Economic Trade-offs Research Articles

Upscaling DAC Hubs with Wind Energy and CO2 Mineral Storage: Considerations for Large-Scale Carbon Removal from the Atmosphere.

Continued fossil fuel emissions will increase CO2 concentrations in the atmosphere and could require removal of 10 Gt of CO2 per year or more to reach IPCC global climate goals. Large-scale construction of direct air capture (DAC) hubs to scrub CO2 from the atmosphere paired with geological storage is a prominent approach to potentially meet this target. We consider one location for theoretical scale-up of a DAC hub: the Kerguelen plateau in the Southern Indian Ocean which has high-potential renewable energy resources (wind) and large volumes of basalt rock for mineral storage. With consistent wind, previous studies indicate a hub in this location could collect approximately 75 Mt of CO2 annually, with conservative storage resources for 150-300 Mt of CO2 each year. Even with its immense wind and storage potentials, 14 Kerguelen-scale hubs would be needed to capture and store 1 Gt of CO2 per year. This brings into focus the important social, economic, and environmental trade-offs that must be considered in finding an acceptable balance between climate solutions, renewable energy requirements, and nature. Engaging public groups on these trade-off considerations will be crucial for gigaton scale-up of CO2 removal in just and responsible ways.

Seasonal variation in electricity demand of solar-powered net-zero energy housing in temperate climates

Net-zero energy buildings produce enough renewable energy to meet their own annual energy requirements and have been proposed as an important method of reducing operational greenhouse gas emissions in the building sector. However, self-generation via building-integrated solar PV in cold and temperate climates is anti-correlated with increasingly-electrified heating demand and could increase seasonal variability in net electricity demand to the point that it poses challenges for future electricity systems. In this paper we explore scenarios of future large-scale uptake of electrically-heated, solar-PV net-zero energy residential buildings in New Zealand and quantify the seasonal variation of the resulting net electricity demand. A scenario of large-scale uptake of very high efficiency buildings leads to reductions in annual demand of −30% and seasonal variation of −50% in 2050 compared to a base case of current building standards. In comparison, a scenario with self-generation via solar PV without changes to the building standard reduces annual demand by −30% but increases seasonal variation by +40%. In a scenario where very high building standards are combined with solar PV, annual demand decreases by −65% and seasonal variation by only −4%. From a policy perspective, whether large-scale solar PV self-generation should be supported (in addition to very-high efficiency buildings) depends on an economic trade-off between the value of distributed solar generation (including any carbon emission reductions) vs the electricity system cost of seasonal variation. For New Zealand, given the low cost of renewable electricity from a variety of alternative sources, scenarios of large-scale uptake of solar-powered net-zero energy buildings are not favourable from an electricity system perspective.

Techno-economic and life cycle assessment of agrivoltaic system (AVS) designs

Land use competition between agricultural activities and ground-mounted solar photovoltaic (PV) deployment has increased worldwide attention to hybrid agriculture, and PV systems known as agrivoltaic systems (AVS) in efforts to increase the efficiency of energy and food production and minimize the land use competition. However, little is known about AVS's economic feasibility and environmental tradeoffs. Here we aim to evaluate the techno-economic and environmental impacts of four AVS configurations (full density, half density, mono-axial tracking, and bi-axial tracking) and compare their performance against PV-only systems. We used the life cycle revenue generated from a hectare of land area ($/ha) as a functional unit of our analysis. We found that all AVS configurations outperformed PV-only systems in the economic feasibility assessment, where bi-axial tracking was the best-performing AVS. Further, we developed a case scenario for agricultural farmers to determine the minimum selling price of electricity required for AVS to compete with the economic performance of crop-only farms. We found that the AVS designs require additional incentives (2¢ - 6¢ per kWh of electricity generation) to be as competitive as the crop-only farms. The life cycle environmental assessment demonstrated that the AVS has better environmental performance than PV-only systems, with ∼15–55 % less environmental impacts per functional unit. On average, electricity generation accounts for ∼80 % of AVS environmental impacts, while food production and water demand account for ∼20 %. Additionally, a sensitivity analysis conducted on various uncertain parameters, such as crop yield, water demand, electricity selling price, crop selling prices, discount, and inflation rates, while varying these parameters across broader ranges, indicates that AVS designs become a more economically and environmentally sustainable alternative over PV-only systems in the majority (>66 %) of the data analyzed.

Economic and Environmental Sustainability Trade-Off Analysis in Sheep Farming Using the Farm Accountancy Data Network Database

Agriculture and livestock farming significantly contribute to the success of all United Nations Sustainable Development Goals of Agenda 2030 and are pivotal in the sustainability transition of the European agri-food sector. However, those sectors have been criticized for generating negative environmental externalities. In this context, adopting indicators able to evaluate agriculture and sheep farming sustainability is essential for fostering sustainable development in the primary sector and defining appropriate policies to support it. Such indicators are crucial for understanding if European Union policies striving to realize win–win opportunities based on synergy between farms’ environmental and economic dimensions are realistic. This paper focuses on this wave of interest and has two aims. First, it intends to investigate the existence of synergies or trade-offs between those dimensions using a trade-off analysis. To this end, a significant set of economic and environmental farm indicators was selected, and two composite indicators were created. Second, it aims to investigate the relationship between those two indicators and some pivotal structural and socio-demographic variables. This study was carried out on 219 Sardinian sheep farms included in the Italian Farm Accountancy Data Network. The findings showed a low synergy between the economic and environmental spheres, a relationship between economic indicators and farmers’ ages and organic production variables, and no relationships between the environmental dimension and the analyzed variables.

Lives Versus Livelihoods: The Epidemiological, Social, And Economic Impact Of COVID-19 In Latin America And The Caribbean.

During the COVID-19 pandemic, Latin American and Caribbean countries implemented stringent public health and social measures that disrupted economic and social activities. This study used an integrated model to evaluate the epidemiological, economic, and social trade-offs in Argentina, Brazil, Jamaica, and Mexico throughout 2021. Argentina and Mexico displayed a higher gross domestic product (GDP) loss and lower deaths per million compared with Brazil. The magnitude of the trade-offs differed across countries. Reducing GDP loss at the margin by 1percent would have increased daily deaths by 0.5 per million in Argentina but only 0.3 per million in Brazil. We observed an increase in poverty rates related to the stringency of public health and social measures but no significant income-loss differences by sex. Our results indicate that the economic impact of COVID-19 was uneven across countries as a result of different pandemic trajectories, public health and social measures, and vaccination uptake, as well as socioeconomic differences and fiscal responses. Policy makers need to be informed about the trade-offs to make strategic decisions to save lives and livelihoods.

Sequential action-based dynamic decision-support model for urban ecological planning

Decision-makers often encounter the challenge of efficient long-term ecological planning to consider economic and environmental trade-offs. This challenge becomes particularly complex while addressing dynamic ecological responses to ongoing urban development. Thus, we developed a sequential action-based dynamic decision-making model to simulate sequential action mitigation measures over time, while considering the dynamic ecological responses that emerge with urban development. We used a multi-objective optimization algorithm to identify optimal plans that maximize landscape connectivity and edge density, while minimizing the implementation costs per action. We focused on utilizing ecological corridors and habitat creation as mitigation measures from 1980s to 2010s. The results show that the initial low-investment strategy adopted in 1980s and sequential planning led to significantly improved ecological benefits beyond the 2000s when compared to the single-action planning approach implemented in 2010s. In contrast, an initial high-cost investment in the 1980s gradual declined the ecological benefits starting from 1995. We have demonstrated that adopting sequential planning provides valuable insights into effective urban ecological planning, especially when analyzing time-series data. This sequential approach enables decision-makers to make informed choices, thereby ultimately facilitating sustainable urban and regional planning.

Comparative techno-economic and life cycle analyses of synthetic “drop-in” fuel production from UK wet biomass

Renewable synthetic hydrocarbon “drop-in” fuels can help mitigate greenhouse gas emissions from transport, particularly in hard-to-abate sectors like freight and aviation. However, no study has extensively addressed the concerns over biomass availability, cost viability, and CO2 reduction feasibility that are associated with diverse production configurations and feedstocks. Here, we report detailed techno-economics and life cycle greenhouse gas emission assessments of drop-in fuel productions via hydrothermal liquefaction to assess their economic viabilities, CO2 mitigation potentials, and prospects for scale-up specifically within the UK context. Our approach integrates key production factors which include regional availability of main feedstocks (digestates, food waste, biodegradable municipal waste, and sewage sludge), plant configurations (centralised vs decentralised) and hydrogen sources (grey, blue, green). We demonstrated the economic trade-off between economy-of-scale and feedstock transport distances in the centralised/decentralised configurations, and also the economic and emissions trade-offs associated with the use of different hydrogen sources. We find that co-processing of different waste feedstocks is an important strategy to minimise fuel selling price by enabling better economy of scale and feedstock transport, resulting in a fuel selling price of £14.76 – 20.30 per GJ. The corresponding greenhouse gas emissions from the co-processing case vary from 11.4 to 24.9 kgCO2eqperGJ for 2021, based on the consequential life cycle assessment approach. Furthermore, we estimated that the utilisation of key UK wet feedstocks could only provide 4.5 % of current fuel consumptions and reduce emissions by 4.5–5.4 Mt CO2eq/year, which translates to 3.4–4.0 % reduction in the UK’s 2021 transport emissions.

Balancing economical and environmental trade-off in modular construction yard planning: Models and properties

This study investigates an integrated yard planning and module transportation problem in modular integrated construction (MiC). A Stackelberg game model is proposed to characterize the relations between the government and contractors. The government is the leader and decides the locations and areas of temporary storage yards to facilitate the cost-effective and eco-friendly transportation of MiC modules. The contractors are the followers and decide the transport mode (i.e., road transport or intermodal transport) for modules to minimize their total transportation costs. This study provides an in-depth analysis of model properties to derive a number of useful managerial insights. The economical and environmental trade-offs between costs and emissions are observed. Our study further proves that an optimal solution is likely to simultaneously reduce the overall costs and carbon emissions, in comparison to choosing the location with the largest area to construct a temporary storage yard. These insights offer a comprehensive framework for understanding the interactions between government and contractors. Overall, this paper aims to promote the implementation of MiC by achieving the economical and sustainable transportation of MiC modules.

Developing Circular Waste Management Strategies Based on a Waste Eco-Park Concept: A Multiobjective Optimization with Environmental, Economic, and Social Trade-offs

Developing Circular Waste Management Strategies Based on a Waste Eco-Park Concept: A Multiobjective Optimization with Environmental, Economic, and Social Trade-offs

Rights for me but not for thee: Restriction of human rights based on group membership and threat perceptions.

Policies aimed at limiting border crossing and influencing other cultural values have been enacted domestically and internationally in the name of security. However, do these decisions concerning such tradeoffs resonate equally across all groups? In two studies, we probe the moderating impact of intergroup threat on the inclination to restrict human rights. In Study 1, we employ a unique economic tradeoff model to directly compare the value of security with the rights of either citizens or non-citizens. In Study 2, we broaden these findings by examining whether support for infringements on the right to privacy varies among diverse groups. Across both studies, our results consistently show that an increase in intergroup threat corresponds to heightened restriction of rights, but only when contemplating individuals who are not citizens, such as non-citizens, residents, or foreigners. We propose future research directions that include promoting the concept of a global community and exploring altruistic behaviours associated with rights protection.

Economic Development Strategies: Taxes, Incentives, and Public Expenditures

Economic development strategies may include tax, incentive, and public expenditure policies. Budget-constrained state and local governments must make tradeoffs when determining the final mix of economic development and other public policies each year. In this paper, I first provide descriptive evidence on economic development policy tradeoffs. I then classify economic development strategies and relate them to real GDP per capita growth.

Sedentist Epidemiology: COVID-19 Policies and Pastoral Mobility in Turkana County, Kenya

Abstract Authorities have often seen pastoralist mobility as a challenge for public health and veterinary disease control. While the movement of humans and animals can influence disease transmission, authorities often overlook the complexity of these epidemiological relations and ignore the ecological and economic trade-offs of restricting pastoral mobility. This study reviews the Covid-19 response at the border between Turkana County (Kenya) and Moroto District (Uganda), with particular focus on the Kenyan side. Drawing on interviews with Kenyan public health officials, NGOs' practitioners and pastoral households, we examine the treatment of pastoralist mobility in the Covid-19 response. Our findings suggest that, while there is special attention to and investment in extending health services to pastoralists, most of the thinking focuses on their rural location and household dispersal, rather than their mobility. In fact, pastoral transhumance was at times treated as a threat to disease control and national public health while other forms of cross-border mobility continued. We apply the concept of 'sedentist bias' to suggest that this understanding of pastoral mobility has become entrenched in the technics of public health planning.

Ecological and economic trade-offs between amount and spatial aggregation of conservation and the cost-effective design of coordination incentives

To counter not only the continuous loss but also the fragmentation of species habitats, coordination incentives (CI) have been proposed to incentivise the spatial aggregation of conservation efforts. An important issue is the cost-effective design of these instruments. Two main types of CI, the agglomeration bonus and the agglomeration payment, are analysed with stylised models. Their ecological effects are assessed through a metapopulation simulation model. Rather than choosing the usual approach and analysing the joint ecological-economic model, I analyse the ecological and economic sub-models separately and join the results within an economic production theory framework in which production factors (here, the proportion and aggregation of conserved land parcels) are financed under a budget- or cost constraint and generate an output (here, metapopulation viability). This decomposition of the ecological-economic analyses allows highlighting the ecological and economic trade-offs between proportion and spatial aggregation of conservation and generating a more general understanding of the budget- and cost-effectiveness of CI. Results include, among others, that the agglomeration payment is never more budget- and cost-effective than the agglomeration bonus and that in the agglomeration bonus the budget-effective level of spatial aggregation is lower than the cost-effective level.

Hydrogen-free catalytic depolymerization of waste polyolefins at mild temperatures

Reductive methods of polyolefin waste deconstruction such as hydrogenolysis/hydrocracking have enabled advances in plastic upcycling at low temperatures. However, these processes require hydrogen gas, presenting economic and environmental tradeoffs. Here, we present an overview of recent developments in low-temperature, hydrogen-free depolymerization of polyolefins. We start by introducing technologies that utilize sacrificial solvents to cleave C-C bonds, followed by progress in solvent-free depolymerization. We then provide an overview of catalytic processes in petroleum and lignin upgrading that may be extended to polyolefin activation and depolymerization, including alkane dehydrogenation/aromatization, transfer hydrogenation, and hydrogen co-generation, as well as opportunities for utilizing the polymer itself as a hydrogen source. Next, we provide an overview of techniques for quantifying reaction progress via hydrogen consumption and for characterizing the degree of unsaturation of polyolefins. We close with an outlook on the role of feedstock treatment, economic analysis, and process optimization in ushering in these new technologies.

Techno-economic Assessment of CO2 Electrolysis: How Interdependencies between Model Variables Propagate Across Different Modeling Scales.

The production of base chemicals by electrochemical conversion of captured CO2 has the potential to close the carbon cycle, thereby contributing to a future energy transition. With the feasibility of low-temperature electrochemical CO2 conversion demonstrated at lab scale, research is shifting toward optimizing electrolyser design and operation for industrial applications, with target values based on techno-economic analysis. However, current techno-economic analyses often neglect experimentally reported interdependencies of key performance variables such as the current density, the faradaic efficiency, and the conversion. Aiming to understand the impact of these interdependencies on the economic outlook, we develop a model capturing mass transfer effects over the channel length for an alkaline, membrane electrolyser. Coupling the channel scale with the higher level process scale and embedding this multiscale model in an economic framework allows us to analyze the economic trade-off between the performance variables. Our analysis shows that the derived target values for the performance variables strongly depend on the interdependencies described in the channel scale model. Our analysis also suggests that economically optimal current densities can be as low as half of the previously reported benchmarks. More generally, our work highlights the need to move toward multiscale models, especially in the field of CO2 electrolysis, to effectively elucidate current bottlenecks in the quest toward economically compelling system designs.

Economic web-building behavior and behavioral investment trade-offs in a cobweb spider

Web-building spiders that build detritus-based bell-shaped cobwebs are model organisms for studies on behavioral plasticity because their web architecture components are easily quantified and behavioral investments are clearly separated. We investigated the web architectures and behavioral investments of the cobwebs built by Campanicola campanulata under different weight (heavy, medium, and light) detritus to research its cobweb architecture variation and analyzed the investment trade-off between foraging and defense. The results showed that spiders could actively choose lighter detritus to build retreats to reduce material and energy cost. There was a clear trade-off between defense and foraging investment of spiders choosing different weight detritus for their webs. The total length of gumfooted lines (foraging investment) was longer for the spiders that chose lighter detritus, but the energy expenditure during web-building (defense investment) was higher for the spiders that chose heavier detritus.

Economic trade-offs in marine resource use between offshore wind farms and fisheries in Scottish waters

The rapid expansion of offshore wind farms (OWFs) has prompted growing concerns about the extent to which competition over the marine resource causes trade-offs within the energy-food nexus. Reflecting this concern, the paper develops a novel marine resource allocation module which augments a computable general equilibrium (CGE) model, calibrated on Scottish data. This allows simulations with varying degrees of differential productivity of the marine resource across alternative uses. Simulation results with the model show that increasing OWFs can impose substantial negative impacts on seafood supply. Extensive analysis is undertaken to test the sensitivity of the model results to changes in the heterogeneity of the marine resource between sectors and the degree of substitution between capital and the marine resource in the competing sectors. The outcomes of this analysis support policies to develop the integrated management of food and energy production in the marine environment. This includes spatial integration and the use of tools such as co-location in policy implementation. They also highlight the potential for the substitution of capital for the marine resource in the OWF sector as a means of substantially reducing the negative impact on the Fishing sector.

A new method to assess sustainability of agricultural systems by integrating ecosystem services and environmental impacts

Agricultural stakeholders disagree on how to put the general concept of sustainability into practice. But most recognize the need for assessment methods to characterize the current situation and gauge progress yet to be made. Many sustainability assessment methods for agricultural systems have been published, but very few integrate ecosystem services (ES). And yet, ES indicators are key to better integrating biological processes to support the agroecological transition. Although researchers have attempted to link the concept of environmental impact (EI) and ES through life cycle analysis (LCA), gaps remain when it comes to doing so within a sustainability assessment method. Here a new method based on an original conceptual indicator framework embedding new predictive indicators of EI and ES indicators was developed. This framework covers 22 environmental themes and integrates few basic economic and social indicators. The method was implemented on 33 farms with different certifications and production specifications. All farms were members of an agricultural cooperative in north-eastern France. We selected 250 plots to cover the farms’ crop rotations. The correlation analysis showed no systemic trade-off between EI or ES and economic indicators. Meanwhile, the joint assessment of ES and EI (like the multivariate analysis), delivered more nuanced results than a classical opposition between intensive and organic farming. Some farms with a moderate or even good level of ES often do not leverage them, as shown by their high EI. The principle component analysis and subsequent hierarchical ascendant classification allowed us to distinguish five clusters providing a more complex picture than simply opposing conventional and organic agriculture. Finally, the positive deviance analysis revealed that economic, environmental and social considerations can be balanced in a way that seems to be more sustainable than, for example, an organic farm that has very successfully reduced EI but at a cost of several economic and social trade-offs.

Customers as Friendly Shareholders: Uncovering the Complex Mutual Fund-Broker Relationship

This paper examines mutual funds’ dual role as both clients and shareholders of broker banks. Mutual funds are more likely to hold and significantly overweight stocks of their broker banks. In line with the portfolio decisions, fund voting is biased toward broker management in contentious proposals. Such voting bias is inconsistent with maximizing broker banks’ shareholder value yet significantly affects voting outcomes and the presence of contentious proposals at the banks’ shareholder meetings. Furthermore, we show that although client funds are rewarded with preferential initial public offering allocations from connected brokers for their voting support, fund managers’ engagement in reciprocal practices is ultimately determined by the economic tradeoffs they face. Our study not only uncovers a new mechanism—being brokers’ friendly shareholders—through which the two parties maintain their quid pro quo relationships but also raises a broader concern about governance of important financial institutions. This paper was accepted by Victoria Ivashina, finance. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2023.4820 .

Sustainable Supplier Selection under Financial Hardships: The Conflicting Impact of Spatial and Temporal Psychological Distances

Economic crises stress trade-offs between costs and sustainability for environmentally orientated firms impacting supply-chain management decisions. Inspired by the disruption to supply caused by the COVID-19 pandemic, we explore supplier selection during a financial crisis, studying the impact of psychological distance on the cost–environmental performance trade-off. Across three experiments (N = 420), we examine the choice between a low-cost and an environmental supplier at close and far psychological distances. Study 1 and Study 2 demonstrate that closer spatial and social distances, respectively, increase the preference for the environmental supplier. Study 3 extends these studies by showing that distance influences perceptions of the firm’s objectives, mediating supplier preference. In contrast, Study 4 shows that a far temporal distance increases the preference for selecting the environmental supplier, differing from spatial distance, due to a reversal in the appraisal of the firm’s objectives. Taken together, our results provide a greater understanding of the cognitive influences on sustainable procurement decision-making during the COVID-19 crisis.