Economic Trade-offs Research Articles

Economic performance of the pairing-off poverty alleviation between China’ cities

This study evaluates the economic performance of China's East-West pairing-off poverty alleviation, a policy enacted in 2016 aiming to eradicate absolute poverty by 2020 through substantial fiscal transfers from the assisting cities to the assisted impoverished counties. Employing a counterfactual framework and analyzing data from 2013 to 2018, this research assesses the economic performance of China's East-West pairing-off poverty alleviation. Our findings reveal a negative impact of the fiscal pressure burdened by the assisting cities on their economic performance. Meanwhile, the allocation of anti-poverty funds to the assisted counties does not exhibit a significant impact on their economic outcomes. The mechanism analysis suggests that the fiscal pressure experienced by the assisting cities shows negative impacts on fixed assets investment, innovation activities, and economic growth expectations. Further analysis indicates a negative relationship between the policy and the growth of secondary industry and rural income in the eastern regions, while simultaneously identifying a positive impact on the enterprises' financial burden. These results underscore the complex economic trade-offs inherent in poverty alleviation strategy transferring fiscal funds from developed regions to less developed regions and call for a global understanding of pure cash transfer programmes' impacts.

Community assembly influences plant trait economic spectra and functional trade-offs at ecosystem scales

Plant functional traits hold the potential to greatly improve the understanding and prediction of climate impacts on ecosystems and carbon cycle feedback to climate change. Traits are commonly used to place species along a global conservative-acquisitive trade-off, yet how and if functional traits and conservative-acquisitive trade-offs scale up to mediate community and ecosystem fluxes is largely unknown. Here, we combine functional trait datasets and multibiome datasets of forest water and carbon fluxes at the species, community, and ecosystem-levels to quantify the scaling of the tradeoff between maximum flux and sensitivity to vapor pressure deficit. We find a strong conservative-acquisitive trade-off at the species scale, which weakens modestly at the community scale and largely disappears at the ecosystem scale. Functional traits, particularly plant water transport (hydraulic) traits, are strongly associated with the key dimensions of the conservative-acquisitive trade-off at community and ecosystem scales, highlighting that trait composition appears to influence community and ecosystem flux dynamics. Our findings provide a foundation for improving carbon cycle models by revealing i) that plant hydraulic traits are most strongly associated with community- and ecosystem scale flux dynamics and ii) community assembly dynamics likely need to be considered explicitly, as they give rise to ecosystem-level flux dynamics that differ substantially from trade-offs identified at the species-level.

Future redistribution of fishery resources suggests biological and economic trade-offs according to the severity of the emission scenario

Future redistribution of fishery resources suggests biological and economic trade-offs according to the severity of the emission scenario

True Costing in Logistics & Supply Chain Management: How do we make decisions based on True Economic Trade-Offs (T-ETOs)?

Decision-making in logistics (including /supply chain management) is often based on traditional cost-price information from a company's accounting department. Externalities, like social and environmental impact, are usually not included in decision-making. To include a more integrated trade-off, the cost-price information should include information on the traditional costs and the costs of externalities like fair wages (social costs) and costs of damage, pollution, etc. (environmental costs). The article provides an overview of traditional costs and attempts to monetise externalities (by using the concept of shadow prices and the Lagrange multiplier or λ) as a base for decision-making in logistics. Some case studies are presented from the last decade and an example of a true economic trade-off for buying a diesel truck-tractor or an electric truck-tractor. In the previous example, much decision data is missing because no track record has yet been developed in this industry. The key issue is making external effects measurable so that business practices can make sound decisions based on financial, social, and environmental data. The author ends the contribution with a call for further (applied) research into true pricing in logistics.

Economic Research on Ethanol Feed-Use Coproducts: A Review, Synthesis, and Path Forward.

During the mid-2000s to the early 2010s, the domestic ethanol industry witnessed substantial growth, with ethanol coproducts emerging as vital elements for plant profitability and livestock feeding. Initially serving as supplementary revenue streams, coproducts from ethanol production have evolved into diverse value-added offerings, bolstering revenue streams, and sustaining profit margins. This study reviews existing economic research on ethanol coproducts, detailing methodologies, product focus, and research locations. Initially gathering 972 articles from 9 databases, 110 articles were synthesized. We find that most studies primarily examined the growth and future of the ethanol industry with a limited focus on specific coproducts. Feed-use distillers' grains, especially dried distillers' grains, were the most widely published while newer coproducts like pelletized, de-oiled, and high-protein distillers' grains were relatively understudied. Non-feed-use products were notably overlooked, highlighting the need for exploration beyond conventional applications. The evolving market landscape for ethanol co-products has surpassed published academic understanding of the economic tradeoffs necessitating further research into product dynamics, pricing, marketing, market structures, and regulatory frameworks. This highlights and underscores the importance of investigating value-added grains across diverse commodities and geographic contexts to inform strategic decision-making and policy formulation.

Economic trade-offs of harvesting the ocean twilight zone: An ecosystem services approach

The mesopelagic or ocean twilight zone (OTZ) in the ocean contains huge numbers of fish in a relatively pristine environment and may therefore attract interest as a commercial fishery. In this study we evaluate in economic terms, the likely trade-offs between the different services provided by the mesopelagic layer in the Bay of Biscay and the societal benefits of its commercial exploitation. Benefits arise mainly from the likely use of this group of species as raw material for producing fishmeal and fish oil. Costs are derived from the loss in climate regulating and cultural, services, but also from the loss in the provisioning service of other commercial species. To do so we compare the current non-exploited status with a situation in where mesopelagic fishes are harvested at levels capable of producing the Maximum Sustainable Yield. Results suggest that if mesopelagic fishes are harvested, a mean value of 1.2 million Euro loss in a year will be created in the Bay of Biscay, although in a range between 42 million Euro loss and 48 Euro million benefits. This uncertainty comes, mainly, from the limited existing knowledge of the mesopelagic fishes’ biomass but also from the uncertainty on the biomass of the rest of the species of the studied ecosystem. The large range indicates that a better understanding of the mesopelagic ecosystem is needed, however, results also show that ecosystem services under no exploitation provided by the OTZ could be more valuable than the fishmeal and fish oil that potentially could be obtained from the fishes harvested in this sea layer.

Life cycle emissions and unit production cost of sustainable aviation fuel from logging residues in Georgia, United States

Production of Sustainable Aviation Fuel (SAF) has gained popularity for reducing carbon emissions from the aviation sector. To evaluate the environmental and economic tradeoffs related to SAF production and its potential use, this study estimates the life cycle carbon emissions and unit production cost of SAF produced from logging residues generated during harvest and thinning operations in Georgia, a major roundwood producing state in the Southern United States. We considered two production pathways, i.e., Ethanol-to-Jet (ETJ) and Iso-Butanol-to-Jet (Iso-BTJ), to compute the carbon savings and unit production costs. A sensitivity analysis was performed to identify significant factors contributing to the overall carbon savings and unit production costs for the selected pathways. After considering revenues generated from co-products, the minimum aviation fuel selling price (MASP) was $2.71 L-1 and $2.44 L-1 for ETJ and Iso-BTJ pathways, respectively. Capital investment cost at biorefinery accounted for most of the MASP, followed by the minimum haul rate for transporting biomass and variable cost for alcohol intermediate production. Finally, after considering tax credit from the Inflation Reduction Act of 2022 and RIN (Renewable Identification Number) credit along with co-product revenue, the MASP ranged between $2.29 L-1 and 0.83 L-1 for the ETJ pathway and between $2.04 L-1 and $0.59 L-1 for the Iso-BTJ pathway. In addition, the carbon intensity of both the ETJ and Iso-BTJ pathways were 758 g CO2e L−1 and 976 g CO2e L−1, with relative carbon savings of 70.6 % and 62.1 % compared to conventional aviation fuel. The production cost suggests a minimum abatement cost of $59 t CO2e−1 for the ETJ and -$59.3 t CO2e−1 for the Iso-BTJ pathways in the presence of federal incentives. Our study shows that logging residues-based SAF could reduce the overall carbon footprint of the aviation sector; however, policy support is needed to support its production in light of higher production costs.

Trade Secret Protection and the Integration of Information Within Firms

We examine the effect of trade secret protection laws on internal information integration (i.e., the extent to which economic agents are provided with access to decision-relevant information from other economic agents within a firm). We argue that stronger trade secret protection laws increase firms’ internal information integration because they reduce the proprietary costs of information leakage. To test our prediction, we measure a firm’s internal information integration by the share of its sites integrated into its enterprise management system. Exploiting the staggered adoption of trade secret protection laws via the Uniform Trade Secrets Act (UTSA), we find that these laws increase firms’ internal information integration. This effect is stronger (weaker) for firms with higher proprietary costs (coordination benefits). Further, we provide evidence that the UTSA-induced increase in internal information integration translates into improvements of firms’ internal information quality and decision-making quality. Taken together, our results enhance the understanding of the economic trade-offs shaping firms’ internal information environment. This paper was accepted by Ranjani Krishnan, accounting. Funding: S. Bormann and K. Hombach gratefully acknowledge funding from Deutsche Forschungsgemeinschaft (DFG, German Research Foundation) [Grant Project-ID 403041268–TRR 266 Accounting for Transparency]. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2021.03484 .

Integrated life cycle assessment in off-grid energy system design—Uncovering low hanging fruit for climate mitigation

We perform an ex-ante life cycle assessment, integrating cradle-to-gate greenhouse gas emissions into an off-grid energy system model. By applying a multi-objective optimization, minimizing both costs and carbon dioxide equivalent (CO2e) emissions, we find the Pareto boundary between these two goals. As a case study, we chose the power supply to an astronomical observatory in Chile, using mostly solar power and energy storage in batteries and hydrogen. We compare the ex-ante study to a prior ex-post life cycle assessment, and furthermore dive into sensitivities of our model regarding component lifetimes and costs. We find (i) low-hanging fruit in lowering emissions with small cost increases, (ii) ex-ante life cycle assessments’ possibility to find less CO2e intensive power systems compared to ex-post conducted studies, (iii) a pronounced sensitivity of the optimization model on assumed lifetimes of energy storage components. This study shows the importance of including life cycle CO2e emissions into the optimization objective of energy system models. This method uncovers the environmental and economic trade-offs associated with high shares of renewable energies in off-grid energy systems.

Efficient estimation of crystal filterability using the discrete element method and the Kozeny-Carman equation

A new method is proposed for efficiently predicting filter cake resistance as a function of crystal size distribution. The method is useful for the preliminary design of processes where an economic tradeoff is encountered between a crystallization step and a filtration step. In that case it is necessary to estimate the filter cake resistance repeatedly as a function of crystal size distribution for the process design and optimization. The method is faster than CFD-DEM and more precise than the random packing assumption. The proposed method is validated using published experimental data. To demonstrate the proposed method, an integrated crystallization-filtration process of ammonium alum is simulated and analyzed. The results show that by increasing the residence time of ammonium alum crystals in the crystallizer from 15 min to 60 min, the crystal cake resistance can be reduced by 42% and the filter area can be reduced by 23%.

Methodology for Assessing Retrofitted Hydrogen Combustion and Fuel Cell Aircraft Environmental Impacts

Hydrogen (H2) combustion and solid oxide fuel cells (SOFCs) can potentially reduce aviation-produced greenhouse gas emissions compared to kerosene propulsion. This paper outlines a methodology for evaluating performance and emission tradeoffs when retrofitting conventional kerosene-powered aircraft with lower-emission H2 combustion and SOFC hybrid alternatives. The proposed framework presents a constant-range approach for designing liquid hydrogen fuel tanks, considering insulation, sizing, center of gravity, and power constraints. A lifecycle assessment evaluates greenhouse gas emissions and contrail formation effects for carbon footprint mitigation, while a cost analysis examines retrofit implementation consequences. A Cessna Citation 560XLS+ case study shows a 5% mass decrease for H2 combustion and a 0.4% mass decrease for the SOFC hybrid, at the tradeoff of removing three passengers. The lifecycle analysis of green hydrogen in aviation reveals a significant reduction in CO2 emissions for H2 combustion and SOFC systems, except for natural-gas-produced H2 combustion, when compared to Jet-A fuel. However, this environmental benefit is contrasted by an increase in fuel cost per passenger-km for green H2 combustion and a rise for natural-gas-produced H2 SOFC compared to kerosene. The results suggest that retrofitting aircraft with alternative fuels could lower carbon emissions, noting the economic and passenger capacity tradeoffs.

Assessing the environmental and economic impacts of adopting circular economy for sustainable resource management in the Indian construction sector

PurposeThe aim of this study is to understand the environmental benefits and economic savings associated with adoption of circular economy in the construction sector. The research findings will support different stakeholders and decision makers to develop business models based on responsible consumption of resources and build sustainable business models.Design/methodology/approachThe research uses mixed methodology wherein inventory for life cycle assessment and life cycle costing for environmental and economic impacts is based on primary data using on-site visits for qualitative and quantitative data.FindingsDifferent types of land transportation infrastructures are compared for their environmental impacts. It is found that bridges have the highest environmental impacts as compared to tunnels, roads and railways. Further, the results affirm the environmental and economic benefits of adopting circular economy practices.Originality/valueThis is one of a kind research that compares the environmental and economic tradeoffs of adopting circular economy in different types of land transportation infrastructures.

Dynamics of large-scale solar PV adoption feedback effects: A technical, economic, and environmental assessment

Large residential solar photovoltaic (PV) penetration has a compound effect on the grid load reductions, PV hosts’ economic savings, and the achievable environmental benefits, which is not fully understood. This study combines process-based energy balance modeling, life cycle assessment, regression analysis, and stochastic demand simulations to assess the technical, economic, and environmental tradeoffs under increased residential solar PV adoption, using Boston, MA as a testbed. It was found that increased PV adoption may lead to a steeper ramp-up in the grid during winter months, but a flattened peak load curve during summer months, emphasizing the need for seasonal time-of-use rates and energy storage. It also reduces electricity wholesale prices, lowering PV hosts' economic benefits by about $15 million under 100 % adoption. The largest buildings present the highest load reduction (top 5.5 %) and environmental benefits (top 16.6 %), but they are the least cost efficient (top 14.5 %), requiring tradeoff balance.

What if prescribed fire is not an option? A review of alternative treatments.

Fire has been a significant part of southeastern American forests for thousands of years. Prescribed fire is an effective method to achieve some land management goals, but sometimes it is not possible to use this tool. Fortunately, there are alternative treatment options that land managers can consider. Although none of these surrogate treatments will produce the same suite of benefits as prescribed fire, they can mimic some of the benefits that prescribed fire creates and are better than applying no treatments. This publication provides an overview for landowners and land managers that want to understand surrogate treatments and the economic and ecological tradeoffs associated with each treatment.

A review of technological innovations and environmental impact mitigation

This paper explores the dynamic landscape of environmental impact mitigation, examining technological innovations and strategies across sectors. The review navigates through renewable energy advancements, circular economy principles, and nature-based solutions, emphasizing the nuanced relationship between technology and sustainability. While opportunities abound, challenges such as unintended consequences, economic trade-offs, and global disparities underscore the need for comprehensive, collaborative approaches. The synthesis of cutting-edge technologies, policy innovation, and public engagement emerges as a potent force for mitigating environmental impact. The conclusion envisions a future where innovation, informed by lessons learned, guides humanity toward sustainable coexistence with the planet. As we face the urgent imperative of environmental stewardship, this paper contributes insights to inform policies, inspire innovations, and foster a collective commitment to building a resilient and sustainable future.

Assessing economic trade-off for advances in amine-based post-combustion capture technology

The study aims to evaluate the trade-off relationship between reducing energy consumption through technological improvements, including process modifications and the use of CO2-absorbing solvents, and the increased costs associated with their implementation in power and industrial sectors. Additionally, the economic potentials of heat-integrated CO2 capture and amine solvent degradation are explored. Four representative cases are considered, involving changes to lean vapor compression (LVC) and a blended amine solvent from a monoethanolamine (MEA) benchmark process. The findings indicate that the characteristics of combustion processes have a minor impact on the energy intensity of amine-based CO2 capture, but they significantly affect its cost. This is primarily due to substantial variations in fuel costs and equipment size. Technological advancements, such as process modifications and the use of amine solvents with high CO2 absorption capacity, play a crucial role in reducing both the energy consumption and costs associated with CO2 capture. However, the study suggests that careful consideration is needed when utilizing expensive amine solvents with high CO2 absorption capacity, particularly in situations prone to solvent degradation, as solvent loss can significantly impact the economic viability of CO2 capture.

Mapping hydropower expansion and cash crop dynamics in Colombia using Landsat time series

Satellite-based monitoring provides insights on synergies and trade-offs between energy production and land use and land cover (LULC) changes (LULCC) around hydropower dams. Using Landsat data, we mapped LULCC related to hydropower expansion to understand change dynamics of cash crop production in the Magdalena River basin (Colombian Andes). We leveraged secondary map products and an active learning routine to produce thematically detailed LULC maps, for 2009, 2015, and 2020, including key cash crops (rice and oil palm). Our area-adjusted accuracy assessment revealed high overall and class-specific user’s and producer’s accuracies, exceeding 80% for oil palm, rice, non-agricultural vegetation, wetlands, and grasslands, and accuracies of ∼60% for other temporary and permanent crops. We identified substantial losses of rice (10,6%) and grasslands (25,9%) in El Quimbo due to reservoir flooding. For Hidrosogamoso, there was a loss of wetlands downstream. Our products provide the basis for balancing social, economic, and environmental trade-offs related to conflicting land uses.

Carbon footprints, mitigation effects and economic performance of dairy farm systems in Inner Mongolia

CONTEXTReducing the GHG emissions intensity of milk production has become a key sustainability challenge for the dairy sector. Addressing this challenge requires thorough understanding of the current GHG emission levels of individual farms, the practices influencing GHG emissions, and the economic trade-offs associated with reducing those emissions. OBJECTIVEQuantify the carbon footprint (CF) and economic performance of milk production in Inner Mongolia (the main dairy farming region in China), and understand the main contributing factors to them. The effects of potential mitigation options at dairy farm system level were evaluated. METHODS: Life cycle assessment methodology was used to analyze the CF of 15 dairy farms (with year-round cow housing and crop feeding) selected for different milk production levels, herd structures and diet composition. RESULTS AND CONCLUSIONSThe average CF per kg of fat and protein corrected milk (FPCM; after allocation to milk) was 2.3 kg carbon dioxide equivalents (CO2-eq) (1.5–3.4 kg CO2-eq). Emissions related to feed production, manure management and enteric fermentation were the top three GHG emission sources and contributed an average of 27% (5%–46%), 28% (19%–38%) and 18% (14%–25%), respectively, to total emissions. The average cost of the farm system per ton FPCM was USD 540 per year. Feed costs dominated at 70% of the total costs. The CF of milk was negatively correlated with profit per kg FPCM. Mitigation potential of the CF of dairy production for single mitigation strategies ranged from 2.3% to 20.0% compared with business as usual, and combined mitigation measures could reduce emissions by 48.3%. The most effective mitigation measures should focus on decreasing N-fertilizer use per ha for feed crop production and increasing feed crop yield, adjusting herd structure for milk productivity and using localized feed inputs. All mitigation measures had a positive impact on farm profit, except for the improved manure management (changing the farms using manure composting to a static compost system and changing natural storage to direct land application). Therefore, the combination of crop and dairy production and manure management offer the greatest potential to reduce the GHG emissions from Inner Mongolia dairy farm systems. Economic subsidies and extension of findings to farmers might encourage more rapid adoption of these technologies. SIGNIFICANCEThe insights from our study can provide guidance for defining and prioritizing mitigation strategies for dairy production to reduce GHGs emission in other rapidly developing countries and regions with crop-based housed-cow dairy production.

Economic and Environmental Trade-Offs of Simultaneous Sugar and Lignin Utilization for Biobased Fuels and Chemicals

Economic and Environmental Trade-Offs of Simultaneous Sugar and Lignin Utilization for Biobased Fuels and Chemicals

Economic viability of a large vessel mesopelagic fishery under ecological uncertainty

Motivated by the global rise in demand for marine products, there is increased interest in exploitation of the mesopelagic zone. However, the feasibility of this potential fishery remains uncertain, partly due to limited biological data and knowledge on sustainability of exploitation, and due to questions related to its economic viability. Consequently, there is a demand for better insights into these factors before any commencement of a fishery. Here we use the DISPLACE individual-vessel based bio-economic model to evaluate economic and biological trade-offs of a fishery on Maurolicus muelleri and Benthosema glaciale, the main potential target fish species in the mesopelagic zone of the Northeast Atlantic. We found that a fish price between 1.6-5.0 €/kg is necessary for mesopelagic resources to assure a profitable mesopelagic fishery, which is twice that expected for species with similar fat content. These high fish prices are necessary to cover the high fuel consumption costs due to the distant fishing grounds. Furthermore, the distance of the fishing grounds makes the fuel tank capacity a limiting factor for the fishery. A first evaluation of preliminary harvest control strategies indicated that a low fishing mortality of F = 0.2 year-1 resulted in the highest potential profitability of the fishery. Restriction of gear mesh sizes did not significantly affect the profitability of the fishery. We show that the current ecological uncertainties, especially regarding the life-history, species-specific and spatio-temporal abundance and distribution estimates have a significant impact on the estimates of potential viability of the fishery. It is therefore of the utmost importance to gain more insights in those factors before investments are made into the development of such fishery.