Subsidy Systems Research Articles

Small-scale traditional management of highly species-rich grasslands in the Carpathians

Abandonment or change of traditional (pre-modern) management systems threaten semi-natural grasslands worldwide. Understanding existing traditional grassland management could greatly help to improve our ability to preserve biodiversity in traditionally managed farmlands. We studied the management of species-rich man-made grasslands (ca. 32–52 vascular plant species on 16m2) and the related traditional ecological knowledge in Gyimes (Romania), where more than 40,000 hectares of meadows and pastures are still managed traditionally. Methods of ecological anthropology e.g. participatory field work, semi-structured interviews (33 interviewees), and free listings were used. Csángós (people living in these valleys of the Carpathians) distinguish hay meadows based on manuring: nearby and distant hay meadows. Pastures are classified into pastures near settlements, mountain pastures, and pastures for sheep. Traditional management of meadows includes mowing, cleaning, mowing-date rotation of tracts, amelioration with hayseed and Onobrychis viciifolia seeds, manuring, manual thinning of unwanted plants, suppression of mosses, and small-scale drainage. We argue that the mowing-date rotation system found in Gyimes is a unique land-use practice that could greatly enhance biodiversity together with hayseed scattering. Treatment of pastures is more simple: sectional cleaning of shrubs/trees, and burning and corralling against Nardus. The goal of Csángós is not to protect biodiversity, but to keep their grasslands in good condition for a long run, and thus ascertain the availability of hay in the needed quantity and quality. We argue that subsidy systems should encourage the maintenance of this and similar systems, support the still existing local traditional communities and also in protected areas management systems should build on the experiences of these small-scale traditional farmers.

Co-firing of imported wood pellets – An option to efficiently save CO2 emissions in Europe?

Abstract In this paper the energy and carbon footprints of pellet imports from Australia, West Canada, and Russia for co-firing in Europe are investigated. Their ecologic and economic performances are proven by applying the Belgian and UK co-firing subsidy systems, which require dedicated sustainability evaluations. Based on the modelling of different subsidy schemes and price scenarios, the present paper identifies favourable conditions for the use of biomass co-firing in Germany and Austria, which currently do not have dedicated co-firing incentives. The present paper shows that under present conditions, co-firing has a narrow financial gap to coal with −3 to 4 € Cent/kWh el and has low CO 2 mitigation costs compared to other renewables. Moreover, it is shown that co-firing is one of the most cost-attractive options to reach the EU-2020 targets. For policy makers, the support of co-firing is found to be very efficient in terms of cost-benefit ratio. It is proven that the co-firing subsidy schemes might direct supply chain decisions towards options with low energy and carbon impacts.

The dimensioning of PV-battery systems depending on the incentive and selling price conditions

Electric energy storage is probably the first viable for households since they pay the highest electricity tariffs, being a factor four higher than bulk electricity prices. The attractiveness depends on the subsidy systems (if existing), the electricity price and the purchase cost of a PV installation and a battery system. Since the electricity price may not remain constant during the lifetime of the storage system, a financial cash flow calculation is needed including discount rate and inflation. In this research the optimal PV-battery system is determined as a function of the remuneration (discerning a subsidised region, a “market” price region and no fees at all), the investment year (2012, 2017 and 2021) and the electricity price increase rate (0%, 4%, 6%) (including the general inflation rate). The analysis is based on available battery energy storage systems on the market and on real household measurement data. All these degrees of freedom secure the accuracy of the analysis. The article shows also the battery throughput cost with a direct comparison to the electricity cost.It becomes clear that batteries can already be cost-effective today without subsidies and irrespective of the electricity price increase, but without a return on investment if the electricity price does not increase more than the inflation. An investor cannot recommend batteries today. However, if the electricity price increases with 4% than batteries become quickly attractive and do not need subsidies.

Continuous, pulsed and disrupted nutrient subsidy effects on ecosystem productivity, stability, and energy flow

Resource pulses and subsidies can supply ecosystems with an important source of nutrients that supports additional productivity at multiple trophic levels. Common carp Cyprinus carpio provide ecosystems with a continuous nutrient subsidy through bioturbation and excretion but may also initiate a nutrient pulse through carcass decomposition. We examined how continuous (common carp foraging and excretion), pulsed (carcass decomposition) and disrupted (carp introduced and then removed) nutrient subsidies differed in their ability to alter nutrient availability, ecosystem productivity and stability and energy flow. Nitrogen and phosphorus availability and primary production were highest in pulsed, intermediate in continuous and lowest for disrupted and control systems. Continuous, and to a lesser extent pulsed, systems were associated with decreased water clarity and macrophyte coverage. Nutrient pulses ascended to higher trophic levels and supported greater densities of consumers (i.e., zooplankton and macroinvertebrates). Biotic and abiotic responses in disrupted systems quickly returned to control levels and water quality improved. Light penetration and Daphnia spp. dynamics were more stable in systems with pulses whereas stability of other variables was similar across treatments. Biotic materials collected from pulsed and continuous subsidy systems were typically enriched in δ15N suggesting common carp‐derived nutrients supported increased productivity whereas δ13C signatures were depleted suggesting a transition to more pelagic energy pathways, likely due to enhanced phytoplankton production. Our results suggest that continuous and pulsed nutrient subsidies vary in their ability to support and sustain ecosystem productivity with resulting variation in food web structure and ecosystem stability.

More Efficient Production Subsidies for Emerging Agriculture in Arab Micro-States: A Conceptual Model

Import-dependent arid Arab micro states such as those in the Persian Gulf are particularly vulnerable to food-security risk. Among the many remedial policy suggestions is some initiation or increase in domestic production to insulate these countries from supply disruption, import price volatility and high import prices. This paper does not address the efficacy of domestic production but notes that such production will require government intervention in the form of production subsidies to mitigate market risk. The narrow focus of this paper is to provide a conceptual model of subsidies that avoids many previous problems in established subsidy systems. The paper describes a subsidy model that makes the most use of market signals, avoids perverse incentives, and provides a structure to encourage efficiency, quality enhancement and product differentiation in agricultural products. The system is designed to be WTO compliant. The model has two components: a calculation of the true economic cost of a unit of an agricultural product and a deficit payment that is calculated to bridge the gap between true economic cost and market remuneration. The structure of the deficit payment is crucial to the establishment of a beneficial incentive system. The paper provides a mathematical rendering of the model, analysis of the associated incentive structure and a numerical example for a hypothetical Arab micro state.

Reflections on Theories of Social Optimization and Their Relevance for Future City Management in Japan

The paradigm of laissez-faire economy presumes that economic agents know efficient loci for input-output combinations and rationally act in the market by following their subjective values. Economy is efficiently organized and given dynamic forces to grow at its own risk. As a result, the greatest happiness for a great number is attained. It is difficult to correctly answer the question, why should we consider city management? Of course, the paradigm will not work in a city due to congestion and agglomeration as well as specificity of location. However, it is not sufficient to consider only subsidiary taxes and subsidy systems like Pigouvian prescriptions that lead the market equilibrium to a Pareto Optimum. In a mature economy such as the Japanese economy that faces a long depression under pressure of aging and decreasing population, there are few investable targets as long as it is taken for granted that the paradigm should be maintained. Moreover, in a globalized economy, cities must compete against their rivals. This means not only efficiency of activities in the Pareto sense in the city but a higher absolute level of activity must be realized. In this study, we focused on external costs and benefits that accrue through the activities of economic agents in a city. We argue that activities should be managed and controlled so external benefits are generated to a maximum extent and the activity level of the city is also maximized.

Optimal Subsidy Systems for Residential Photovoltaic Installation Offered by Local Government Case Study of Saitama Municipalities

Optimal Subsidy Systems for Residential Photovoltaic Installation Offered by Local Government Case Study of Saitama Municipalities

Farmers' Interest in Nature and Its Relation to Biodiversity in Arable Fields

Biodiversity declines in farmland have been attributed to intensification of farming at the field level and loss of heterogeneity at the landscape level. However, farmers are not solely optimizing production; their actions are also influenced by social factors, tradition and interest in nature, which indirectly influence biodiversity but rarely are incorporated in studies of farmland biodiversity. We used social science methods to quantify farmers' interest in nature on 16 farms with winter wheat fields in central Sweden, and combined this with biodiversity inventories of five organism groups (weeds, carabid beetles, bumblebees, solitary bees, and birds) and estimates of landscape composition and management intensity at the field level. Agricultural intensity, measured as crop density, and farmers' interest in nature explained variation in biodiversity, measured as the proportion of the regional species richness found on single fields. Interest in nature seemed to incorporate many actions taken by farmers and appeared to be influenced by both physical factors, for example, the surrounding landscape, and social factors, for example, social motivations. This study indicates that conservation of biodiversity in farmland, and design of new agri-environmental subsidy systems, would profit from taking farmers' interest in nature and its relation to agricultural practices into account.

Price competition between subsidized organizations

Many firms and organizations compete for customers while at the same time receiving substantial funding from outside sources, such as government subsidies. In this paper, we study the effects of two commonly observed subsidy systems on the strategic behavior of competing firms. We compare a per unit subsidy to a subsidy allocated according to the firms’ market shares. We show that, holding the total subsidy budget constant, the per unit subsidy results in lower prices, higher output, lower profits and higher overall welfare as compared to the market-share based alternative. However, we also find that a market-share based subsidy makes collusive behavior between firms much harder. Our results suggest a potential trade-off between short-run and long-run objectives: subsidy systems designed to widen participation may favor collusive behavior. The welfare implications of this trade-off are discussed. Our findings have important policy implications for the design of subsidy systems.

How to Design a Targeted Agricultural Subsidy System: Efficiency or Equity?

In this paper we appraise current agricultural subsidy policy in the EU. Several sources of its inefficiency are identified: it is inefficient for supporting farmers’ incomes or guaranteeing food security, and irrational transfer payments decoupled from actual performance that may be negative for environmental protection, social cohesion, etc. Based on a simplified economic model, we prove that there is “reverse redistribution” in the current tax-subsidy system, which cannot be avoided. To find a possible way to distribute subsidies more efficiently and equitably, several alternative subsidy systems (the pure loan, the harvest tax and the income contingent loan) are presented and examined.

Parent Experiences with State Child Care Subsidy Systems and Their Perceptions of Choice and Quality in Care Selected

Research Findings: This study investigated parents’ experiences using Child Care and Development Fund and other state-dispersed child care subsidies, reasons for choosing their current child care program, and perceptions of the quality of child care received from their current program. A telephone survey of 659 parents receiving child care subsidies in 4 states showed that parents gave generally positive ratings to accessibility and reliability of subsidies, reported that child care subsidies were a substantial benefit to them, and gave low ratings to limitations of child care subsidies. However, 40% of parents reported that they had experienced a disruption in eligibility for subsidy. Parent experiences with child care subsidies varied by state. Parents in the sample identified 4 criteria used to choose their child care program: (a) characteristics of the provider, (b) convenience, (c) whether the provider was licensed or accredited, and (d) whether a personal relationship existed with the provider. Selection criteria varied by type of care parents were using. The majority of the participants rated the overall quality of their child care as perfect or excellent (73.6%), but ratings of quality also varied by the type of child care parents were using. Practice or Policy: Implications for child care subsidy program administration and for improving the quality of child care purchased by public subsidies in the context of parental choice are discussed.

A "Value Ecology" Approach to the Performing Arts

In recent years, ecological thinking has been applied to a range of social, cultural and aesthetic systems, including performing arts as a living system of policy makers, producers, organisations, artists and audiences. Ecological thinking is systems-based thinking which allows us to see the performing arts as a complex and protean ecosystem; to explain how elements in this system act and interact; and to evaluate its effects on Australia’s social fabric over time. According to Gallasch, ecological thinking is “what we desperately need for the arts.” It enables us to “defeat the fragmentary and utilitarian view of the arts that dominates, to make connections, to establish overviews of the arts that can be shared and debated” (Gallasch NP). John Baylis took up these issues in "Mapping Queensland Theatre" (2009), an Arts Queensland-funded survey designed to map practices in Brisbane and in Queensland more broadly, and to provide a platform to support future policy-making. In this paper, we propose a new approach to mapping Brisbane’s and Queensland’s theatre that extends Baylis’ ‘value chain’ into a ‘value ecology’ that provides a more textured picture of players, patterns, relationships and activity levels in local performing arts.

The credit crunch and subsidized low-income housing: the UK and US experience compared

This paper examines how the mortgage crisis and subsequent recession have affected subsidized rental housing in the United Kingdom and the United States. These two nations approach the housing needs of low-income households in very different ways and to very different degrees. In the UK, non-profit housing associations are pivotal to the production and management of affordable rental housing; in the US, the affordable housing system revolves mostly around a single program, the Low-Income Housing Tax Credit. Yet the crisis destabilized key parts of both countries’ subsidy systems and raised important questions about their sustainability in the future. The UK responded sooner and arguably more effectively than the US to the crisis. However, over the longer term, the prospects for affordable housing development are likely to be more difficult in the UK than in the US.

Cost-effectiveness analysis of subsidy schemes for industrial timber development and carbon sequestration in Japanese forest plantations

This study uses simulations to investigate the effects of implementing two different Japanese forestry subsidy systems on timber production and carbon stock, and examines the consequences for harvesting strategies. An existing Local Yield Table Construction System (LYCS), a wood conversion algorithm, and a harvesting cost model were used in the simulations to test the applicability of different subsidies to the thinning of stands. Using forest inventory data collected by local government staff, simulation output was used to calculate forestry profits, carbon stocks, subsidies, the amount of labor required, and the cost effectiveness of investing in subsidies. By comparing the output of simulations based on two scenarios, we found that both the clear-cutting area and the amount of harvested timber were larger under Scenario 2, in which the rules governing subsidy allocations are more relaxed, than under Scenario 1, in which the rules are more restrictive. Because the harvested timber under Scenario 1 was mainly produced by clear-cutting, the forestry profits and the subsidy predicted in the early period of the simulation, were larger under Scenario 1 than under Scenario 2. In contrast, the carbon stock was larger under Scenario 2 than under Scenario 1. The simulation model is likely to be useful for improving Plan-Do-Check-Act cycles implemented in Japanese forest management systems.

Factors influencing the transferability of occupational safety and health economic incentive schemes between different countries

This article looks at the factors that influence the transferability of different types of occupational safety and health (OSH) economic incentives from one country to another. To review the legal, political, and cultural framework conditions for economic incentive schemes in the European Union (EU), the European Agency for Safety and Health at Work (EU-OSHA) surveyed EU member states about the state of such schemes in their countries. In addition to the survey responses, relevant information on existing schemes and their national context within the 27 EU member states was gathered through reports, articles, and databases. Following this, countries were clustered according to cross-cultural differences. Despite the apparent variations in Europe's social security systems, there is a high degree of similarity between the countries regarding the basic criteria of design of the system. In addition, different kinds of incentives are used in different member states regardless of the social insurance system. When it comes to insurance incentive schemes, the fundamental difference between countries is whether the workers' compensation scheme is based on a competitive market between private insurance companies or a kind of monopoly structure, where the employers do not have the choice between several insurance companies. A clear majority of 19 of the 27 EU member states have a monopoly system. Subsidy systems, tax incentives, and insurance-based "experience rating" are theoretically -possible in all EU countries. In competitive insurance markets, effort-based incentives are more difficult to achieve. A possible solution could be the introduction of long-term contracts or the creation of a common prevention fund, financed equally by all insurers.

Determinants of Self-Reported Medicine Underuse Due to Cost: A Comparison of Seven Countries

To compare the predictors of self-reported medicine underuse due to cost across countries with different pharmaceutical subsidy systems and co-payments. We analysed data from a 2007 survey of adults in Australia, Canada, Germany, the Netherlands, New Zealand (NZ), the United Kingdom (UK) and the United States (US). The predictors of underuse were calculated separately for each country using multivariate poisson regression. Reports of underuse due to cost varied from 3% in the Netherlands to 20% in the US. In Australia, Canada, NZ, the UK and the US, cost-related underuse was predicted by high out-of-pocket costs (RR range 2.0-4.6), below average income (RR range 1.9-3.1), and younger age (RR range 3.9-16.4). In all countries except Australia and the UK, history of depression was associated with cost-related underuse (RR range 1.2-4.1). In Australia, Canada, Germany, the UK and the US lack of patient involvement in treatment decisions was associated with cost-related underuse (RR range 1.2-1.4). In Australia, Canada and NZ, indigenous persons more commonly reported underuse due to cost (RR range 2.1-2.9). Cost-related underuse of medicines was least commonly reported in countries with the lowest out-of-pocket costs, the Netherlands and the UK. Countries with reduced co-payments or cost ceilings for low income patients showed the least disparity in rates of underuse between income groups. Despite differences in health insurance systems in these countries, age, ethnicity, depression, and involvement with treatment decisions were consistently predictive of underuse. There are opportunities for policy makers and clinicians to support medicine use in vulnerable groups.

Stability of Child‐Care Subsidy Use and Earnings of Low‐Income Families

This article explores the duration and effect of child‐care subsidy use among low‐income working mothers in Wisconsin. Using an event‐history model, the study finds that mothers are likely to cycle on and off subsidy systems and that their subsidy spells tend to end relatively quickly. Results from a Tobit model with a lagged dependent variable suggest that long‐term use of child‐care subsidies is associated with increases in mothers’ earnings.

Accelerating the transition to sustainable energy systems

The slow pace of transition to sustainable energy systems is the result of several factors running in parallel. The starting points are very low. Even 30% per annum increases in rated capacity (for wind energy or solar PV, for example) take many years to make a big impact at the global level. Policy initiatives are for the most part ineffectual in relation to the urgency and scale of what is required, and often fail to address the fundamental causes of this slow progress. This reflects a “top-down” approach—often accompanied by unrealistic targets and simultaneously undermined by a lack of consistency across policies, which reflect a “utopian social engineering mentality”, made worse because: “The Planner's response to failure of previous interventions (is) to do more intensive and comprehensive interventions” as William Easterly has put it. In short, there is little or no accountability. This approach has failed to harness the sympathy, imagination, self-interest, or sound options of energy users—although it may attract developers, including those not hitherto noted for renewable energy projects or environmental concern. Targets are usually too short term and clearly unrealistic, especially where fossil fuel use is rising very rapidly, and renewable energy use expands modestly. Government subsidies for traditional energy forms continue. Insufficient attention is paid to what individuals might achieve in energy efficiency and renewable energy terms if permitted to have, or retain (in industrialized countries, where the burden of taxation is often inhibiting), the wherewithal to make the necessary investments. Subsidy systems often promote renewable energy schemes that are misdirected and buoyed up by grossly exaggerated claims. One or two mature renewable energy technologies are pushed nationally with insufficient regard for their costs, contribution to electricity generation, transportation fuels’ needs, or carbon emission avoidance. Investors are rewarded excessively under some national schemes for mature technologies that should not require support, and that frequently do not make the contribution to renewable energy output or carbon emission avoidance they claim. Costs to business and domestic electricity consumers, through the subsidy payments they make, are much greater under some schemes than what other carbon abatement measures would cost. Higher-cost, less mature renewable energy technologies that have large potential for meeting global energy needs are not getting the support they warrant. This is of grave concern given the minimum 30–50 year lead times required to make a large global contribution. Without departing from the sense of urgency required to address the pressing needs for sustainable energy systems, it is imperative that the involvement of people at the grassroots level is harnessed and sound commercial and technical criteria are applied.

Housing inequalities in an enlarged European Union: patterns, drivers, implications

This article examines variations in housing quality, accessibility and affordability in the EU, and on this basis proposes a typology of inter-country variations in housing conditions. This typology reveals good housing conditions in the ‘long-standing’ northern EU member states, intermediate conditions in most of the remaining ‘long-standing’ member states and poor conditions in many of the ‘new’ Central and Eastern European member states. The institutional context within which these variations have arisen is also considered specifically in relation to: housing tenure systems, finance and subsidy systems, construction systems and trends, and governance arrangements, as are the implications of these inequalities for the EU and how they can be addressed.

One size fits all? Policy instruments should fit the segments of target groups

In order to meet the Kyoto CO 2 reduction targets, technical innovations in the field of energy-efficiency must diffuse more rapidly into a larger market. However, markets develop gradually, especially if innovations are involved. Diffusion starts with the early market (innovators and early adopters), followed by the mainstream market (the early and late majority), and ends with the laggards. The actors in these markets differ in their willingness to adopt innovations; the early market actors have a visionary attitude, and the mainstream market actors are more pragmatic. In order to choose policy instruments that will most effectively influence these two markets within the target group of housing association, we addressed the following two questions. (1) What are the differences between the early and mainstream market actors from a behavioural-change point of view? (2) In what way do existing policy instruments differ in influencing the behaviour of these actors? We analyzed early market and mainstream decision-making behaviours, and how the active ingredients in policy instruments specifically target the characteristics of the two markets. Mainstream instruments should intervene as early as possible in the decision-making process and emphasize communication about advantages such as comfort and quality in addition to money and energy savings. Furthermore, they should present energy conservation as a solution to an actual problem. Instead of bureaucratic subsidy systems for the mainstream, the motto should be “cash on the barrel-head”. Early market actors are highly internally motivated, implying that early market interventions have to be challenging and facilitating.