Green Payments Research Articles

Identifying and assessing intensive and extensive technologies in European dairy farming

Abstract In order to tackle climate change and biodiversity loss, the European Union (EU) promotes extensive farming. However, identifying such farms across countries and assessing their performance for policy purposes remains challenging. This paper combines a latent class stochastic frontier model (LCSFM) with a novel nested metafrontier approach. The resulting model enables the identification of intensive and extensive farms across countries, estimation of farm efficiency and identification of different technology gaps. Based on Farm Accountancy Data Network data of French, Irish and Austrian dairy farms,we find poorer environmental but better economic performance of intensive farms, compared to extensive farms. The largest productivity differences stem from technology gaps and not from inefficiency. The approach enables a more nuanced analysis of sources of inefficiency to assist policy design for future green payments in the EU.

Application Scenarios, Low-carbon Models and Practical Paths of Green Payments in China

As an infrastructure in the field of green finance, green payment plays an important role in guiding the green-oriented allocation of social resources and the public's awareness of environmental protection, and promoting the greening, recycling and low-carbonization of the production methods of enterprises and the consumption patterns of individuals and households. This paper explores the basis of green payment development in China from five aspects: theory, market, policy, finance and digital ecology, and examines the positioning of green payment to help achieve the goal of "carbon neutrality" at three levels: macro, meso and micro. In the light of the lifestyles of Chinese residents, the specific application scenarios of green payment in China, such as transportation, low-carbon life and paperless payment, are compiled. We use electronic payment methods such as WeChat payment to explore the mode of green payment ecosystem to achieve low-carbon development, and explore the practical path of green payment to help "carbon neutrality" in both broad and narrow sense from the perspective of industrial chain. Finally, the above analysis is combined with the practical significance of green payment for carbon neutrality and the suggestions for the future development of green payment in different dimensions.

A New Model on Customers’ Attraction, Retention, and Delight (CARD) for Green Banking Practices

Purpose: Green loans, green credit cards, green checking accounts, and green mortgages are all part of current banking operations, are online banking components. The goal of this research is to identify a research need and potential research agendas for linking green banking practices of certain selected commercial and public sector banks in India. The purpose of this study is to create a conceptual model that effectively represents the characteristics of green banking operations and their relationship to total green banking customer satisfaction. Design/Methodology: This study examines the current state of various bank green banking practices. The information was gathered from academic journals and websites. Findings: This review-based analysis identifies the present state of green banking practices. The influence of green initiatives by public and private banks, such as internet banking, internet payments, green payments, and credit card loans, is investigated. The research gap is computed using the current situation and the desired green activity approach. Depending on the research gap, different research objectives to link green banking practices are developed and analysed. Originality: The current state of affairs, research gaps, and research goals related to green banking practices and boosting brand value to retain and satisfaction of the customers are examined in this review-based research study. Paper Type: Review and focus group based conceptual model.

Environmental, Social, and Economic Aspects of the Green Economy in Polish Rural Areas—A Spatial Analysis

The global climate, ecological, and energy crisis has increased the interest in the green economy (GE) concept that aims to resolve environmental problems while promoting economic growth, social stabilization, and creating favorable conditions for sustainable economic growth. The implementation of GE solutions requires an assessment system for evaluating the extent to which business operations are consistent with GE principles. In this study, the environmental, economic, and social dimensions of the quality of life were identified, and agricultural factors were considered to determine the progress in the implementation of GE principles. The correlation between the success of GE implementation and the utilization of environmental funding provided by the Common Agricultural Policy (CAP) was analyzed. A composite GE index composed of 19 variables was developed for this purpose with the use of Hellwig’s taxonomic measure of development. The strength of the correlation between GE implementation and the utilization of green payments under the CAP was evaluated by calculating Pearson’s correlation coefficient. Polish rural areas were analyzed at the level of Local Administrative Units (LAU). The study revealed spatial variations in GE development, and it demonstrated that local projects financed from EU funds had a positive impact on the environment. However, the utilization of EU support schemes differs considerably across Polish regions. The analysis revealed that agri-environmental-climate measures (spending per ha) were most strongly correlated with the economic dimension of the quality of life. Southern Poland and suburban areas differed considerably from Eastern Poland where green payments were less effective in promoting GE development. The results of this study are useful for planning, land management, and the development of socioeconomic development strategies at the municipal, regional, and local level.

Plastics in blue carbon ecosystems: a call for global cooperation on climate change goals

Plastics in blue carbon ecosystems: a call for global cooperation on climate change goals

A Goal-Framing Approach to Green Payments’ Efficiency When Vertical Integration Is an Option

This article explores farmer's decisions regarding the expansion of organic farming through intensive input use and the degree of in-house organic fertilizer production. Using a theoretical synthesis of two strands of the scholarly literature, namely pro-environmental norms and the goal-framing theory, the contribution of this article to the current literature is: (i) it redefines the concept of the crowding effects, which encompasses both changes in environmental preferences and in normative objectives; (ii) it points that the impact of a green payment on vertical integration depends on both the relative (i.e. the direction) and the absolute (i.e. the magnitude) size of the crowding effect being expected; (iii) it states that a trade-off between input use and vertical integration does always exist once a land subsidy is implemented, but not necessarily if a price premium is offered instead.

Environment and Climate in the Common Agricultural Policy

SummaryIn the 2014–20 CAP, environment is targeted through a combination of measures in both Pillar 1, through cross‐compliance and green payments, and Pillar 2, mainly through voluntary measures with compensation for cost incurred and income forgone. The European Commission's legislative proposals for the CAP after 2020 would suppress green payments but their objectives would be retained as part of new conditionality requirements. A new environmental instrument would be introduced in Pillar 1, the ‘eco‐scheme’, and the CAP would be implemented through national strategic plans offering Member States large room for manoeuvre in application of the principle of subsidiarity. This article explains the weak environmental effectiveness of the CAP until now. It then analyses the extent to which the European Commission's proposals could improve the regulation of the environment and climate impacts of European agriculture. Pillar 2 measures are largely unchanged with their strengths and weaknesses. There is a risk that short‐run political pressures will lead numerous countries to opt for limited ambition in their eco‐schemes. However, there is an urgent need to tackle climate and biodiversity issues seriously. This could be done following the principles of public economics and environmental federalism. In that perspective, defining simple and robust agri‐environmental indicators is crucial.

Multilevel Assessment of Agrarian Sustainability in Bulgaria

The goal of this study is to unpack sustainability in terms of understanding and evaluation using as a case Bulgarian agriculture. A hierarchical system for assessing agrarian sustainability in Bulgaria at national, regional, sub-sectoral, ecosystem and farm level is proposed. It includes 3 aspects(pillars), 17 principles, 35 criteria, and 46 indicators and reference values for evaluating sustainability as well as approach for their integration and interpretation. Assessment is made of agrarian sustainability in the country at various level using aggregate macro and farm level micro data. The assessment has found out that there is a considerable differentiation in the level of integral and aspects sustainability of different type of farms, ecosystems, subsectors and regions. Nevertheless, results on the integral agrarian sustainability based on macro aggregate and micro farm data are quite similar. The later indicates that both approaches are reliable and could be simultaneously used according to the level of analysis, needs of decision makers, and available data. Major factors encouraging improving economic sustainability are market demand and price; direct state subsidies; market competition; financial capability; participation in public support programs; possibility of benefitting immediately; possibility of benefitting in the near future; tax preferences; possibility of benefitting in the long term; and integration with buyers of farm products. Main factors encouraging the enhancement of social sustainability are personal convictions and satisfaction; social recognition of individual contribution; immediate benefits for other people and groups; regional community initiatives and pressure; access to advisory services; European Union policy; and existing regional problems and risks. Important factors encouraging environmental sustainability are problems and risks existing at the global scale; official regulations, standards, and norms; existing regional problems and risks; and European Union policies. Public policies and instruments that improve economic sustainability of Bulgarian agriculture include: direct area-based payments; national top-ups for products and livestock; modernization of agricultural holdings; green payments; support for semi-market farms. At the same time the impact of national and European policies on social and environmental sustainability is relatively weak. Having in mind the importance of holistic assessments of this kind for improving agrarian sustainability, farm management and agrarian policies, they are to be expended and their precision and representation increased. The latter requires a closer cooperation between and participation of all interested parties as well as improvement of the precision through enlargement of collected statistical data, number of surveyed farms, and incorporating more “objective” data from field tests and surveys, monitoring, expertise of professionals in the area, etc.

Development of Perverse Environmental Subsides for Sheep Production in Iceland

Sheep production in Iceland is heavily subsidized with a part of the payments tied to land condition and compliance with sustainable land use according to a Quality Management System (QMS). A large proportion of the rangelands used for sheep grazing are public lands. The paper is based on Land Improvement Plans (LIP’s) and Soil Conservation of Iceland (SCSI) correspondence obtained by appeal under the Information Act. The results show that “green payments” are made for use of land that fails to meet the criteria given for such payments, based on the extent of barren areas, active soil erosion, and vegetation condition. Strong formal objections by the SCSI about the content and implementation of QMS have been ignored. It is further shown that the land use section of the QMS (L-QMS) is non-transparent and not well scientifically grounded. The use of the term “sustainable land use” is confounded when used to justify the use of collapsed ecosystems. The LIP’s show high to extreme grazing intensities on land in poor condition, thus further defying ideas for green subsidy schemes. The investigation reveals serious conflicts between environmental and agricultural sectors, at agency and ministerial levels, which is enhanced by incoherent legislation structures. It is vital to reconstruct the green subsidies for sheep farming in Iceland, based on science and best available information with a much broader stakeholder participation than at present, involving multi-sectoral agencies and scientists, NGO’s, communities, the general public, and land users.

Energy Efficient Spectrum Auction Process with Utility Functions

The concept of green payments together with single and multiple bidding processes for short-term spectrum auctions are compared based on two reference cases: (1) when the users and the auctioneer are aware of the value of the reserve price, and (2) when the value of the reserve price is known only to the auctioneer. This involves a novel concept known as the green payment. This concept is combined with the use of probabilities to determine the users participating in the auction process. The purpose of the green payment and the probability is to help in reducing the amount of energy wasted as a result of the auction process. The utility of each user and that of the wireless service provider with and without the green payment is also examined. The revenue obtained from each of the examined models is also compared to determine which model is more profitable for the WSP. This paper shows that the use of multiple bidding process for short-term spectrum auctions gives a better performance measure when compared to the single bidding process, more particularly when the value of the reserve price is known to the auctioneer and the users in the system. It also shows that using the proposed probability equation in combination with the concept of the green payment helps in reducing the amount of energy consumed by the system.

Complying with greening practices in the new CAP direct payments: An application on Italian specialized arable farms

The main novelty of the most recent Common Agricultural Policy reform is the greening, which provides a payment to farmers who respect certain ‘agricultural practices beneficial for the climate and the environment’. The greening is part of a framework that includes other changes to the first pillar.In the present study the possible impact of first pillar reform on a Farm Accountancy Data Network (FADN) sample of Italian farms was carried out using a Positive Mathematical Programming model. This model considers the mechanisms of production choices according to compliance with the greening practices, as well as possible administrative penalties or reductions in payments in the case of non-compliance.Results showed that while the impact of the greening practices is limited in terms of land use, there were positive effects on environmental indicators. Coupled payments, along with greening practices, determine a larger impact and are effective in achieving environmental goals. Moreover, the system for reducing green payments and levying administrative penalties in case of non-compliance is effective and ensures compliance with practices in almost all farms.

Current European policies are unlikely to jointly foster carbon sequestration and protect biodiversity

The extension of forest area is a globally accepted tool to offset CO2 emissions from deforestation and the combustion of fossil fuels. The common assumption is that in addition to the perceived climate benefits increasing forest area will also support biodiversity, thus making afforestation a “win-win scenario”. Based on the existing scientific evidences, we show that joined climate and biodiversity benefits are strongly context-dependent and that the outcome of afforestation is often highly questionable. In Europe, grasslands managed at low intensity contribute substantially to biodiversity conservation and carbon storage. However, many of these grasslands have been lost due to abandonment and subsequent spontaneous succession towards woody vegetation, or due to land use intensification. Moreover, grasslands are the ecosystems most often deliberately afforested in the context of EU carbon-centered policies that may thus counteract biodiversity conservation programmes. By reviewing the main EU policies targeting forests and grasslands, we found a striking ambivalence between policies and funding schemes addressing grassland conservation on the one hand (e.g. Habitats Directive, green payments within the Common Agricultural Policy) and those supporting afforestation on the other (e.g. rural development funds). We suggest three measures towards a better harmonization of the European Union policies that target forest and grassland ecosystems: (1) promoting the alignment of the decisions taken across different policy sectors; (2) focusing on the whole range of ecosystem services and biodiversity issues rather than on carbon management only; (3) valuing systems managed at low-intensity for their multifunctionality.

Energy Efficient Short Term Spectrum Auction Using the Concept of Green Payments

This work seeks to demonstrate the economic importance of short-term spectrum auction and how it can be implemented with fewer overheads. This can be achieved using the proposed market driven sealed bid spectrum auction process with a novel concept called the green payment. The green payment serves as an incentive during the auction process to encourage the users to use the radio spectrum in an efficient manner. The model proposes to tax users that are not power efficient while those that are power efficient pay a subsidy during the auction process. First, the appropriate bidding and auction periods are examined and determined such that the bidding period is dependent on the traffic load in the system. Using the obtained bidding period, the value of the green payments is then examined and the appropriate level of tax and subsidy are also determined. The economic importance of the model in terms of the revenue generation for the service provider and in terms of the tax being adequate to finance the subsidy is also examined. These results show that using the proposed concept of green payment, the energy consumed and the system delay can be reduced when compared to a non-green payment based auction process. The results also show that the proposed model is beneficial to the service provider in terms of increase in profit and that the tax and subsidy system is self-sustaining.

LUMINATE: linking agricultural land use, local water quality and Gulf of Mexico hypoxia

In this paper, we discuss the importance of developing integrated assessment models to support the design and implementation of policies to address water quality problems associated with agricultural pollution. We describe a new modelling system, LUMINATE, which links land use decisions made at the field scale in the Upper Mississippi, Ohio and Tennessee Basins through both environmental and hydrological components to downstream water quality effects and hypoxia in the Gulf of Mexico. This modelling system can be used to analyse detailed policy scenarios identifying the costs of the policies and their resulting benefits for improved local and regional water quality. We demonstrate the model's capabilities with a simple scenario where cover crops are incentivised with green payments over a large expanse of the watershed.

The role of risk aversion and labor constraints in the adoption of low input practices supported by the CAP green payments in cash crop farms

Since the late 1980s, many alternative practices have been proposed to European farmers to reduce pesticide and input use in general. These practices have been promoted by agro-environmental contracts signed between individual farmers and the European Union and by which farmers engage themselves in changing their practices. The adoption rate of these measures has remained very low in many European regions particularly in Southwestern France. This article aims at stressing the role played by risk attitude and labor constraint in farmers’ adoption decision. After presenting a static theoretical model which assesses the impact of labor constraints and risk attitude on the level of adoption of low input practices supported by agro-environmental contracts, the article proposes a numerical application based on a mathematical programming risk-model implemented on two typical crop farms in South-western France. Three kinds of contracts (no tillage, long rotation, lower pest treatments) are tested, two of them (long rotation and lower pest treatments) aiming at directly reducing input use. The results show that, despite the overall positive impact of alternative practices under contract on environment and farmers’ income, increased yield variability under positive risk aversion and larger labor requirements are actual barriers to adoption.

Analysing Dutch dairy farmer behaviour towards the provision of public goods: The added value of an economic simulation experiment

The objective of this paper is to examine the value of experiments for assessing the impact of the proposed Common Agricultural Policy of 2013 on farm income and farming strategies. We focus specifically on the impact of an alternative direct payment system based on a flat rate and green payments. We show the added value of an economic simulation experiment to existing economic micro- and sector modeling analysis when analyzing farmer behavior. It is shown that the suitability of and rewards for the provision of green services play a significant role in their uptake by farmers and the support for them. These results are useful in implementing a revised direct payments system in the Netherlands for the future.

Profitability of organic and conventional soybean production under ‘green payments’ in carbon offset programs

AbstractEmphasis on reducing emissions from the greenhouse gases (GHG), carbon dioxide (CO2), nitrous oxide (N2O) and methane (CH4) has increased in recent years in the USA, primarily for industry, transportation, energy and agricultural sectors. In this study, we utilized on-farm data collected by the USDA-National Agricultural Statistics Service (NASS) Agricultural Resource Management Survey (ARMS), secured under an agreement with the USDA-Economic Research Service (ERS) to analyze the profitability of organic and conventional soybean production, based on changes that ‘green payments’ in a cap-and-trade system would introduce in agricultural markets in the USA. In particular, the analysis focused on establishing whether organic producers would be better positioned to sequester carbon (C) and reap the benefits of the C-offset scheme compared to conventional producers, given the differences in costs, management practices and environmental benefits between organic and conventional production methods. We estimated several changes in profitability of soybean producers according to management practices, incentives for the generation of offset credits, and increase in energy input prices that a potential cap-and-trade system may introduce in future agricultural markets in the USA. Survey data suggested that even with lower yields, conventional producers could profit from converting to organic agriculture, given organic price premiums. In addition, taking into consideration both direct and indirect costs, average cost for conventional-till (CT) organic soybean production was approximately 9% lower than no-till (NT) conventional production. With a C market and payments for soil C sequestration through potential Clean Energy legislation, additional profit could be accrued by organic producers, because organic production would have 28% greater ton CO2 eq. acre−1 yr−1 sequestration than conventional NT. Thus, the environmental benefits from GHG reduction could incentivize increased conversion from conventional to organic production across the USA.

Valuation of agricultural land-use scenarios with choice experiments: a political market share approach

This paper evaluates the preferences of cantonal politicians for future agricultural land-use scenarios in a rural region of the Swiss lowlands. We combine results from a choice experiment with the outcome of a mathematical programming model. As a result, we define cost-efficient future land-use scenarios which would find acceptance in the cantonal parliament. Our study indicates that the level of agricultural production associated with the extent of environmental goods and services in these land-use scenarios is a crucial issue in the political acceptance and thus in the design of green payments for agriculture.

Green payments and the US Farm Bill: information and policy challenges

Agriculture in the United States is heavily influenced by the Farm Bill and has considerable negative impacts on ecosystem functioning. Could the Farm Bill be redesigned to fund “green” payments that would encourage producers to provide beneficial ecological services? Such a change would be a complex undertaking, involving missing or uncertain information, heterogeneous systems, and challenging political and budgetary realities. Much of the information necessary for Farm Bill redesign is available, but is not being used; however, there remain critical gaps in our understanding of how to structure science‐based, producer‐relevant policy. One way to fill these information gaps is to fund cooperative pilot projects, based on environmental units of interest, such as watersheds. Nevertheless, political and budgetary constraints may mean that such information is more likely to inform policy and activities outside of the Farm Bill.

Green payments and dual policy goals

We use a mechanism design framework to analyze the optimal design of green payment policies with the dual goals of conservation and income support for small farms. Each farm is characterized by two dimensions of attributes: farms size and conservation efficiency. The policymaker may not be able to use the attributes as an explicit criterion for payments. We characterize optimal policy when conservation efficiency is unobservable to policymakers, and when farm size is also unobservable. An income support goal is shown to reduce the conservation distortion caused by asymmetric information. The cost of optimal green payment mechanisms is shown to depend crucially on whether large or small farms have greater conservation efficiency.