Production Subsidies Research Articles

Effective climate policy needs non-combustion uses for hydrocarbons

A central issue that is discussed in climate policy is the fear of owners of stocks of fossil hydrocarbon deposits that high CO2 taxes and bans on the combustion use of hydrocarbons will turn their stocks into stranded assets. They might react by extracting and selling their reserves today: a rush to burn results. We show how the stranded-asset problem could be avoided or strongly moderated. We analyze a simple intertemporal equilibrium with a given stock of fossil hydrocarbons. The key variable for a climate-neutral solution to the rush-to-burn problem is to maintain existing and generate new markets for climate-neutral products from fossil hydrocarbons in the future. We give examples of such products. In this framework subsidies for such products (or for their innovation) also reduce the rush-to-burn problem. In contrast, the creation of substitutes for fossil hydrocarbon-based climate-neutral products, or subsidies for such products reduce the market for products made from fossil hydrocarbons. This aggravates the stranded-assets problem and thus has a climate-damaging effect.

Trade liberalization, export quality, and three dimensions of wage inequality*

AbstractIn the context of quality content of export baskets becoming the most important determinant of export growth for developing countries, we show that reduction in tariff on final import goods asymmetrically affects the quality of skill‐based export goods that differ with respect to the relative skill intensity of their higher‐quality varieties. This offers a plausible explanation for asymmetric quality variations across product groups observed for Brazil and India since the 1980s. On the contrary, tariff‐reduction‐induced quality variations, regardless of their asymmetry, accentuate wage inequality in all dimensions by depressing the informal unskilled wage through displacement of unskilled workers from the formal sector and the consequent informalization of the economy. This suggests that tariff reductions accentuating wage inequality, as shown in the existing literature, may be underestimated if induced variations in the quality of export goods are unaccounted for. A quality‐content production subsidy or a subsidy targeting the use of skilled labor, given to producers of the export good whose quality is downgraded as a consequence of tariff reduction, can be used as a concurrent policy to mitigate such effect. The wage inequality will also decline to some extent following such subsidies. A proportional factor income tax may be a quality‐neutral way to finance the subsidies.

The impact of government subsidies on contract design of green technology R&D cooperation

ABSTRACT Different types of government subsidies are used to promote green technology innovation in many countries. Driven by government subsidies and consumer green preference, it’s common for manufacturers (the marketer) to cooperate with research institutes (the innovator) in green technology research and development (R&D). Managing R&D collaboration under different government subsidies is a challenge for the marketer. Meanwhile, how can the government design the subsidy policies to achieve a better effect is also vital. Thus, a two-level three-player game is proposed. The upper layer is the government's decision on R&D subsidy or per-unit production subsidy, and the lower layer is a principal-agent model composed of a marketer and an innovator, who cooperate simply or deeply with a contract with or without milestone payment. We find that: (a) It is always advantageous for the marketer to offer a milestone payment after successful R&D; (b) Deep R&D cooperation is more profitable for the marketer; (c) R&D subsidy is better at stimulating the environmental performance of green technology cooperation.

Product subsidy and expected consumption with inventory inaccuracy: Implications of RFID adoption in Indian public distribution system

In countries that fight malnutrition and hunger, governments and international agencies sponsor subsidy programmes to improve consumption of staple food among the poor. Although the donors in such programmes provide product subsidy to make it affordable and accessible, the supply chain used to deliver these products to the end beneficiary is prone to losses and diversion. Intervention of advanced technologies like RFID, GPS, and GIS are likely to improve the efficiency and effectiveness of such systems. However, considering budget limitation, a key concern for the donors is to investigate how diversion of fund in favour of technology would impact the product subsidy and expected consumption. We model the situation as a price-taking and price-setting newsvendor who implements the subsidy programme, and a donor who provides funding, to investigate the issue. We perform numerical analysis using actual data concerning to the food security system of India and our results show that, for both the price-taking and price-setting situation, the system with RFID generates more consumption as compared to that of the non-RFID situation at same donor budget. We also find that, fixing the price at suitable level the donors could control the profit of the implementing firm, and could generate more consumption as compared to that of the price decontrol situation.

Effective Climate Policy Needs Non-Combustion Uses for Hydrocarbons

A central issue that is discussed in climate policy is the fear of owners of stocks of fossil hydrocarbon deposits that high CO2 taxes and bans on the combustion use of hydrocarbons will turn their stocks into stranded assets. They might react by extracting and selling their reserves today: a rush to burn results. We show how the stranded-asset problem could be avoided or strongly moderated. We analyze a simple intertemporal equilibrium with a given stock of fossil hydrocarbons. In this framework the following properties hold: For a climate-neutral solution to the rush-to-burn problem it is important to maintain existing and generate new markets for climate-neutral products from fossil hydrocarbons in the future, where we give examples for such products. Subsidies for such products (or for their innovation) reduce the rush-to-burn problem. In contrast, the creation of substitutes for fossil hydrocarbon-based climate-neutral products, or subsidies for such products reduce the market for products made from fossil hydrocarbons. This can aggravate the stranded-assets problem and thus can have a climate-damaging effect.

Dynamics of Electricity Production against the Backdrop of Climate Change: A Case Study of Hydropower Plants in Poland

Renewable energy sources (RES) play an important role in the European Union’s energy sector as a result of the energy policy framework adopted. Its share in the final energy consumption varies depending on the country and the adopted energy policy. The article presents the structure of electricity production from renewable energy sources in Poland in the years 2002–2019. It was found that the share of energy production from hydroelectric power plants in Poland in relation to the amount of energy produced from renewable energy sources in the analyzed years has strongly decreased. The reason for this state was an increase in the production of energy coming from wind and biomass energy combined with an increase in subsidies for these energy producers. Additionally, unstable hydrological conditions, mainly low river flows, may be the reason for the low share of energy produced in power plants. As a case study, data for five small hydropower plants (SHP) located on the Gwda river (north-western Poland) were analyzed. Electricity production volumes were analyzed depending on the size of the Gwda river flow. It was found that the lower amount of electricity produced at SHPs on the Gwda river is mainly due to lower flows in the river. In the future, unstable electricity production from renewable energy sources may have a significant impact on achieving Poland’s energy targets in 2030.

Comparing the Associated Factors on Lifestyle Between Type 2 Diabetic Patients and Healthy People: A Case-Control Study.

the most important way to control diabetes is to follow a preventive lifestyle and if a diabetic individual follows a preventive lifestyle which he or she has accepted. The main objective of the current study is to compare the factors affecting the lifestyle in patients suffering from Type II diabetes and the healthy individuals in Kermanshah City. this study is based on a case-control design where using simple random sampling, 110 patients suffering from type II diabetes are selected as the case group and 111 healthy subjects among the companions of other patients are selected as the control group from the Center for Diabetics in Kermanshah City. The average age of the participants is . The questionnaires used for collecting the data included the following: the demographic information questionnaire and the lifestyle questionnaire which covers diet, physical activity, coping with stress, and smoking. Software applications including STSTA14 and SPSS23 were used for performing statistical computations and logistic regression or linear regression tests were used for analyzing the collected data. in the subscales of diet, physical activity, spiritual growth, and stress management, there was a significant difference between the diabetic and healthy groups in a wat that the average score for these subscales was higher in the healthy individuals. While the average score for "health responsibility" was higher in the diabetic group compared to the healthy subjects, the difference was not significant (). Moreover, there was a significant statistical relationship between the two groups, i.e. the diabetic and healthy groups, and the variables of age, education level, and occupation (P > 0.05). healthy lifestyle including proper diet and athletic activity is effective in preventing type II diabetes. Accordingly, implementing policies in the urban transportation system such as providing a special lane for bikers in the cities, increasing the tax for harmful foods, considering subsidies for healthy food products, and self-care of individuals can be effective.

Can International Technological Diffusion Substitute for Coordinated Global Policies to Mitigate Climate Change?

In short, yes. I use a multi-region integrated assessment model with fuel-specific endogenous technical change to examine the impact of Europe and China reducing emissions to zero by mid-century. Without international technological diffusion this is insufficient to avoid catastrophic climate change. But when innovation can diffuse overseas, long-run temperature increases are limited to 3 degrees. This occurs because policy not only encourages green innovations but also dissuades dirty innovations which would otherwise spread. The most effective policy package in emissions-reducing regions is a research subsidy funded by a carbon tax, driven in the short term by the direct effect of the carbon tax on the composition of energy, and later by innovation induced by research subsidies. Green production subsidies are ineffective because they undermine incentives for innovation.

Optimal innovation investment: the role of subsidy schemes and supply chain channel power structure

We investigate the impact of government subsidy schemes and channel power structure on the level of innovation in a two-tier supply chain. Our results indicate that consumer subsidies are more effective than producer subsidies in promoting innovation investment for a given channel power structure. Regardless of the power structure, supply chain members, consumers and society benefit more from consumer subsidies. If government subsidies are absent, innovation investment is higher when neither member of the supply chain dominates, and consumer surplus and social welfare are also higher in the Nash game. Under the consumer subsidy scheme, although government expenditures are higher in the manufacturer-led game, innovation investment is the same under different power structures, and consumer surplus and social welfare are also, in turn, the same. Under the producer subsidy scheme, the manufacturer invests more in innovation, and government expenditure is also higher when the retailer dominates the supply chain. Under producer subsidies, consumers and society benefit from the presence of powerful retailers when the investment cost is lower, and consumer surplus and social welfare have an inverted U-shaped relationship with the retailer’s power otherwise.

The Impact of Government Subsidies and Retailer Contracts on Product Recovery

Conducting product recovery and remanufacturing not only help manufacturers decrease the unit cost of production, but also benefit the environment. However, most manufacturers are hampered by the huge initial investment of related operations. In order to alleviate the manufacturers’ financial pressure of product recovery and remanufacturing, some governments implement the production subsidy (subsidy P) and recycling subsidy (subsidy I). Meanwhile, retailers can provide the revenue-sharing contract (contract S) and cost-sharing contract (contract C). Hence, this paper mainly studies the incentive designs of the government and retailer, and the effects of these incentives on the closed-loop supply chain. We first establish a Stackelberg game model consisting of a government, a manufacturer and a retailer, then investigate and compare the optimal decisions and payoffs of each member under each incentive combination of the government and retailer. Our results first show that, on the other hand, the government’s subsidy type cannot affect the retailer’s design of contract C, but subsidy I can induce the retailer to share a higher rate of sale revenue, comparing to subsidy P. On the other hand, the retailer’s contract S could induce the government to increase subsidy rate in most cases, comparing to contract C. Second, the subsidy P can always lead to a higher collection rate, lower wholesale and retail prices, and higher payoffs for the government, manufacturer and retailer, comparing to subsidy I. Besides, under subsidy I, contract S always leads to a higher collection rate, lower wholesale and retail prices, and higher payoffs for the government, manufacturer and retailer, comparing to contract C. However, under subsidy P, contract S can lead to a higher collection rate, a lower wholesale price, and higher payoffs for the manufacturer and retailer, comparing to contract C only when the manufacturer’s recovery efficiency is high. Moreover, the retail price is always higher and the government payoffs is always lower under contract C. Third, the government prefers to implement the subsidy P and then which contract is chosen by the retailer depends on the collection efficiency of the manufacturer. Therefore, subsidy P combining with contract S or C is the equilibrium incentive combination.

Farmers' land allocation responses to the soybean rejuvenation plan: evidence from “typical farm” in Jilin, China

PurposeThe purpose of this paper is to test the impact of the soybean rejuvenation plan and the subsidy on farmers' land allocation decisions, which may reference policy adjustment from a micro perspective.Design/methodology/approachThe paper develops a multi-objective optimized programming model on farm-level, which simulated the land-use changes, as well as the resulting changes in benefits of the rational “typical farm”. The simulation scenarios include changes in subsidy policy and production efficiency, and the baseline scenario was the production status in 2018.FindingsThe results show that an increase in soybean producer subsidy will encourage farmers to allocate more land for soybean planting, which can be considered as a policy tool in promoting soybean production in China. Besides, the effect of subsidy in adjusting soybean acreage for farms is further affected by external conditions such as production technology (such as breeding technology, pesticide and fertilizer application efficiency). Meanwhile, large-scale farms show more significant land adjustments when facing changes in policies and external conditions.Originality/valueThe value of this paper is to simulate the effects of soybean policy and subsidy change on farmers' land-allocation decisions through a multi-objective farmer decision-making model, which provides a micro perspective to understand the implementation effect of the soybean revitalization plan.

Metrics on the sustainability of region-specific bioplastics production, considering global land use change effects

Expanding the production of fuels and fibres based on traditional food crops can put additional pressures on ecosystems and natural resources, with potential spillover effects through induced land use change (iLUC). Computable General Equilibrium (CGE) modelling provides a systematic framework for ex-ante sustainability analysis, capturing the complex interactions between land uses, agri-food markets, and international trade. This study applies an integrated CGE framework that considers loss of natural vegetation to derive quantitative indicators on the sustainability of manufacturing bioplastics from arable crops in five major producing regions (Brazil, China, the European Union, United States and Thailand). The approach consists of increasing bioplastics production at the cost of conventional plastics in each of these regions separately by means of a production subsidy, simulating bioplastic production targets. In order to assess the uncertainty in sustainability metrics, different levels of market penetration are considered, as well as variability in key model parameters. Increasing bioplastics production in Thailand is in general associated with more favourable metrics, although this is related to the relatively small size of the sector, which triggers minor market-mediated effects. When iLUC is included, increased bioplastics production in China is, on average, associated with the largest land footprint (16.93 ha t–1); whereas the highest CO2 emission intensity is estimated for bioplastics produced in the European Union (10.41 t CO2-eq. t–1). Emissions from iLUC outweigh potential greenhouse gas (GHG) savings from fossil fuel substitution, except for Thailand, where increasing bioplastics production from sugarcane and cassava saves on average 2.0 kg CO2-eq. t–1. This translates into decades of carbon payback time and high abatement costs even for Thailand, while trade-offs arise among the metrics proposed. Other impacts besides deforestation and GHG emissions should ideally be considered to examine further interactions within the Water-Food-Energy nexus, though this may require combining global with regionalized approaches, with the associated challenges.

Emigration, Tax on Remittances and Export Quality

We examine the implications of the emigration of unskilled workers for the quality of a skill-based good exported by a small open economy. This issue is relevant in the context of quality constraints faced by the developing countries like China and India in promoting their exports, on the one hand, and the significantly large emigrations of workers, particularly unskilled workers, which lower their productive capacities, on the other hand. We show that even though unskilled workers are not directly used in the production of quality-differentiated export goods, their emigration would lower export quality when quality upgradation requires more intensive use of skilled workers relative to capital. This result follows from the complementarity between skilled and unskilled wages in a competitive general equilibrium model. A quality-content production subsidy in such a case can mitigate the adverse effects of emigration. The significantly large remittances received from unskilled emigrants create scope for taxing such remittances to finance the subsidy. JEL Classification: F16, F20, F22, F24

Implications of government subsidy on the vaccine product R&D when the buyer is risk averse

This paper analyses the choice of subsidy offered to a vaccine supply chain with a risk-averse buyer. We find that for a higher innovation effort and level of social benefits, the per-unit production subsidy is better when there is a low innovation cost coefficient, a low level of risk aversion, or a high potential demand. Otherwise, under the opposite conditions, the R&D innovation effort subsidy should be selected. Furthermore, from an evolutionary game theoretical perspective, we also present the stability performance for the subsidies, and the results show that when the manufacturer’s innovation cost coefficient is relatively low, the more profitable per-unit production subsidy may be abandoned due to its performance instability.

Overcoming the limitations of variable renewable production subsidies as a means of decarbonising electricity markets

The limitations of production subsidies for variable renewable energy (VRE) plant as a means of decarbonising electricity markets are well known. Despite this, production subsidies for VRE plant are the most prevalent form of policy intervention in Australia. In the absence of cost-effective storage, production subsidies for VRE plant can create incentives to produce electricity at times the system may not need it, thereby severing the link between the spot market and financial incentives to generate. Such production subsidies can also reduce the incentive for new VRE plant to participate in ‘firm’ forward derivative markets. In this paper, we examine two adjustments that could be made to production subsidies for VRE plant that would correct for these unintended consequences. Firstly, the quantum of the subsidy could be a function of the wholesale electricity price, electricity demand or emissions; and secondly, new generators would be ineligible to receive production subsidies without demonstrating that they are facilitating the supply of financial derivative contracts. The effect of both adjustments would be to increase the incentive of VRE plant to demand-follow; that is, make its output ‘firmer’.

What impact are subsidies and trade barriers abroad having on Australasian and Brazilian agriculture?*

This paper provides new estimates of the extent and economic effects of agricultural policies that provide domestic support or import protection to farmers in countries that compete in the global marketplace with unsubsidised farmers. Analyses earlier this century found that import market access barriers accounted for more than 90 per cent of the global welfare cost of all assistance to farmers, with domestic support measures providing as little as 5 per cent. Since then the share contributed by domestic support has grown greatly in some high‐income and emerging economies, thanks to policy re‐instrumentation. Using the latest version of the GTAP model and database of the global economy, this paper estimates the economic effects of direct farmer subsidies, and of the producer subsidy and consumer tax equivalents of farm trade policies, on farmers in three lightly assisting countries. The estimates adjusted for country size suggest the effects on agricultural exports, net farm income and national economic welfare of such policies are far more adverse for Australia, Brazil and especially New Zealand than for the rest of the world, and that domestic supports abroad are much more important contributors to those losses now than they were at the start of this century.

Effective Climate Policy Needs Non-Combustion Uses for Hydrocarbons

A central issue that is discussed in climate policy is the fear of owners of stocks of fossil hydrocarbon deposits that high CO2 taxes and bans on the combustion use of hydrocarbons will turn their stocks into stranded assets. They might react by extracting and selling their reserves today: a rush to burn results. We show how the stranded-asset problem could be avoided or strongly moderated. We analyze a simple intertemporal equilibrium with a given stock of fossil hydrocarbons. In this framework the following properties hold: For a climate-neutral solution to the rush-to-burn problem it is important to maintain existing and generate new markets for climate-neutral products from fossil hydrocarbons in the future, where we give examples for such products. Subsidies for such products (or for their innovation) reduce the rush-to-burn problem. In contrast, the creation of substitutes for fossil hydrocarbon-based climate-neutral products, or subsidies for such products reduce the market for products made from fossil hydrocarbons. This can aggravate the stranded-assets problem and thus can have a climate-damaging effect.

Using Not-Dominated Sorting Backtracking Search Algorithm for Optimal Power System Planning in the vicinity of the Electric Vehicle Charging Station and Scattered Generation Sources under Uncertainty Conditions

The cost of electricity generation depends on different parameters and characteristics. These parameters and characteristics are regional characteristics, fuel costs of fossil fuel power plants, government policies, and technological capabilities, which lead to fluctuations in the cost of electricity generation. The production cost has gradually decreased with the rapid progress of technology and gaining more experience in using wind and solar energy. Therefore, the cost of electricity generation per kilowatthour has declined significantly in recent years. On the other hand, the cost of fuel for gas and thermal power plants is increasing with the reduction of oil and gas reserves and the elimination of subsidies for petroleum products. Therefore, it is necessary to replace gas and thermal power plants with wind and photovoltaic power plants in the future. Moreover, using charging stations for electric vehicles as a source of energy exchange in the form of V2G and G2V greatly helps to manage the costs involved. Using electric vehicles reduces fuel costs, maintenance costs, and air pollution allows protecting the environment and reducing respiratory, heart, and lung diseases. In this paper, the optimal planning in the location of the photovoltaic power plant, wind, and charging station in the presence of load uncertainty and electricity price uncertainty are examined using the crowding-based distance index in the edited Not-Dominated Sorting Backtracking Search Algorithm. Examining the results in MATLAB software on the 33-bus IEEE network indicated the high accuracy, speed, and control of the algorithm.

Toward a Global Film Preservation Movement? Institutional Histories of Film Archiving in Latin America

Toward a Global Film Preservation Movement? Institutional Histories of Film Archiving in Latin America Rielle Navitski (bio) Upon its founding in 1938, the world’s oldest organization dedicated to audiovisual preservation announced its global ambitions in its choice of name, the Fédération internationale des archives du film (International Federation of Film Archives, FIAF). Yet only European and US institutions participated in its creation, namely the United Kingdom’s National Film Library (now the British Film Institute), the Cinémathèque française, Germany’s Reichsfilmarchiv (shuttered in 1945), and the Film Library of New York’s Museum of Modern Art (MoMA). US and European members still dominate FIAF’s ranks today despite initiatives targeting Global South archives, including its School on Wheels, which traveled to several locations in Africa and Latin America between 2002 and 2015, and the editions of the Film Preservation and Restoration Workshop held in Mumbai, Pune, Chennai, Buenos Aires, and Mexico City between 2015 and 2020.1 As of 2020, under a third of [End Page 187] FIAF’s members and associates were based in Africa, Asia, Latin America, or the Middle East.2 This essay makes the case that media scholars must attend to both the structural inequalities and the mutually beneficial exchanges that mark the global history of the film preservation movement—a history that has long been framed in Euro-American terms—in order to understand their reverberations in the present. Long-standing global imbalances within the archiving movement fuel regional disparities in preservation, compounding social and environmental factors. These include climate (heat and humidity accelerate the deterioration of film emulsion and magnetic media such as videotape) as well as periodic institutional crises due to financial precarity and political shifts. As I was drafting this text in summer 2020, Latin America’s largest audio-visual archive, the Cinemateca Brasileira, teetered on the brink of closure. The archive had yet to receive any of its yearly budget due to the federal government’s abrupt termination of its contract with the nonprofit charged with administering the Cinemateca, the Associação de Comunicação Educativa Roquette Pinto (ACERP). In August, the Brazilian government took possession of the Cinemateca’s facilities, symbolically confiscating the keys in the presence of federal police. Shortly thereafter, the archive’s forty-one remaining staff members were summarily dismissed. ACERP never received the funds for their wages—they had gone unpaid since early April—and it seemed clear no agreement would be reached. While the government announced it would award a temporary contract to the Sociedade Amigos da Cinemateca (Society of Friends of the Cinémathèque) to administer the archive in December 2020, at this essay’s press time the contract was still unsigned and the Cinemateca remained closed. Unmistakably a manifestation of the right-wing Bolsonaro administration’s onslaught on the cultural sector, which included dissolving the Ministry of Culture and freezing state subsidies for Brazilian film production, the Cinemateca’s state of emergency was partly due to decades of inadequate financial support and precarious infrastructure, which contributed to the nitrate fires that struck the archive in 1957, 1969, 1982, and 2016. Considering how earlier moments inform these contemporary dilemmas, I identify the archives that emerged in post–World War II Latin America as a key site for examining the successes and limitations of the film preservation movement’s internationalization, given that Latin American institutions were the first outside the United States and Europe to participate in the movement’s expansion. Over a dozen cinémathèques were founded in the region between 1945 and 1965, typically through close contact with FIAF and with the organization’s secretary-general, Henri Langlois of the Cinémathèque française, in particular. In addition to shedding light on long-standing disparities within the film preservation movement, attending to this institutional history can help us incorporate the values and practices of working archivists into academic discourse on “the archive.” Although they have [End Page 188] offered important correctives to approaches that treat archives as neutral repositories, media scholars often give short shrift to the theory and practice of professionals in the field, instead favoring sweeping declarations about archival configurations of knowledge...

Оподаткування сільськогосподарських товаровиробників: наслідки трансформаційних змін і напрямки подальшого розвитку

An efficient development of the agricultural sector of the economy of Ukraine is possible only under the condition of stability and optimality of tax legislation, while its constant changes adversely affect the activities of agricultural enterprises. Therefore, the State support and the creation of favorable conditions for development will allow the agro-industrial complex to become a highly efficient and competitive sector of the economy. The article is concerned with studying and analyzing the transformational changes in taxation of agricultural producers in Ukraine. Both the positive and the negative consequences of tax reforms implementation are examined, in particular, the results of the introduction of a single tax for the taxation of agricultural enterprises are considered and the dynamics of volumes of its revenues to local budgets is analyzed; the main problems that arose in the agricultural sector as a result of the reform carried out by the State on receiving the value added tax (VAT) from agricultural enterprises are distinguished and the impact of this reform on the profitability of these enterprises is disclosed. Efficiency of the introduction of the system of budget subsidies for agricultural producers, which were provided to them in connection with the abolition of a special VAT tax regime, is analyzed. Since support for the agricultural sector is one of the strategic priorities for the development of the national economy, the main aspects of the processes of further reform of the taxation system of agricultural enterprises are distinguished. This will increase the efficiency of their activities, improve the financial condition and develop agricultural production in Ukraine. As a result, this will have a positive impact on the increase in tax revenues to budgets of all levels and reduce attempts to evade taxation.