Circular Economy is one of the phrases that you’ll nowadays most often hear at any sustainable development debate. It is basically a new catch phrase for anything that was previously associated with sustainable development. Since still nobody really knows how to make an economy sustainable, circular, square or rectangular, now, for yours truly, the EEA managed to come up with a very simple solution to the problem.

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There is a new petition in Luxembourg against the 32 years (!) life-time extension of the Cattenom nuclear reactor. If you want you can read and sign it HERE, and please do so. Sign if before the 30th of July!! (Don’t forget that you will receive an email in order to activate your signature.)

This nuclear reactor is one of Europe’s biggest, but also the one with most problems. I have written extensively on it HERE. More information (in German) is HERE.

This debate must be viewed in the light of the recent discussion in the Luxembourgish parliament that Luxembourg wants to build an electricity line connecting Luxembourg to France directly. This is most likely in order to connect Luxembourg directly with Cattenom. Obviously, a petition should thus necessarily be linked also to the development of this electricity line: What use is there to try and stop a lifetime extension of a nuclear power plant when, at the same time, the government plans to build an electricity line in order to receive electricity from just that plant?

In my opinion, Luxembourg needs to very carefully think of what kind of electricity mix it envisions for the future, and building an electricity line directly to France will clearly shape its future electricity mix towards nuclear energy. This is not an innocent choice!

THIS is the currently latest version of the previously entitled paper `An Aggregation Dilemma’. I thank especially Reyer Gerlagh, Humberto Llavador and Gwenaël Piaser for extensive discussions and comments.

The results in this paper show that a policy maker who ignores regional data and instead relies on aggregated integrated assessment models will strongly underestimate the carbon price and thus the required climate policy. Using a stylized theoretical model we show that, under the mild and widely-accepted assumptions of asymmetric climate change impacts and declining marginal utility, an Aggregation Dilemma may arise that dwarfs most other policy-relevant aspects in the  climate change cost-benefit analysis. Estimates based on the RICE model (Nordhaus and Boyer 2000) suggest that aggregation leads to around 26% higher total world emissions than those from a regional model. The backstop energy use would be zero in aggregated versions of the model, while it is roughly 1.3% of Gross World Product in the regionally-disaggregated models.
Though the policy recommendations from fully aggregated models like the DICE model are always used as a benchmark for policy making, the results here suggest that this should be done with the reservations raised by the Aggregation Dilemma in mind.

For anyone interested, please feel free to comment.

A recent article on Project Syndicate, entitled “The Unsustainability of Organic Farming“, by Henry I. Miller and Richard Cornett, has rightly seen quite some traffic. In that article the authors warn about the dangers of organic farming, in particularly forwarding the following points:

  1. The use of compost instead of fertilizers in organic farming may lead to groundwater contamination (via nitrates) and generates significant greenhouse gases.
  2. Organic farming has lower yield levels than conventional farming (20%-50%) and consequently may lead to higher stress on e.g. soils.
  3. And now I quote for simplicity: “Organic practices afford limited pesticide options, create difficulties in meeting peak fertilizer demand, and rule out access to genetically engineered varieties.”
  4. “Another limitation of organic production is that it works against the best approach to enhancing soil quality.”

Some quick comments are in line here I think.

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In a recent article on Project Syndicate entitled “Carbon Majors and Climate Justice“, Naderev (Yeb) Saño and Julie-Anne Richards suggest that fossil-fuel entities should be taxed, envoking the polluter pays principle. They note that

It seems only fair and reasonable, therefore, that all fossil-fuel entities, but especially the carbon majors, pay a levy on each ton of coal, barrel of oil, or cubic meter of gas they produce to a new International Mechanism for Loss and Damage, which would help to fund efforts to address the worst effects of climate change. Furthermore, given that the effects of climate change today are the result of past emissions, the carbon majors should pay a historical levy, too.

According to the authors, the money raised should then be used for e.g. climate-vulnerable countries, or disaster preparation.

There are, however, four points that one may advance against this idea.

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One topic I am particularly interested in is ecolabels, basically the labeling of products to ascertain their environmental standards. In this respect, the European Commission is now launching a Public Consultation on ecolabels entitled “Evaluation of the Implementation of the EU Eco-label Regulation”.

They question policy makers, stakeholders, producers and consumers about their views on the EU Ecolabel. I urge everyone to reply to their survey, which you can do via this link: It should take roughly 5 minutes to reply. This is your opportunity to help shape legislation in Europe.

One of the more interesting questions in the survey was this: “Is it beneficial to have a set of common requirements in the pursuit for a single market for green products across Europe in the form of the EU Ecolabel?”

Clearly, one issue with the whole ecolabel business right now is the huge diversity of ecolabels and the differences in their requirements. They increase the uncertainty of the consumer and at the same time help producers to sell their products by apparently attaching an ecolabel to them but with potentially very weak requirements. This is, however, simply weakening ecolabels altogether. Given the range of products and labels available, policy makers cannot expect consumers to take the significant amount of time needed to study the various ecolabels that are out there. Thus, it is reasonable to expect that consumers, faced with this uncertainty, may simply turn to pricing decisions again since the ecolabel loses its product differentiation character. Hence, standards/regulations should be applied uniformly.

Interested readers in cars and ecolabeling can take a look HERE, those interested in ecolabeling more generally can look HERE (in German). Those interested in some academic work on ecolabels can look HERE.



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