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2. The introduction of subsidies for equipment that a group would need to use to
achieve the desired result, reducing the costs of the equipment directly or reducing the cost of money borrowed to buy the equipment. This might involve cities
subsidizing the cost of more water efficient cooling equipment for use in electricity generation.
3. The introduction of taxes on equipment crucial to the continuation of current
undesirable practices, such as one could tax conventional tillage equipment
when one is interested in higher water use efficiency, and lower greenhouse gas
emissions.
4. The use of technology standards which mandate an upgrade in technology to the
desirable actions such as the automobile café standards on vehicle miles per
gallon.
5. The imposition of some form of regulations such as banning appliances that do
not meet certain water or energy efficiency characteristics such as high water
shower heads.
6. The development of differentiated markets favoring products from Nexus implementing parties, for example, opportunities to purchase electricity only from
renewable wind sources.
In implementing such incentives, one naturally needs to be careful about inducing such things as the rebound effect as discussed above and also will need to be
flexible potentially increasing prices and decreasing prices to get the amount of
resource transferred that is desirable.
5.3 Broader Items
Some other economic concepts merit mention including externalities, income distribution, dynamic concerns, uncertainty and risk aversion, public and private roles,
and cost–benefit analysis.
5.3.1 Externalities
Frequently, activities have positive or negative impacts that damage others for which
they are not held liable. Such a situation is called an externality by economists
where production or consumption of one of the Nexus items imposes negative
impacts on other parties.
Here we will generally deal with negative externalities where the impacts on the
other parties are adverse. Examples of such externalities commonly involve polluting emissions, as follows:
1. Where applications of nitrogen fertilizers on food crop impact local rivers and
aquifers but is not reflected in the costs of the fertilizer appliers or their resultant
crop product price.
B. A. McCarl and Y. Yang
2. The introduction of subsidies for equipment that a group would need to use to
achieve the desired result, reducing the costs of the equipment directly or reducing the cost of money borrowed to buy the equipment. This might involve cities
subsidizing the cost of more water efficient cooling equipment for use in electricity generation.
3. The introduction of taxes on equipment crucial to the continuation of current
undesirable practices, such as one could tax conventional tillage equipment
when one is interested in higher water use efficiency, and lower greenhouse gas
emissions.
4. The use of technology standards which mandate an upgrade in technology to the
desirable actions such as the automobile café standards on vehicle miles per
gallon.
5. The imposition of some form of regulations such as banning appliances that do
not meet certain water or energy efficiency characteristics such as high water
shower heads.
6. The development of differentiated markets favoring products from Nexus implementing parties, for example, opportunities to purchase electricity only from
renewable wind sources.
In implementing such incentives, one naturally needs to be careful about inducing such things as the rebound effect as discussed above and also will need to be
flexible potentially increasing prices and decreasing prices to get the amount of
resource transferred that is desirable.
5.3 Broader Items
Some other economic concepts merit mention including externalities, income distribution, dynamic concerns, uncertainty and risk aversion, public and private roles,
and cost–benefit analysis.
5.3.1 Externalities
Frequently, activities have positive or negative impacts that damage others for which
they are not held liable. Such a situation is called an externality by economists
where production or consumption of one of the Nexus items imposes negative
impacts on other parties.
Here we will generally deal with negative externalities where the impacts on the
other parties are adverse. Examples of such externalities commonly involve polluting emissions, as follows:
1. Where applications of nitrogen fertilizers on food crop impact local rivers and
aquifers but is not reflected in the costs of the fertilizer appliers or their resultant
crop product price.
B. A. McCarl and Y. Yang