on October 25-26, 2018 at VEGA (“Venice Science Park”, Marghera Venice), organized by CMCC Foundation in partnership with We are Here Venice and Ca’Foscari Challenge School and promoted by the City of Venice, within the initiative “Le Città in Festa”. Climathon is a global 24-hour climate change hackathon happening simultaneously in more than one hundred cities around the world, promoted by Climate-KIC. It brings together the challenges of the world’s cities with the people who have the passion and ability to solve them. Climathon attracts innovators, entrepreneurs, students and professionals to create innovative solutions to cities climate challenges. 32 participants in Venice, organized in 7 teams, worked hard to find new and original solutions to reduce, recycle and reuse waste in Venice. The winner for Climathon 2018 is the project "Light Blu Venice", that tackles the plastic combining economic incentives and technology.

For more information see here.

Ricke K., Drouet L., Tavoni M., Caldeira K. (2018)
Country-level Social Cost of Carbon
Nature Climate Change, DOI: https://doi.org/10.1038/s41558-018-0282-y

EAERE Magazine: Issue N.2 Summer 2018 is out now

EAERE Magazine This second issue of the European Association of Environmental and Resource Economists’ new Magazine is all about this year’s Award Winners. The first article is a summary of the paper “Feed-in Subsidies, Taxation, and Inefficient Entry” by Fabio Antoniou and Roland Strausz, the Winners of the EAERE Award for Outstanding Publication in the Journal Environmental and Resource Economics. Enrica De Cian and Natalia Fabra, two Winners of the EAERE Award for European Research Council Grants laureates in the field of environmental and resource economics, have contributed articles about their ERC projects. The two winners of the European Lifetime Achievement Award in Environmental Economics, Mordechai Shechter and Aart de Zeeuw, answer the Juniors-ask-Seniors Interview questions. Read EAERE Magazine online or download a pdf here.

Temporary research felloships
Politecnico di Milano, Department of Architecture and Urban Studies, Milan, Italy
Deadline: 26 Nov 2018

Call for applications for the award of temporary research fellowships within the framework of the following research programme : "STRENGTHS AND WEAKNESSES OF THE ECONOMIC AND TERRITORIAL DEVELOPMENT STRATEGIES FOR DEPRESSED AREAS/THE ITALIAN CASE WITHIN THE EUROPEAN CONTEXT/2018_ASSEGNI_DASTU_32"
Further info at (in italian)

Several job openings in integrated assessment modeling and the low carbon economy
RFF-CMCC European Insitute on Economics and the Environment (EIEE), Milan, Italy
Deadline: Assignments are expected to begin in the fall 2018/early 2019

EIEE, a research institute co-founded in 2018 by Resources for the Future and the CMCC Foundation, encourages to submit applications for several junior and senior researcher positions.

The successful candidates will work on either of these two broad topics:
- Integrated Assessment Modeling: maintaining and developing the WITCH IAM, focusing on either energy systems, macro-economic modeling, distributional impacts, technological change, uncertainty and decision making.
- The low carbon economy: quantitative and/or qualitative analyses of the low carbon transformation, including, but not limited to, green innovation, competitiveness, employment, human migration, climate finance and policy evaluation.

Further info at: EIEE website

Call for Paper: Seventh IAERE Annual Conference Udine, 7-8 February 2019 - Deadline for paper submissions: 15 Nov 2018

3rd IAERE School (Bologna, September 24-28, 2018)

Call for Paper: Seventh IAERE Annual Conference
Udine, 7-8 February 2019 - Deadline for paper submissions: 15 Nov 2018