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Author: Hänsel, Martin C. ×

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    Taxing interacting externalities of ocean acidification, global warming, and eutrophication
    (Malden, Mass. : Wiley-Blackwell, 2021) Hänsel, Martin C.; Bergh, Jeroen C. J. M. van den
    We model a stylized economy dependent on agriculture and fisheries to study optimal environmental policy in the face of interacting external effects of ocean acidification, global warming, and eutrophication. This allows us to capture some of the latest insights from research on ocean acidification. Using a static two-sector general equilibrium model we derive optimal rules for national taxes on (Formula presented.) emissions and agricultural run-off and show how they depend on both isolated and interacting damage effects. In addition, we derive a second-best rule for a tax on agricultural run-off of fertilizers for the realistic case that effective internalization of (Formula presented.) externalities is lacking. The results contribute to a better understanding of the social costs of ocean acidification in coastal economies when there is interaction with other environmental stressors. Recommendations for Resource Managers: Marginal environmental damages from (Formula presented.) emissions should be internalized by a tax on (Formula presented.) emissions that is high enough to not only reflect marginal damages from temperature increases, but also marginal damages from ocean acidification and the interaction of both with regional sources of acidification like nutrient run-off from agriculture. In the absence of serious national policies that fully internalize externalities, a sufficiently high tax on regional nutrient run-off of fertilizers used in agricultural production can limit not only marginal environmental damages from nutrient run-off but also account for unregulated carbon emissions. Putting such regional policies in place that consider multiple important drivers of environmental change will be of particular importance for developing coastal economies that are likely to suffer the most from ocean acidification. © 2021 The Authors. Natural Resource Modeling published by Wiley Periodicals LLC.
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    Optimal carbon taxation and horizontal equity: A welfare-theoretic approach with application to German household data
    (Amsterdam : Elsevier, 2022) Hänsel, Martin C.; Franks, Max; Kalkuhl, Matthias; Edenhofer, Ottmar
    We develop a model of optimal taxation and redistribution under an ambitious climate target. We take into account vertical income differences, but also explicitly capture horizontal equity concerns by considering heterogeneous energy efficiencies. By deriving first- and second-best rules for policy instruments including carbon and labor taxes, transfers and energy subsidies, we investigate analytically how vertical and horizontal inequality is considered in the welfare maximizing tax structure. We calibrate the model to German household data and a 30 percent emission reduction goal and show that redistribution of carbon tax revenues via household-specific transfers is the first-best policy. Under plausible assumptions on inequality aversion, transfers to energy-intensive households should be about five times higher than transfers to energy-efficient households. Equal per-capita transfers do not require to observe households’ efficiency type, but increase equity-weighted mitigation costs by around 5 percent compared to the first-best. Mitigation costs increase by less, if the government can implement a uniform clean energy subsidy or household-specific tax-subsidy schemes on energy consumption and labor income that target heterogeneous energy efficiencies. Horizontal equity concerns may therefore constitute a new second-best rationale for clean energy policies or differentiated energy taxes.
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    Ocean warming and acidification may drag down the commercial Arctic cod fishery by 2100
    (San Francisco, California, US : PLOS, 2020) Hänsel, Martin C.; Schmidt, Jörn O.; Stiasny, Martina H.; Stöven, Max T.; Voss, Rudi; Quaas, Martin F.
    The Arctic Ocean is an early warning system for indicators and effects of climate change. We use a novel combination of experimental and time-series data on effects of ocean warming and acidification on the commercially important Northeast Arctic cod (Gadus morhua) to incorporate these physiological processes into the recruitment model of the fish population. By running an ecological-economic optimization model, we investigate how the interaction of ocean warming, acidification and fishing pressure affects the sustainability of the fishery in terms of ecological, economic, social and consumer-related indicators, ranging from present day conditions up to future climate change scenarios. We find that near-term climate change will benefit the fishery, but under likely future warming and acidification this large fishery is at risk of collapse by the end of the century, even with the best adaptation effort in terms of reduced fishing pressure.