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Environment

Current research in environmental economics and resource economics is focused on:

  • Forecasting emissions to air (ISus)
  • Valuation of environmental (dis)amenities
  • Waste policy (ISus)
  • Climate policy in Ireland (carbon tax) and abroad (FUND)

Besides our work on a domestic carbon tax, we also study European climate policy, financially supported by the Environmental Protection Agency. It is feasible to reduce the economic costs of the 20/20/20 package without violating its environmental integrity (Tol, ESRI, 2008) although the EU seems to be heading the other direction (Tol, IE, 2008).
New research, funded by the Environmental Protection Agency, shows that public investment in water supply and conservation has usually been well spent, whereas the returns on investment in wastewater treatment have been much more variable. Household water use varies with age and family structure and increases with "class", i.e., income, education, and occupation (Lawlor, McCarthy & Scott, JEPM, 2007).
 
Weight-based charging for waste substantially increases recycling and composting, but has no significant effect on illegal dumping (Scott & Watson, EPA, 2007).
 
New estimates suggest that Ireland’s forests have a considerable value for recreation: €50-60 million per year for Irish residents only (Mayor, Scott & Tol, ESRI, 2007).
 
There is scope for a substantial reduction of carbon dioxide emissions from aviation, but current policies are misdirected at passenger behaviour and will lead to minimal emission reduction (<1%) for sizeable subsidies (> €1 bln) to industry (Fitz Gerald & Tol, CESifo, 2007 and Mayor and Tol, ESRI, 2008, using HTM).
 
With funding from the Environmental Protection Agency, the ESRI is extending its economic model for the medium-term forecast to predict emissions to air and water and resource use. Preliminary results from ISus suggest that sectoral value added always exceeds the damage done to the environment. Emissions of fluorinated gases and carbon monoxide, and hazardous waste grow faster than the economy, but other emissions and resource use grow slower. Emissions of acidifying gases are falling even as the economy expands (O'Doherty & Tol, ESR, 2007).
 
Future research will build on this to provide better measurement of the interplay between society and the environment and a more comprehensive assessment of environmental policy. This will involve:
  • Extending the coverage (e.g., water) and dis-aggregation (e.g., regional) of environmental accounts and forecasts as more data become available.
  • Using and extending hedonic pricing methods (e.g., Mayor et al., ESRI, 2008) to build a nation-wide, time series of the value of the environment; this research will feed into estimates of the Green Net National Product (NNP), and into estimates of the marginal externality costs.
  • Exploring the determinants of emissions and resource use, using micro-data of firms and households.
  • Estimating the effects of environmental quality on human health.
  • Extending existing policy research on waste and climate, using ex ante and ex post analyses, to cover water quality and quantity, land use, and biodiversity.

Programme Coordinator: John Fitz Gerald

Others who work in this area include David Anthoff, Paul K Gorecki, Hugh Hennessy, Eimear Leahy, Sean Lyons, Laura Malaguzzi Valeri, Karen Mayor, Edgar Morgenroth and Richard Tol with research affiliate Sue Scott. 

ESRI research in environment and natural resources is closely linked to research in competition and regulation, energy, health, macroeconomics, taxation, welfare and pensions, and transport and infrastructure.

The ESRI is ranked among the top 5% research institutes in environmental economics in the world.