Alternative Policy Instruments Research Articles

THE IMPACT OF ALTERNATIVE MONETARY POLICY INSTRUMENTS ON ELECTRONIC PAYMENT CARDS (2017-2023)

The current study aimed to show the extent of the impact of independent variables on alternative monetary policy tools in electronic payment cards, as the problem of the study was whether the alternative monetary policy tools of the Central Bank of Iraq contribute to enhancing dealing with electronic payment cards, as the variables were analyzed financially for the period (2017-2023 )annually and then using the statistical program SPSS V 26 to test hypotheses according to the standard multiple linear regression model that was suitable for this study. The study showed a set of conclusions, including a statistically significant impact relationship of alternative monetary policy instruments in electronic payment cards. The study recommended promoting alternative monetary policy tools to achieve significant economic benefits by investing in infrastructure, enhancing awareness, and improving regulatory frameworks.

Environmental taxation of plastic bags and substitutes: Balancing marine pollution and climate change

Several countries have imposed either a ban or a tax on single-use plastic packaging, motivated by their contribution to marine plastic pollution. This may lead consumers to opt for similar unregulated substitutes, potentially undermining or even counteracting the intended effect of the policy instrument. The purpose of this study is to theoretically and empirically compare the environmental and welfare effects of the first-best Pigouvian taxes on both plastic bags and a substitute (paper bags), with two alternative second-best policy instruments: a tax on plastic products alone, and a common uniform tax on all packaging materials. The empirical analysis accounts for two different types of environmental externalities from the use of both bag types: marine pollution and greenhouse gas emissions. It also compares results for two countries, Denmark and the USA, which differ in the demand for plastic and paper bags. The theoretical analysis shows that a unilateral tax on plastic bags should equal the marginal environmental damage of plastic bags minus a fraction of the marginal environmental cost of paper bags, hence being lower than the Pigouvian tax. The optimal common tax should equal a weighted average of the marginal environmental damage of the two bag types and would be lower than the Pigouvian tax on plastics if the marginal external cost of plastic bags exceeds that for paper bags. The empirical analysis shows that for default parameters, the variation in tax level across the studied scenarios is small. It also shows that if Pigouvian taxes cannot be implemented, a common uniform tax on both bag types would result in a higher welfare gain than a tax on plastic bags alone. Sensitivity analysis reveals that the level of the second-best taxes and their associated environmental and welfare impacts are sensitive to assumptions regarding the littering rate and decay rate of plastic bags in the marine environment.

Regulatory incentives for transmission system operators under flow-based market coupling

Flow-based market coupling is a critical element of the electricity market in Europe. Transmission System Operators determine the commercial transmission capacity that can be implicitly traded in a zonal day-ahead market. However, this entails a trade-off: higher commercial transmission capacities increase market efficiency, affecting the electricity market prices, but also increase redispatch costs, affecting the network tariff. The decision on the commercial transmission capacity should optimally balance day-ahead welfare and redispatch costs, but depends on the rules and regulated incentives enforced on the TSOs. A MinRAM criterion, i.e., imposing minima for the commercial transmission capacity, is a one-size-fits-all policy without variation in time and space that unlikely leads to optimal transmission capacity allocation and is hard to tune because regulators have incomplete information. Incentive regulation is an alternative policy instrument promoting welfare-maximizing commercial transmission capacities, robust against information asymmetry. We provide a set of mathematical conditions to properly design an incentive scheme that rewards price convergence and penalizes excessive redispatch costs. Therefore, this paper serves as a stepping stone towards tapping the full potential of cross-border trade in zonal markets for policymakers, regulators, TSOs and market participants.

Curbing methane emissions from Italian cattle farms. An agroeconomic modelling simulation of alternative policy tools

Methane (CH4) emissions from cattle farms have been prioritised on the EU agenda, as shown by recent legislative initiatives. This study employs a supply-side agroeconomic model that mimics the behaviour of heterogeneous individual farms to simulate the application of alternative economic policy instruments to curb CH4 emissions from Italian cattle farms, as identified by the 2020 Farm Accountancy Data Network survey. Simulations consider increasing levels of a tax on each tonne of CH4 emitted or of a subsidy paid for each tonne of CH4 curbed with respect to the baseline. Individual marginal abatement costs are also derived. Besides, to consider possible technological options to curb emissions, a mitigation strategy is simulated, with different levels of costs and benefits to appraise the potential impacts on the sector.Relevant reductions in operating income are foreseen, the most substantial in farm types and size classes characterised by lower levels of carbon productivity. The introduction of the mitigation strategy shows that the outcome in terms of mitigation potential, without undermining production level, highly depends on the implementation costs, but can also vary widely due to heterogeneous farms’ economic performances. Policy implications are also derived.

Policies to reduce local participation in illegal hunting: The case of Kafue National Park in Zambia

Using data collected from 217 respondents living near the Kafue National Park in Zambia, we assess how households value alternative policy interventions aimed at minimizing poaching. Building on the current debate on community-based wildlife conservation policy, we presented households with different combinations of agro-inputs packs donation, access to a micro-credit facility and donation of dairy cows for milking. These were proposed as alternative policy interventions to compliment the traditional command and control policy framework, implemented through a rise in frequency of game patrols and increase in minimum jail sentences for poaching offenses. We use a discrete choice experiment to estimate policy preferences and potential trade-offs between poaching and proposed alternative policy instruments. Our findings show that increase in each of the proposed interventions could significantly contribute to the well-being of respondents, potentially reducing the number of hunting trips a poacher would make per month. Similarly, a rise in the deterrent interventions have significant, but weak effect on respondents' choice to poach. The above carrot and stick instruments could be deferentially applied based on cost and effectiveness of each combination to achieve desired goals.

'Glocalizing' land-use and forest governance in the tropics: examining research partnerships and international forest policies affecting Brazil, DRC and Indonesia.

Background: International and market forces are key drivers of deforestation and forest degradation, with transnational and market-based solutions in land-use and forest governance often missing economic, distributive, and environmental targets. Methods: This paper tackles both the framing and effectiveness of transnational initiatives affecting forest lands and peoples in the Global South, and the quality of relationships between institutions in the Global North and the Global South. Through more equitable research partnerships, this paper draws lessons from case studies in Indonesia (legality verification system in different forest property regimes), the Democratic Republic of the Congo (lifting of a moratorium on new logging concession), and Brazil (FSC in the Amazon region and the Amazon Fund). Results: International partnerships have privileged market-based instruments and commodity exchange between Global South and Global North countries, and the benefits of such mechanisms are unevenly distributed. Complementary and alternative policy instruments are discussed for each geography. Conclusions: Glocalizing land-use and forest governance implies in advancing equitable research partnerships between institutions in the Global South and Global North, and strengthening a community of practice for critical enquiry and engagement in partnerships for sustainable development. Land-use, climate and forest governance mechanisms must redress power dynamics, and partnership models, and commit to improving well-being and sustainable livelihood outcomes.

Cost-benefit analysis of two possible deposit-refund systems for reuse and recycling of plastic packaging in Sweden

Plastic packaging is a major contributor to the environmental impacts associated with the linear plastic production and consumption system due to the prevalence of short-lived single-use plastic (SUP) packaging. Deposit-refund system (DRS), as an alternative policy instrument to Extended Producer Responsibility in waste management, is deemed as a potentially promising way to address the failure of the current plastic waste management and facilitate circular plastic packaging production and consumption for food contact use. In this paper, two DRS scenarios for recycling and reuse respectively are explored, with PET trays for food-grade use in Sweden in focus. Their costs and benefits are investigated relative to the business-as-usual scenario over a 25-year period. Results show that the costs are greater than the benefits for the recycling scenario but not for the reuse scenario and that the benefit-cost ratio (1,67) of the reuse scenario is 2.3 times as high as that (0,73) of the recycling scenario. The distributive analysis reveals major cost drivers such as deposit handling and recycling in the recycling case and deposit handling, dishwashing and packaging in the reuse case and major cost takers such as materials industry and hospitality/supermarkets in both scenarios. However, the results are uncertain, as is indicated by sensitivity analysis. Several parameters with high uncertainty are identified and highlighted for system development and innovation. • Deposit return schemes generate environmental benefits • Costs risk outweighing benefits • Need for system innovation

Martin Weitzman: A Gift That Keeps on Giving

Martin Weitzman: A Gift That Keeps on Giving

Tax policies to reduce carbon emissions

AbstractCarbon taxes or similar pricing instruments could play a crucial role in helping countries decarbonise their economies. No country has a single carbon price that applies to all greenhouse gas emissions. The UK is typical in having adopted a complex patchwork of policies that raise the cost of different polluting activities to different degrees, resulting in implied carbon taxes that vary greatly across sources of emissions. We document and quantify these inconsistencies in the case of the UK, and assess the case for greater uniformity after accounting for considerations of efficiency, distribution, carbon leakage and the use of alternative policy instruments. We argue for greater rationalisation of environmental taxes in the UK and other developed economies.

Is corporate transparency the solution to political failure on our greatest problems? A discussion of Darendeli, Fiechter, Hitz, and Lehmann (2022)

Advocacy groups have responded to the lack of political solutions to some of the greatest problems we face—from climate change to armed conflicts—by lobbying for securities regulation that increases corporate transparency. They aim to incentivize corporations to address problems that lack other political solutions. I discuss what we can (and cannot) learn about the efficacy of reporting mandates from the findings in Darendeli et al. (2022) and related papers that stakeholders respond to greater availability of corporate social responsibility information. I support my arguments with evidence from mandatory conflict mineral disclosures—to date, the only related US securities regulation. Although stakeholder responses are likely necessary to incentivize changes in corporate behavior, they are insufficient to justify a mandate. A convincing justification must explain how reporting mandates lead to socially beneficial real effects, are best overseen by the Securities and Exchange Commission, and are less costly than alternative policy instruments. So far, proponents of reporting mandates have, at best, provided incomplete justifications. These circumstances are problematic given the current push for mandatory reporting related to issues such as climate change and workplace diversity.

Optimal Environmental Policy in a Dynamic Transboundary Pollution Game: Emission Standards, Taxes, and Permit Trading

Global environmental problems such as transboundary pollution and global warming have been recognized as major issues around the world. In practice, governments of all countries are actively exploring various environmental policies to control pollution. The government needs to consider the impact of neighboring regions when formulating environmental policies, especially in the context of transboundary pollution. However, the above problems are less studied, to bridge this gap and aim at solving problems in existing practices, we consider a differential game model of transboundary pollution control to examine which policy is more effective in promoting environmental quality and social welfare in a dynamic and accumulative global pollution context. Three alternative policy instruments, namely emission standards, emission taxes, and emission permit trading, are considered and compared. The results show that the social welfare of each region is the lowest and the total pollution stock is the highest under the emission tax policy due to the “rent-shifting,” “policy-leakage,” and “free-riding” effects. Moreover, the realized level of the environmental policy in the Nash equilibrium of the policy game is distorted away from the socially optimal level. The emission standards policy is found to be better than the emission tax policy and characterized by initiating the rent-shifting effect without the policy-leakage effect. Moreover, the pollution stock of two regions is found to be the lowest and the social welfare is found to be the highest under the emission permit trading policy, which is not associated with any of the three effects. Finally, a numerical example is used to illustrate the results, and a sensitivity analysis is performed in the steady state.

Specialty crops and the farm bill

AbstractSpecialty crops include a myriad of diverse commodities, markets, and supply chains. In contrast to major field crops, specialty crops have historically been covered by different Farm Bill provisions and other policies, in part due to their heterogeneity. As specialty crop production and markets evolve, the applicability and efficacy of alternative policy instruments change as well. We track how Farm Bill coverage of specialty crops adjusted throughout the years in broad types of policy approaches: commodity programs, trade, nutrition, research, risk mitigation, and conservation. Looking forward, we consider how specialty crops fit with current White House priorities of economy, equity, and climate as discussions begin on a new Farm Bill.

Support for behavioral nudges versus alternative policy instruments and their perceived fairness and efficacy

AbstractAn extensive debate has emerged in recent years about the relative merits of behavioral policy instruments (nudges) aimed at changing individual behavior without coercion. In this article, we examine public support for non‐deliberative nudges and deliberative nudges and compare them to attitudes toward top‐down regulation and free choice/libertarian options. We also examine whether support for both types of nudges is associated with perceptions of fairness and efficacy. We test these expectations with a survey experiment with 1706 UK adult respondents (representative of the population on age, gender, and location) in two policy areas (retirement savings and carbon offsets for airline passengers). We find higher levels of public support for both nudge policy options compared to top‐down regulation. Support for nudges is associated with the perceived fairness of nudges more than their efficacy.

Which policy instrument do citizens and civil servants prefer? A choice experiment on Swedish marine policy

Abstract In the choice between alternative environmental policy instruments, economists tend to favor policies capable of attaining cost-efficiency, but other considerations may be more important to stakeholders. We perform a choice experiment modeled on Swedish water and marine policy to estimate preferences for different policy instruments among citizens and municipal civil servants. Both the modal citizen and the modal civil servant prefer direct regulation and subsidies to nutrient trading. Moreover, nutrient trading is unlikely to deliver sufficiently large cost savings for civil servants to prefer it to other instruments. These results are consistent with the apparent reluctance to adopt water quality trading in Europe.

Multidimensional Societal Targets, Risks, and Government Intervention in the Mining Industry

We explore the impacts of commodity price volatility, the adoption of new technology and environmental risks on the long-term sustainability of a stylized mining firm and examine the implications for government policy intervention. We first analyze whether a mine should remain open or be closed when premature closing is costly due to land rehabilitation and reclamation resulting from an environmental accident. We then go on to investigate alternative resource policy instruments for by which the government may extract resource rents, examples being an ad valorem tax on output, a mining industry-specific corporate tax rate and a royalty on the amount of ore removed. Furthermore, we evaluate the potential of a number of means to correct for environmental externalities and compensate for damages that a mine causes during its lifetime, specifically a Pigou tax on effluents, fines on environmental accidents, mandatory up-front payments to an environmental liability fund and a surety bond to cover closure and reclamation costs. Our simulation results for government revenues from alternative policy packages over the lifecycle of the mine provide important information for policy implementation and the design of taxation and liability payments.

Financial implications of mobile phone-based personal carbon trading: a case study of Safaricom

Abstract Personal carbon trading (PCT) has garnered significant interest in the literature as an alternative policy instrument to the largely unpopular carbon tax. However, it has been hindered by the cost and administrative complexity concerns as a result of covering potentially millions of emitters. This work expands on a prior study which presented a mobile phone-based PCT scheme for personal road transport in Kenya. In that study, the system design and operation was extensively developed, and distributional impact was assessed using sample data of motorists to identify equity issues. In this extension, I justify the scheme further by assessing the cost concerns using a case study approach of the mobile service provider, Safaricom. Data from the sample survey is revisited and combined with Safaricom’s financial reports to simulate the potential cost of the scheme. Results revealed running costs of less than £80 000 annually, several times lower than estimates that relied on the chip card system. Policymakers and researchers are encouraged to build on this scheme’s viability as a globally-inclusive variant of PCT.

How do incumbent companies’ heterogeneous responses affect sustainability transitions? Insights from China’s major incumbent power generators

Transitions research has often been unintentionally biased toward novelty and assumes incumbents as homogeneous groups that are “locked-in” to certain sociotechnical regimes. In reality, incumbents are heterogeneous at the company and industrial levels and thus have heterogeneous responses that can both accelerate and deter sustainability transitions. To fill the research gap, this paper explores the determinants of such heterogeneous responses and insights for sustainability transitions, taking China’s major incumbent power generators as its case study. The results are: first, incumbent companies respond heterogeneously if firm-specific, socioeconomic, and institutional factors give different opportunities and barriers. Policy feedback effects and development of complementarities in infrastructure, instruments, and organizational elements can increase heterogeneous responses. Second, their heterogeneous responses can accelerate sustainability transitions if they go beyond destabilization of regime, legitimization of alternative policy instruments, and development of infrastructure and institutions that trigger co-evolution with socioeconomic and institutional factors.

Resource and Environmental Policies for the Mining Industry: What Should Governments Do About the Increasing Social and Environmental Risks?

Growing demand for materials required in the construction of renewable technologies and zeroemission infrastructure may signal significant changes for the minerals and metals market. These in turn might exacerbate the social and environmental risks associated with the mining industry. We explore the impacts of commodity price volatility, the adoption of new technology and environmental risks on the long-term sustainability of a stylized mining firm and examine the implications for government policy intervention. We first analyze whether a mine should remain open or be closed when premature closing is costly due to land rehabilitation and reclamation resulting from an environmental accident. We then go on to investigate alternative resource policy instruments for by which the government may extract resource rents, examples being an ad valorem tax on output, a mining industry-specific corporate tax rate and a royalty on the amount of ore removed. Furthermore, we evaluate the potential of a number of means to correct for environmental externalities and compensate for damages that a mine causes during its lifetime, specifically a Pigou tax on effluents, fines on environmental accidents, mandatory up-front payments to an environmental liability fund and a surety bond to cover closure and reclamation costs.

Europeanisation of energy policy and area-based partnerships: Regional diversity of interest in renewable energy sources in local development strategies in Poland

Cross-sectoral partnerships, known as Local Action Groups (LAGs), are a key pillar of the European Union’s Community-Led Local Development approach in member states. LAGs prepare bottom-up territorial strategies, having a relatively high degree of freedom to set their own development goals and the scope of the activities for which they receive EU funding. In this sense, there is clear potential for LAGs to implement local scale initiatives around renewable energies (RE). To understand the scope and extent of such bottom-up initiatives in Poland, we analyse the regional diversity of operations in RE in the local development strategies of 324 LAGs prepared for the EU Programming Period 2014–2020. Specifically, we analysed whether local communities planned to undertake educational actions or investments related to RE in their strategies. Content analysis shows a relatively low interest in this subject by the communities analysed at the time their strategies were prepared. Across the country, educational activities related to RE were planned in 13% of strategies and investments related to RE in only 9% of them. Possible reasons for the generally low local interest in RE may relate to the levels of education and income of local communities. However, the regional disparities could be the result of the individual policy of regional authorities. We discuss the possible causes of this apparent lack of interest in RE among local communities in the context of EU-wide efforts for a low-carbon economy. Alternative policy instruments, or more precise targeting of rural development funding to sustainable energy may be needed to accelerate the transition to low-carbon energy sources in Poland.

Formulation of Smart City Policy Instruments (Study Jogja Smart Service Program in Yogyakarta City)

This study aims to provide an overview of the formulation of policy instruments in improving public services of the Yogyakarta City. Therefore, this study describes the effectiveness that has been achieved and also describes the problems that arise in the Jogja Smart Service Program (JSS) in the context of the formulation of policy making. This can then be useful for developing alternative policy instruments that are similar. In the perspective of public administration, a program of policy can be seen part of the management of decisions in public policy, where the resources and actors are organized and coordinated. This gives consequences about how the process of making instrument formulation at the time of making the policy. Thus, it becomes interesting to see how the process of formulation of policies in the Jogja Smart Service Program (JSS). By using descriptive qualitative research methods, the stages of the method in this research are collecting data related to the policy formulation process of the Jogja Smart Service Program (JSS), in the form of interviews and documentation of regulations and related policies. The result of the research is the formulation of Jogja Smart Service (JSS) policies in Yogyakarta City which still has various challenges, so a combined instrument is needed, namely synergy and collaboration between the government, private sector, community and other stakeholders to support the effectiveness of the program.