Land ecosystems in northern Eurasia will be under a variety of pressures in the 21st century that will affect both their structure and function. Climate change and land-use change are likely to be the major pressures. Climate change will lead to changes in disturbance regimes such as fire and changes in the distribution of plant and animal species. Land-use changes, driven by population growth, resource consumption and a broad set of economic considerations, will interact with climate-driven changes to reshape the earth’s landscape. Here we present results of an integrated assessment analysis for the region that examines the consequences of concurrent pressures on land ecosystems associated with climate and land-use changes. Preliminary results indicate that climate-induced vegetation shifts allow more areas in northern Eurasia to be used for food crop production (an additional 23%) and pastures (an additional 38%), but limits the additional area to be used as managed forests (38% less) by the end of the 21st century than is projected when vegetation shifts are not considered and no climate policy is implemented. In contrast, under a climate policy, climate-induced vegetation shifts had little influence on food production, but allow more area to be used for cellulosic biofuel production (an additional 23%), and less additional area to be used for pasture (50% less) and managed forests (28% less) over this same time period. Fire associated with climateinduced vegetation shifts causes the region to become a carbon source over the 21st century whereas the region is projected to be a carbon sink if no vegetation shifts are assumed to occur. Thus, consideration of vegetation shifts should be included in future assessments of environmental change on terrestrial carbon budgets in this region.

We estimate and compare the effects of small and large irrigation dams on cropland productivity in South Africa. To this end, we construct a panel data set of South African river basins. The econometric analysis reveals that although large dams increase cropland productivity downstream, they have a negative effect on cropland within the vicinity. However, their existence can enhance the relatively small positive impact of local small dams. Although a cost-benefit analysis of irrigation benefits shows that small dams may be more viable than large ones, large dams can play a potentially important role within a system of both types of dams.

© 2013 the authors

In the negotiations of the United Nations Framework Convention on Climate Change (UNFCCC), new market mechanisms are proposed to involve Non-Annex I countries in the carbon markets developed by Annex I countries, beyond their current involvement through the Clean Development Mechanism (CDM). Sectoral trading is one such mechanism. It would consist of coupling one economic sector of a Non-Annex I country, e.g., the Chinese electricity sector, with the carbon market of some Annex I countries, e.g., the European Union Emission Trading Scheme (EU ETS). Previous research analyzed the potential impacts of such a mechanism and concluded that a limit would likely be set on the amount of carbon permits that could be imported from the non-Annex I country to the Annex I carbon market, should such a mechanism come into effect. This paper analyzes the impact of limited trading in carbon permits between the EU ETS and Chinese electricity sector when the latter is constrained by a 10% emissions reduction target below business as usual by 2030. The limit on the amount of Chinese carbon permits that could be sold into the European carbon market is modeled through the introduction of a trade certificate system. The analysis employs the MIT Emissions Prediction and Policy Analysis (EPPA) model and takes into account the banking–borrowing of allowances and the inclusion of aviation emissions in the EU ETS. We find that if the amount of permits that can be imported from China to Europe is 10% of the total amount of European allowances, the European carbon price decreases by 34%, while it decreases by 74 % when sectoral trading is not limited. As a consequence, limited sectoral trading does not reverse the changes initiated in the European electricity sector as much as unlimited sectoral trading would. We also observe that international leakage and leakage to non-electricity sectors in China are lower under limited sectoral trading, thus achieving more emissions reductions at the aggregate level. Finally, we find that, if China can capture the rents due to the limit on sectoral trading, it is possible to find a limit that makes both regions better off relative to when there is no international trade in carbon permits.

Regulatory measures have proven the favored approach to climate change mitigation in the U.S., while market-based policies have gained little traction. Using a model that resolves the U.S. economy by region, income category, and sector-specific technology deployment opportunities, this paper studies the magnitude and distribution of economic impacts under regulatory versus market-based approaches. We quantify heterogeneity in the national response to regulatory policies, including a fuel economy standard and a clean or renewable electricity standard, and compare these to a cap–and–trade system targeting carbon dioxide or all greenhouse gases. We find that the regulatory policies substantially exceed the cost of a cap–and–trade system at the national level. We further show that the regulatory policies yield large cost disparities across regions and income groups, which are exaggerated by the difficulty of implementing revenue recycling provisions under regulatory policy designs.