Abstract: The implementation of the European Union Water Framework Directive (WFD) requires nationally generalizable estimates of the benefits of protecting inland and coastal waters. As an alternative to benefit transfers and meta-analyses, J. Vesterinen, E. Pouta, A. Huhtala and M. Neuvonen utilize national recreation inventory data combined with water quality data to model recreation participation and estimate the benefits of water quality improvements. Using hurdle models, the authors analyze the association of water clarity in individuals' home municipalities with the three most common water recreation activities – swimming, fishing and boating. The results show no effect on boating, but improved water clarity would increase the frequency of close-to-home swimming and fishing, as well as the number of fishers. Furthermore, to value the potential benefits of the WFD, they estimate the consumer surplus of a water recreation day using a travel cost approach. A water policy scenario with a 1-m improvement in water clarity for both inland and coastal waters indicates that the consumer surplus would increase 6% for swimmers and 15% for fishers. In contrast to previously estimated abatement costs to improve water quality, net benefits could turn out to be positive. Their study is a promising example of applying existing national recreation inventory data to estimate the benefits of water quality improvements for the purposes of the WFD.

by J. Vesterinen 1, E. Pouta 1, A. Huhtala 1 and M. Neuvonen 2
1. MTT Agrifood Research Finland, Luutnantintie 13, 00410 Helsinki, Finland
2. Finnish Forest Research Institute, Jokiniemenkuja 1, 01370 Vantaa, Finland
Journal of Environmental Management via Elsevier Science Direct www.ScienceDirect.com
Volume 91, Issue 4; March-April, 2010; Pages 984-994

Executive Summary
Over the last two decades, utility ratepayer funding for energy efficiency programs has seen both booms and busts. Currently, roughly 35 states implement some set of ratepayer-funded electric and/or natural gas energy efficiency programs, with a total U.S. budget of $3.1 billion in 2008 (CEE 2008).1 The top 10 states account for about 80% of this total, each of which planned to spend $100 million or more in 2008. California, the undisputed heavyweight in terms of the absolute magnitude of its spending on energy efficiency, represented one-third of the total U.S. energy efficiency program budget in 2008.
A proliferation of new state-level policies enacted over the past several years suggests that the next decade may see a dramatic and sustained increase in overall funding levels, and a fundamental re-drawing of the energy efficiency map. These new policies include: energy efficiency portfolio or resource standards (EEPS or EERS), requirements that utilities acquire all cost-effective energy efficiency, strengthened integrated resource planning (IRP) or demand-side management (DSM) planning requirements, and regulatory incentive mechanisms to better align utility financial interests with improvements in customer energy efficiency.

To assess the impact of these new policies on energy efficiency spending and savings, Galen Barbose, Charles Goldman, and Jeff Schlegel developed a set of projections (low, medium, and high) of ratepayer-funded energy efficiency program spending and savings through 2020, based on a state-by-state review of energy efficiency policies currently on the books or in the pipeline, as well as recent IRPs and DSM plans. The projections suggest the following set of trends:
• Total ratepayer-funded energy efficiency program spending in the U.S. (90% of which is targeted to electric end-uses) is projected to increase from $3.1 billion in 2008 to $5.4-$12.4 billion per year in 2020, with a Medium Case projection of $7.5 billion.
• Much of the projected increase will be centered in populous states that, historically, have been relatively minor players on the national energy efficiency stage, but have recently enacted aggressive new energy efficiency policies, including: Illinois, Maryland, Michigan, North Carolina, Ohio, and Pennsylvania. These six states, which together represented less than 4% of energy efficiency program spending in 2008, account for more than 60% of the projected increase in total U.S. spending from 2008-2020 under our Low Case (and smaller percentages under the other cases).
• Among states that have traditionally provided strong support for ratepayer-funded energy efficiency programs, significant funding increases (i.e., over $200 million per year) are projected under both the Mid Case and High Case scenarios for New Jersey, New York, and Massachusetts. In the High Case, significant funding increases are also projected for a number of other traditional leaders, including California, Connecticut, Minnesota, and Wisconsin.
• Across all three scenarios, spending levels become significantly more evenly distributed across states than is currently the case....
• Projected increases in ratepayer funding for electric energy efficiency programs are estimated to yield annual electric energy savings in 2020 ranging from 0.45% (Low Case) to 0.93% (High Case) of total U.S. retail sales in that year, with a Mid Case estimate of 0.58%. This compares to estimated annual savings of 0.34% of U.S. retail sales in 2008.
• Cumulative electricity savings projected from ratepayer-funded programs implemented over the 2010-2020 period equal 4.7% of EIA’s reference case forecast of 2020 retail electricity sales in the Low Case, 6.1% in the Medium Case, and 8.6% in the High Case.
• Energy savings from ratepayer-funded efficiency programs, as a result of the state-level policies examined in this report, have important implications for the potential incremental impact (in terms of both its size and distribution) of a national EERS or clean energy standard. For example, an EERS requiring cumulative savings of only 5% of retail sales by 2020 would result in little or no incremental increase in energy efficiency savings than would likely occur in the absence of such a policy.

The Medium and High Case spending projections represent more than a doubling and quadrupling, respectively, of current national energy efficiency program funding levels. And in some states, program funding is projected to increase by an order of magnitude or more under one or more of the three scenarios. While achieving a ramp-up of this scale over the next decade is most likely feasible, states and program administrators are expected to face a number of near-term and longer-term challenges....

by Galen Barbose, Charles Goldman, and Jeff Schlegel
Ernest Orlando Lawrence Berkeley National Laboratory; Environmental Energy Technologies Division http://eetd.lbl.gov/ea/ems
Report LBNL-2258E; October 2009

Abstract: Recently, the sport of ice climbing has seen a dramatic increase in popularity. This paper uses the travel cost method to estimate the demand for ice climbing in Hyalite Canyon, Montana, one of the premier ice climbing venues in North America. Access to Hyalite and other ice climbing destinations have been put at risk due to liability issues, public land management agendas, and winter road conditions. To this point, there has been no analysis on the economic benefits of ice climbing. In addition to the novel outdoor recreation application, this study applies econometric methods designed to deal with “excess zeros” in the data. Depending upon model specification, per person per trip values are estimated to be in the range of $76 to $135.

by D. Mark Anderson; Department of Economics, University of Washington, Box 353330, Savery 305, Seattle, WA 98195-3330, USA; Tel.: +1 406 366 0921.
Journal of Environmental Management via Elsevier Science Direct www.ScienceDirect.com
Volume 91, Issue 4; March-April, 2010; Pages 1012-1020

Abstract:
Hedonic techniques are commonly used to recover implicit prices for the attributes of differentiated products – particularly housing. However, if unobservable house or neighborhood attributes are correlated with the attributes of interest, OLS estimates of their implicit prices will be biased. A variety of quasi-experimental approaches have been used to deal with this problem in the past, but Patrick Bajari, Jane Cooley, Kyoo il Kim and Christopher Timmins argue that, in many important empirical settings, these strategies are not applicable. In this paper, the authors propose an alternative strategy based instead on two assumptions from economic theory – (1) that market prices reflect the characteristics of the home, including those that are not directly observed by the econometrician, and (2) that housing markets are informationally efficient, at least in a limited sense. In particular, they assume that characteristics observable to buyers cannot be used to earn excess returns. Using
data describing housing transactions in California’s Bay Area between 1990 and 2006, Bajari, Cooley, Kim and Timmins find evidence in support of their assumption. Applying their estimator, the authors recover implicit prices for three of the EPA’s ”criteria” air pollutants – particulate matter (PM10), sulfur dioxide (SO2), and ground-level ozone (O3). In contrast to simple cross-sectional or fixed effect estimators, marginal willingnesses to pay for a reduction in all three pollutants considered individually or together) are all statistically significant with the expected sign and quite large in magnitude. These results suggest that ignoring bias from time-varying correlated unobservables will lead to an understatement of the benefits of a pollution reduction policy.
...
The authors allow Bay Area housing prices to be determined by different hedonic price functions in each of three separate periods: (1) 1990-1994, (2) 1995-2000, and (3) 2001-2006. These periods correspond (roughly) to periods of depreciation, appreciation, and very rapid appreciation in this housing market. They report results for three different econometric models. First, the authors estimate a simple cross-sectional model for each of the three time periods in our data set. ... Second, they estimate a house fixed-effect model that constrains the derivative of ln(P) with respect to each pollutant to be constant over time. Finally, they estimate a constrained specification of the model described in equation.
...
For many pollutant-year combinations, Mean Willingness-To-Pay (MWTP) exhibits the counterintuitive (i.e., positive) sign. Moreover, for every pollutant, results are unstable across years.
...
[In the initial model] Elasticities calculated at means of pollutants, which are 22.55 for PM10, 0.0351 for SO2, 0.0994 for O3. Willingness to pay calculated for marginal 1 μg/m3 change in PM10 and 1 ppb change in other pollutants, annualized at rate of 0.07 for average house price of $543,896.
...
MWTP for PM10, has a counterintuitive sign, suggesting the presence of some sort of unobservable that was not adequately controlled for by the house fixed effect. This is the typical sort of bias encountered in the hedonic valuation of air pollution – desirable unobservables may evolve over time in conjunction with worsening air pollution (e.g., the opening of new businesses, or other forms of economic growth). The house fixed effect is unable to control for this sort of evolving unobservable.
...
Whereas the fixed-effect estimates of the MWTP for PM10 had a counterintuitive sign, estimates from their efficient housing market model imply a statistically significant MWTP to avoid an additional microgram of particulate matter per cubic meter ranging between $396 and $502.
...
In the case of SO2, MWTP rises from $36 to $296 when time-varying unobservables are accounted for. In the case of O3, MWTP only rises from $67 to $107, suggesting that, while still an issue, time-varying unobservables may not be as serious of a concern for this pollutant.
...
by Patrick Bajari 1 and 2, Jane Cooley 3, Kyoo il Kim 1 and Christopher Timmins 2 and 4
1. University of Minnesota and NBER
2. National Bureau of Economic Research (NBER) www.NBER.org
3. University of Wisconsin
4. Duke University
October 6, 2009
National Bureau of Economic Research (NBER) www.NBER.org
NBER Working Paper No. 15724; Issued in February 2010
full free earlier versions can be obtained from
Duke University Department of Economics Working Papers:
http://econ.duke.edu/~timmins/bckt.pdf
University of Toronto Department of Economics Working Papers:
http://www.economics.utoronto.ca/index.php/index/research/downloadSeminarPaper/1940

Abstract: In this paper Joshua Graff Zivin and Matthew J. Neidell estimate the impacts of climate change on the allocation of time using econometric models that exploit plausibly exogenous variation in daily temperature over time within counties. The authors find large reductions in U.S. labor supply in industries with high exposure to climate and similarly large decreases in time allocated to outdoor leisure. They also find suggestive evidence of short-run adaptation through temporal substitutions and acclimatization. Given the industrial composition of the US, the net impacts on total employment are likely to be small, but significant changes in leisure time as well as large scale redistributions of income may be consequential. In developing countries, where the industrial base is more typically concentrated in climate-exposed industries and baseline temperatures are already warmer, employment impacts may be considerably larger.

by Joshua Graff Zivin and Matthew J. Neidell
National Bureau of Economic Research (NBER) www.NBER.org
NBER Working Paper No. 15717; Issued in February 2010

... The Crown Estate, owner of the UK’s coastal seabeds, granted rights to energy companies to develop the biggest expansion of wind energy ever seen in the world.

The announcement has the potential to see an additional 32GW of clean electricity feeding into the UK grid, on top of 8GW from previous rounds. 32GW is enough offshore wind energy to supply nearly all the homes in the UK and will mean an extra 6,400 turbines. Investment in UK offshore wind overall could be worth £75 billion and support up to 70,000 jobs by 2020.

The next generation of offshore wind farms that will be developed under the licenses announced in January 2010 will require larger and more efficient turbines, capable of generating 5MW of power.

It was hailed by Prime Minister Gordon Brown and Energy and Climate Secretary Ed Miliband, who met The Crown Estate

The developers who have signed exclusivity zone agreements with The Crown Estate are:
* Moray Firth Zone, Moray Offshore Renewables Ltd which is 75% owned by EDP Renovaveis and 25% owned by SeaEnergy Renewables – 1.3 GW
* Firth of Forth Zone, SeaGreen Wind Energy Ltd equally owned by SSE Renewables and Fluor – 3.5 GW
* Dogger Bank Zone, the Forewind Consortium equally owned by each of SSE Renewables, RWE Npower Renewables, Statoil and Statkraft – 9 GW
* Hornsea Zone, Siemens Project Ventures and Mainstream Renewable Power, a consortium equally owned by Mainstream Renewable Power and Siemens Project Ventures and involving Hochtief Construction – 4 GW
* Norfolk Bank Zone, East Anglia Offshore Wind Ltd equally owned by
* Scottish Power Renewables and Vattenfall Vindkraft – 7.2 GW
* Hastings Zone, Eon Climate and Renewables UK– 0.6 GW
* West of Isle of Wight Zone, Eneco New Energy – 0.9 GW
* Bristol Channel Zone, RWE Npower Renewables, the UK subsidiary of RWE Innogy – 1.5 GW
* Irish Sea Zone, Centrica Renewable Energy and involving RES Group – 4.2 GW

For more information on the Round 3 announcement see The Crown Estate website (http://www.thecrownestate.co.uk/round3[external Link])

1GW of offshore wind would power around 680,000 homes. This is based on an average household consumption of 4,500KWh and an average load factor of 35%.

Carbon Trust figures on jobs and investment are taken from CT’s July 2009 report “Focus for success: a new approach to commercializing low carbon technologies”, p.53
www.carbontrust.co.uk/Publications/pages/publicationdetail.aspx?id=CTC752[external Link]

TAG is pursuing the development of a world class, state of the art, automated tubular production facility for the rolling and welding of large diameter tubulars and the construction of foundations, (monopiles, tripods, jackets and transition pieces) at their Haverton Hill Facility in Teesside.

The existing TAG facilities offer developers an integrated manufacturing, marshalling, assembly and load out capability perfectly situated on the River Tees on the east coast of the UK, being very well placed for the largest planned offshore developments for the UK. The ... development will bring much needed jobs to the region: 50 permanent direct jobs at TAG within the new facility and this could increase to 100 depending on shift patterns / workload.

U.K. Department of Energy and Climate Change http://www.decc.gov.uk
Press Notice dated January 8, 2010

It is shaping up to be the Great Game of the 21st century. To top officials and business executives here at the World Economic Forum, Topic A this year was the race to develop greener, cleaner technology, which is emerging as one of the critical factors in reshaping the world economy as emerging powers snap at the heels of battered Western economies.

With the United States and China sizing each other up across the Pacific and Europe seeking to maintain its economic stature, it is a battle for potentially millions of jobs and trillions of dollars in export revenues. The outcome — which pits a venture capital-driven market approach relying on government subsides against a top-down system of state capitalism — has the potential to influence how economic and political systems evolve.

Concern that China may be edging ahead in potentially lucrative growth sectors like renewable energy was palpable here....

“Six months ago my biggest worry was that an emissions deal would make American business less competitive compared to China,” said Senator Lindsay Graham, a Republican from South Carolina who has been deeply involved in climate change issues in Congress. “Now my concern is that every day that we delay trying to find a price for carbon is a day that China uses to dominate the green economy.”

He added: “China has made a long-term strategic decision and they are going gang-busters.”
...
In the energy sector alone, the deployment of new technologies, like wind and solar power, has the potential to support 20 million jobs by 2030 and trillions of dollars in revenue, analysts estimate.
...
From China’s perspective, experts here said, climate change offers the opportunity to leapfrog Western competitors.
...
In China, the government poured an estimated $440 billion into clean energy last year. It is investing heavily in renewable energy and nuclear power. It also is pursuing efforts to make extraction of its vast coal reserves cleaner. Already home to one-third of the globe’s solar-energy manufacturing capacity and 400 solar-energy companies, China is expected to surpass Spain this year as the No. 3 country in terms of wind power installations, behind Germany and the United States.

William Rhodes, senior vice chairman of Citigroup and board vice chairman of the National Committee on U.S.-China relations, predicted that Beijing’s research into storing carbon emissions underground could soon lead to a major breakthrough.
...
By Katrin Bennhold
FOR FULL STORY GO TO
http://www.nytimes.com/2010/01/30/business/global/30davos.html
The New York Times www.nytimes.com
Published January 29, 2010