FROM THE DIRECTO R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

REPORTS ON LATEST RESEARCH

A FEEM Confe re n ce on “Auctions and Market Design”, B. Bortolotti . . . . . . . . . . 5

P r i vatisation in the Transition Economies: Methods and Consequence s ,

S. Est r i n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Why is CSR Attra c t i ve? Fro n t i e rs of CSR Succe ss , L. Ferraguto,

D. Nicolai, F. Vigan� . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Economic Assessments of High Water Costs in Venice, P. Nunes. . . . . . . . 15

R e s e a rch Evaluation Systems as a Policy-design Tool acro ss Euro p e ,

V. Papponetti . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

HIGHLIGHTS OF RESEARCH PROGRAMMES

Climate Change Modelling and Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 0

Global Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 9

Sustainability Indicators and Environmental Valuation . . . . . . . . . . . . . . . . .3 2

Natural Resources Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 6

Knowledge, Technology and Human Capital . . . . . . . . . . . . . . . . . . . . . . . . . .5 0

International Energy Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 5

Corporate Social Responsibility and Sustainable Management . . . . . . . . . .6 0

Privatisation, Regulation, Antitrust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 6

W W W. P R I VAT I Z AT I O N B A R O M E T E R . N E T . . . . . . . . . . . . . . . . . . . . . . . . . .7 0

RESEARCH TALKS TO POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 4

TRAINING ACT I V I T I E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 1

MARIE CURIE TRAINING SITE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 4

F E E M FO R S C H O O L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 8

C U LTURE FACTO R Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 9

FEEM’S FUTURE C O N F E R E N C E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 1

F E E M ’ S P U B L I CAT I O N S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 2

FEEM newsletter 2.2004

Fondazione Eni Enrico Mattei

continues its trend of growth, at

the fore f ront of economics and

environmental research.

Our Institute has intensified its

re s e a rch activity in the core

re s e a rch programmes, pro m o t i n g

at the same time an active process

of research dissemination through

innovative ideas and new operational

tools.

In July 2004 Fondazione Eni

Enrico Mattei launched the on-

line Privatization Baro m e t e r

( w w w. p r i v a t i z a t i o n b a ro m e t e r. n e t ) :

the first Internet portal focusing

on privatisation in the enlarged

E u ropean Union, a unique and

independent source on privatisation

reporting comprehensive information

on the historical process and most

recent and future trends for an

in t e rnational audience of re s e a rc h e r s ,

enterprises, analysts, consultants,

i n t e rnational agencies, govern m e n t s ,

policy-makers, and media. During its

first five months of activity, the

Privatisation Barometer has been

widely accessed (over 7000 log-ins

and 200 re g i s t e red users as of

November 1st, 2004), and was

recently selected by the OECD

(Organisation for Economic Co-

operation and Development) as its

primary source of privatisation data.

The Fondazione is establishing itself

as a key actor in the dialogue

between the scientific community,

the civil society and the policy

community at the local, national

and international levels, thanks to

its expanding international research

networks and partnerships, and

to its presence throughout the

territory.

For the future, our Foundation

intends to consolidate its re p u t a t i o n

in the field of re s e a rch, accepting the

challenges of innovative thinking in a

socio-economic and political ly

uns tab le wo rl d , en hanc ing

communication and fostering

dissemination of re s e a rch at all levels.

From the Director

Alessandro Lanza

The recent fiasco of Google’s IPO

and the successful floatation of

ENEL’s shares suggest that auction

designs are crucial to meet the

seller’s objectives. The Auctions and

Market Design cycle of conferences

aimed at studying the implications

of various selling mechanisms in

different markets.

The final AMD conference was

jointly organised by Consip Spa (the

Italian Pro c u rement Agency) and

was held in Rome on September

23-25. The conference feature s

three sessions: theory, finance and

applications and the main results

presented are summarised below.

Victor Ginsburgh, Patrick Legro s ,

and Nicolas Sahuguet analyse the

w e l f a re consequences of an incre a s e

in the commissions charged by the

organiser of an auction market.

Commissions are similar to taxes

imposed on sellers and buyers and

the economic problem that re s u l t s

looks similar to the question of tax

incidence in consumer economics.

The authors argue, however, that

auction markets deserve a separate

t reatment. Indeed they show that an

i n c rease in commissions makes

sellers worse off, but some (or all)

buyers may gain. The results are

t h e re f o re strikingly diff e rent fro m

the standard result that all

consumers lose after a tax or a

commission increase. The authors

apply their results to comment on

the Christie’s and Sotheby’s class

action and argue that the method

used to distribute compensation

was misguided.

John Asker and Estelle Cantillon

study multi-attribute auctions in

which a buyer seeks to procure a

complex good and evaluate offers

using a quasi-linear scoring rule.

Suppliers have private information

about their costs, which is

summarised by a multi-dimensional

type. The scoring rule reduces the

multidimensional bids submitted by

each supplier to a single dimension,

the score, which is used for

deciding on the allocation and the

resulting contractual obligation.

The authors exploit this idea and

obtain two kinds of results. First,

they characterise the set of

equilibria in quasi-linear scoring

auctions with multi-dimensional

types. In particular, they show that

there exists a mapping between the

class of equilibria in these scoring

auctions and those in standard

single object IPV auctions. Second,

they prove a new expected utility

equivalence theorem for quasi-

linear scoring auctions.

The seller of N distinct objects is

uncertain about the buyer’s

valuation for those objects. The

s e l l e r ’s problem, to maximise

expected revenue, consists of

maximising a linear functional over

a convex set of mechanisms. A

solution to the seller’s problem can

always be found in an extreme

point of the feasible set. Alejandro

M. Manelli, and Daniel R. Vincent

identify the relevant extreme points

and faces of the feasible set. With

N = 1, the extreme points are easily

described providing simple proofs

of well-known results. The revenue-

maximising mechanism assigns the

object with probability one or zero

depending on the buyer’s report.

With N > 1, extreme points often

involve randomisation in the

assignment of goods. Virtually any

extreme point of the feasible set

maximises revenue for a well-

behaved distribution of buyer’s

valuations. The authors provide a

simple algebraic pro c e d u re to

determine whether a mechanism is

an extreme point.

Susan Athey, Jonathan Levin, and

Enrique Seiray study entry and

bidding patterns in sealed bid and

open auctions with heterogeneous

bidders. Using data from U.S.

Forest Service timber auctions, the

authors document a se t o f

sys temat ic effec t s o f auct ion

format: sealed bid auctions attract

m o re small bidders, shift the

allocation towards these bidders,

and can also generate higher

revenue. The authors propose a

model, which extends the theory of

private value auctions with

heterogeneous bidders to capture

participation decisions, that can

account for these qual itative

e ffects of auction format. They

then calibrate the model using

parameters estimated from the

data and show that the model can

explain the quantitative effects as

well. Finally, they use the model to

p rovide an assessment of

bidder competit iveness, which

has important consequences

for auction choice.

A FEEM Confe re n ce on “Auctions and Marke tD e s i g n ”

Bernardo Bortolotti*

*FEEM

L a w rence M. Ausubel, and Rafael B.

Romeu study the participation and

performance of sophisticated versus

unsophisticated auction participants

in an environment with numero u s

bidders, uncertainty, and asymmetric

information. They examine multi-

unit, pay-as-bid, currency auctions

conducted by the Central Bank of

Venezuela. The authors find that

sophisticated bidders outperform

their less sophisticated rivals during

periods of high volatility, appare n t l y

as a result of their superior

information-gathering technology.

The result is consistent across both

quantity (sophisticated bidders win

m o re market share) and price

(sophisticated bidders pay lower

p remiums). The result is consistent

with the view that a pay-as-bid

auction format may be detrimental

to participation by less-informed

b i d d e r s .

When procurement contracts are

incomplete, they are fre q u e n t l y

changed after the contract is

awarded to the lowest bidder. This

results in a final cost that differs

f rom the initial price, and may

involve significant transaction costs

due to renegotiation. Patrick Bajari,

Stephanie Houghton, and Steven

Tadelis propose a stylised model of

bidding for incomplete contracts

and apply it to data fro m

highway repair contracts. The

authors estimate the magnitude of

transaction costs and their impact

using both reduced form and fully

structural models. Their re s u l t s

suggest that transactions costs are

a significant and important

determinant of observed bids, and

that bidders strategically respond to

contractual incompleteness. The

findings of the paper point at

disadvantages of the tradit ional

bidding process that are a

consequence of transaction costs

from contract adaptations.

A buyer with downward slooping

demand faces a number of unit

supply sellers. Roberto Burguet

characterises optimal auctions in

this setting. For the symmetric case,

a uniform auction (with price equal

to lowest rejected offer) is optimal

when complemented with reserve

prices for diff e rent quantities

a c q u i red. For asymmetric sellers,

the optimal distortions are familiar.

The problem is similar to the third

degree discriminating monopsonist

problem, just as in the unit (flat)

demand case (Bulow-Roberts,

1989), and when the number of

sellers (and the demand) gro w s

their outcomes approach at the

speed of the law of large numbers.

The book-building pro c e d u re for

selling initial public offerings to

investors has captured significant

market share from auction

alternatives in recent years, despite

significantly lower costs in both

direct fees and initial underpricing

when using the auction

mechanism. François Degeorge,

François Derrien, and Kent L.

Womack show that in the French

market, where the frequency of

book-building and auctions was

about equal in the 1990s, the

ostensible advantages to the issuer

using book-building were

a d v e r t i s i n g - related quid pro quo

benefits. Specifically, the authors

find that book-built issues were

m o re likely to be followed and

positively recommended by the

lead underwriters and were also

m o re likely to receive “booster

shots” post issuance if the shares

had fallen. Even non-underwriters’

analysts appear to promote book-

built issues more, but only when

their underwriters stood to gain

f rom acquiring shares in future

issues from the re c o m m e n d e d

firm’s lead underwriter. Bookbuilt

issues also appeared to garn e r

more press in general (but only

after they had chosen book-

building, not before). Yet, the

authors do not observe valuation or

return differentials to suggest that

these types of promotion have any

value to the issuing firm. They

conclude that underwriters using

the book-building pro c e d u re

have convinced issuers of the

questionable value of advertising

and promotion of their shares.

David Goldreich provides evidence

of bounded rationality by large

dealers in U.S. Treasury auctions.

The author argues that these

dealers use a heuristic of yield-

space bidding which leads to biases

manifested in three ways: they

submit dominated bids, i.e., those

that could be improved without

raising the bidding price; they bid in

a manner that disre g a rds the

unevenly spaced price grid; and

they round bids in yield space.

C o n s i s t e n t w i t h b o u n d e d

r a t i o n a l i t y, Goldreich shows that

bidders are less susceptible to bias

when the cost of suboptimal

bidding is high. While the literature

p rovides substantial evidence

of behavioural biases among

individual investors, there is less

documentation available for large

sophisticated institutions that are

likely to be important for setting

asset prices. These primary bond

dealers who regularly bid for billions

of dollars in Treasury bill auctions are

p recisely such economic agents.

Philip A. Haile, Han Hong, and

Matthew Shum develop tests for

common values at first-price

sealed-bid auctions. Their tests are

nonparametric, require observation

only of the bids submitted at each

auction, and are based on the fact

that the “winner’s curse” arises

only in common values auctions.

The tests build on re c e n t l y

developed methods for using

observed bids to estimate each

bidder’s conditional expectation of

the value of winning the auction.

Equilibrium behaviour implies that

in a private values auction these

expectations are invariant to the

number of opponents each bidder

faces, while with common values

they are decreasing in the number

of opponents. This distinction

forms the basis of their tests. The

authors consider both exogenous

and endogenous variation in the

number of bidders. Monte Carlo

experiments show that their tests

can perform well in samples of

moderate sizes. Haile et al. apply

their tests to two different types of

U.S. Forest Service timber auctions.

For unit-price (“scaled”) sales often

argued to fit a private values

model, their tests consistently fail

to find evidence of common values.

For “lumpsum” sales, where a

priori arguments for common

values appear stronger, the tests

yield mixed evidence against the

private values hypothesis.

Using data on Government of

Canada securities auctions, Ali

Hortacsu, and Samita Sareen show

that in countries where direct access

to primary issuance is re-stricted to

g o v e rnment securities dealers,

“ o rd e r-fow” information is a key

s o u rce of private information for

these security dealers. Ord e r- f l o w

information is revealed to a security

dealer through his/her interactions

with customers, who can place bids

in the auctions only through the

security dealer. Since each dealer

interacts with a diff e rent set of

customers, they, in effect, see

d i ff e rent portions of the market

demand and supply curves, leading

to differing private inferences of

w h e re the equilibrium price might

lie.

Claudio Mezzetti, Aleksandar Peke,

and Ilia Tsetlin study sequential and

s i n g l e - round uniform-price auctions

with affiliated values. The authors

derive symmetric equilibrium for the

auction in which k1 objects are sold

in the first round and k2 in the

second round, with and without

revelation of the first-round winning

bids. They demonstrate that

auctioning objects in sequence

generates a lowballing effect that

reduces first-round revenue. Thus,

revenue is greater in a single-ro u n d ,

uniform auction for k = k1 + k2

objects than in a sequential uniform

auction with no bid announcement.

When the first-round winning bids

a re announced, the authors also

identify two informational effects: a

positive effect on second-round price

and an ambiguous effect on first-

round price. The expected first-ro u n d

price can be greater or smaller than

with no bid announcement, and

g reater or smaller than the expected

price in a single-round uniform

auction. As a result, total expected

revenue in a sequential uniform

a u c t i o n w i t h w i n n i n g - b i d s

announcement can be greater or

smaller than in a single-ro u n d

uniform auction.

I n t ro d u c t i o n

I m p roved company performance

was at the heart of the transition

f rom a command to a market-

oriented economy in central and

Eastern Europe. The main way that

this was achieved was through a

huge, radical and very rapid

privatisation process. By 2004, tens

of thousands of firms had been

privatised and privately owned

firms supplied the bulk of output in

all the transition economies. In this

p a p e r, we explore some of the

issues thrown up by these

momentous changes.

Most observers re g a rd state

ownership, with its weak

managerial motivation and

perverse incentives, as one of the

main factors behind the poor

economic performances of the

communist bloc. State-owned firms

suffer from the classic problems

arising from the separation of

company ownership and control in

an especially virulent way, and it is

hard for the state to replicate the

corporate governance mechanisms

- capital market disciplines, statutes

p reventing certain behaviors,

transparent accounting procedures,

e ffective monitoring systems -

available to private owners.

The problem was especially serious

in communist countries where the

monitoring of management and

the incentives for efficiency were

a l ready weak. The collapse of

central planning and the lack of any

other external constraints meant

that managers and insiders gained

almost total discretion to follow

their own objectives, leading to

“asset stripping” by managers, job

and wage guarantees for workers,

and rent absorption by all parties.

Privatisation, as a way to focus

company objectives on profits and

sharpen managerial incentives, was

therefore an essential element of

reform. As the Czech privatisation

minister, Dusan Triska said in 1992,

“Privatisation is not just one of

many items on the economic

program. It is the transformation

itself.”

P r i vatisation Methods

The sheer scale of privatisation in

the transition economies posed

considerable practical problems. At

the aggregate level, the stock of

domestic private savings in these

countries was too small to purchase

the assets being offered. For a few

firms, auction or public tender

methods were used. Such sales

could in principle be to domestic or

foreign purchasers but, in practice,

only Hungary and Estonia were

willing to sell an appreciable share

of former state-owned assets to

f o reigners. Elsewhere, sales of

state-owned enterprises have

mainly been to a country’s own

citizens.

Some countries also experimented

with restitution to former owners;

e.g. in the former East Germany,

H u n g a r y, the former Czechoslovakia

and Bulgaria. Restitution immediately

c reates a property-owning middle

class and re-establishes “re a l

ownership” but entails legal

complexities. For example, suppose

that a factory has been built on a

plot of land formerly owned by a

f a r m e r. Does the farmer receive the

land, and there f o re rental for the

factory? Should the farmer be

compensated for the value of the

p roperty at the time of its seizure ,

and if so how is such an evaluation

to be made some?

P roblems in implementing these

methods and the urgency of the

problem led a number of transition

countries to introduce “mass

privatisation” - distribution of share s

in the privatised company for free

(or at a nominal price). There

a re a number of forms of mass

privatisation. A crucial pol icy

decision is whether the vouchers

a re distributed equally to the

population as a whole or whether,

as in Russia and many CIS states, to

management and employees.

The offer of free share h o l d i n g s

to insiders was used to diff u s e

potential opposition to privatisation

f rom managers and workers.

Policymakers also had to decide

whether the vouchers could be

exchanged directly for share s

in companies, or whether the

vouchers were to be invested in

funds that own a number of

different companies. In the Czech

and Slovak republics and in Russia,

vouchers could be exchanged

directly for shares, but in Poland,

Privatisation in the Transition Economies:Methods and Consequences

Saul Estrin*

*Adecco Professor of Business and Society and Deputy Dean for Faculty London Business School, London, United

Kingdom

citizens’ vouchers were exchanged

for shares in government-created

funds that jointly owned former

state-owned enterprises.

Mass privatisation proved to be the

predominant form of privatisation

in the transition countries. Nineteen

of the 25 transition economies

used it as either a primary or

secondary method. Nine countries

used management -employee

buyouts as their primary methods,

with six more using them as their

secondary method. Only five

countries used direct sales as the

primary privatisation method.

P r i vatisation Outco m e s

Mass privatisation facilitated an

e x t remely speedy ownership change

in most transition economies. Few

countries had contained a private

sector of any significance in 1990,

with the private sector share of GDP

usually less than 20 perc e n t .

The transformation has been

e x t r a o rd i n a r y. As early as 1994, the

private sector share was above 50

p e rcent in nine countries: Hungary

and Poland, along with Russia,

Estonia, Latvia, Lithuania, Armenia,

Czech Republic and Slovak Republic.

By 2000, the private sector in five

additional nations had reached at

least 50 percent of GDP - Armenia,

Bulgaria, Croatia, Georgia, and

Kazakhstan - and only two laggard s ,

Belarus and Turkmenistan, still had

private sector activity below 25

p e rcent of GDP.

But there remain real concern s

about the quality of privatisation,

because it did not always lead to

the establishment of eff e c t i v e

corporate governance mechanisms.

The long “agency chains” implicit

in mass privatisation led to

ownership structures that were

highly dispersed. Mass privatisation

also often led to ownership by

insiders. For example, insiders held

a majority shareholding in 75

p e rcent of firms in Russia

immediately post-privatisation

(1994) and outsiders only 9

p e rcent. Insider ownership was

p redominantly in the hands of

workers but this created little

problem for management because

worker ownership was highly

dispersed so control was effectively

in the hands of management. The

situation appears to have been

m o re mixed in central Euro p e .

Insider and foreign ownership were

p redominant in Hungary, while

insider and de novo ownership pre-

dominated in Poland. The Czech

Republic is an alternative case

where investment fund ownership

predominated.

The Consequences of

P r i va t i s a t i o n

The impact of privatisation on the

performance of firms in transition

economies has for the most part

been positive. However, the

privatisation effect is significantly

stronger in central Europe than in

Russia and the CIS countries; in

most cases, the impact is around

twice the size. For example, in

Poland the diff e rence in sales

growth rate between private and

state-owned firms is estimated to

be between 5.4 and 8.7 percent;

and in central Europe the difference

in productivity between to be 4.3

percent. In contrast, the findings

for Russia and the CIS states are

m o re mixed, with some studies

indicating positive performance

effects from privatisation and other

zero or even a negative effect.

The identity of the eventual owner

has affected the outcome of

privatisation. Djankov and Murrell 1

conclude that diff e rences in

enterprise performance between

d i ff e rent owners are very important:

“Privatisation to workers is detrimental,

privatisation to diffuse individual

owners has no effect and

privatisation to Funds or foreigners

has a large positive effect”. They

find that privatisation to investment

funds is five times as pro d u c t i v e

as privatisation to insiders, and

privatisation to fo reigners or

blockholders is three times as

p roductive as privatisation to

insiders. Banks and blockholders

on average improve company

performance about as much as

foreign owners. One interpretation

is that the crucial issue is ownership

concentration, since blockholders,

funds, foreigners and banks all

have concentrated holdings.

The relatively poor performance of

Russia and the CIS countries in the

impact of privatisation can be

explained by two factors. The first

factor is the preponderance of a

relatively less effective form of

private ownership - specifically

dispersed worker ownership. The

second factor is the relatively worse

functioning of corporate govern a n c e

mechanisms cited above, which has

meant that worker owners have

been less effective in impro v i n g

performance than they might have

been in countries with a stronger

institutional framework, such as

Poland.

C o n c l u s i o n s

Privatisation in central and Eastern

E u rope has been an important

element in the transformation of

these economies, and has laid the

foundations for the emergence of a

market economy. However the

scale of privatisation required, and

the paucity of domestic resources,

led to the adoption of privatisation

methods which, though effective in

the transfer of ownership rights,

did not tackle many of the crucial

corporate governance issues central

to productivity enhancement. In

many countries, especially those

now entering the European Union,

these issues are now being

addressed.

Note

1 Djankov, Simeon and Peter Murrell.

2002. “Enterprise Restructuring: a

Quantitative Survey,” Journal of

Economic Literature. 40:3, 739-92.

Overview on the RARE

project

RaRe (Rhetoric and Realities –

Analysing Corporate Social

Responsibility in Europe) is a pro j e c t

funded within the EU 6th framework

p rogramme. The European Union is

considering a common CSR strategy

in order to support “good company

practices that complement public

e fforts for sustainable development”.

The EU will is to facilitate “a

convergence in the instruments used

to ensure a proper functioning of the

i n t e rnal market and the pre s e r v a t i o n

of a level playing field”.

The three - year project, developed by

a consortium of seven leading

re s e a rch partners from all over Euro p e ,

aims to improve the understanding of

how an effective Corporate Social

Responsibility could be helped by

policy instruments, and how it could

actua l l y benef it sus ta inabl e

development in Europe. On a socio-

political level, the project is meant to

evaluate the contribution of

companies’ CSR measures in achieving

EU policy goals in four areas: climate

and chemical policies, re s o u rc e

management, gender equality and

anti-bribery policy.

RaRe project specifically works on a

tripartite sector survey that focuses

on Oil Industry, Fishery and

Banking. The methodology of the

p roject is constituted by two

specifically developed tools, strictly

directed to detect the degree of

CSR between the polar terms of

Rhetoric and Realities. The tools are

CSR impact assessment, which is

aimed to separate Rhetoric of CSR

f rom factual impacts in the

considerable sectors (reality), and

the success factors model which is

aimed to filter out those success

a reas leading a company to

undertake a CSR path.

The complementary par t is

constituted by the empirical analysis

within each of the three sector

surveys, 20 multinational companies

will be selected and investigated

t h rough a questionnaire, in order to

verify how much their behaviours

respond to the four specific policy

fields. Further focus on Small and

Medium Enterprises and CSR’s

application in the new EU members

will be developed, as they are

f requently less active in beyond-

compliance activities for lack of

re s o u rces, lower public profile and

stakeholders accessibility.

The synthesis result will give the

baseline for recommendations on

publ i c po l i ci e s: by ga in ing

i n t e rdisciplinary results on Corporate

Social Responsibility and pushing

method development among

re s e a rchers from all over Europe, the

p roject contributes to the creation of

a European re s e a rch area. Curre n t l y,

since the start of the project (June

2004), the main results and outputs

of RaRe are the first three work

packages (of fifteen), concern i n g

a background paper on the

t h e o retical, empirical and policy –

oriented dimensions; the impact

assessment tool; the success factors

model. On November 4th and 5th,

the second project meeting took

place at FEEM - Milan.

The CSR success factors

model: FEEM’s co n t r i b u t i o n

to RaRe project

F E E M ’s re s e a rch team has developed

a model which shows the frontiers of

CSR success. The model is conceived

as a general instrument that, in

principle, could suit every kind of

c o m p a n y, re g a rdless of the sectors it

belongs to, and re g a rdless of a

peculiar policy field. The idea

e x p ressed by the model is the

identification of six areas (or CSR

success factors), featuring a

p rototype of the company’s life, in

which the application of CSR

activities and instruments makes

o rdinary companies’ operations an

a rea of success. The success is

intended here as a positive effect of

the responsible behaviour in a

specific area of operations. Success is

also declined in frontiers of CSR

success, and not in single actions or

factors that could be the cause

(determinants) of it.

The model is conceived for a

“ w i n -win” situation: the company

complying with emerging social,

e n v i ronmental and ethics re g u l a t i o n s ,

being socially responsible and

i n c reasing stakeholders’ values

while it s own reputat ion g a i n s

competitiveness, stability and quality

in performances (pro d u c t / p ro c e s s ) ;

the civil society, the stakeholders are a ,

the consumers being satisfied with

Why is CSR Attra c t i ve? Fro n t i e rs of CSR Succe ss

Ludovico Ferraguto*, Daniele Nicolai** and Federica Vigan�**

*Master MEMA – Bocconi University

**FEEM

the accountable image of the single

company gain in terms of socio-

economic impact, local development,

sustainability along the thre e

d i m e n s i o n s .

The basic question of the model is:

under what conditions will CSR lead

to success or to failure? We assume

that success is given by the

achievement of the goal expre s s e d

by the concept of the single factor

itself. To give an explicit example:

Dialogue and Participation as success

is achieved through the concre t e

implementation of those practices

which make the dialogue with the

d i ff e rent subjects/stakeholders

possible. “Failure” instead is given in

the case in which the goal of the

success area, even if the instruments

a re adopted, is not achieved.

This assumption does not mean that

we exclude a responsible behaviour in

the cases in which there is no

adoption of instruments, but that we

consider a measure of success in

responsible behaviour, the capability

to be aware and to make others

( s o c i e t y, policy maker, company itself)

a w a re of the responsible behaviour.

From the former considerations it

follows that the means to achieve

s u c c e s s i s t h e a d o p t i o n o f

instruments or an instrument mix.

H ow the model wo r k s

The model’s purpose is to

determine the logical sequence

which links independent variables

(drivers-explanatory factors) to

dependent ones (success are a s ) ,

and to assess the instruments’

application effectiveness, in order

to permit their impact assessment.

C S R ’s success is explicated in six are a s

that re p resent six dimensions of CSR.

Every single area is defined through a

specific combination of the drivers-

explanatory factors: it is a process of

interaction of some key factors that

delimits the success area and leads to

a success behaviour.

The drivers have been identified

between factors internal and extern a l

to the company, re p resenting elements

i n h e rent to a company’s organisation.

We have considered three main aspects

for each dimension: the internal factors

have been shaped on institutional

design and implementation eff o r t s

of CSR, corporate organisation and

c u l t u re and actor commitment. The

e x t e rnal factors are specified on the

basis of business/sector enviro n m e n t ,

civil society pre s s u re and institutional

embedding.

A third category of considere d

variables i s given by CSR

instruments. Instruments are

considered in the measure of their

application to the identified area.

Given the identification of the

independent (drivers/explanatory

factors) and dependent (success

factors) variables, instruments are

considered as intervening variables,

d e t e r m i n i n g t h e c o n c r e t e

implementation of CSR.

The fra m ework of CSR

s u cce ss are a s

Success area 1: Dialogue and

Participation

Resulting from the combination of

the internal factors (mainly corporate

c u l t u re) and, on the external, the

Graph 1. The overall structure of the RaRe pro j e c t

reputational factor, the response to

s o c i e t y ’s call for the consideration to

e n v i ronmental and social issues

i s provided by dia logue and

participation. These elements

become decisive in order to establish

an effective communication pro c e s s .

Success area 2: Competitiveness

As long as a company aims to

i m p rove its economic performances,

an integrated strategy contemplating

also environmental and social issues is

n e c e s s a r y. In this sense, competitiveness

can be defined as the long-term

capacity to successfully aff o rd market

relations, gaining a durable balance

in terms of economic income, but

also innovation, market stability,

good social relations, and respect for

the environment.

Success area 3: Disclosure and

accountability

The company’s disclosure is a factor

of transparency which allows the

economic operators, the institutions,

and the community to acquire

knowledge of the company’s activities

and re s o u rces. It aims at the cre a t i o n

of an interface linking the intern a l

face of the company with the

e x t e rnal actors involved in the

a c t i v i t y. Diff e rent stakeholders

benefit from a disclosure pro c e s s :

public institutions, economic

partners, society and community.

Success area 4: Networking

In order to optimise performances,

sharing re s o u rces and impro v i n g

e fficiency in work structure along the

supply chain, networking re p re s e n t s

an effective solution. Within the

network a consolidated framework is

c reated, establishing non - episodic

partnership relations with other

i n t e rested subjects. The companies

linked within a network follow a

specialisation path, by which every

company occupies a specific place

within the net or the supply chain.

The network shares not only

information, but also the core

p roductions, that is to say, economic

a i m s .

Success area 5: Incremental

Approach

If long-term quality and competitiveness

re p resent the goal s of every

c o m p a n y, incremental approach is

the process through which it is

possible to reach such results. It

could be described as a process in

which the final goal is re a c h e d

t h rough intermediate steps. These

steps are often specified on a settled

time – range (usually determined

yearly). Incremental approach has a

p revalent internal dimension, being a

p ro c e d u re which continuously monitors

a company’s performances t h ro u g h

the adoption of standardised practices.

Success area 6: Corporate

Governance

Corporate Governance can be seen

as a résumé of all the success factors:

an improved approach is implicit in

all issues, and constitutes a basic

condition for CSR’s success. The

g o v e rnance of CSR-oriented

companies must encompass

instances for transpare n c y, share d

and clear pro c e d u res, participation,

answering expectations coming fro m

s h a reholders and stakeholders and

giving a common framework for all

these inputs. This leads to a

fundamental re-orientation in values

concept, which in this context is

intended to include also stakeholders

v a l u e .

I n struments ca te g o r i e s

and ra n k i n g

The model lists the CSR instruments

in seven diff e rent categories:

· C ompany codes;

· I n t e rnational codes and standard s ;

· Social responsibility reporting and

a u d i t i n g ;

· Socially responsible investment (SRI);

· Social and ecological labelling;

· Stakeholder pro c e s s e s ;

· N o n - s t a n d a rdised company initiatives.

Two observations should be made

re g a rding the first and the last

category. The first one (Codes of

conduct) has been specified in

Company codes (codes drawn by

single enterprise) and International

or standard codes (documents

elaborated by coalitions of

companies, governments, NGOs,

civil society and others); the last one

includes all the non-standardised

company initiatives in the CSR field

which are generally problematic to

identify and to measure.

For every success area the model

p rovides an instruments’ ranking,

based on the contribution made by

every single instrument to reach the

aim of a specific approach to CSR

success. The measure chosen to

attribute a specific weight to the

single instrument is that of its degre e

of effectiveness. The ranking allows a

first evaluation of which instruments

a re the most effective according to

the specificity of the operational CSR

success are a .

The ro le of policy-making

within the model

One of the most important goals of

the RARE project is to pro v i d e

indications to support and orient

E u ropean policy-making in developing

specific re g u l a t i o n s / p rogrammes and

encouraging responsible behaviours.

The model is conceived for the

identification of those success are a s

that become decisive and strategic

for the implementation of CSR

practices. Starting from the re s e a rc h

question of the project “What is the

actual impact of CSR instruments

and policies adopted in corporations

a c ross Europe?”, the identified

success areas should re p resent an

intermediate step for the elaboration

of specific policies. Success are a s

p roperly re p resent frontiers on which

public action has to concentrate its

focus. Thus oriented, public policies

will effectively affect companies’

activities and behaviours.

This leads us to observe that CSR

implementation has a circular

application. Graph 2 illustrates thre e

phases: the effects starting at the

company level determine CSR

success (phase 1); CSR success inputs

conveying to policy makers (phase 2);

the policy making activity re f l e c t i n g

back on the company level (phase 3).

As an important role is played by

the government in supporting

CSR and communicating “what

the government is doing”, the

final outcome of this process is

decisive to re-launch the challenge

of CSR as a strategic instrument of

sustainable development, both for

the organisations and for the

wider community.

Graph 2. CSR implementation according to a circular scheme

This study focuses on the economic

valuation of short-term impacts due

to periodic flooding incurred by an

important Venetian stakeholder,

the business activities located and

operating at ground level in the city

of Venice.

By short term we mean that the

study refers to impacts caused by

periodic flooding on the current

structure, type and distribution of

the business activities located and

operating in the city of Venice. In

other words, we do not consider

any additional changes that

periodic flooding can cause on the

number and type of economic

activities.

Impacts of periodic flooding are

defined in terms of both “on site

impacts” and “indirect impacts”.

The former refer to damages that

periodic flooding causes on the

architectonic structure, equipment

and goods of the specific business

activities. The latter refer to a wider

range of damages, including

damages that periodic flooding

causes on the overall socio-economic

and cultural organisation, functioning

and performance of the city of

Venice.

In the economic valuation two

i n t e r p retations of impacts of

periodic flooding emerge. The first

refers to a private insurance

perspective and it is linked to the

economic interpretation of the on

site category of the flooding

impacts. It covers the monetary

value assessment of an insurance

p remium so that each business

activity would be insured against

any damage on the architectonic

s t r u c t u re, equipment and goods

due to periodic flooding. The

second interpretation of periodic

flooding impacts refers to the

category of indirect impacts. The

interpretation of these impacts is

related to a wider valuation

perspective and related to a public

protection perspective. Therefore,

according to this perspective, the

economic valuation exercise refers

both to the private and public

damage categories. These include

inter alia the negative impacts of

flooding on the overall mobility of

persons and goods in Venice, which

in turn will have a negative impact

on the economic value of the

business activities.

In order to assess the monetary

value associated with the on site

impacts, we worked with an

available data set, which was

created by COSES, Consortium of

R e s e a rch Activities between the

Municipality of Venice and the

Province of Venice. This data set

refers to a questionnaire executed

next to all the 5097 business

activities located and operating at

ground level in the city of Venice. It

co nta i ns a w i de r ang e o f

i n fo rm at ion re g a r d ing th e

characteristics of the business

activities, including architectonical

characteristics of the building

w h e re the business activity is

situated, geographical location,

type and size of business. Due to

the difficulties encountered in the

market valuation of the indire c t

impacts, some specific statistical

methodologies and techniques

have been adopted (conjoint

analysis) in order to calculate a

monetary value. These techniques

a re usually used in many other

studies about monetary valuation

of goods and services which are not

regularly traded in the market

and which do not there f o re

have a market price (for example

e n v i ronmental goods or cultural

goods).

The conclusions of this study are

m a n y. The principal can be

summarised as follows.

A c c o rding to the information

contained in the COSES data set,

the monetary value of the on-site

damages on the arc h i t e c t o n i c a l

characteristics of the business

activities, including damage on

walls, floors and doors, is estimated

around 3.5 million Euros per year.

This estimate does not include

other categories of on site damage

of flooding on the furnishing of the

business activities, the loss of goods

and the damage of professional

equipment. Furthermore, this estimate

does not include any damage

among indirect impact categories.

Instead, if we consider all the on

site damage categories, the total

monetary estimate is expected to

i n c rease. In order to pro d u c e

precise figures, we anchored the

valuation exercise on a new

q u e s t i o n n a i re. The questionnaire

puts forward two specific flooding

scenarios: (i) the exceptional high

Economic Assessments of High Water Costs inVenice

Paulo Nunes*

*FEEM

water scenario of the 16th of

November 2002, and (ii) a series of

ordinary high water events during a

week. The estimated cost of the

high water event of the 16th of

November 2002, for all the

economic activities located on the

ground floor in Venice, is around

10.6 million Euros. In the specific

case of a series of high water

events, the total cost is estimated at

a round 7.6 million Euros. In

addition, we asked re s p o n d e n t s

about their expenditures on specific

p rotection devices, like paratia,

elevations, pumps and tanks. The

total cost estimated for the

adoption of protection devices by

all the economic activities situated

on the ground floor in Venice, is

about 10.5 million Euros.

In order to compute the monetary

value of both on site and indirect

impact due to periodic flooding, we

e x p l o re the use of a conjoint

analysis valuation exercise. By

using such a non-market valuation

m e t h o d o l o g y, it is possible to

estimate the variation in the

economic value of the business

activities located in the city of

Venice according to its different

characteristics, including its location

with respect to the sea level, which

in Venice is measured with

reference to the tide benchmark or

Punta della Salute Tidal Datum.

According to estimation results, the

variation in the value attributable to

a reduction in the flood level from

130 to 110 cm is around 906

million Euros. This corresponds to a

variation per business activity of

about 177,703 Euros and to an

annual damage of 21.08 million

Euros (using the discount rate of

2% to distribute the value variation

over a period of 99 years).

In conclusion, using the same kind

of methodology and econometric

model, we have estimated the

benefit of definitely protecting the

business activities located on the

ground floor from tide levels till 150

cm, which amounts between 1.130

billion Euros and 1.134 billion

Euros, that is around 22 and 26

million Euros per year, using a

discount rate of 1.5% and 2%

respectively.

On the basis of these results, a

typical year like year 2002,

characterised by approximately one

exceptional high water event and

two weeks of repeated flooding,

would cause a total cost of around

29 million Euros for the economic

activities located on the gro u n d

floor in Venice.

A monetary valuation of the

damages associated with high

water events should not to consider

only the direct and indire c t

damages in a specific period of

time, but should also care about

the intertemporal aspects of the

high water impacts. These are

related to the influence of flooding

on the business opportunities, to

the difficulties encountered by the

economic operators who have to

work in precarious conditions in

some periods of the year, to the

existing economic incentives to

relocate the business activity.

When in March 2000 the Lisbon

E u ropean Council set the strategic

goal for the European Union to

become the “most competitive and

dynamic knowledge-based economy

in the world”, it indicated in scientific

re s e a rch and development a major

impulse to economic growth. In

that same year, the Euro p e a n

Commission launched the Euro p e a n

R e s e a rch Area as the means thro u g h

which Member states are spurred to

reform their national re s e a rc h

systems. Amongst main priorities are

those focused on the establishment

or re i n f o rcement of re s e a rc h

evaluation systems, in order to

p rovide both feedback on the

e fficiency and performance of public

policies and guidance to policy

i m p rovements and innovation.

The focus on re s e a rch evaluation

systems is currently on the political

agenda of many Countries, as part of

a broader reform of the national

re s e a rch system. However, the level

of implementation of re s e a rc h

evaluation systems varies a lot acro s s

States, both as concerns the

i n f r a s t r u c t u res put in place and the

actual policy use of the results of

e v a l u a t i o n .

A study published by OECD on

the type of evaluation systems

implemented at national level shows

a wide fragmentation of appro a c h e s

(OECD: 2003, p. 21). Nearly all

OECD Countries conduct ex-ante

evaluations, but only Finland and

the UK perform on-going and ex-

post exercises. A few Countries

implement sophisticated pro c e d u re s

on programmes or institutions, such

as the UK, where ad hoc assessments

a re also conducted. Follow-up

evaluations are now incre a s i n g l y

performed in many Countries, with

some exceptions such as Italy and

Spain. Evaluation in Japan is

essentially an ex-ante exerc i s e ,

w h e reas on-going or ex-post

assessment processes are still largely

u n c o m m o n .

In principle, the aim of re s e a rc h

evaluation is to test pro g ress in

re s e a rch activities, in order to help

define future policy planning,

allocate financial and human

re s o u rces, and possibly enhance

public understanding of R&D.

Evidence suggests that this is not

always the case.

R e s e a rch evaluation is eff i c i e n t l y

implemented only in a small number

of Countries. In the UK, for instance,

it is a practice consolidated in the

national re s e a rch system. First

e x e rcises in the field draw back to

the middle 1980s, when the Science

and Technology Assessment Unit

was estab lished within the

Department of Trade and Industry

(DTI). The UK Research Assessment

E x e rcise (RAE) re p resents to date the

best available evaluation practice

aimed to orient the allocation of

g o v e rnmental funds to re s e a rch. This

ex-post peer review assessment of

public re s e a rch is implemented every

few years by the four Higher

Education Funding Councils for

England, Scotland, Wales, and

N o r t h e rn Ireland (HEFCE, SHEFC,

H E F C W, and DEL NI respectively) and

has strong policy impact. First, it is a

tool of future budgetary flows to

Higher Education Institutes (HEIs).

Second, it addresses the design of

re s e a rch policies. For example, the

policy recommendations made in the

2001 RAE led to the establishment of

two grants in new areas of re s e a rc h :

the Re se arc h De ve lo pment

Foundation Grant (RDFG) and the

Strategic Research and Development

Grant (SDFG). Third, it monitors on a

regular basis the quality of the

re s e a rch carried out by Universities

and Colleges, and provides an

overview of re s e a rch performance in

the public re s e a rch system. Fourth,

the RAE contributes to enhance

public understanding of R&D,

because its results are posted on the

I n t e rnet and made accessible to the

public.

Another Country where re s e a rc h

evaluation is often used as a policy-

design tool is Finland. Here re s e a rc h

policy is ruled by the principle

“management by results”, meaning

that the formulation of policies on

science and technology takes due

account of the results of evaluation.

By way of example, in 1993 the

Academy of Finland underwent an

i n t e rnal re-organisation of its

re s e a rch structure following a

t h o rough evaluation commissioned

by the Ministry of Education. In

TEKES, the Technology Development

Agency operating under the Ministry

of Trade and Industry, public funds to

R e s e a rch Evaluation Systems as a Po l i c y - d e s i g nTool acro ss Euro p e

Valeria Papponetti*

*FEEM

re s e a rch are allocated on the basis of

ex-ante evaluation pro c e d u res. Only

those projects likely to generate the

g reatest long-term benefits to the

national economy and society, to

foster innovation and pro m o t e

national economic competitiveness

a re financed. Also, the extern a l

evaluations conducted on TEKES’

activities provide feedback on how to

support the strategic development of

the Agency, and are often taken into

policy consideration. The evaluation

e x e rcise conducted in 1995 had a

d i rect impact on the redistribution of

the R&D public funds for the

following years, as recommended by

the evaluation report in order to

enhance TEKES’ innovative strength.

The RAE in the UK and some

examples from Finland show that the

e fficient policy use of re s e a rc h

evaluation depends also on how far

the evaluative culture is embedded in

the national re s e a rch system. It is in

fact important that the scientific

community and the performers of

re s e a rch understand that the

evaluation of their activities may be

beneficial to future policy planning.

The policy use of re s e a rch evaluation

is actually still deficient in those

countries, namely in South Euro p e ,

w h e re the scientific community is not

familiar with a systematic control of

re s e a rch activities. In Italy, for

example, evaluation practices are a

relatively new experience. First

Guidelines for re s e a rch evaluation

w e re issued in 2003, with the

objective to “endow Italy with an

objective and reliable system,

capable of improving the

institutional correlation among

evaluation results, selection of

p rojects and re s o u rce allocation”.

H o w e v e r, evidence suggests that the

establishment of an eff i c i e n t

evaluation system suffers from a lack

of cultural support, and results are

r a rely translated into policy actions.

In Universities, which is where most

of the national re s e a rch is carried

out, re s e a rchers do not re c o g n i s e

evaluation as a valuable instrument

t o w a rds better policy orientation.

Evaluation practices are perceived as

a bureaucratic burden and a time-

wasting exercise, and academics are

often reluctant to judge the re s e a rc h

activities of their colleagues.

This attitude hampers for example

the establishment (and the activity)

of the Internal Committee of

Evaluation (CIV), whose role is to

evaluate the pro g ress of the

U n i v e r s i t y ’s activities and report the

results to the National Committee for

the Evaluation of University Researc h

(NUEC) and the Ministry for

Education, Research and University

(MIUR). In principle, each CIV should

perform comparative cost-eff i c i e n c y

analyses aimed to evaluate the

management of public funds, the

p roductivity of national University

re s e a rch and its quality. However,

evidence shows that this is far fro m

being achieved. In the years 1996-

1997, the Observatory for the

evaluation of re s e a rch (later NUEC)

conducted an evaluation exercise

o n t h e U n i v e r s i t y s y s t e m ,

concluding that not all Universities

had established their CIV. When

available, the CIV Reports often

p rovide inadequate or incomplete

information on fundamental aspects

of re s e a rch activities in the University.

H e t e rogeneity makes it difficult for

the NUEC and the MIUR to carry out

an overal l evaluation of the

University re s e a rch system, because

they have a partial acquisition of

knowledge, with only a small

p e rcentage of the Reports

containing comparable information.

Also, the predominance of the

elderly in the University system,

which is typical of Italy, is an obstacle

to reforming processes in the

a p p roach to re s e a rch evaluation.

Similarly to Italy, Spain has long

s u ff e red from the incapacity to

establish an efficient management

a p p roach to re s e a rch, and has only

recently started to intro d u c e

evaluation practices in the national

science system. First evaluations in

Spain date back to the late 1980s

and 1990s, but they were mainly ad

hoc experiments conducted on

specific cases and they were not

really falling under a systematic

methodological approach. Their only

purpose was to provide information

on re s e a rch performance and they

w e re not aimed to address policy

planning or the reallocation of public

funds. The establishment of a

re s e a rch evaluation system becomes

a national strategic priority only with

the adoption of the second National

Plan for Research and Development

(1992-1995). The fourth National

Plan for Research and Development

(2000-2003) puts a lot of emphasis

on the evaluation of re s e a rch as a

means to select which re s e a rc h

activities are eligible for public

funding, but these principles have

not been implemented, yet.

This cross-national analysis yields two

main conclusions.

First, the case studies confirm, in line

with the literature, that three main

types of re s e a rch evaluation systems

can be identified in Europe: i) high-

level evaluation practices conducted

t h roughout the national re s e a rc h

system (UK, France); ii) evaluation

as a priority of the national

research planning since the 1980s

(Scandinavian Countries, Germany

and Iceland); iii) limited evaluation

activities now under re - d e f i n i t i o n

( I t a l y, Spain, Portugal).

B a s i c a l l y, re s e a rch evaluation is

evenly implemented to distribute

public funds to re s e a rch, whereas its

impact at the level of policy planning

or public understanding of R&D is

confined to a few number of cases.

Evaluation practices in Finland are in

fact also seen as a means to enhance

public understanding of R&D.

In F in land, fo r example , the

g o v e rnment pursues the involvement

of stakeholders and society at large

in the process of science policy

design, and agencies establish close

consultation processes with private

and public interested parties.

Second, while re s e a rch evaluation is

s t rongly recommended as a policy

design tool, it is also largely

contested. For example, the RAE in

the UK still provides guidance in

this field but its methodological

a p p roach is increasingly criticised

(e.g. lack of objectivity, allocation of

funds to conventional re s e a rch to the

detriment of innovative lines of

re s e a rch) and is now leading to a re -

definition of many pro c e d u r a l

a s p e c t s .

T h i rd, the efficient implementation

of re s e a rch evaluation depends to

some extent upon how far the

scientific re s e a rch community

supports evaluation practices and co-

operates with the evaluators.

In Spain, a main priority of the fourth

National Plan for Research and

Development (2000-2003) is to

i n t roduce incentives to encourage

a positive culture to re s e a rc h

evaluation. The focus is on how to

train a managerial staff with

adequat e admin is t rat i ve and

technical skills. In the late 1990s

some Universities (e.g., University of

B a rcelona and University of Granada)

i n t roduced t ra in ing courses

on evaluation in their master

p rogrammes on Public Administration.

In Italy, the Conference of Italian

University Rectors (CRUI) is very

active in this field and amongst its

main concerns is that of spreading a

robust evaluative culture that accepts

re s e a rch evaluation as a policy design

tool. In this context, there are

however some encouraging signs.

Since 1997, the allocation of public

financial funds to University re s e a rc h

is based on ex-ante evaluations

aimed to select re s e a rch projects of

relevant national interest (Progetti di

R i c e rca di rilevante Intere s s e

Nazionale, PRIN). This approach is

taking over the former so-called

“finanziamento a pioggia” that has

characterised the Italian re s e a rc h

system for a long time. The shift

f rom the “finanziamento a pioggia”

t o w a rds a pre-selection system

has clear policy impacts. First,

p roponents are spurred to raise the

innovative profile of their proposals

in view of future selection pro c e d u re s .

The competitive assignment of

public funds raises the quality of

re s e a rch, because evaluators base

their judgement on scientific novelty

and originality. Research pro p o s a l s

tend to be formulated in a more

accurate way, both in terms of

objectives, scientific workplan, and

innovative strength. Also, there is an

i n c rease in the number of national

p rojects with an ambitious critical

mass in terms of expertise, duration,

and financial support. Second,

selection pro c e d u res make re s e a rc h e r s

m o re responsible of the work they

a re carrying out. Third, by making

themselves familiar with evaluation,

re s e a rchers are more pre p a red to

compete for funding on the

E u ropean or international set.

Overall, the efficient implementation

of re s e a rch evaluation in Countries

lacking cultural support is a slow

p rocess requiring time, as the Italian

case shows. The analysis confirms

that it is where re s e a rch evaluation is

embedded in the local culture that it

yields the greatest benefits at policy

level.

R e s e a rch in this pro g r a m m e

a d d resses the socio-economic

dimension of cl imate change,

mitigation and adaptation policies.

It focuses on a comparative

evaluation of existing models and

the development of new integrated

assessment models for the study of

policies aimed at climate change

control.

The goal is twofold: to make

p ro g ress at the scientific and

academic level, and to be up front

in the policy dialogue and debate,

which provides the re s e a rc h

p rogramme with the necessary

inputs to develop innovative and

constructive scientific research. The

researchers involved in this research

p rogramme participate in intern a t i o n a l

networks and study groups of

scholars and scientists, in world-

wide negotiations on climate

change issues, and in several

projects supported by national and

international institutions.

In particular, thanks to re s e a rch work

undertaken under this pro g r a m m e ,

FEEM is member of the EU-based

network European Climate Forum

and of the Climate Policy Network, in

co-operation with MIT, RFF and ZEW,

a transatlantic initiative with the goal

of identifying common re s e a rch t a s k s

and of comparing policy a n a l y s e s

related to climate change. It is also

involved in the consortium “Economic

and Technological Dimensions of

S tabi l i s i ng Atmospher ic CO2

Concentrations: An International and

Comparative Analysis”. Finally, FEEM

is partner in two new projects: one

funded by the EU (Ensemble) and

one funded by Fondazione Lombard i a

Ambiente addressing the climate

change and the control of

g reenhouse gases in the Italian

region of Lombardy (Pro g e t t o

K y o t o ) .

ENSEMBLES -

E N S E M B L E - b a s e d

P redictions of Climate

Changes and their Impacts

Funded by the Euro p e a n

C o m m i ssion, DG Research, Glo b a l

Change and Eco s y stems, 2004-2009

C o - o rd i n a tor: Roberto Roson

R e s e a rc h e rs: Andrea Bigano,

Fra n ce s co Bosello

Over the next five years the major

p ro g ress in climate science is

expected to take place in six a re a s :

( i ) T h e p r o d u c t i o n o f

p robabilistic predictions from seasonal

to decadal and longer timescales

t h rough the use of ensembles; (ii) The

integration of additional processes in

climate models to produce true Earth

System models; (iii) Higher re s o l u t i o n

climate models to provide more

regionally detailed climate pre d i c t i o n s

and better information on extre m e

events; (iv) Reduction of uncertainty

in climate predictions thro u g h

i n c reased understanding of climate

p rocesses and feedbacks and

t h rough evaluation and validation of

models and techniques; (v) The

i n c reased application of climate

p redictions by a growing and

i n c reasingly diverse user community;

(vi) The increased availability of

scientific knowledge within the

scientific community and to

stakeholders, policymakers and the

p u b l i c .

ENSEMBLES intends to make

scientific contributions to all these

a reas and, most importantly, ensure

that these six strands are all taken

f o r w a rd in an integrated and co-

o rdinated way. General objectives of

the project are :

• Build an integrated Euro p e a n

capability to predict climate changes,

and consequent socio-economic

impacts, on seasonal, decadal and

longer timescales, using a pro b a b i l i s t i c

multi-model ensemble approach to

climate scenario construction.

• Assemble Earth System models

including the various components

( a t m o s p h e re, ocean, land, cryosphere ,

c h e m i s t r y, biogeochemistry, population,

economy) and the interactions

between t h e m .

• Develop high resolution (i.e., up

to 20 km) regional climate models

for Europe along with high quality

q u a l i t y - c o n t rolled gridded climate

datasets for Euro p e

• Advance understanding of the

key processes and feedbacks

(including, as far as possible, those

due to the effects of policy) that

g o v e rn changes in climate, and

related consequences, with

particular attention to the incidence

of extreme events and the possibility

of abrupt climate change.

• Develop a comprehensive appro a c h

to the validation of climate change

ensembles and the impacts

Climate Change Modelling and Policy

Marzio Galeotti

Research Programme Co-ordinator

assessments, which includes the

exploitation of seasonal to decadal

p redictability studies, there b y

p roviding for the first time a sound,

quantitative measure of confidence

in future scenarios.

• Estimate quantitatively the

p redictability of climate changes and

variations, especially those associated

with flood and drought, on timescales

of seasons, decades and beyond, and

to provide better estimates of the

likelihood of abrupt, catastro p h i c

climate change in the coming century.

• P rovide detailed, pro b a b i l i s t i c

assessments of the impacts of

climate change at high re s o l u t i o n

(i.e., up to 20 km) over Euro p e .

• Disseminate the knowledge

gained during the project to policy

makers, scientists, and citizens of

E u rope and the world through the

i n t e rnet, publications, data

distribution, workshops, and

education and training.

FEEM is active within Researc h

Theme 7 (RT7 – Scenarios and Policy

Implications). The purpose of RT7 is

to adopt scenarios of gre e n h o u s e

gas emissions, land use change and

adaptive capacity with and without

g reenhouse gas emission re d u c t i o n

policies, and to test the sensitivity of

these scenarios to climatic change.

Specific objectives of FEEM in RT 7

a re :

• Management and liason (leader).

In particular, Roberto Roson is vice

chairman of the RT7 Steering Board

and member of the ENSEMBLES

Management Board .

• P rovis ion of scenarios of

emissions, land use, and adaptive

capacity (participant).

• Testing the sensitivity of scenarios

to climate change (leader).

• Interfaces between climate

change impacts and economic

models (participant).

T h e re are about 70 re s e a rch centre s

involved. Within RT7, in addition to

FEEM, there are CICERO (Center for

I n t e rnational Climate and Enviro n m e n t a l

R e s e a rch – Oslo, Norway), LSE

( L o n d o n School of Economics, United

Kingdom), RIVM (The National

Institute of Public Health and the

E n v i ronment, The Netherlands),

SMASH (Société de Mathématiques

Appliquées et de Sciences Humaines)

– CIRED (Centre International de

R e c h e rche sur l ’ E n v i ronnement et le

D é v e l o p p e m e n t , France), IIASA (The

I n t e rnational Institute for Applied

Systems Analysis, Austria), UniHH

( R e s e a rch unit Sustainability and

Global Change, Centre for Marine

and Climate Research, Hamburg

U n i v e r s i t y, Hamburg, Germany)

PROGETTO KYOTO –

R e s e a rch project on climate

change and GHGs co n t ro l

in the Lombardy re g i o n

Funded by Fondazione Lombard i a

A m b i e n te, 2004-2005

C o - o rd i n a tor: Ale ss a n d ra Goria

The project aims to provide all the

i n g redients (databases, scenarios,

po l i c ies ) for the cont rol o f

g reenhouse gases at a re g i o n a l

level. The projects foresees five

main research lines:

• “Climate” - study of the evolution

of climate and of actual tendencies

in Lombardy with respect to the

f requency and intensity of extre m e

climate events

• “Inventory” - completion and

updating the emissions inventory of

GHGs considered by the Kyoto

p rotocol and EU directives

• “Moni tor ing” - tuni ng of

monitoring networks of GHG

emissions and of net carbon flows

between atmosphere, soil and

agro-forestry systems in Lombardy

• “Externalities” - assessment of

health, economic and enviro n m e n t a l

e x t e rnalities due to current and

f u t u re climate change

• Scenarios and Policies” - study of

changes in emissions following fro m

d i ff e rent economic growth scenarios

and alternative mitigation policies

FEEM is involved in the Extern a l i t i e s

re s e a rch line (and soon in the

Scenarios and Policies line). The

specific aim is to estimate the

e n v i ronmental external costs of

climate change via monetary and

non-monetary assessment of

impacts generated by potential

i n c reases in the frequency and

intensity of extreme weather events

and of temperature on the natural

s y s t e m .

EFIEA II - European Fo r u m

on Integrated

E n v i ro n m e n tal Ass e ssment

Funded by European Commiss i o n ,

RTD Pro g ramme Environment and

C l i m a te, Human Dimensions of

E n v i ro n m e n tal Change of the

E u ropean Commission, Dire c to ra te -

g e n e ral XII, 2002-2005

C o - o rd i n a tor: Carlo Carra ro

R e s e a rc h e rs: Barbara Buchner

I n o rder to have in tegrated

e n v i ronmental assessment – an active

and rapidly developing field – bear its

best possible fruits, cro s s - f e r t i l i s a t i o n

of the various approaches practised

in this field and community building

a re needed. By involving scientists

and decision makers from a diversity

of backgrounds and communities,

the network of the Concerted Action

EFIEA serves this purpose.

The two main objectives of EFIEA are

to improve the scientific quality of

integrated environmental assessment

and to strengthen the interaction

between environmental science and

p o l i c y. In addition, the EFIEA fosters

co-operation between scientists and

decision makers inside the Euro p e a n

Union, communication and co-

operation outside the EU, and

training of IEA techniques.

The above mentioned objectives will

be reached through many joint

activities, culminating in thirteen

d i ff e rent workshops, for which many

papers and presentations will be

p re p a red. The results will be

published amongst others in

booklets, bro c h u res, and web sites,

and they will be widely disseminated.

The Opening Workshop on

Sustainability Assessment was held

in Amsterdam, 8-9 October, 2002. In

July 2002 a Workshop on “Scenarios

of the Future – the Future of

Scenarios” was organized by the

University of Kassel, supported by

EFIEA and EEA. ICIS (Maastricht) and

IVM (Amsterdam) organised a

C o n f e rence on “Participatory

methods for Integrated Assessment”

in February 2003 in Maastricht

financed by EFIEA and the Dutch

Council for Research on Space,

N a t u re and Enviro n m e n t .

Within EFIEA’s work package 3, FEEM

– in collaboration with Universiteit

Maastricht (ICIS), Seecon Deutschland

GmbH (Participatory Management

Consultants) and Universität Hamburg

(ZMK) – has been able to obtain

funding for a Policy Integration

Workshop on “Climate Change,

E n v i ronment and Tourism in Euro p e ’s

Coastal Zones. Exploring To u r i s m ’s

Dependence on Climatic Conditions,

its Vulnerability to Climate Change,

and its Adaptation Options.” The

workshop took place on 11-12

N o v e m b e r, 2004, in Genoa, Italy.

CAT&E - Concerted

Action on Trade and the

Environment

Funded by European Commiss i o n ,

DG Research, Environment and

S u sta i n a b le Deve lo p m e n t

P ro g ramme, 2002-2005

C o - o rd i n a tor: Carlo Carra ro

R e s e a rcher: Ale ss a n d ra Goria

The trade and environment policy

and re s e a rch agendas have

expanded rapidly. Following the

conclusion of the Uruguay Round,

the agenda of the World Trade

Organization (WTO) expanded

to incorporate a number of

environment related issues, such as

public health, agriculture and

sustainable development. This has

created a major area of research.

This concerted action aims to ensure

the debate between re s e a rch centers

and to draw new participants into

the process. It also provides for

dialogue with policy makers. The

concerted action is structure d

a round a series of substantive

questions and intends to respond to

the dynamics of this evolving

re s e a rch agenda and to generate

new impulses for re s e a rch.

The main objectives of the concerted

action are :

i) To foster an in-depth debate on the

b road range of issues arising in the

trade and environment agenda

involving policy makers, other

stakeholders and re s e a rchers. The

major issues to be addressed are :

issues arising from existing trade

a g reements, issues arising fro m

related environmental policies and

institutional issues;

ii) To hold annual members’

meetings and conferences for thre e

years to develop and focus re s e a rc h

in the trade and enviro n m e n t

agenda;

iii) To promote the EU re s e a rc h

leadership and improve the re s e a rc h

net-working and capacity building

between EU countries, pro v i d i n g

support for the EU efforts to

integrate environmental concern s

into trade policy;

iv) To develop new collaborative

re s e a rch projects;

v) To widely disseminate re s u l t s

among re s e a rchers and stakeholders.

The project agenda foresees the

organisation of three annual

members’ meetings to identify and

discuss priority re s e a rch issues and

t h ree annual conferences to pre s e n t

c u r rent re s e a rch to a wider audience.

FEEM is a member of the consortium

and attends the meetings pro v i d i n g

information on its own re s e a rc h

work on CAT&E related issues,

p roviding peer review of the

l i t e r a t u re surveys and state of the art

reports drafted by the lead

participants to the network, and

e x p ressing its own views on trade

and environment priorities.

The concerted action started in

December 2002 and will last 36

months. It is coordinated by Pro f .

Onno Kuik from IVM, The

Netherlands, and involves other two

lead participants and 18 Euro p e a n

members. After the kick-off meeting

hosted on June 12-13 2003 by IVM,

A m s t e rdam, a second members’

meeting was held on May 17-18

2004 again in Amsterdam. The same

city hosted the second annual

c o n f e rence “Trade, Enviro n m e n t ,

and Development: the North-South

Dimensions” on November 1-2,

2004.

TRANSUST - Modelling

the Transition to

S u sta i n a b le Eco n o m i c

S t r u c t u re s

Funded by European Commiss i o n ,

DG Research, Environment and

S u sta i n a b le Deve lo p m e n t

P ro g ramme, 2003-2005

C o - o rd i n a tor: Marzio Gale o t t i

R e s e a rc h e rs: Va lentina Bosetti,

Fra n ce s co Bosello, Barbara Buchner

This project purports to identify and

build a network of excellence that

p rovides a communication platform

for re s e a rchers interested in modelling

the transition to sustainable economic

s t r u c t u res.

S p e c i f i c a l l y, based on the experience

with existing models the project

aims at:

• Sharing information about

existing models in a peer re v i e w. The

t h e o retic frameworks on which the

available models are based are

c o m p a red. In order to pre p a re a

f u t u re modelling framework, the

s t rengths and weaknesses of existing

models in addressing issues of

sustainability are identified.

• Assessing the comparative

advantages of various model

designs. Based on a list of policy

issues, the ability of the available

models to handle these tasks are

investigated.

• Identifying re s e a rch tasks for

modeling sustainable economic

s t r u c t u res. The reliability and

sensitivity of different models with

respect to a few crucial features are

tested. Among other things, this

involves looking at technological

change, risk perception and co-

benefits. Recent contributions from

economic theory, in particular on

technological change and capital

t h e o r y, are analysed for their

potential to improve the modelling

of the transition to sustainable

economic structures.

The project is centrally co-ordinated

by (WIFO) of Austria, and involves,

besides FEEM, CIRED of France, the

University of Osnabrueck (Uosna),

ZEW, and IfW of Germany, ECN and

IVM in the Netherlands, LIFEA

of Poland, CEET of Spain, and

Cambridge Econometrics (CE) of

the United Kingdom.

Meetings have been held in Vienna,

for the kick-off, hosted by WIFO, in

Mannheim hosted by ZEW, in

Amsterdam hosted by ECN and in

Trieste, Italy, hosted by ICTP in

collaboration with FEEM. The final

conference of TranSust in its current

phase took place in Venice, Italy,

organised by FEEM in collaboration

with WIFO, on October 28-29,

2004.

I TA LY-US Co-operation on

S c i e n ce and Te c h n o logy of

C l i m a te Change

Funded by the Italian Ministry of the

E n v i ronment and Te r r i tory, 2003-

2 0 0 5

C o - o rd i n a tor: Carlo Carra ro

R e s e a rc h e rs: Andrea Bigano,

Fra n ce s co Bosello, Barbara Buchner

This multi-disciplinary project stems

f rom a re s e a rch agreement signed in

January 2002 by the governments of

the United States of America and of

Italy; it involves 13 Italian partners

and 30 American partners. The

a g reement acknowledges the

importance of robust scientific re s u l t s

and of the power of technological

innovation in order to overcome the

uncertainty associated with global

changes and in particular, with

climate change. The project consists

of 15 working packages, ranging

f rom climatologic analysis of climate

variability to the design of highly

e fficient fuel cells.

F E E M ’s scientific contribution

involves four sub-projects: the study

of the impact of climate change on

world energy demand, the study of

climate and energy policy in Russia,

the analysis of future climate policy

regimes and finally a study of the

linkages among GHG emissions,

uncertainty and technological

i n n o v a t i o n .

The subproject on Energy demand

and climate change aims at

generating a comprehensive multi-

country study of the long and short-

run relationship between demand

for the main energy vectors and

t e m p e r a t u re. The results of this study

can be used as a basis for an

assessment of the worldwide

economic impacts of climate-

change-induced shifts in energy

demand. Such analysis is performed

by means of a computable general

equilibrium model of the world

economy (GTA P - E F ) .

The subproject on Climate and

energy policy in Russia analyses the

linkages between Russia’s position

in the current state of affairs of

Kyoto negotiations, and the

Russian and European energy

policies. The withdrawal of the US

(the largest potential emission

permit buyer) from the Kyoto

a g reement has modified the

incentives faced by Russia, which

can now count on a much lower

demand for its permits and hence a

much lower selling price for its “hot

hair”. This is bound to have

consequences on Russia’s decisions

about its fossil fuel stocks, and

hence, on the energy policy options

available to Europe.

The subproject on Future climate

policy regimes considers alternative

plausible instruments to overcome

the current weaknesses of the

Kyoto negotiations. The pro c e s s

towards the Kyoto Protocol is still

alive, the more so after Russia’s

decision to ratify it. However, The

US decision not to ratify Kyoto has

weakened the Kyoto Protocol and

undermined its enviro n m e n t a l

effectiveness. At the same time,

general consensus has emerged

that the Kyoto Protocol represents

only a first step towards the

b roader aim of minimising the

danger of climate change.

The subproject on GHG emissions,

uncertainty and technological

change focuses on the role of R&D

investments and of learn i n g - b y -

doing as one of the main practical

keys for reconciling the curre n t

fundamental conflict between

economic activity and the

e n v i ronment. The role of uncertainty

c o n c e rning new discoveries and

technology diffusion is also analysed.

In addition to this, the climate

change domain itself is intrinsically

dominated by uncertainty, mainly

related to carbon diffusion pro c e s s e s ,

climate sensitivity and dynamics and

to the final impacts on ecosystems

and on human activities All these

factors are taken into account

t h rough the formulation of a

stochastic programming version of

the FEEM RICE model.

The project is centrally co-ordinated

by the Istituto Nazionale di

Geofisica e Vulcanologia (INGV),

Bologna, Italy. Partners are FEEM,

the Abdus Salam Intern a t i o n a l

C e n t re for Theoretical Physics

(ICTP), ARPA Emilia Romagna

(ARPA SMR), CNR Istituto di Scienze

dell’Atmosfera e del Clima (CNR-

ISAC), Università degli Studi di

Napoli Parthenope (UPA), Università

della Tuscia - Dipartimento di

Scienze dell’Ambiente Forestale e

delle sue Risorse (DISAFRI), CNR

Istituto di Biometereologia (IBIMET-

CNR), Istituto di Biologia

Agroambientale e Forestale (IBAF),

Solvay Solexis SpA, CRF Società

Consortile per Azioni, Nuvera Fuel

Cells Europe S.r.l., Ansaldo Fuel

Cells SpA.

S TA B I L I S ATION GROUP -

E conomic and

Te c h n o lo g i cal Dimensions

of Stabilising Atmospheric

CO2 Conce n t rations: An

I n ternational and

C o m p a ra t i ve Analy s i s

Funded by Pa r t n e rs

C o - o rd i n a to rs: Carlo Carra ro and

Marzio Gale o t t i

This network aims to apply re c e n t

re s e a rch to specific questions re l a t i n g

to the economics of atmospheric

stabilisation, in ways that can

i m p rove understanding and insight

a c ross a range of diff e re n t

methodological approaches and

allow key sensitivities to be clarified.

T h e re is particular emphasis on the

insights from the new generation

modelling of approaches to innovation

in energy technologies and systems,

set in context of a broader ‘umbre l l a ’

p rogramme on the economics of

stabilisation.

The proposed work programme is

s t r u c t u red into two components: (i) a

p roject involving diff e rent types of

economic models in a number of

d i ff e rent re s e a rch centres that would

c o m p a re the results generated by the

d i ff e rent models. The main aim

would be to explore how diff e re n t

a p p roaches to modelling technical

change affect results relating to the

cost and technological investment

p rofi les over time and space

assoc iated wi th atmospher i c

stabilisation at diff e rent levels; (ii) a

b roader high-level intern a t i o n a l

‘ u m b rella’ programme between

leading international institutions on

the economics of stabilisation. This

would provide a broader govern a n c e

for the model comparison pro j e c t ;

e n s u re timely publication of

influential, relevant results from it;

liaise with IPCC and other re l e v a n t

bodies; and provide an umbrella for

linking the results to other aspects of

the economics of atmospheric

stabilisation that may be considere d

in this wider context.

The model comparison project is

being coordinated as a joint venture

between the Department of Applied

Economics, Cambridge University /

Tyndall Centre, and Potsdam Institute

of Climate Impacts / University of

Oldenberg. The Umbrella pro g r a m m e

will be vested in a much wider

i n t e rnational collaboration of leading

institutions with an interest in the

field (see Annex A), and coord i n a t e d

f rom a centre separate from the

model comparison project itself.

Based upon preliminary consultations

held in Potsdam, Utrecht and Milan,

diverse modelling teams would

undertake to generate results re l a t i n g

specifically to questions surro u n d i n g

atmospheric stabilisation that would be

of interest to, and on a timescale for,

the IPCC Fourth Assessment. The final

results would be written up as a series

of papers from the diff e rent teams.

CPN – Climate Po l i c y

N e t wo r k

Funded by Pa r t n e rs

C o - o rd i n a tor: Carlo Carra ro

The Climate Pol icy Network

provides a forum for the policy-

oriented discussion of scientific

results on future strategies for

addressing the problem of climate

change in an international context.

Based on high-level academic

standing, the network aims at

enhancing the understanding of

determinants of cooperation

and broad participation in an

international climate regime. The

re s e a rch agenda is designed to

facilitate a vital exchange of ideas

between re s e a rcher and policy

makers and to stimulate additional

re s e a rch in order to provide a

sound basis for future policy

interventions.

A core activity of the network is to

organise conferences on key

challenges of climate policy. These

c o n f e rences are organised by the

partners in turn, and are open to

i n t e rested re s e a rchers and policy

makers. A policy briefing will bring

the outcomes of each conference to

the public.

The Climate Pol icy Network

(CPN) is an association of research

institutions that stand out for high

academic credentials and an explicit

(applied)policy focus on climate

change issues. The partnership of

the network currently comprises

R e s o u rces for the Future (RFF)

based in Washington D.C. USA,

Fondazione Eni Enrico Mattei

(FEEM) in Milan Italy, the Centre for

European Economic Research (ZEW)

in Mannheim Germany, and

Massachusetts Institute of

Technology ‘s Joint Program on the

Science and Policy of Global

Change in Cambridge USA.

The First Workshop on “Climate

Policy after Kyoto: Sorting out the

d i ff e rences between the U.S. and

E u rope” was organised on 19-20

January 2004 by ZEW in Mannheim,

G e r m a n y. The second meeting, the

CPN Fall Meeting, took place in

Washington on 7-8 October 2004

and was hosted by RFF. Fruitful

discussions on both the transatlantic

developments in climate policy and

on technological change as a crucial

aspect in environmental policy and

modelling characterised this event.

CCPS - Climate Change

Policy Stra te g i e s

Funded by FEEM

C o - o rd i n a to rs: Carlo Carra ro and

Marzio Gale o t t i

R e s e a rc h e rs: Va lentina Bosetti,

Fra n ce s co Bosello, Barbara Buchner

Members of the Programme are

c u r rently engaged in re s e a rc h

c o n c e rning the implications of the

Kyoto agreement on climate change

c o n t rol, which is going to re c e i v e

new impetus after the Russia

ratification. The implications for the

market of international emission

trading and for the stability of the

emerged coalition as well as the

question of “issue linkage” are also

investigated. Research has begun on

“Post-Kyoto scenarios”, i.e. the

analysis of what happens after the

“first commitment period”.

C o n c e rning endogenous and induced

technical change, re s e a rchers are

c u r rently engaged in extending

p revious modelling work and

completing the transition to the new

N o rdhaus’ RICE99 model. Finally, a

line of re s e a rch aiming to account for

uncertainty in the endogenous

p rocess of technical change has been

recently opened. In M a y - J u l y

2 0 0 4 L a u rent Gilotte (CIRED)

cooperated with CCPS re s e a rchers at

FEEM Milan on issues concern i n g

uncertainly and technical change.

I M PACTS – Eco n o m i c

A ss e ssment of Impacts of

C l i m a te Change

Funded by FEEM and ICT P

C o - o rd i n a tor: Roberto Roson

R e s e a rc h e rs: Maria Berrite l l a ,

Fra n ce s co Bosello, Marco Lazzarin,

Fra n ce s co Pauli, Laura Rizzi,

P rakash Supko ta and Jian Zhang

This project aims at exploring the

general equilibrium effects on the

world economy of climate change

and its related policies. Tw o

modelling tools are currently in use:

G TA P, a world CGE model and

database, and G-Cubed, an

econometric dynamic GE model.

These models will be linked to some

e n v i ronmental modules, simulating

the effects of climate change on

various environmental variables.

These estimates will subsequently be

used to produce shock simulations in

the CGE models. Primary aim of

these simulation experiments is

tracing out the diff e rent structural

e ffects triggered by changes in

e n v i ronmental indicators: variations

in the terms of trade, competitiveness

of industries and regions, capital

movements, and others.

R e s e a rch is carried out in cooperation

with the ICTP, the University of

Hamburg and the Abare (Sidney). A

six-day long meeting was organised

by FEEM in Venice on 9-16 Marc h

2004. Presently the re s e a rch is being

developed along three different

strands. The first entails the

implementation of a re c u r s i v e

dynamic version of the economic

model. The second pertains to

enriching the production structure of

the model by inserting water as an

additional input; this is particularly

important for the study of the

feedback between climate change

and the agricultural sector. The third

is the evaluation of socio-economic

consequences deriving from climate-

change induced increase in fre q u e n c y

and intensity of extreme events.

E KC - The empirica l

relationship betwe e n

e n v i ronment and grow t h

Funded by FEEM

C o - o rd i n a to rs: Marzio Galeotti and

A le ss a n d ro Lanza

R e s e a rcher: Matteo Manera .

The project studies the re d u c e d - f o r m

empirical relationship between

pollution and growth. This re l a t i o n s h i p

is known as Environmental K u z n e t s

Curve (EKC). The aim is to analyse the

relationship in terms of its empirical

performance and robustness. The

ultimate goal is that of ascertaining

whether or not EKCs are a useful tool

of applied environmental analyses.

C u r rent re s e a rch focuses on two

t o p i c s :

• the robustness of panel

integration and co-integration tests

for assessing the existence of the EKC.

• the empirical re l a t i o n s h i p

between demographic transition

and environmental transition.

EEE – A Beijer-FEEM-

ICTP joint project on

Ecological and

Environmental Economics

Funded by ICT P

C o - o rd i n a tor: Carlo Carra ro

FEEM, the Beijer Intern a t i o n a l

Institute of Ecological Economics and

ICTP (The Abdus Salam Intern a t i o n a l

C e n t re for Theoretical Physics) are

carrying out a three-year project on

Ecological and Enviro n m e n t a l

Economics. Research activities

concentrate in three main areas:

• integrated climate models, with

focus on the integration between

global climate models, re g i o n a l

models of climate impacts and

economic models to assess the

economic consequences of climate

impacts in a coherent framework;

- dynamic ecological models, with

focus on indicators of genuine

wealth, economics and dynamic

complex systems, non-market

interactions and informal institutions;

- i nd ica tors o f sus ta inabl e

development, with focus on the

development of a theory for

indicators of sustainable development

for complex dynamic systems.

A permanent group of re s e a rchers on

integrated climate models is hosted

by ICTP for the duration of the

p roject. The re s e a rch is integrated

with the research programme

c u r rently undertaken by the We a t h e r

and Climate Group of ICTP.

Recently the following activities were

organized within the EEE project, in

the ICTP headquarters (Trieste, Italy):

• Workshop on In tegrated

Assessment of Sus ta inab le

Development, Apr il 1-2, 2004

• 2nd workshop on Spatial

Dynamic Models of Economics and

Eco-Systems, April 15-17, 2004

• Workshop on Spatial Aspects of

Reserve Design Optimization under

Economic Constraints, April 19-21,

2 0 0 4

• Informal follow-up of the

Teaching workshop on Accounting

for Urban Environment, April 22-24

• Informal workshop on IWAP -

Inclusive Wealth and Accounting

Prices, April 26-29.

P u b l i ca t i o n s

• Berrittella, M., A. Bigano, R.

Roson and R. S. J. Tol (2004), “A

General Equilibrium Analysis of

Climate Change Impacts on

Tourism”, FEEM Working Paper

N . 1 2 7 . 2 0 0 4 .

• Bigano and S. Proost (2004),

“The Opening of the Euro p e a n

Electricity Market and Enviro n m e n t a l

Policy: Does the Degree of

Competition Matter?”, FEEM

Working Paper N.40.2004.

• Bosello, F., M. Lazzarin, R. Roson

and R. Tol (2004), “Economy-wide

Estimates of Climate Change:

Human Health “, Fondazione Eni

Enrico Mattei, May.

• Bosetti, V., C. Carraro and M.

Galeotti (2004), “The Dynamics of

Carbon and of Energy Intensity in a

Model of Endogenous Te c h n i c a l

Change”, Fondazione Eni Enrico

Mattei, May.

• Bosetti, V., M. Galeotti and A.

Lanza (2004), “How Consistent Are

A l t e rnative Short-term Climate

Policies with Long-term Goals?”,

Fondazione Eni Enrico Mattei, May.

• Bosetti, V. and B. Buchner

(2004), “Using Data Envelopment

Analysis to Assess Relative

E fficiency of Diff e rent Climate

Policies Portfolios”, Fondazione Eni

Enrico Mattei, July.

• Bosetti, V. and L. Drouet (2004),

“Accounting for Uncertainty

A ffecting R&D in an Economic-

climate Model”, Fondazione Eni

Enrico Mattei, July.

• Bosetti, V. and L. Gilotte (2004),

“Uncertainty on Climate Sensitivity

and Endogenous Technical Change:

How Much These Two Factors Aff e c t

Policy Strategies?”, Fondazione Eni

Enrico Mattei, July.

• B u c h n e r, B. and C. Carraro (2004),

“Economic and Enviro n m e n t a l

E ffectiveness of a Te c h n o l o g y - b a s e d

Climate Protocol”, FEEM Wo r k i n g

Papers N.61.2004 and CEPR

Discussion Paper N. 4412.

• B u c h n e r, C. Carraro and D. Raggi

(2004)., “Can Equity Enhance

E fficiency? Some Lessons from the

Kyoto Protocol”, C. Carraro and V.

Fragnelli (eds.), Game Practice and

the Environment, Cheltenham:

Edwar Elgar.

• B u c h n e r, B. and M. Galeotti

(2004), “Climate Policy and

Economic Growth in Developing

Countries: The Impact of Kyoto”,

I n t e rnational Journal of Global

E n v i ronmental Issues, 4, 109-138.

• Castelnuovo, E., M. Galeotti,

G. Gambarell i, and S. Ve r g a l l i

(2003), “Learning By Doing vs.

L e a rning By Searching in

Models for Cl imate Change

Policy Analysis”, FEEM Wo r k i n g

P a p e r, N. 11.2003, forthcoming

Ecological Economics.

• Galeotti, M. and C. Kemfert

(2004), “Interactions between

Climate and Trade Policies: A

Survey”, “Interactions between

Climate and Trade Policies: A

Survey”, Journal of World Trade 38.

• G a m b a relli, G. and A. Goria

(2004) “Economic Evaluation of

Climate Change Impacts and

Adaptibility in Italy”, Fondazione Eni

Enrico Mattei, July.

S e m i n a rs and Confe re n ce s

• On April 29 2004 Francesco Pauli

and Laura Rizzi presented “The

Impact of Climate Change on Local

Population Health Status: A

P reliminary Analysis for Udine

Municipality” at ICTP within the EEE

P rogramme, Trieste, Italy

• On May 4 2004 Barbara

Buchner gave a lecture on “The

Future of the Kyoto Protocol and

the European Union” in the Course

on Sustainabil ity: Strategies,

Methodologies, Pol icies and

Actions for Central and Eastern

Europe, organized by the Italian

Ministry for the Environment and

Territory in cooperation with Venice

I n t e rnational University and the

Regional Environmental Center for

Central and Eastern Europe, in

Venice, Italy.

• On May 7 2004 Barbara Buchner

gave a lecture on “Managing Global

Commons: The Case of Intern a t i o n a l

Climate-change Control”, PhD

p rogramme in Analysis and

G o v e rnance of Sustainable

Development, in Venice, Italy.

• On May 13 2004 Maria Berrittella

p resented “A General Equilibrium

Analysis for the Economic Va l u a t i o n

of Climate Change Impacts” at the

E n v i ronment Department, University

of York, York, UK.

• On June 6 2004 Barbara Buchner

p resented the paper “Economic and

E n v i ronmental Effectiveness of a

Technology-based Climate Pro t o c o l ” ,

at the ETH Conference in Ascona,

S w i t z e r l a n d .

• On June 17 2004 Barbara

Buchner presented “Beyond Kyoto:

Identifying the Long-term Options”,

at the 7th Annual Conference on

Global Economic Analysis “Tr a d e ,

Poverty and the Environment” Wo r l d

Bank, Washington, D.C. 17- 19 June

2 0 0 4 .

• On June 17-19 2004 Roberto

Roson presented the paper “A

General Equilibrium Analysis of

Climate Change Impacts: Early

Results” at the GTAP 7th Annual

C o n f e rence on Global Economic

Analysis, held in Washington D.C.,

U S A .

• On June 19 2004 Andrea Bigano

p resented the paper “A General

Equilibrium Analysis of Climate

Change Impacts on Tourism” at the

Seventh Annual Conference on

Global Economic Analysis Tr a d e ,

P o v e r t y, and the Environment, held

in Washington D.C., USA

• On June 22 2004 Va l e n t i n a

Bosetti presented the paper “How

Consistent Are Alternative Short-

term Climate Policies with Long-term

Goals?” at the EMF/IEA/ETSAP/IIASA

I n t e rnational Energy Workshop held

in Paris, France.

• On June 22 2004 Marzio Galeotti

p resented the paper “The Dynamics of

Carbon and Energy Intensity in a

Model of Endogenous Te c h n i c a l

Change” at the EMF/IEA/ETSAP/IIASA

I n t e rnational Energy Workshop held in

Paris, France.

• On June 29 2004 Laurent Gilotte

gave a seminar on “Optimal

Abatement Policy and Inertia in Tre n d s

of Carbon Intensity” at FEEM Milan.

• On June 25-28 2004 Roberto

Roson presented the paper “A

General Equilibrium Analysis of

Climate Change Impacts” at the

13th EAERE annual conference, held

in Budapest, Hungary.

• On June 30 to July 2 2004

Roberto Roson presented the paper

“A General Equilibrium Analysis of

Climate Change Impacts: Early

Results” at the ECOMOD

I n t e rnational Conference on Policy

Modelling, held in Paris, France.

• On July 20 2004 Anna Kukla

p resented her re s e a rch on “Relative

Unemployment, Skill Gaps and

Cohort Effects in Europe: Economic

Factors and Labour Market

Institutions “ at FEEM Milan.

• On September 2 2004 Va l e n t i n a

Bosetti presented the paper “The

Dynamics of Carbon and Energy

Intensity in a Model of Endogenous

Technical Change” at the 6th IAEE

E u ropean Conference held in Zurich,

S w i t z e r l a n d .

• On September 2-4 2004

Francesco Bosello was in Brussels,

Be lg ium, fo r th e ECOMOD

C o n f e rence on Input Output and

General Equilibrium: Data, Modelling

and Policy Analysis, where he

p resented the paper “Economy

Wide Estimates of Climate Change:

Sea Level Rise”.

• On September 2-4 2004 Jian

Zhang was in Brussels, Belgium, for

the ECOMOD Conference on Input

Output and General Equilibrium:

Data, Modelling and Policy Analysis,

w h e re she presented the paper

“Economic Impact of Closing

National Forests for Commerc i a l

Timber Production in Florida and

Liberty County “.

• On the September 29 2004 Jian

Zhang gave a seminar on “Imperfect

Competition in CGE Models” at

FEEM, Ve n i c e .

• On October 5 2004 Andre a

Bigano gave a seminar on “A

General Equilibrium Analysis of

Climate Change Impacts on

Tourism” at FEEM in Milan.

• On October 7 2004 Barbara

Buchner presented “Climate Policy in

E u rope” at the CPN Fall Meeting

organized by Resources for the

F u t u re in Washington D.C., USA.

• On October 8 2004 Marzio

Galeotti presented “FEEM’s

A p p roach to Modeling Endogenous

Induced Technical Change” at the

CPN Fall Meeting organized by

R e s o u rces for the Future in

Washington D.C., USA.

• On October 28 2004 Marzio

Galeotti presented the Cross Cutting

Paper on “Technical Pro g ress” at the

TranSust Final Conference held in

Ve n i c e .

R e s e a rc h e rs

At the end of May 2004 re s e a rc h e r s

M a rco Lazzarin and Andrea Galvan

left FEEM and the EEE program. At

the end of her six-month fellowship,

Anna Kukla re t u rned to Poland. The

Milan office of FEEM hosted Laure n t

Gilotte visiting from CIRED for thre e

months, from May through to July. In

addition, Jian Zhang and Prakash

Sapkota joined the CCMP Pro g r a m m e

with in the Tr ies te -based EEE

P ro g r a m m e . Jian Zhang holds a

M.Sc. in computer sciences and a

Ph.D. in Economics from the Uiversity

of Monoa, Hawaii. Prakash Supkota,

p resently spending a re s e a rch visit in

Trieste for three months, works as

senior economist at the Himalayan

Institute of Development, Nepal.

F i n a l l y, we have just learned that

Francesco Pauli has been assigned

the post of Assistant Professor at the

University of Padua: congratulations!

“ G o v e rnance” has been incre a s i n g l y

recogni sed as one of the key

determ inants o f susta inab le

development. Assessing govern a n c e

and understanding its link with

specific economic and policy

variables remain, however, a

challenge. This research unit aims

to develop a multidisciplinary

framework for the analysis of

g o v e rnance, both at the global and

at the national level, and the factors

that promote it. This interd i s c i p l i n a r y

e ffort will attempt to integrate the

recent developments achieved

within economic theory with

p ro g resses made in the fields of

s o c i o l o g y, law and the theory of

o r g a n i s a t i o n s .

Individual re s e a rch projects will

(i) investigate the existing

methodologies and analytical

resources available to researchers

and policymakers to assess a

b ro a d e r, multidisciplinary concept

of global and national governance;

(ii) evaluate the impact of poor

g o v e rnance on growth and

re s o u rce management – both

natural and public re s o u rces;

(iii) identify the key determinants of

good governance; and

(iv) explore how governance data

can be used to identify institutional

weaknesses and areas for re f o r m .

It is important to emphasise that

though a large body of work has

been produced on national

g o v e rnance, this re s e a rch unit aims

at exploring also the global

dimension of governance, which

includes, for example, issues such as

management of global commons,

role of multinationals, migrations,

i n t e rnational knowledge spillovers

and re s e a rch policy.

CTN – Coalition Theory

N e t wo r k

Funded by FEEM in co o p e ra t i o n

with CORE, UAB, GREQAM, Wa r w i c k

U n i ve rsity and EUREQua.

C o - o rd i n a to rs: Carlo Carra ro and

S e rgio Curra r i n i

R e s e a rc h e rs: Silvia Berto l i n ,

B a r b a ra Buchner, Carmen Marc h i o r i ,

A le ss a n d ra Sgobbi

The Coalition Theory Network (CTN)

is an association of six high level

scientific institutions, aimed at the

advancement and the diffusion of

re s e a rch in the area of coalition

formation. The six current members

a re: the Center for Operation

R e s e a rch and Econometrics (CORE),

the Department of Economics at the

University of Warwick, the Équipe

U n i v e r s i t a i re de Recherche en

Économie Quantitative (EUREQua),

the Fondazione Eni Enrico Mattei

(FEEM), the Universitat Autònoma

de Barcelona (CODE), and the

Université de Marseille (GREQAM).

The activity of the CTN through the

years has been directed to thre e

main objectives:

i) the dissemination and discussion

of new results by established

scholars, to scientists from within

and outside the network and to

policy makers

ii) the promotion of scientific

collaboration among young and

senior re s e a rc h e r s

iii) the training of young scholars,

with special opportunities for EU

member states.

Since 2002, all the activities of the

network are reported on a d e d i c a t e d

web site (http://www.feem.it/ctn).

The web site also serves as a

re f e rence guide for all re s e a rchers in

the field of coalition theory, thro u g h

posting of most recent and yet

unpublished re s e a rch re s u l t s ,

upcoming events, such as

c o n f e rences and summer schools,

and web re s o u rces. The website

also offers the possibility to post

papers on the web or to submit the

paper for the FEEM “CTN Wo r k i n g

Papers Series”.

FEEM has recently launched the

CTN Newsletter, an initiative

involving all the partners in

collecting and disseminating the

advances, the news and new

p roposals arising within the

Coalition Theory Network, such as:

invited professors and their

contributions; studies, new

re s e a rches and initiatives; new

papers on coalition theory;

upcoming conferences and summer

schools; e-mail changes, etc. This

publication is circulated twice a year

in electronic format to the CTN

mailing list, and is also available in

the CTN website.

The series of CTN workshops is

ongoing, annually, since 1995, and

has gained increaseing attention,

consistently through the years, both

in the academic and in the policy

Global Governance

Carlo Carraro

Research Programme Co-ordinator

world. The next meeting will be

held in Paris on 28-29 January

2005.

R e s e a rch Po l i c y

Funded by FEEM

C o - o rd i n a tor: Massimiano Bucc h i

R e s e a rc h e rs: Va leria Pa p p o n e t t i ,

M a u ro Scanu

The objective of this project is to

provide insight into the evaluation

re s e a rch systems of a set of

selected Countries both within and

outside Europe, with a special focus

on the impact that re s e a rc h

evaluation practices have on

research policies.

The recognition that science and

innovation contribute significantly to

economic growth and social welfare

has underlined the importance of

p roviding national pro c e d u res and

s t r u c t u res aimed at appraising the

quality of scientific re s e a rch. All EU

Countries are currently undergoing a

c o m p rehensive reassessment of their

systems for the evaluation of their

scientific performance - although to

a varying degree.

This project aims at mapping the

re s e a rch evaluation systems of the

main OECD countries with a view

to: Provide a state-of-the-art on the

field, appraise the evolutionary

t rend in re s e a rch evaluation

systems, analyse whether there is

fragmentation of pro c e d u res and

s t r u c t u res or a tendency toward s

harmonised avenues and compare

E u ropean case studies with major

R&D competitors.

Vo l u n tary Agreements

Funded by FEEM and the Euro p e a n

C o m m i ssion, DG Research, Marie

Curie Fe l lowship Pro g ra m

C o - o rd i n a tor: Carlo Carra ro

R e s e a rc h e rs: Rinaldo Bra u ,

R i cca rdo Ta rq u i n i

The use of voluntary approaches has

emerged in the 1990s as the most

rapidly growing - in terms of number

and scope - policy instrument for

e n v i ronmental management and

policy in Europe. Despite their

i n c reasing implementation, however,

voluntary approaches have re c e i v e d

relatively little critical discussion

amongst academics and policy-

makers. This project aims at

providing a theoretical framework

to analyse both strengths and

w e a k n e s s e s o f v o l u n t a r y

approaches.

Vo l u n t a r y a p p r o a c h e s a r e

commitments from polluting firms

or sectors to improve their

e n v i ronmental per formance .

“ Voluntary approaches” is a bro a d

term that encompasses many

d i ff e rent kinds of arrangements,

such as self-regulation, voluntary

ini t i a t i ves, vo luntary codes ,

e n v i ronmental charters, voluntary

a c c o rds, voluntary agre e m e n t s ,

c o - regulation, covenants, and

n e g o t i a t e d e n v i ro n m e n t a l

a g re e m e n t s , to name just a few.

All these types include three main

d i ff e rent instruments: unilateral

commitments made by polluters,

negotiated agreements between

industry and public authorities, and

public voluntary schemes developed

by environmental agencies. This

p roject addresses four fundamental

aspects of voluntary appro a c h e s :

1 ) compet i t ion concerns ; 2)

integration of voluntary appro a c h e s

with existing legal systems; 3)

e n v i ronmental effectiveness and

economic efficiency; and 4) design

and implementation of voluntary

a g reements, in particular at the

industry level.

This project benefits from the

participation of several PhD students

f rom diff e rent EU countries who

spend a year of study at FEEM,

thanks to the support provided by the

Marie Curie Fellowship pro g r a m m e .

P u b l i ca t i o n s

• Massimiano Bucchi, Va l e r i a

Papponetti, Mauro Scanu , “ R e s e a rc h

evaluation as a policy design tool.

Mapping approaches across a set of

case studies”

• Carlo Carraro and Carmen

M a rchiori, “Endogenous Strategic

Issue Linkage in Intern a t i o n a l

Negotiations”, in C. Carraro and V.

Fragnelli, eds, Game Practice and

the Environment, E. Elgar, 2004.

• Rinaldo Brau and Carlo Carraro ,

“ Voluntary Approaches as Climate

Policy Tools: Competition Issues and

the Role of Market Structure”, in

Voluntary Approaches in Climate

P o l i c y, edited by A. Baranzini and P.

Thalmann, 2004.

• Sergio Currarini, “Voting over

Federations”, University of Ve n i c e

Discussion paper, 2004.

• Sergio Currarini, “Network

Design in Games with Spillovers”,

Grand Coalition Working Papers,

2004 (submitted to Games and

Economic Behaviour).

• M a rco Marini, Sergio Currarini,

“Coalition Formation in Games

without Synergies”, FEEM Nota di

L a v o ro, 43.2004, Milan.

S e m i n a rs and Confe re n ce s

• On 20 May 2004 at FEEM Ve n i c e ,

Michael Finus (University of Hagen,

Germany) presented his paper

“Modesty Pays: Sometimes!”. The

papers intends to demonstrate the

success of cooperation in small

coalitions in non-cooperative game

t h e o retical models of intern a t i o n a l

e n v i ronmental agreements (IEAs).

• On 26 May 2004 FEEM hosted an

informal seminar on social networks

and social capital, held by Fern a n d o

Vega-Redondo, Matteo Marsi li ,

Partha Dasgupta, (Universidad de

Alicante - ICTP - University of

C a m b r i d g e ) .

• The next edition of the Coalition

Theory Workshop will be held on

28th and 29th January 2005 in

Paris, at Maison des Sciences

Economiques, Université Paris-1

Panthéon-Sorbonne. Main topic will

be Coalitions, decentralization and

public policies. Among the invited

speakers who have alre a d y

confirmed their participation:

Alessandra Casella (Columbia

University), Eric Maskin (Princeton

University), Frank Page (University of

Alabama), Rajiv Vohra (Bro w n

U n i v e r s i t y ) .

R e s e a rc h e rs

Carmen Marchiori, now at LSE, re -

joined FEEM to work in the Global

G o v e rnance programme. She is

involved in the extension of the non

cooperative theory of bargaining to

account for uncertainty and the

possibility of coalition formation.

Alessandra Sgobbi, a PhD Student in

the Doctoral Programme on the

Analysis and Governance of

Sustainable Development, joined the

p rogramme to work on applications

of game theory for the management

of natural re s o u rces, water in

p a r t i c u l a r.

cCASHh - Climate Change

and Adaptation Strategies

for Human Health in Euro p e

Funded by the Euro p e a n

C o m m i ssion, DG Research, Energ y ,

E n v i ronment and Susta i n a b le

D eve lopment Pro g ramme, 2001-2004

Co-ordinator:Anna Alberini

Researchers: Aline Chiabai,

Giuseppe Nocella

For this project, which has recently been

concluded, Anna Alberini and Aline

Chiabai developed and administere d

three survey questionnaires.

The first survey questionnaire was

c reated for public health off i c i a l s ,

emergency response officials, and

climate change experts. The purpose

of the survey was to obtain a sense

of the factors that these persons

consider determinants of adaptive

c a p a c i t y. We used the data collected

t h rough the survey to estimate

statistical models that identify and

c o m p a re the relative importance of

factors thought to be associated w i t h

adaptive capacity. One intere s t i n g

f e a t u re of our re s e a rch is that we

employ conjoint choice questions

which ask respondents to indicate

which of two countries they consider

the one with the higher adaptive

c a p a c i t y. The two countries are

described by two attributes

capturing re s o u rces (GNP per capita,

inequality in the distribution of

income), one attribute capturing the

distribution of age in the population

(the percentage of people of age

older than 65), one attribute

measuring the health stock of the

population (life expectancy), two

attributes capturing health care

(physicians per 100,000 re s i d e n t s

and type of health care system), and

one attribute capturing access to

information (high or low).

B r i e f l y, we find that the public health

p rofessionals and emergency

response officials we survey deem

resources, the inequality in the

distribution of re s o u rces, the type of

health care system, and the level of

access to information important

determinants of adaptive capacity.

Having a health care system based on

universal coverage, for example, is

judged to be equivalent to a gro w t h

in per capita GNP of $12,000, while

high access to information is deemed

equivalent to $14,000 worth of per

capita income. Likewise, the answers

to our conjoint choice questions

p rovided by our respondents imply

that a country with a highly unequal

distribution of income would re q u i re

4,600 more dollars in per capita

income to have a degree of adaptive

capacity equivalent to that of a

country with a more equalitarian

distribution of income. Caution

should be used to interpret these

results, because we cannot claim

that our sample is necessarily

re p resentative of the population of

public officials and experts.

The second objective of the cCASHh

p roject was to arrive at credible Va l u e

of a Statistical Life1 f i g u res that can

be used in estimating the mortality

benefits of adaptation policies in the

context of heat waves and extre m e

events in Italy and in the Czech

Republic. We began this task with a

review of the relevant theoretical and

empirical economic literature. We

arrived at the conclusion that

suitable VSL values did not exist for

either Italy or the Czech Republic,

and that original valuation studies

w e re needed for both countries. The

a p p ropriate format for these studies

should be contingent valuation.

We there f o re created two contingent

valuation survey questionnaires that

elicit willingness to pay for re d u c t i o n s

in the risk of dying for card i o v a s c u l a r

and respiratory causes - the typical

causes of excess deaths during heat

waves. The two questionnaires were

s e l f - a d m i n i s t e red using the computer

by samples of Italian and Czech

residents in late May - early June, and

September 2004, re s p e c t i v e l y. We

find that respondents understood the

good being valued (a risk reduction in

the risk of dying for a specific set of

causes) and the valuation exerc i s e ,

and that their responses to the

payment questions are broadly

consistent with economic theory.

Regarding the VSL to use when

examining adaptation policies that

would reduce the mortality impacts

of extreme (weather) events, we

have developed and pre-tested a

contingent valuation questionnaire.

The questionnaire is currently being

programmed into software for self-

administration by respondents. We

plan to conduct a pilot study based

on this instrument at no extra cost

to the project.

Sustainability Indicators and EnvironmentalValuation

Anna Alberini

Research Programme Co-ordinator

ARSENALE VE – Public

P re fe re n ces and Urban

R e g e n e ration: Land Use

Changes and Aesthetics at

the Ve n i ce Ars e n a le

Funded by: FEEM

Co-ordinator: Anna Alberini

Researchers: Alberto Longo,

Patrizia Riganti

Is it possible to elicit people’s

p re f e rences for reuse of underutilised

urban areas, and, if so, how do

their pre f e rences compare with

those of the government entities in

charge of making decisions re g a rd i n g

these areas?

These are the two key questions we

ask in a project funded by FEEM and

recently completed by Anna Alberini,

Alberto Longo and Patrizia Riganti. In

seeking to answer these questions,

we focus on a historical site in Ve n i c e ,

the Arsenale (Ancient Shipbuilding

Ya rd), which has high cultural and

symbolic significance, and is highly

prized for its arc h i t e c t u re .

We developed a conjoint choice

q u e s t i o n n a i re where we ask re s i d e n t s

of the city of Venice to choose

between alternative transformations

of the Arsenale. Each transformation is

described by six attributes: (i) land use,

(ii) use of basins and waterways within

the Arsenale, (iii) new buildings in the

n o r t h e a s t e rn part of the Arsenale, (iv)

fast transportation links with the

mainland, the rest of the city and the

airport, (v) permanent jobs cre a t e d ,

and (vi) cost to the taxpayer. We use

the responses to the conjoint choice

questions to understand what types of

reuse residents pre f e r, and to attach a

monetary value to each attribute.

The pre f e rences of residents are then

c o m p a red with those of public off i c i a l s

and other stakeholders, which we

survey using a similar questionnaire.

I N T E LCITIES – Inte l l i g e n t

C i t i e s

Funded by the European

Commission, DG Information

Society, 2004-2005

Co-ordinator: Alessandro Costa

Researchers: Anna Alberini, Aline

Chiabai, Carole Maignan

FEEM re s e a rcher Aline Chiabai is

c u r rently preparing a questionnaire

that will be administered to the users

of Cyber Emploi Nice, a publicly-run

employment and training facility. The

purpose of the questionnaire is to

elicit the pre f e rences for various

attributes describing on-line job

s e a rch and training services, the

willingness to pay for them, and the

demand function for them. This

information will allow the authorities

in charge to compare the benefits of

the on-line service with the costs of

setting up and running such service.

The questionnaire will use conjoint

choice questions.

INSURE - Flex i b le

Fra m ework for Indica to rs

for Sustainability in

Regions using Syste m s

Dynamics Modelling

Funded by the Euro p e a n

C o m m i ssion, DG Research, Glo b a l

Change and Eco s y stems, 2004-2007

Co-ordinator: Pietro Caratti

Researcher: Chiara Riboldi

The project, started in April 2004, is

c o - o rdinated by TAU Consultora

Ambiental and involves eight

re s e a rch partners from the academia

and consultants located in eight

countries in the South Mediterranean,

E u rope and Candidate EU.

The main objective of the project is to

combine a methodological appro a c h

for carrying out a sustainable indicator

system with the development of a

System Dynamics application that

supports in re p resenting sustainability.

This is intended to develop a common

flexible European framework for

sustainable indicators aimed at

monitoring pro g ress toward s

Sustainable Development at the

regional scale. It expects to

overcome the main obstacles, that

the development of sustainability

indicators currently faces, such as lack

of data, sectoral integration and

c o m p a r a b i l i t y. Thus, we pursue thre e

re s e a rch objectives:

1) Place the sustainability concept in

the middle of the indicator system:

The hypothesis is to define

sustainability in a well-structured

h i e r a rchy in order to make the

framework as independent as

possible from the indicators and data

a v a i l a b i l i t y. The approach has a very

pragmatic application in comparing

sustainability performances acro s s

regional contexts.

2) Integrate the information for

indicator calculation by means of

System Dynamics: System Dynamics

o ffers a very suitable tool for the

development of a formalised heuristic

description for sustainability, capable

of developing an integrated and

autonomous information system for

indicator development. There are two

f e a t u res that make System Dynamics

suitable for sustainability aspects: the

study of trends and the integration of

local and universal knowledge.

3) Using the existing network for

regional sustainability indicator

development: There are several

e fforts at the European level to

c reate regional/national networks

of European interest. The project

investigates the feasibility of

establishing interactions with the

c u r rent European initiatives in ord e r

to consistently develop a region -

based sustainability indicator system.

Collaboration with regional or

national institutions should bridge

the gap between the theore t i c a l

a p p roach of the project and concre t e

experience and practice at the

regional national level . The

development of a re g i o n - b a s e d

flexible approach to face gaps and

h e t e rogeneity in sustainability

indicators frameworks and a System

Dynamics application implementing

it re p resent the two main pro j e c t

outputs. Reports on case studies that

apply the developed appro a c h

to diff e rent regional contexts as

to check its applicability are a

complementary project output.

A project web site wil l aid in

exchanging information among the

re s e a rchers and in disseminating the

final results of the re s e a rc h .

The potential impact of this project

will be measured in terms of its

contribution to the impro v e m e n t

of t he shared knowledge in

combining sustainable indicators

(e.g. economic, environmental and

social indicators) to be used to

e n s u re comparability at the

E u ropean level. The project will

contribute to enhance the curre n t

tools for building sustainability

indicator systems, providing them

with a higher degree of ro b u s t n e s s

than they currently have.

The main responsibil it ies of

FEEM consist in ensuring the

i n t e rconnection and cohere n c e

between the developed theore t i c a l

framework and common practice

related to data collection, pro c e s s i n g

and application to the policy sphere .

This activity is supported by the

collaboration with existing

institutions and networks. FEEM

facilitates the know-how exchange

between the project consortium and

c u r rent institutional networks and

organisations interested in a

region–based sustainability indicators

system. FEEM is also one of the

partners in charge of disseminating

the project outcomes and of

organising seminars and training

a c t i v i t i e s .

The kick-off meeting and the second

p roject meeting to finalise the pro j e c t

work programme and to start data

collection and the sustainability

framework development took place

in Madrid, May 2004, and in Prague,

June 2004, re s p e c t i v e l y. The next

meeting, to be held in Germany at

the beginning of 2005, will be

focused on the implementation of

the sustainability framework in the

System Dynamics model.

Publications

• Alberini, Anna, Paolo Rosato,

Alberto Longo, Valentina Zanatta

(forthcoming), “Information and

Willingness to Pay in a Contingent

Valuation Study: The Value of S.

Erasmo in the Lagoon of Ve n i c e , ”

J o u rnal of Environmental Policy and

M a n a g e m e n t .

• Anna Alberini, Alberto Longo,

Stefania Tonin, Francesco Tro m b e t t a

and Margherita Turvani, (forthcoming),

“The Role of Liability, Regulation and

Economic Incentives in Bro w n f i e l d

Remediation and Redevelopment:

Ev id en ce fr om Su r ve ys o f

Developers,” Regional Science and

Urban Economics.

• Alberini, Anna, Maureen L. Cro p p e r,

Alan Krupnick, and Nathalie Simon

(2004), “Does the Value of a

Statistical Life Vary with Age and

Health Status? Evidence from the

U.S. and Canada,” Journal of

E n v i ronmental Economics and

Management, 48(1), 769-792.

• Thérivel R., P. Caratti, Partidário

M. Theodórsdóttir Á. H.and Ty l d e s l e y

D., ”Writing SEA guidance”, Impact

Assessment and Project Appraisal

j o u rnal, n°4, 2004 (forthcoming Dec.

2 0 0 4 ) .

• Caratti, Pietro (2004) “ANSEA:

Un Approccio Anali t ico al la

Valutazione Ambientale Strategica”,

Rapporti per lo Sviluppo Sostenibile,

FEEM, Milan, October 2004.

• Caratti, Pietro, Dalkmann H.,

Jiliberto J. (eds), (2004), Analysing

Strategic Environmental Assessment,

Cheltenham: Edward Elgar

P u b l i s h i n g .

• Alberini, Anna (2004), “Robustness

of VSL Values from Contingent

Valuation Surveys,” FEEM Wo r k i n g

Paper 135.04, Milan, October.

• Alberini, Anna, Alistair Hunt, and

Anil Markandya (2004), “Wi l l i n g n e s s

to Pay to Reduce Mortality Risks:

Evidence from a Thre e - c o u n t r y

Contingent Valuation Study,” FEEM

Working Paper 111.04, Milan, July.

Seminars and conferences

• Anna Alberini presented a paper

entitled “Willingness to Pay for

Mortality Risk Reductions: The

E ffects of Age, Health Status, and

Latency” at the Department of

Economics, Rice University, October

2004, and at the Department of the

E n v i ronment, University of Yo r k ,

October 2004.

• Anna Alberini presented the

paper “Three-Country Application of

Alberini/Krupnick Survey Instrument:

Methodology and Results” at the

U.K. Department of Enviro n m e n t ,

Food and Rural Affairs, London, UK,

June 2004.

• Anna Alberini presented the

following papers at the annual

EAERE meeting, Budapest, June

2004:

(i) “Policies for Cleanup and Reuse of

Contaminated Sites: Evidence from a

Survey of US Real Estate

Developers,” presented at the

annual EAERE Meeting, Budapest,

June 2004.

(ii) Willingness to Pay for Reducing

Mortality Risks: Evidence from a

T h ree-country Contingent Va l u a t i o n

S u r v e y,” presented at the annual

EAERE Meeting, Budapest, June

2 0 0 4 .

(iii) “Robustness of VSL Values fro m

Contingent Valuation Surveys,”

p resented at the annual EAERE

Meeting, Budapest, June 2004.

• Paolo Rosato presented the

seminar “La valutazione dei beni

ambientali: alcune esperienze nella

laguna di Venezia.’ Valuation of

E n v i ronmental Goods: Experience

f rom the Lagoon of Venice, at the

M a s t e r ’s degree programme in

Integrated Environmental Management,

University of Pavia, Sept. 2004, and

at the Advanced Training in

Valuation of Complex Goods,

Genoa, Sept. 2004.

• Alberto Longo presented the

paper “The Effect of Contamination

and Cleanup on Commercial and

Industrial Properties: A Hedonic

Pricing Model of Maryland and

B a l t i m o re City” at the 13th Annual

C o n f e rence of the Euro p e a n

Association of Environmental and

R e s o u rce Economists, Budapest,

June, 2004, and at the National

Center for Smart Growth, University

of Maryland, College Park,

Maryland, April 2004.

He also presented the paper “The Role

of Liability, Regulation and Economic

Incentives in Brownfield Remediation

and Redevelopment: Evidence fro m

Surveys of Developers,” at the School

of Environmental Sciences, University

of East Anglia, Norwich, UK, February

2 0 0 4 .

• Valentina Zanatta pre s e n t e d

“Stated Pre f e rence Methods in

the Valuation of Historical and

A rchitectural Goods” at the Faculty

of Architecure, Turin Polytechnical

U n i v e r s i t y, March 2004, and “The

Role of Benefit-Cost Analysis

for Public, Architectural and

Environmental Goods” at the

M a s t e r ’s degree programme in

Economic Valuation, at the Faculty of

A rc h i t e c u re, Turin Polytechnical

U n i v e r s i t y, May 2004, and “Economic

Valuation of Environmental Goods,”

at the Faculty of Arc h i t e c u re, Tu r i n

Polytechnical University, May

2 0 0 4 .

She also presented the paper “The

Value of Recreational Sports Fishing

in the Lagoon of Venice: Evidence

f rom Actual and Hypothetical Fishing

Trips” at the annual EAERE Meeting,

Budapest, June 2004.

• M a rek Giergiczny pre s e n t e d

“ Va lu ing the s ta t i st ica l l i f e.

Compensating wage study”, FEEM

Milan, 23 June 2004

Note

1 F o r m a l l y, the Value of a Statistical Life

is the rate at which individuals are

willing to trade off income for a risk

reduction. The VSL is multiplied by the

expected number of lives saved by the

policy to arrive at the monetised

mortality benefits of the policy itself.

The Management of Natural

R e s o u rces is challenged by the

objectives of sustainable development,

a concept that is the basis for many

of the regulations that natural

re s o u rce managers are obliged to

respect. The integration of

e n v i ronmental, social, and economic

issues in management processes is

possible only if institutions and

decision makers have access to

information and methodologies

a p p ropriate to the task. Objectives

that focus on the quality of life for

f u t u re generations re q u i re a shift in

decision making priorities, and

reliable scenario assessment

mechanisms that support the

consideration of the future

consequences of today’s actions.

In this context, the NRM re s e a rc h

p rogramme is involved with pro j e c t s

that seek to develop the kind of

knowledge that is re q u i red for

sustainable development. One of the

focuses is decision support for the

management of water re s o u rc e s .

The MULINO (recently completed,

but still under development with

i n t e rnal re s o u rces), TRANSCAT and

H y WaMIS projects each have the

objective of producing a Decision

Support System. The social

imp l i cat ions of management

decisions can be difficult to assess

and having to include both

quantitative and qualitative

information in decision pro c e s s e s

makes designing appropriate tools

particularly important. Another

primary re s e a rch topic is Integrated

Coastal Zone Management. Tw o

p rojects, SMART and ICZM-VE

( recently completed) have looked at

a set of five case studies in the

Mediterranean basin and a special

case study in the Venice lagoon, in

this light. Attention on the

Mediterranean area is placed also

t h rough the ISIMM Project and the

N O S T R U M - D S S c o o rdination action.

The first focuses on irrigation and

w a te r ma n ag e me nt in the

Mediterranean basin; particular

emphasis is placed on the social and

institutional innovations needed for

facing the growing conflicts for

water demand in the area. The

second aims at promoting the

development of DSS tools in support

of policy making for Integrated

Water Resources Management

(IWRM) in the Mediterranean area.

F i n a l l y, the PANDORA project looks

into the perceptions of stakeholders

and explores ways of collecting and

including knowledge from a range of

actors in integrated planning and

assessment processes.

T h rough these projects the NRM

p rogramme is conducting re s e a rch at

local, national and regional scales.

The geographical area of interest has

recently expanded outside Euro p e .

Specific interest of the Researc h

P ro g r a m m e i s t h e w h o l e

Mediterranean Basin, but re c e n t

p rojects and proposals are also

focusing on Latin America and Asia

(China, India and the South East

A s i a ) .

One new project is in the pipeline

and will start effectively during the

next semester: N E WAT E R ( N e w

a p p roaches to adaptive water

management under uncertainty), in

which FEEM will carry out re s e a rc h

contribution to support the

development of DSS tools and the

management of uncertainty in the

IWRM (Integrated Water Resourc e s

Management) pro c e s s .

N O S T R U M - D SS

N e t work on Gove r n a n ce ,

S c i e n ce and Te c h n o lo g y

for Susta i n a b le Wa te r

R e s o u rce Management in

the Medite r ranean. The

ro le of DSS to o l s

Funded by the Euro p e a n

C o m m i ssion, DG Research, Specific

m e a s u res in support of inte r n a t i o n a l

co - o p e ration - Medite r ra n e a n

Partner Countries (MPC), 2004-2007

C o - o rd i n a tor: Carlo Giupponi

R e s e a rc h e rs: Roberta Camera ,

J a copo Crimi, Ale ss a n d ro Fra p i cc i n i ,

Guido Santini, Ale ss a n d ra Sgobbi

The Mediterranean basin is

ch ar a c t e r i s ed by a s t ro n g

h e t e rogeneity of cultures, economies

and societies that often implied

p roblematic interactions. It is one of

the areas where water re s o u rc e

s c a rcity and conflicts between

d i ff e rent water users are more

dramatic. The need and relevance

for sustainable integrated water

management strategies is there f o re

c l e a r. Policy makers have not yet

exploited the great theore t i c a l

potential of Dss tools to apply the

principles of Integrated Wa t e r

Natural Resources Management

Carlo Giupponi

Research Programme Co-ordinator

R e s o u rces Management (IWRM) for

the management of socio-political

conflicts over competing demands

for w ater uses in d if f e re n t

e n v i ronmental situations. Extensive

evidence suggests that their

potential is often not exploited

for various reasons, as lack of

communication between scientists

and policy makers. A need for

reorientation of science to support

policy making and for the adoption

of multi-sectorial and multi-

disciplinary approaches integrating

socio-economic and enviro n m e n t a l

considerations is evident. NOSTRUM-

Dss will address this gap by

a p p roaching the analysis of needs

e x p ressed by stakeholders belonging

to the various Mediterranean

countries, directly involved in the

p roject activities and by fostering

mediation between policy objectives

and scientific knowledge to create an

e n v i ronment appropriate for a more

equitable and efficient water

re s o u rce management in the basin.

The key objectives of this Co-

o rdination Action are :

1. To establish durable links between

scientific institutions, govern m e n t s ,

NGOs, SMEs and other stakeholders

and improve public awareness on

water management;

2. To improve scientific knowledge

and applied methodologies in IWRM;

3. To promote the development of

suitable Dss tools built upon re a l

needs of policy making in IWRM.

The Mediterranean is strategically

located between diff e rent sets of

c u l t u res, diff e rent development

choices, dividing them. However, in

its historic role, the Mediterranean

used to be a unifying element

between those diff e rent, but

intrinsically interconnected, worlds. It

is in order to contribute to the idea of

the Mediterranean area as an

u n icum of d ive r si t ie s , that

NOSTRUM-DSS has established a

wide partnership between intere s t e d

parties in the field of Integrated

Water Resource Management

(IWRM) with concrete prospects of

long term duration.

In theory the Decision Support System

(Dss) should have an enormous

potential as a tool for the

identification of optimal water

re s o u rce management regimes in the

Mediterranean basin, where water

re s o u rce scarcity could prove a

contributing factor to conflict and

i n s t a b i l i t y. Dss tools can help to

design management strategies

which are flexible enough to

accommodate changing political and

socio-economic situations as well as

technological innovations, but, at the

same time, strict enough to ensure

the ecological sustainability of water

uses. Yet, Dss’ potentiality is too

often not exploited because of

various reasons, first of all a lack of

interaction between policy makers

and re s e a rchers: on the one hand,

re s e a rchers are often not re s p o n s i v e

to the needs of stakeholders and

policy makers; on the other hand,

policy makers have a tendency not to

use scientific information for the

formulation of water re s o u rc e s

management policies. In addition,

water planning is traditionally

understood within a centralised

framework, which focuses on

engineering solutions: the curre n t

attempt to move toward s

participatory planning for water

re s o u rces can significantly be

i m p roved by the adoption of suitably

designed Dss tools, which take into

consideration the interests, needs

and objectives of all re l e v a n t

s t a k e h o l d e r s .

The ultimate aim of NOSTRUM-DSS

C o - o rdination Action is there f o re to

contribute to bridge the gaps

between science and real life, in

o rder to provide Dss developers with

insight into the language and the

needs of policy makers (PMs) and

stakeholders, and subsequently to

p rovide PMs with effective tools

based on an integrated approach for

p roblem solving in the context of

I W R M .

The European Union supports the

development of IWRM plans, with

s t ronger stakeholders’ participation,

p ro-poor emphasis and gender

s e n s i t i v i t y, and NOSTRUM-Dss will

o ffer support to this policy thro u g h

its emphasis on the development of

useful Dss tools.

Activities undertaken in NOSTRUM-

Dss involve a core group of five

partners drawn from the North and

South of the Mediterranean, which

a re responsible for the day-to-day

implementation of the Co-ord i n a t i o n

Action. FEEM has the re s p o n s i b i l i t y

for the overall scientific and

administrative management and co-

o rdination of Co-ordination Action.

Alongside the core group, the

Consortium is constituted by a

b roader number of organisations,

institutions, and individuals

operating in the field of water

re s o u rce management.

Twenty - seven organi sa t ions ,

i n c l u d i n g p a r t n e r s a n d

subcontractors, are involved in the

C o - o rdination Action. The Partners

a re responsible for the elaboration of

National Reports which are

documents of utmost importance for

the NOSTRUM-DSS project because

they will re p resent the common

knowledge base for the

implementation of the CA. In

p a r t i c u l a r, the elaboration of those

reports should ensure the

identification and the active

involvement of local stakeholders

since the beginning of the pro j e c t .

Some of the expected results of the

C o - o rdination Action are :

• Identification of multi-sectoral

a p p r o a c h e s t o t h e d e s i g n ,

development and implementation of

DSS tools in IWRM;

• Identification of multi-disciplinary

a p p roaches to t he des i gn ,

development and implementation of

DSS tools in IWRM;

• I m p roved comm unicat io n

between science and policy;

• Improved co-operation among

Mediterranean institutions;

• Assessment of data availability

and constraints in relation to DSS

users’ needs;

• Establishment of durable links and

long-term collaborations between the

partners and re p resentatives of the

policy and academic institutions in the

Mediterranean Are a ;

• Set of Best Practices Guidelines

for the development and application

of Dss tools for IWRM in the

countries of Mediterranean basin.

• Publication of a monographic

book on Dss tools.

The kick-off meeting of the

NOSTRUM-DSS project took place in

Lisbon the 10th-12th of October

2004. The main aims of the meeting

w e re to reach a common

understanding among partners about

the implementation of the co-

o rdination action (CA), to organise

and launch the activities of the first

year and to inform partners about

management rules.

A key issue of the meeting was the

discussion and finalisation of the

National Report (NR) outline.

ISIIMM - Institutional and

Social Innovations in

Irrigation Medite r ra n e a n

M a n a g e m e n t

Funded by the EC, Euro - M e d i te r ra n e a n

Regional Pro g ramme for Local Wa te r

Management, 2003-2007

C o - o rd i n a tor: Carlo Giupponi

R e s e a rc h e rs: Roberta Camera, Dora

C a stiglione, Anita Fa ssio, Guido Santini

The main concern of the ISIIMM

p roject is irrigation and water

management. These topics will be

a d d ressed through a broad scope of

related issues, such as the

relationships with the enviro n m e n t ,

the management policies, and the

adaptation of local communities to

local problems, especially saving and

sharing water.

The overall objective of ISIIMM

is to understand the curre n t

contradictions that are associated

with local water management in

Mediterranean watersheds and to

find the institutional innovations

a c c o rding to the area of social

c o m p romise in each locality.

Thus, the main thematic issues

a d d ressed are: integrated water

re s o u rce management, participatory

implications of users and stakeholders,

new institutional tools, new social

a p p roach, environmental implications

of management, river basin scale for

management, information and

training of users and stakeholders.

They are based on the principles

developed in the EC Water Framework

D i rective, which considers water

management broadly according to

four disciplinary appro a c h e s :

geographical, ecological, economical

and sociological.

The project, which is implemented in

t h ree EU countries (France, Italy and

Spain) and three Euro-Med countries

(Egypt, Lebanon and Moro c c o ) ,

builds up a strong co-operation

between Development Partners,

who work wit h loca l users ’

associations, and Scientific Partners,

who work on collective water

management issues.

These partners will exchange

experience and knowledge about

institutions, organisations, and rules

for water uses that are applied

at three levels: intern a t i o n a l

(Mediterranean basin), national

(national frameworks), and local

(both regional basin situations and

specific river basins).

The project is co-ordinated by

AGROPOLIS, an Association located

in Montpellier, France, in charge of

the linkage between re s e a rch and

development, especially in the Euro -

Mediterranean perspective.

The ISIIMM kick-off meeting was

held in Montpellier in June 2003.

On the 16th and 17th of October

2003 the methodological meeting

took place in Marrakech, Morocco.

The meeting aimed at explaining

the management guidelines of the

p roject and at identifying the

different approaches to adopt in

the investigation of the case

studies.

In this project FEEM acts as the

National Coordinator and scientific

partner in charge of the

implementation of the Italian case

s t u d y. It co-operates with the

Watershed Coord i n a t o r, Autorità di

Bacino dell’Alto Adriatico, that works

in the field in direct connection with

the water users and stakeholders.

The Italian case study considers two

d i ff e rent levels of analysis, the whole

Piave River Basin and a pilot area. The

analyses of the diff e rent key axes of the

ISIIMM project refer to both these

levels or at least to one of them. The

national level is also taken in

consideration especially in the

elaboration of the institutional analysis.

The Piave River Basin is located in

the northeastern part of the Italian

peninsula. The whole area has a

surface of 4,100 sq km and

includes 127 municipalities. The

basin is populated by 381,000

inhabitants.

The pilot area is located in the Sile

River basin, which is naturally and

artificially connected to the Piave

River. FEEM and Autorità di Bacino

identified this area with the support

of two local bodies, the Land

Reclamation Board “Destra Piave”

and the Aqueduct and Sewerage

Union “Schievenin”. The are a ’s

surface amounts to about 13.000

ha and is located in the NorthWest

of Treviso and includes five

municipalities, Istrana, Morgano,

Quinto, Paese and Trevignano. The

area has been selected because the

implementation of a new

integrated approach to water

management is foreseen. On one

hand the Land Reclamation Board

intends to re-think the irrigation

system in an area that is developing

fast from rural to peri-urban by

substituting the existing low -

e fficiency gravitational irrigation

system with a higher more efficient

system, utilising sprinkler irrigators.

On the other hand, the Aqueduct

and Sewerage Union needs to

install both, the sewerage system

and the aqueduct for drinkable

water in the same area. Both

institutions aim at optimising the

use of the resources of the Piave

River and agree on the benefits of a

collaboration and integration of

their projects: the integration

c o n c e rns the use of the same

infrastructure which leads to a new

system with economic and

managerial synergies.

At the end of the first phase of

p roject implementation the Italian

team drafted a preliminary version of

the case study report. The main aim

of the report was to provide a first

p i c t u re of the case study area.

In particular, it presented some

territorial and enviro n m e n t a l

characteristics of the River Basin and

m o re specifically of the pilot are a ,

w h e re the re s e a rch activities are

p resently focused. Also the

institutional and social aspects of the

case study were tackled in this

document. It is worth mentioning

that this report aimed to provide only

a preliminary analysis of the case

s t u d y, and it will be completed and

harmonised during the next steps of

the project implementation.

The periodic meetings of the

ISIIMM Steering and Scientific

C om mi t t ee we re h e l d i n

Montpellier in June 2004. During

these events the preliminary results

of the case studies were presented

and discussed. Another important

event was hosted at FEEM premises

in Venice in September 2004. It was

the Coherence group meeting in

which the comparability and the

coherence of the preliminary case

studies findings were discussed.

In July 2004 a training seminar on

participatory techniques took place

at FEEM, this event involved the

whole Italian working group. In

October 2004 a special Scientific

Committee meeting was hosted at

Land Reclamation Board Destra

Piave in Treviso. This event was

or g an i se d by t he p ro j e c t

coordinator with the support of

FEEM. In this circumstance, the

work done by the Cohere n c e

Group has been shown and the

preliminary outcomes and issues of

the ISIIMM project have been

discussed. The next steps of the

p roject are the organisation of

international seminars in order to

exchange experiences among the

p roject participants and to train

local stakeholders on several topics

and to finalise the development of

the local case studies. In the

context of the Ital ian case, the

different axes of analyses will be

further developed and the

construction of a Decision Support

System is envisaged in order to help

the local decision makers in the

planning phase of the integrated

w ate r p ro j e c t . A n a c t i v e

involvement of the local actors by

means of surveys and workshops is

also foreseen. For more information

on the project, please visit:

www.agropolis.org

SMART - Sustainable

Management of Scarce

Resources in the Coastal

Zone

Funded by the Euro p e a n

C o m m i ssion, DG Researc h ,

I n ternational Co-opera t i o n

P ro g ramme, 2002-2005

C o - o rd i n a tor: Carlo Giupponi

R e s e a rcher: Gre tel Gambare l l i

The coastal zones of the

Mediterranean are undergoing rapid

development resulting in gro w i n g

and conflicting demands on the

natural re s o u rces. At the same time

they are subject to the often

i r reversible degradation of these

re s o u rces and thus of the very basis

for development. The overall

objective of the SMART project is to

develop, implement and test a new,

participatory but scientifically sound

and rational approach to planning

and management of the coastal

zone that can help to re c o n c i l e

conflicting demands on scarc e

natural re s o u rc e s .

The study of natural re s o u rces in the

coastal areas illustrates the

dependency of the usually dynamic

and fast growing coastal zones on

their upstream river basin systems.

The SMART project will explore

methods and tools for long-term

policy analysis and strategic decision

support for integrated coastal

development with a special emphasis

on water re s o u rces and land use,

and the re s o u rce balance between

the coastal region and inland are a s .

A common methodology for policy

design, evaluation, and decision

making will be developed and tested

in a set of parallel case studies in

e ac h of the p ar t i c ipa t ing

Mediterranean countries (Tu r k e y,

Lebanon, Jordan, Egypt and Tu n i s i a ) .

Lessons from the comparative

analysis of these case studies will

help to ensure a generally applicable

m e t h o d o l o g y, and at the same time

help to foster inter- regional contacts

and the exchange of experience.

The approach is based on a multi-

sectoral integration of quantitative

and qualitative analysis, combining

advanced tools of quantitative

systems engineering using numerical

simulation models, with methods of

e n v i ronmental, socio-economic and

policy impact assessment using rule-

based expert systems technology

and interactive decision support

methods. Water re s o u rce modelling

that includes both quantitative and

qualitative information will pro v i d e

the framework for policy scenarios,

exploring diff e rent development

strategies, the consequences and

implications of demographic, socio-

economic, and technological

development, and the interaction of

these driving forces towards long-

term sustainability for coastal re g i o n s

a nd th e i r h in te r lan d. The

generalisation of the policy lessons

l e a rned, and the dissemination of

p roject results to as wide as possible

an audience using a broad range of

c omm unic at ion method s is

understood not as a post-pro c e s s i n g

step in the project, but as an

essential element of the policy

making process itself, assisted by

systems analysis and information

technology as the methodological

c o re of the approach.

The re s e a rch activities for the SMART

p roject began with the kick-off

meeting in January 2003 which was

held in Cairo. Then, four meetings of

the Consortium were held in

Lebanon (June 2003), Tu r k e y

(September 2003), Jordan (February

2004), and Tunisia (September

2004). The Austrian partner,

E n v i ronmental Software and Services

(ESS) is responsible for the scientific

c o - o rdination of the project. The

p roject has a three-year life span and

it is now at the beginning of its third

y e a r. Up to now, it has covered thre e

of the four main phases and

associated milestones.

The first, initial phase was dedicated

to the an a lys is of deta i led

re q u i rements and constraints, data

availability versus data re q u i re m e n t s ,

and t he res u lt in g deta i l ed

specifications for the most suitable

methodological approach. The main

output of this phase is Deliverable

D 0 1 . 1 ( R e q u i re m e n t s a n d

Constraints Report), coordinated by

FEEM and delivered in July 2003.

The second phase concentrated, in

parallel, on data compilation and

tool development. Three main tools

have been developed to model the

demand and supply balance of water

re s o u rces in coastal zones, with

consideration for economic, social

and environmental impacts, in a

sustainability perspective. The thre e

components of the modell ing

p ro c e d u re are :

• Wa t e r w a re, a river basin scale

water re s o u rces management

information and decision support

system, which describes a dynamic

water budget for a given catchment

in terms of water demand and

s u p p l y, allocation policies, eff i c i e n c y

of use, water quality, and the

economics of demand and supply.

The system is described in Deliverable

D03.2 (Implementation Report:

H y d rological Simulation Modelling

S y s t e m ) .

• The Telemac system, a powerful

integrated modelling tool for use in

the field of free-surface flows. In

S M A RT, the system particularly

a d d resses water quality issues. It is

described in D03.1 (Implementation

Report: Water Resources Modelling

F r a m e w o r k ) .

• The Socio-economic analysis,

with the purpose to identify for the

case study areas the main social

and economic issues related to

water re s o u rces management in

coastal zones. The main outputs of

this component are D02.1

(Identification of problem issues -

Summary Report) and D02.2

(Guidelines for the socio-economic

analysis).

All associated deliverables are

downloadable from the pro j e c t

w e b s i t e .

The third phase focused on the

deve lopment of a commo n

methodology and set of tools for the

d i rect comparability of policy options

for a range of five regional case

studies with diff e rent emphasis

within the common theme of coastal

water re s o u rces management.

During the last meeting in

Hammamet (Tunisia), the final set of

variables for the definition of

common scenarios and 7 main

sustainability indicators to be used

for the comparative analysis have

been agreed upon, under the co-

o rdination of FEEM. Besides, the

methodology to be used for the

fourth phase has been presented by

F E E M .

The fourth and final phase will

concentrate on the comparative

policy analysis, jointly led by FEEM

and the Portuguese partner. The

results from the methodological

applications to the five case studies

wil l be evaluated through an

integrated and comparati ve

approach, in order to derive policy

suggestions for the achievement of

a sustainable water management

in the Med ite r ranean coas ta l

zones. The project will end in

August 2005.

Info@ http://www. e s s . c o . a t / S M A RT/

T R A N S CAT - Inte g ra te d

Wa ter Management Of

Tra n s b o u n d a r y

C a tchments

Funded by the Euro p e a n

C o m m i ssion, DG Research, Energ y ,

E n v i ronment and Susta i n a b le

D eve lopment Pro g ramme, 2003-2006

C o - o rd i n a tor: Carlo Giupponi

Researchers: Silvia Bertolin, Jacobo

Fe�s V�zquez, Martina Gambaro,

Jaroslav Mysiak.

The TRANSCAT project aims at

contributing to the process of

implementing the new EU water

policy, through a three-year multi-

disciplinary re s e a rch project that

started at the beginning of

February 2003.

The main objective of the project is

an operational and integrated

c o m p rehensive Decision Support

System (DSS) for water management

of catchments in borderland re g i o n s ,

within the context of the

implementation of the EU Water

Framework Directive. The DSS to be

developed focuses mainly on

pollution, flooding and water

abstraction issues. It will allow an

integrated international management

of the river basin, which may save

considerable financial re s o u rces and

solve environmental and social-

economic problems. It wiil also deal

with the complexity of the water

re s o u rces systems and the uncertainty

of decision-making.

FEEM contribution in the re s e a rc h

p rogramme consists in supporting

the synergy between the TRANSCAT

p roject and other previous and

ongoing international pro j e c t s .

Emphasis is placed on the

development of a platform for

supporting pan-European cooperation

and on networking and allowing a

m o re detailed insight into pro b l e m s

related to water re s o u rce use. After

the organisation of the project’s

open conference on “Integrated

Water Management of Tr a n s b o u n d a r y

Catchments”, successfully held in

Venice last March, FEEM engaged in

the diffusion of the project activities

t h rough two main channels: the

e l e c t ronic forum and the E-News.

The forum was conceived to

o ffer the partners, the scientific

c o m m u n i t y, the local authorities, and

the case studies stakeholders an

instrument for the exchange of ideas

on water management issues. The

forum is open to all re g i s t e red users

and is subdivided into six main

categories to favour the discussion

on transboundary related topics -

h t t p : / / w w w. f e e m - w e b . i t / t r a n s c a t _

forum/index.php.

The E-News has multiple tasks to: i)

build a bridge between pro j e c t

re s e a rch and ongoing activities of

the EU and national institutions in

the same field and in particular those

related to the implementation of the

Water Framework Directive (WFD); ii)

disseminate the project results; iii)

inform on the initiatives related to

w at er m ana gemen t is s ues .

T R A N S C AT E-News is re g u l a r l y

c i rculated to subscribed members,

and can also be downloaded

f rom the TRANSCAT website at

h t t p : / / w w w. t r a n s c a t - p ro j e c t . n e t /

engnews.php.

A second contribution by FEEM

consists in supplying its experience in

DSS development and implementation,

in particular the skills related to the

design and application of the mDSS

tool, the software for decision

support developed by the MULINO

(an FP5 project concluded early this

year). A revision of the project work

plan carried out as a follow up of the

mid term review of the pro j e c t

envisages a potential role of an

adjusted version of mDSS in support

of the modelling tools and other

s o f t w a re for stakeholders’ involvement,

to facilitate their integration in the

decision making process.

I TAES - Inte g ra ted Tools to

design and imple m e n t

A g ro Enviro n m e n ta l

S c h e m e s

Funded by the Euro p e a n

C o m m i ssion, DG R e s e a rch, Scientific

Support to Policies, 2004-2007

C o - o rd i n a tor: Carlo Giupponi

R e s e a rcher: Anita Fa ss i o

The project is related to the design of

optimal Agro Environmental Schemes

(AESs). It emphasises a series of

crucial issues among which, expected

e n v i ronmental impacts, transaction

costs and institutional arrangements

deserve an intensive re s e a rch eff o r t .

AESs are designed, implemented,

m o n i t o red and enforced according to

h e t e rogeneous patterns that re f l e c t

agricultural and environmental

diversity as well as institutional

differences across Europe. Both

environmental effectiveness and

economic efficiency are often

questionable. A clear understanding

of theses issues re q u i res an

integrated analysis of farmer’s

b e h a v i o u r, institutional arrangements

and environmental impacts.

The first step of the project is a

c o m p rehensive comparison of case-

study areas in order to l ink

institutional and contractual

arrangements with farmers’ uptake

and the total cost of AESs, including

administrative costs. Indeed, AESs

with the same targets are

implemented in very diff e re n t

institutional settings and may lead to

contrasted environmental and

economic outcomes.

A second step deals with the

modelling and empirical analysis of

f a r m e r ’s behaviour according to

d i ff e rent governance attributes of

AESs, to explain the interactions

between the type of contractual

arrangement and the private

transaction costs. Based on existing

AESs, the simulation of altern a t i v e

schemes would be carried out. A

specific objective is to assess the ro l e

of the type of contract and eligibility

r u l e s o n t h e p r o v i s i o n o f

e n v i ronmental goods in a given area.

The f ina l s tep addresses the

integration of all available information

in a common framework. Expert

panel opinion, collected with

dedicated questionnaires and

workshops, will complement the

available data measuring AES

e n v i ronmental impacts. Multi criteria

analyses will be applied in order to

integrate multidisciplinary data, the

final outcome being helpful for policy

making at diff e rent levels including

the local one.

FEEM is a subcontractor of INRA. The

objective of the subcontract is to

contribute to the design and the

organisation of the enviro n m e n t a l

appraisal of AESs in the diff e rent case

study regions of the project, including

the selection and the organisation

of rel evan t agri cu ltu ra l and

e n v i ronmental indicators within WP5

(Assessment of the enviro n m e n t a l

impacts of AESs). A draft document

about “Environmental appraisal of

AESs in the case study regions:

qualitative-quantitative indicators

and conceptual framework” was

c i rculated in April 2004 to accomplish

with the first task in support of WP5

activities FEEM also contributes to

WP10 (Multi-criteria analysis (MCA)

and recommendations), to synthesise

and translate the re s e a rch results into

recommendations for the policy

makers. At the third project meeting

in Rennes (26-27/10/04) the second

contribution of FEEM was defined in

terms of a new methodological

document to be elaborated upon the

p reliminary drafts circulated alre a d y

by WP5 and WP10 partners. The

document should provide a pro p o s a l

for designing the approach for

experts involvement in the appraisal

of the environmental effectiveness of

the AESs and for integrating the

results with the multi-cr iteria

a n a l y s e s .

M E ACAP - Impact of

E n v i ro n m e n ta l

A g reements on the

Common Agricultura l

Policy (CA P )

E u ropean Commission, DG R e s e a rc h ,

Scientific Support to Po l i c i e s ,

2 0 0 4 - 2 0 0 7

C o - o rd i n a tor: Carlo Giupponi

R e s e a rc h e rs: Fra n ce s co Bosello ,

B a r b a ra Buchner.

By ratifying a range of intern a t i o n a l

e n v i ronmental agreements, the

EC has entered into binding

commitments which potentially

s t retch many years ahead. A few of

these agreements involve obligations

which are particularly ambitious and

demanding for the agriculture sector.

This project is concerned with two of

the most important intern a t i o n a l

a g reements for agriculture and the

rural economy in Europe: the

UNFCCC and its Kyoto Protocol, and

the UN Convention on Biological

Diversity and the Cartagena Pro t o c o l .

The project provides:

1. An assessment of the exact

obligations falling on the Community

with respect to agriculture in the

fulfilment of commitments under the

Kyoto Protocol and the CBD,

clarifying how agriculture could

contribute relative to other sectors of

the economy and land users.

2. An analysis of the most

a p p ropriate adaptations and

innovations in the agricultural sector

re q u i red to meet the new objectives

and obligations. The focus is on

economic eff i c i e n c y, enviro n m e n t a l

e ffectiveness and compatibility with

other objectives and constraints, at

the farm and wider national and EU

levels. Interactions between CBD and

Kyoto Protocol driven measures are

exposed and analysed and a wide

range of conditions in Europe, both

in existing and new Member States

a re considered. Forestation and

f o rest management issues are also

taken into account.

3. An assessment of how far these

changes at farm level and upward s

re q u i re alterations in policy, both at

the national and EU levels. The main

focus here is on agricultural and rural

development policies, especially

those within the CAP. Specific

m e a s u res of relevance to Candidate

Countries need to be identified.

4. The completion and dissemination

of an integrated strategy for

implementation of the two

a g reements in the EU agricultural

s e c t o r, including concrete policy

recommendations applicable at a

E u ropean level, such as good

agricultural practice.

The study also contributes to the body

of scientific re s e a rch on the

e ffectiveness o f intern a t i o n a l

e n v i ronmental agreements, and on

the interaction between intern a t i o n a l

a g reements and EU policy.

The operative start of the project was

marked by the kick-off meeting held

in London last March 2004. By then,

the FEEM re s e a rch group involved

completed and handled its first two

deliverables.

One was aimed at providing a

p i c t u re of the policy-economic

framework in which EU 25 member

states are called to implement

specific regulations in their

agricultural and forestry sectors, in

the light of the commitment

imposed by EU directives and CAP

and by international agre e m e n t s ,

primarily the Kyoto Protocol on GHG

reduction. The work consisted in an

initial analysis of the present GHG

reduction obligations falling on the

EU as whole and on single countries

with a particular emphasis on the

latest evolution of the negotiation

p rocess on climate-change contro l .

The peculiar role of agriculture and

f o restry was highlighted.

The other concentrated on the specific

m e a s u res adopted or proposed for the

agricultural and forestry sector at the

country level to reduce GHG

emissions. Their expected eff i c i e n c y

and effectiveness was described. A

t h i rd deliverable is under pre p a r a t i o n :

it consists in a technical description of

the main GHG reduction technologies

applicable in the agriculture and

f o restry sectors.

HYWAMIS - Pollution

Prevention in India:

Hyderabad Water

Management Information

System

Co-funded by the European

Commission, Asia-Urbs

Programme, 2004-2005

Co-ordinator: Valerie Cogan

The HyWaMIS project aims at

developing the framework for an

integrated water management

information system as a tool for

sustainable water management in the

city of Hyderabad, India. Focusing on

pollution prevention in the industrial

development areas of Patancheru and

Bollaram the project activities

p redominantly concentrate on the

establishment of an initial “industrial

module” of the information system

p roviding harmonised data on

industrial effluents and their eff e c t s

on ground and surface water bodies.

By application and future extension of

the information system the pro j e c t

aims at elaborating re c o m m e n d a t i o n s

for pollution prevention and contro l

formulated jointly with local

authorities and other stakeholders.

The planned system should provide

an i mproved and ob jec t ive

in format ion bas i s fo r publ ic

information as well as for decision

making and the setting of legislative

m e a s u re s .

The concept and development of the

water information system aims at

p roviding a tool for the integration of

existing data (databases, monitoring

networks etc) and meta-data

(demographic data, land use, climatic

etc) as a contribution to the diff e re n t

user groups aiming at sustainable

regional water management. The

main specific project objectives lie in

the achievement of

• The general design of an

integrated water management

information system

• C o m p rehensible and transpare n t

p resentation of industrial emissions

and water quality

• Recommendations for pollution

p revention and contro l

• Raised public awareness about

water pollution

FEEM has been contacted by the City

of Venice to undertake the activities

foreseen in work package 2: the

establishment and organisation of a

stakeholder platform. The pro j e c t

consortium depends on such a

platform to consider the various user

interests and objectives and to

establish a joint information basis for

water management issues. The work

will explore the power of dialogue for

b reaking down institutional barriers.

This platform will be essential

for a successful and sustainable

implementation for the purpose of

follow-up projects and to implement

the results of this pro j e c t .

The following target groups have

been involved in the planned multi-

stakeholder platform: Public Authorities;

Citizen Groups; Environmental Gro u p s ;

Research Institutions; Private Water

Companies; Industry; and Farmers.

Representatives from these groups

participated in both a questionnaire

and a multistakeholder workshop,

from which a variety of user needs

have been identified based on the

inputs received. Following the

workshop, an advisory panel was

established with re p re s e n t a t i v e

from each of the target groups. The

panel will meet regularly until the

end of the project to give feedback

about the information system and

to formalise their recommendations

for pollution prevention in the case

study area. A second workshop to

be held in September 2004 will

involve the panel members in a

multi-criteria analysis that will be

applied to a specific problem to be

defined by the panel itself.

By giving structure to this kind of

dialogue between the diff e re n t

stakeholders, this work package will

aim at contributing to the socio-

political development and a successful

information and dissemination policy

in this region. The primary aim is to

i m p rove the social and political

climate between industry, agriculture ,

NGOs and govern m e n t .

For more information on the pro j e c t ,

please visit http://www.cnet.at/hywamis/

ICZM-VE - Inte g ra te d

C o a stal Zone Management

in the Ve n i ce are a ,

Valuation methods in a

g e o g ra p h i cal co n tex t

Funded by FEEM

Co-ordinator: Carlo Giupponi

Researchers: Paolo Rosato,

Margaretha Breil, Livio Chiarullo

This re s e a rch project aimed to

develop an ICZM methodological

framework in order to deal with the

complex set of social, economic and

e n v i ronmental issues which sectoral

a p p roaches to development have

p roven unable to address. The

methodological framework was

applied and tested on a limited are a

of the Venetian Lagoon (the island of

Sant’Erasmo). The use of ICZM

in facing the socio-economic

challenges of coastal planning at a

small scale allowed to identify needs

for future action at the larger scale of

the whole Lagoon.

The development of a methodological

framework for applying the

principles of Integrated Coastal Zone

Management (ICZM) is particularly

i n t e resting for the management of

the Venetian territory because of the

lagoon system’s innate vulnerability

and the prevailing traditional

management approaches that tend

to be divisive in terms of planning for

the future. The ICZM approach has

evolved to address the pro b l e m s

c reated by the fragmentation of

authoritative bodies and the new

management challenges arising fro m

issues like climate change and

sustainable development. It is

defined as a governmental pro c e s s

t ha t s ho u ld e ns ur e t ha t

management plans for coastal zones

reflect the integration of

e n v i ronmental and social goals, and

should be created with the

participation of the people, aff e c t e d

by the management decisions.

Past studies focused on the island

of Sant’Erasmo in order to test out

ICZM theory in a contemporary

management context within the

Venetian territory. Specific research

issues included the definition of

local needs and conflicts in relation

to the development plans for the

i sl and; the ident if ica t ion of

problems resulting from obstacles

to co-ordination and collaboration

a mo ng s t a ke ho l de rs ; t he

development of local action plans

for future projects, and the

estimation of economic values

created and/or preserved. The last

aspect was deeply investigated

during 2002 in collaboration with

Corila (a consortium for the co-

o rdination of re s e a rches in the

Venetian area) and thus the interest

emerged for expanding economic

valuations to other islands of the

Venice Lagoon.

A new re s e a rch programme was

launched in late 2002 to investigate

the feasibility of extending economic

valuations outside the well known

context of the Sant’Erasmo island,

and including a specific re s e a rch line

aimed at exploring the potentials of

Geographical Information Systems

for such purpose.

A second phase of investigation was

started among stakeholders,

especially residents of the island in

January 2004, to reveal their

p e rception of and participation in the

transformation process ongoing and

to discuss scenarios of future

development at a time when the first

part of the interventions for

rehabilitation of the island had been

terminated. The project was

concluded at the end of Marc h

2004, results will be presented at the

beginning of November 2004.

VA LUE CS – Va l u ta z i o n e

C e n t ro Sto r i co

Funded by FEEM

Co-ordinator: Paolo Rosato

Researchers: Carlo Giupponi,

Margaretha Breil, Mila Dallavalle

The VALUE CS project aims to

develop a model for the valuation of

the benefit of urban and

e n v i ronmental improvement in the

historical centre of Venice using a

mixed hedonic-hierarchical appro a c h .

The model, developed within two

preceding projects on islands in the

lagoon is now going to be

extended to the historic centre of

Venice. A hedonic pricing approach

based on an analytic hierarc h i c

decomposition of value functions

of real estate will be used in order

to assess impacts of hypothetical

intervention for the historic centre

of Venice. The project started in

January 2004. At present the

geographical database has been

completed, and the model for the

analysis of real estate prices has

been designed, adapting the model

developed for the islands of the

lagoon to the more complex reality

of the historic centre. The phase of

data acquisition from the local real

estate market has been completed

at the end of October 2004.

PANDORA - PArticipatory

Networks and Databases

for Environmental

Research and

Assessment.

P i lot study of the Ve n e t i a n

co m m u n i t y

Funded by FEEM

Co-ordinator: Lorena Rocca

Researchers: Livio Chiarullo,

Martina Gambaro, Marco Scurati

The advantages of active citizen

participation in decision-making

p rocesses are widely acknowledged.

The direct involvement of citizens in

the process of administering public

goods could pave the way to

sustainable urban management.

Among the positive effects are that

citizens express their opinions and

become more committed and

conscious about priority issues, and

that transparency and collaboration

in the decision-making process is

i n c re a s e d .

The general trend of incre a s i n g

I n t e rnet use leads us to consider a

new community of people: the “

citizens of the web”.

The PANDORA project aims to engage

this community by developing, a

participatory multimedia and

interactive platform through the use of

I C Ts. In this new “virtual agorà” each

citizen can express his or her views,

needs, and concerns, can exchange

information, debate ideas, and

cooperate with other users to

consider the major themes related

to sustainable development

Citizen participation will result in a

bottom up contribution to the public

debate and can offer useful

information to the process of local

g o v e rn a n c e .

The PANDORA project explore s

ways of collecting and including

knowledge from a range of actors

in to in tegrated p lann ing and

as ses sme n t pr oce ss es . T he

e ffectiveness of this contribution to

the public decision will depend on

the result obtained from user

participation and from Pandora

potential contact with the public

a d m i n i s t r a t o r s .

In order to serve the various purposes

of the project the Pandora system

has been structured in 3 parts that

c o r respond to the 3 areas of the

I n t e rnet site

1. The informative part of the system

will provide information and content

designed to be accessible to a bro a d

audience. The main aim is to

disseminate environmental, social

and economic information related to

a local context and create aware n e s s

about the sustainability issues

2. The communicative part of the

system will allow the participant to

navigate through the site in a

personalised way and to contribute a

“narrative” feed back about their

local context. This process aims to

p rovide a mutual learning pro c e s s

and an exchange of information and

experiences among web citizens

3. The co-operative part establishes

room to implement the concept of

“collective intelligence”. This pro c e s s

will be fostered as the basis for

developing sustainable scenarios for

the city of Ve n i c e .

Venice is an “unicum”, affected by

various and peculiar issues as high

t ide, uncont ro l l ed tour ism ,

dem ogra ph ic dec rease and

increased pollution in the lagoon.

Being a complex reality, Venice is

the best example to highlight the

need of a sound equilibrium

between environmental, social and

economic variables within an urban

context.

The latest activities of the project are :

In this phase we use both a

quant i ta t ive and qua li ta t i ve

approach always in the context of

circular methodology that means

interplay between final users and

researchers that adjust the project

and the output (web site): research

-> proposed action -> monitoring

and insights ->results -> re-action.

¥ Quantitative research

Methodology: Servqual

Quantitative customer satisfaction

survey measuring the appreciation of

quality; measurement of the gap

between expectations and

p e rception of the actual service

p roposed. Collection, analysis and

evaluation of data from 85

q u e s t i o n n a i res given to re s e a rchers a

p rovided better understanding of

what is considered to be the ideal

web site about the sustainability of

Venice.

¥ Usability Surfing Test

Methodology: Web usability test and

qualitative interviews

Seven surfing tests in the form of live

navigation in the web site pro t o t y p e

w e re applied. The participants were

given 2 tasks to perform in the site

( related to the goals of the site) and

a free surfing session. This test

underlined the functionality and

d i fficulties in the use of the site, and

it provided evidence to construct an

e a s i e r, clearer and user friendly site

b e f o re the on line publishing.

Seven in-depth qualitative interviews

in the way of “thinking aloud “

facil itated the emergence of

spontaneous comments and

evaluation of the project and of its

content proposed in the site; the

result has assisted in the

understand ing of the inner

p e rception and desires of the typical

potential user. We have integrated

their impressions and advise to

i m p rove the system re g a rd i n g

graphics, navigation, content

( e s p e c i a l l y for the participation

s e c t i o n ) .

P resent activities of the project are :

The communication and participation

section of the site are now complete.

In these past months the pro g r a m m e

has implemented the participation

phase:

F i r s t l y, we launched a set of online

poles that analyse the main issues of

Venice and the Lagoon, the Pandora

visitors were asked to focus on

priority and the possible major critical

a rea of intervention.

Then we held 2 blended focus

g roups, with re g a rd to 2 main

questions for Venice:

1) Sustainable tourism in Venice

2) Venice as a multicultural city (this

is linked to a photographic contest,

in which pictures on the subject are

voted for on the Pandora site)

Participants were asked to illustrate

the project and animate the debate.

Then the discussion was launched

online in the Pandora forum and the

g roup went live again after 1 week

to synthesise and elaborate organic

p roposals to build the ideal city.

Now the aim is to fix a periodical

meeting to stimulate participation

f rom the population with comments,

p roposals, visions, scenarios, and to

raise the scale of debate trying to

receive contribution from public

administrators or at least allowing

PA N D O R A’s output to be published

in an official media.

Web site: www.feempandora.it

SABBIA - Integrated

environmental study for

beach management

Funded by FEEM

Co-ordinator: Rosanna Dursi

Researcher: Francesca Palmisani

The SABBIA project aims to develop

and to apply a tool for the

management of peri-urban re s o r t

beaches, in order to identify good

practices, as well as to demonstrate

the relevance of beach management

in Integrated Coastal Zone

Management and sustainable

tourism programmes. The project is

developed in three phases. The first

was characterised by the collection of

the existing data and their

integration through focused surveys.

A questionnaire was distributed to

beach users and decision makers:

results evaluated users’ perc e p t i o n

about beach environment and its

management, as well as collecting

useful information about demands

t o u r i s t ’s. A qualitative SWOT analysis

was carried out in order to draw an

overall territorial asset of the study

a rea. The intermediate phase moved

to the definition of a set of indicators

for the assessment of the state of the

beaches. The indicators pro p o s e d

(115) were adapted re v i e w i n g

l i t e r a t u re both for ICZM and other

themes dealing with beach

management issues and integrated

with new indicators developed for

the study area. The indicators were

classified following the PSIR

framework and divided into two

m a c ro areas (environmental and

socio-economic) and nine themes

(physical, ecological and landscape

f e a t u res, environmental quality,

littoralisation, tourism industry,

service and facilities, accessibility and

m o b i l i t y, governance). Sub-themes

w e re also defined to allow the

assessment of specific issues at

d i ff e rent levels (i.e. biodiversity,

beach morphology, coastal ero s i o n ,

s a f e t y, beach planning). Particular

attention was given to the indicators

re g a rding multisectorial issues, such

as those related to littoralisation.

F i n a l l y, some indicators were

identified taking into account the

s u r v e y ’s results (i.e. people’s

a w a reness). Project has re c e n t l y

moved in third phase, where the set

of indicators and the sub-themes are

used for the formulation of a

quantitative SWOT model, where

s t rengths and weaknesses are

evaluated using quantitative

indicators and risks are assessed and

quantified through quantitative

matrixes. For each sub-theme,

s t rengths and weaknesses are

evaluated using the appro p r i a t e

indicators, which are quantified

t h rough the definition of classes and

the attribution of a quantitative score

for each class. A weight factor is

associated to each indicator and sub-

theme in order to obtain an overall

beach score. Thus allows to identified

opportunities, aiming at re d u c e

e n v i ronmental impacts re c o rded in

the threats evaluation or pro t e c t ,

enhance qualities re c o rded in

s t rengths evaluation and evaluate the

e ffect of policies through a numerical

simulation obtained applying

repeatedly the quantitati ve

assessment. The model is under

construction and will be tested to a

“cell” of beach individuated as the

model application unit. Forthcoming

activities of the project are:

- Closing research activities related

to the third phase (March 2005).

- Dissemination of results through

publications and confere n c e s

( I n t e rnational Conference on Coastal

Conservation and Management in

the Atlantic and Mediterranean –

ICCCM’05, 17 – 20 April 2005,

Tavira).

- Exchange of expertises and

experiences in order to promote a

common approach on beach

management in the Mediterranean.

Publications

• Fabiano M., Camarsa G., Dursi R.,

Ivaldi R., Marin V. and F. Palmisani,

Integrated environmental study

f o r b e a c h m a n a g e m e n t : a

methodological approach, FEEM

Working Paper No. 125.2004.

• Marin V., Dursi R., Ivaldi R.,

Palmisani F. and M. Fabiano, Users’

P e rception Analysis in Ligurian

Beaches (Italy). In: A. Micallef and A.

Vassallo (ed.) 2004, Proceedings of

the First International Conference

on the Management of Coastal

R e c reational Resources ~ Beaches, Ya c h t

Marinas and Coastal Ecotourism, 20

– 23 October 2004, Malta, Euro -

Mediterranean Centre on Insular

Coastal Dynamics; Foundation for

I n t e rnational Studies, Valletta, Malta.

pp. 384.

• Ivaldi R., Dursi R., Marin V. ,

Palmisani F. & Fabiano M., Indicators

for beach assessment: a multisectorial

a p p roach. In: “Delivery Sustainable

Coasts: Connecting Science and

Policy”, Proceedings Littoral 2004, 1,

pp. 271 – 272.

Seminars and conferences

• May 21-22, Beijing, China.

Steering Committee meeting of the

Sino-Italian Cooperation Pro g r a m m e

for Environmental Protection. G.

Santini partcipated to meeting.

• June 26-28 Montpellier, France.

ISIIMM Steering and Scientific

Committee. C. Giupponi pre s e n t e d

the preliminary version of the Italian

Case Study in the context of the

ISIIMM pro j e c t .

• June 14-17, Osnabrueck, Germany.

“Complexity and integrated re s o u rc e s

management” Congress. Jacobo

Féas participated to the event.

• June 15-17, Bruxelles, Belgium.

EC MEDA WATER Projects meeting.

R . Ca me ra p re sen te d t he

preliminary version of the Italian

Case Study in the context of the

ISIIMM project.

• July 8-9 2004, Genoa. Intern a t i o n a l

C o n f e rence on the Marine and

Coastal Environment in the Euro -

Mediterranean are a .

• July 20- 21 Venice, Italy. Seminar

on participatory techniques held by

Dr Matt Hare (SEECON Deutschland

GmbH) and organised at FEEM

p remises. R. Camera presented the

preliminary version of the Italian

Case Study in the context of the

ISIIMM project.

• September 11-13, Hammamet,

Tunisia. SMART project, 4th Board

meeting. G. Gambarelli participated

to the event.

• September 11-14, Svanhovd,

N o r w a y. TRANSCAT mid-term pro j e c t

meeting. C. Giupponi and S. Bertolin

participated to the event.

• September 13 –15, Venice, Italy.

ISIIMM Coherence group meeting

held at FEEM premises. G. Santini

was involved in the meeting.

• September 20-22, Aberd e e n ,

Scotland. Littoral 2004 - Seventh

I n t e rnational Conference “Delivery

Sustainable Coasts: Connecting

Science and Policy” (EUCC).

• September 21-28 , Venice, Italy:

“Partecipazione on line e il modello

Pandora” organized by Feem in the

p rogram Confini Culture Factory. A

p resentation of PANDORA Pro j e c t

f rom Lorena Rocca, Livio Chiarullo,

M a rco Scurati.

• October 10-12, Lisbon, Portugal.

NOSTRUM-DSS Kick-off meeting. C.

Giupponi presented the overall

s t r u c t u re of NOSTRUM-DSS pro j e c t .

R. Camera, G. Santini and A. Sgobbi

w e re involved in the meeting.

• October 14-16, Treviso, Italy.

ISIIMM Special Scientific Committee

meeting held at Land Reclamation

B o a rd Destra Piave pre m i s e s .

C.Giupponi was involved in this

e v e n t .

• October 15th, Abano Terme (PD),

I t a l y. “La grande trasformazione: il

Veneto tra Tradizione e Innovazione”

(14-17 October) organized by AIIG.

A presentation of PANDORA Pro j e c t

f rom Livio Chiarullo.

• October 20-23, Malta. First

I n t e rnational Conference on the

Management of Coastal Recre a t i o n a l

R e s o u rces ~ Beaches, Yacht Marinas

and Coastal Ecotourism.

• October 26 Venice, Italy “ I forum

on line e la multiculturalità”

organized by Feem in the pro g r a m

Confini Culture Factory.

• October 26-27 Rennes, France.

Carlo Giupponi, coordinator of

F E E M ’s re s e a rch programme on

Natural Resources Management, is

the editor of the forthcoming

Special Issue of “Enviro n m e n t a l

Modelling & Software”, Volume 20

Number 2, 2005 devoted to

“Policies and Tools for Sustainable

Water Management in the

E u ropean Union”. This Special Issue

collects eight papers, the first one

a u t h o red by C. Giupponi and

R.A. Letcher, focused on the

management of water re s o u rc e s

and on the complex interactions

between social, economic and

e n v i ronmental systems that sustainable

water management involves.

CONTENTS

Volume 20 Number 2 2005

SPECIAL ISSUE

Policies and Tools for Sustainable

Water Management in the

E u ropean Union

I TAES third project meeting. C.

Giupponi was involved in the event.

• November 8-9, Prague, Chezch

Republic. TRANSCAT project board

meeting. C.Giupponi and J. Mysiak

participated to the event.

• November 16-20, Genoa. ECO-

IMAGINE Conference “COASTA L

GOVERNANCE, PLANNING AND

DESIGN AND GI”.

Researchers

One Marie Curie Fellowship, Anna

Lasut joined the NRM re s e a rc h

p rogramme on October 2004 within

the ENVIRON programme for a

6-month fellowship, during the

a c a d e m i c year 2004-2005. She has

been enrolled in a PhD study with

the University of Science and

Technology in Krakow (Poland). Her

re s e a rch is focused on the

development of a decision support

tool with the use of a systems

dynamics approach to help to assess

flood insurance policy.

In September 2004 Dora Castiglione

has joined FEEM as a trainee. She is

c u r rently involved in the ISIIMM

p roject. Dora Castiglione graduated

in Law at the University of Catania,

after graduation she did a six-month

period of re s e a rch at the Columbia

University in New York focusing on

regulation on water and waste

t reatment. In 2003 she attended a

Master in Environmental Law at the

Statale University of Milan.

In June 2004 Alessandro Frapiccini

joined the programme thanks to a

t h ree-month FEEM scholarship. In

p a r t i c u l a r, he was involved in the

NOSTRUM-DSS project. Alessandro

Frapiccini graduated in Geography at

La Sapienza University in Rome with

a t hesi s on water re s o u rc e s

management. More o v e r, in 2003 he

attended a specialization course on

assessment and management of the

e n v i ronment at Bicocca University in

Milan and he gained knowledge on

Territorial Information Systems

In October 2004 a new re s e a rc h e r,

Jacopo Crimi, has joined FEEM and is

c u r rently involved in the NOSTRUM

p roject. Jacopo Crimi graduated in

E n v i ronmental Sciences at the

University of Milan with a thesis in

Operative Research and Resourc e s

Planning. Before joining FEEM he

worked for the Italian Center for

River Restoration, a non pro f i t

organisation focused on sustainable

managment of water stre a m s .

F rom the second half of this curre n t

y e a r, the NRM Research Pro g r a m m e

has introduced a new pro f e s s i o n a l

role, the Programme Manager, who

is responsible for the management

and operational aspects of the

re s e a rch programme in support to

the Programme Coord i n a t o r. This

role is carried out by Guido Santini,

who also contributes to carry out

re s e a rches and development pro j e c t s

and in particular in those located in

developing countries.

This re s e a rch programme intends to

p rovide analysis and support for

European policy makers in the

transition towards a knowledge-

based economy, as envisaged by the

Lisbon Council. Individual pro j e c t s

a d d ress the relationship between

E u ropean diversity, economic gro w t h

and innovation; the institutional

organisations governing re s e a rch and

development; the impact and

e ffectiveness of diff e rent education

systems; the relationship between

the creation of human capital and

economic growt h; and the

i mp l i ca t io ns of k now le dge

codification and Information and

Communication Technologies (ICT)

for growth and innovation at the

local vs. global level. New databases

have been constructed to support

re s e a rch and policy analysis. The

databases include information on

firms and their R&D activities, training

and formation of human capital,

diversity and growth at the local level.

While carrying out the final

year of the ENGIME network, the

p rogramme has started working on

two new projects launched in early

2004 under the FP6 framework:

PICTURE (Pro-active management of

the Impact of Cultural Tourism upon

Urban Resources and Economies)

which deals with cultural tourism in

small and medium cities, and PRIME

(Policies for re s e a rch and innovation

in the move towards the ERA) on

re s e a rch and technologies policies.

The pro gramm e i s cur re n t l y

negotiating two new projects under

FP6. The first one is the Network of

Excellence on cultural diversity and

sustainability (SUS.DIV - Sustainable

Development in a Diverse Wo r l d ) .

The new Network of Excellence will

bring together 32 re s e a rch institutes

f rom diff e rent disciplines from all

a round Europe for the next 5 years.

Second, re s e a rch on cultural diversity

and related topics is complemented

by the EURODIV project on “Cultural

Diversity in Europe: A Series of

C o n f e rences”. EURODIV devises a

series of five sequential Confere n c e s

on the understanding of cultural

diversity in Europe, the ways of

dealing with diversity and its

dynamics in the globalisation era.

ENGIME - Eco n o m i c

G rowth and Innovation in

M u l t i c u l t u ra l

E n v i ro n m e n t s

Funded by the European

Commission, DG Research,

Improving Human Potential and the

Socio-Economic Knowledge Base,

2001-2004

Co-ordinator: Dino Pinelli

Researchers: Elena Bellini,

Gianmarco I.P. Ottaviano

ENGIME is co-ordinated by FEEM

and involves other eight European

partners. It has officially started on

1st July 2001 and will end in

December 2004. ENGIME intends

to provide to European researchers

an interdisciplinary forum that

studies the complex relationships

between economic gro w t h ,

innovation and cultural diversity.

The EU can be thought of as the

biggest laboratory of interc u l t u r a l

collaboration of today’s world. The

p rocess of enlargement and the

immigration from outside EU will

further increase the degree of

d i v e r s i t y, while EU institutions are

being formed and pro f o u n d

structural changes, such as the

p rocess of globalisation and the

raising of a knowledge-based

e c o n o m y, are taking place.

Cities offer a natural laboratory for

analysing diversity at work. Cities are

the places where costs (for example

in the form of cultural and racial

conflicts) and benefits of diversity

(for example in the form of cro s s -

cultural knowledge spillovers that

foster the processes of innovation

and assign to cities a central role in

the process of economic gro w t h )

show up. Using cities as laboratories,

six consequential workshops will be

organised by the partners over thre e

years to address relevant issues.

The sequencing of workshops

(WKS henceforth) starts by

mapping EU cultural and socio-

economic diversity and analysing

cross-cultural communication, and

then studies in detail the key

mechan i sms (t ru st , conf l i c ts ,

knowledge spillovers) that link

diversity with economic growth and

innovation. In particular, WKS1

studied where Europe and its cities

stand in terms of cultural diversity

and how this is reflected in

social-economic structure s .

WKS2 addressed the form of

communication, with attention to

Knowledge, Technology and Human Capital

Gianmarco I.P. Ottaviano

Research Programme Co-ordinator

the economic incentives and

disincentives to communicate.

WKS3 looked at the costs of

b reaking communication down

in terms of social exclusion.

WKS4 studied the models of

re p resentation and govern a n c e ,

and how they can pro m o t e

communication. WKS5 looked

a t t r u s t a n d s o c i a l c a p i t a l

(communication is restored), their

i n t e r relationships and how they

affect economic growth.

We have now organised the final

event (WKS6), which confronts the

results of the 5 previous workshops

with highly qualified academics and

policy-makers at diff e rent levels. The

final event was held in Rome on 18-

19 November 2004. It was organised

a round the four following topics:

theorising cultural diversity and

cultural diversity policy; cities diversity

and growth; visible and invisible

boundaries; hierarchies and

participatory democracy.

All the information (workshop

p rogrammes, papers, reports, calls

for papers) is available on the pro j e c t

web site: www. f e e m . i t \ e n g i m e .

PRIME - Policies fo r

R e s e a rch and Innovation in

the Move tow a rds the ERA

Funded by the European

Commission, DG Research, Citizens

and Governance in the Knowledge-

based Society, 2004-2008

Co-ordinator: Dino Pinelli

Researchers: Elena Bellini,

Gianmarco I.P. Ottaviano

PRIME stands for Policies for

R e s e a rch and Innovation in the

Move towards the Euro p e a n

R e s e a rch Area. These policies are

facing major transformations. The

first relates to the changing

dynamics of knowledge pro d u c t i o n ,

with the new search regime of the

new leading (NBIC) sciences, and

with the re s e a rch intensification of

many industries and services. The

second is linked to the changing

relationship between science and

s o c i e t y, with the burgeoning of

c o n t roversies and public debates

about priorities and re s e a rc h

practices (such as GM field trials).

The third concerns the gro w i n g

importance of both regional and

E u ropean public authorities. This

means that one can no longer simply

equate public intervention with

national pol icy, and that we

must fundamentally reassess our

accumulated knowledge on R&I

policies. By establishing a Network of

Excellence, PRIME aims to foster the

emergence of a lasting structure that

may integrate the efforts of leading

re s e a rchers in the field. Although

E u rope possesses outstanding

capabilities, the field remains in fact

fragmented in terms of both its

organisation and production of

knowledge (constrained, for

example, by the limited extent to

which truly comparable databases

exist on policy-relevant issues).

The network brings together

over 200 re s e a rchers (half with

established international re p u t a t i o n s )

and 150 PhD students, from four

main disciplines, over 40 institutions

and 16 countries. The Joint

P rogramme of Activities balances

t h ree re s e a rch actions dedicated to

p roducing world class re s e a rch and

t h ree structural actions aimed at

achieving lasting effects in terms of

structuring the field at the Euro p e a n

level, those structural actions

focusing on database and indicators

issues, training, and interactions with

the full range of stakeholders. The

t h ree re s e a rch actions focus on: new

rationales for policy intervention;

multi -actor spaces and the

g o v e rnance of re s e a rch and

innovation in Europe; and dynamics

of Public Sector re s e a rc h .

Every year, small projects are selected

within this framework. In the first

year FEEM will contribute to the

establishment of a University

Observatory at the European level.

The network is coordinated by the

Ecole de Mines in Paris.

P I CTURE - Pro - a c t i ve

management of the

Impact of Cultura l

Tourism upon Urban

R e s o u rces and Eco n o m i e s

Funded by the European

Commission, DG Research,

Scientific Support to Policies, 2004-

2007

Co-ordinator: Dino Pinelli

Researchers: Elena Bellini,

Gianmarco I.P. Ottaviano, William

Malizia, Barbara del Corpo

PICTURE aims to develop a strategic

urban governance framework for

the sustainable management of

cultural tourism within small and

medium-sized European cities. This

framework will help to establish,

evaluate and benchmark integrated

tourism policies at the local level with

a view to maximising the benefits of

tourism upon the conservation and

enhancement of built heritage

diversity and urban quality of life.

To accomplish the above goal, the

following scientific objectives will be

p u r s u e d :

• Evaluate the dynamics of the

e ffects of tourism, at large, upon the

social, environmental and economic

wealth of European small and

medium-sized cities, considering the

built heritage diversity and urban

quality of life characterising such

e n v i ro n m e n t s ;

• Identify and benchmark innovative

urban governance strategies for

sustainable development of cultural

tourism within small and medium-

sized cities;

• P rovide local governments and

decision makers with tools to

facilitate the assessment of the

impact of tourism in a locality, with

particular re g a rd to built heritage

issues and relevant quality of life

parameters, in order to improve their

strategies, plans, and policies;

• Capitalise on and disseminate

existing knowledge and good

practices of sustainable cultural

tourism in Europe, focusing upon the

e ffects of the sector upon the

conservation and enhancement of

built heritage diversity and urban

quality of life.

FEEM is in charge of the analysis of

the impacts of cultural tourism upon

urban economies (as an important

part of the impact on the quality of

l i f e ) .

The first phase of the project has

been recently completed, with the

compilation of a Multi-dimensional

matrix gathering of impacts,

methods and policy measures. The

matrix was compiled following an

extensive multi-disciplinary survey

of l i te rat ure and a se r ies o f

q u e s t i o n n a i res to local authorities.

PICTURE is co-ordinated by the

L a b o r a t o i re d’Études Méthodologiques

A rchitecturales (LEMA), at the Université

of Liège.

PICTURE Website: http://www. p i c t u re -

p ro j e c t . c o m /

E DWIN - Education and

Wage Inequality in Europe

Funded by the European

Commission, DG Research,

Improving Human Potential and

Socio-Economic Knowledge Base,

2002-2005

Co-ordinator: Claudio Lucifora

R e s e a rc h e rs: Fe d e r i co Biagi, Giorg i o

B r u n e l lo, Simona Comi, Elisa Sca r p a

E D W I N ’s overall aim is to understand

the relationship between education

and wage inequality. This re s e a rc h

p roject explores the structure and

change in wage inequality within

and across European countries using

comparable data. It attempts to

explain the observed patterns and

t rends within and between cohorts

in terms of the interplay between

educational expansion and wage

inequalities, and educational systems

and labour market institutions. The

final aim is to derive the practical

implications of our analysis for

economic and social policy.

The rationale for the re s e a rc h

activities is twofold. First, in re c e n t

years the interplay between

education and inequality has taken

on great importance. In particular,

wide interest concentrates on the

redistributional motives embedded in

educational subsidies. On the one

hand, the literature focusing on the

role of human capital in fostering

technological development tends to

s t ress the harmful impact of income

redistribution policies on the

adoption of new technology and

thus on economic growth. On the

other hand, the re d i s t r i b u t i o n

l i t e r a t u re draws attention on the

positive gro w t h - related extern a l i t i e s

that emerge from education-driven

redistributive policies, extern a l i t i e s

that provide a rationale for

subsidisation also of higher (tertiary)

education. Irrespective of the

a p p roach adopted, the general

conclusion is that educational

policies can enhance pro d u c t i v i t y

and ou tp u t growt h, w h i l e

simultaneously improving the

distribution of income and welfare in

society (i.e., educational subsidies

can be justified on both equity and

e fficiency grounds).

Second, the existing literature on

wage inequalities is fairly extensive,

but the ways these two phenomena

and their various components

factually interact are still largely

u n e x p l o red. The dominant view

leading European governments as

well as EU policies is that educational

expansion is an important policy tool

when trying to reverse or, at least,

slow down the rise in inequality

observed in a growing number of

E u ropean countries. At the same

time, evidence from several countries

reveals that aggregate wage and

income inequality is due not only to

d i ff e rences between educational

g roups but, to a very considerable

extent, arises from diff e rences within

these gro u p s .

Claudio Lucifora presented a

draft paper on cohort effects on

unemployment (co-authored with

Federico Biagi and Elisa Scarpa) at

the EDWIN project meeting held in

Madeira on 3 October 2004. The

paper analyses the effects of

demographic and educational

changes on relative unemployment

rates in European countries, using a

panel of European countries for the

1980-2000 period, disaggregated by

cohort, gender and education.

Results show that demographic and

educational shocks are qualitatively

d i ff e rent for young (adult) workers as

well as for more (less) educated

people. While adult workers and

m o re educated individuals usually

experience lower unemployment

rates, changes in the population age

s t r u c t u re (“baby bust”) appear to be

positively related to young workers’

unemployment rates. Conversely,

changes in the skill structure

(“educational boom”), even when

c o n t rolling for skill-biased technological

change, reduce the unemployment

rate of the more educated. Labour

market institutions also influence

unemployment rates in diff e re n t

ways. Unemployment benefits are

found to have a positive impact on

unemployment, while bargaining co-

o rdination and employment pro t e c t i o n

reduce it.

Giorgio Brunello and Charlotte Lauer

(the German partner) drafted a

paper on the effects of cohort size

on real earnings. They find that

cohort size has a negative and

statistically significant effect on the

e a rnings of the older cohorts (aged

between 35 and 54) but no

statistically significant effect on the

e a rnings of younger cohorts (aged

20 to 34). The negative effect of

cohort size on earnings is completely

driven by Southern Euro p e a n

countries. While the share of

individuals aged 20 to 34 in the

population has declined in the EU11

by 10.20 percent between 1991 and

2001, the share of individuals aged

35 to 54 has increased by 9.32

p e rcent. The estimates suggest that,

as a consequence of these significant

demographic changes, the re a l

e a rnings of the younger cohorts

have increased on average by a tiny

0.06 percent, while the earnings of

the older cohorts have declined by

0.93 percent, a modest variation.

The second and final policy-oriented

workshop will be held in Brussels in

late April, 2005. Its main aim is to

p resent a series of compre h e n s i v e

policy-oriented papers that re v i e w

the current state of the art, the main

contributions of EDWIN, and a

discussion of policy implications.

The project is co-ordinated by the

R e s e a rch Institute of the Finnish

Economy ETLA.

The project web site is http://

w w w. e t l a . f i / e d w i n / .

MAEM/MEMA - Master in

E u ro - M e d i te r ra n e a n

A f fa i rs

Funded by the European

Commission, Interreg III B

MEDOCC Programme, 2002-2004

Co-ordinator: Imco Brouwer

Researchers: Tina Cuffari, Chiara

Del Sordo, Maria Lisa Masseti,

Valeria Papponetti, Dino Pinelli,

Riccardo Tarquini

The Project aims at establishing a

Consortium of Universities and

Academic Institutions from the

MEDOCC Countries and other

Mediterranean and Euro p e a n

Countries, in order to create long-

term relations for co-operation

between the Consortium of

Universities and Institutions and the

Regional Governments involved. This

Consortium is set up with the

objective to identify the pro p e r

a p p roach to co-operation when

p roducing re s e a rch applied to

administration. The focus is on

i n t e r regional and international co-

operation, particularly on the issues

of the Interreg III B MEDOCC

P rogramme and the European Spatial

Development Perspectives (ESDP,

2001) of the European Commission,

and of the Process of Barcelona.

The primary objective of the

Consortium is to define a

Programme of Master studies in

Euro-Mediterranean Affairs focused

on the development of knowledge

and skills on Euro-Mediterranean

issues. This is done with the

support of both traditional face-to-

face and up-to-date distance

l e a rning methods. A further

objective of the Project is to

develop public and private

associations with institutions (both

private and public, profit and

n o n - p rofit, governmental, not

g o v e rnmental and intergovern m e n t a l )

in order to stimulate their support

to the initiative through the

assignment of fellowships and

stages to the Master students. The

establishment of such associations

is crucial to help identify the

educational profile of the Master

and guarantee that the Master

students have the expertise and

professional skills required by the

job market both in the public and

private sector of Mediterranean

and non Mediterranean Countries.

This ambitious project is co-

o rdinated by the Regione Toscana -

Dipartimento delle Politiche

Formative e dei Beni Culturali, and

involves 37 administrative partners

and academic institutions. FEEM is in

charge of the overall scientific and

administrative management of the

project (P roject Management Unit:

PMU), supporting the Regione

Toscana in its activities of co-

o rdinator of the pro j e c t .

The project is financially supported

by the In terreg I II B MEDOCC

P rogramme an d the loca l

administrations involved.

The project activities are being

implemented according to the

scheduled agenda and the project is

a p p roaching the conclusion of the

p reparatory phase in autumn 2004.

The five Working Groups are

carrying out and have nearly

completed their activities on the

following thematic issues: Academic

A ffairs (definition of the Master

C V, courses, disciplines); Te a c h i n g

Methodology and Instruments

(distance learning opportunities);

Administrative Affairs (juridical

status of the consortium); Sponsorship;

Co-operation among the Consortium

of Universities and the Regional

Governments.

According to the agenda, after the

second meeting of the Directive

Committee (Cagliari, 14-15 September

2003), intermediate meetings of

the five Expert Groups have been

organised to discuss the intermediate

results of the work carried out. A third

meeting of the Directive Committee

took place in Rome, February 29 -

M a rch 3, 2004, whereas the second

meeting of the Pilot Committee

was held on April 29-30, 2004.

The Directive and Pilot Committees

f o reseen in summer 2004 have

a p p roved the final outputs of the

p roject.

The final event was held at the end

of October with the signature of the

Convention for the establishment of

the Consortium of institutions

supporting the Master.

Publications

• “The economic value of cultural

diversity: Evidence from US cities”

(with Giovanni Peri), CEPR,

Discussion Paper No. 4233, London

(UK) 2004, and FEEM Wo r k i n g

Paper No.34.2004.

• “Cities and cultures” (with

Giovanni Peri), CEPR, Discussion

Paper No. 4438, London (UK) 2004

and FEEM Working Paper

No.92.2004.

• Valeria Papponetti and Dino

Pinelli (2004), “Scientific Advice to

Public Policy-making”, FEEM

Working Paper No.112.2004.

• Dino Pinelli (2004), “Diversità,

Innovazione e Crescita”, Equilibri

No. 2.2004.

• Valeria Papponetti and Dino

Pinelli (2004), “Scienza e società

nella decisione politica”, Equilibri

No. 3.2004.

Seminars and conferences

• Elisa Scarpa gave a seminar on her

paper on “Relative Unemployment,

Skill Gaps and Cohort Effects in

E u rope: Economic Factors and Labour

Market Institutions” on 6 July 2004,

at FEEM Milan.

• G i a n m a rco I.P. Ottaviano pre s e n t e d

the paper on “The Economic Value

of Cultural Diversity: Evidence from

US Cities”, at the 2004 Annual

Meeting of the Society for

Economic Dynamics held in

Florence (Italy) on 1-3 July 2004.

Researchers

The trainees Silvia De Carolis, Paolo

F r a i re and Sander Van Kooten have

left the programme in the early

s u m m e r. Barbara del Corpo started

to collaborate from Turin on the

PICTURE pro j e c t .

The main activity started by this

p rogramme in this period has been

the NEEDS project, an EC Integrated

P roject. This Integrated Project will

continue to develop the work on the

e x t e rnal costs of energy use. The

s t ream that FEEM will lead on is the

one dealing with the extern a l i t i e s

arising from the extraction and

transport of energy. In particular it

will (a) deepen the methodology and

the assessment of those activities

that have not been adequately

analysed in the past, like oil and gas

extraction and transport, electricity

transport, transport of hydro g e n

etc.; and (b) make a re a l i s t i c

quantitative assessment of

e x t e rnalities associated with the

u p s t ream activities (extraction and

transport) of the fuel chain. Of

particular interest will be the

valuation of accidents involving

tanker vessels, the transport of oil

and gas over long distances and an

assessment of the risk re d u c t i o n

potential from new technology and

re g u l a t i o n .

The methodology that will be

used is the same as in ExternE: the

c a reful modelling of the impact

pathway by which emissions fro m

an ac ti vi t y a re di spersed in

the ambient environment, an

assessment of these impacts and

their valuation in quantitative

terms. The project, coordinated by

ISIS, Italy, involves circa 80

participating institutions and

started in summer 2004.

F rom the work carried out in the last

few months, a Specific Support

Action on renewable re s o u rces was

submitted to the EC. This project --

CREED (Current and Renewable

Energy Resources in Developing

Countries) seeks to understand the

p a t t e rn of use of renewable energy

in developing countries, by (a)

evaluating the economic potential

for the use of renewable energy in

the future (to 2030); (b) assessing the

possibility for EU industries to

contribute to the realisation of this

potential and (c) offering practical

advice on how the potential for

renewable energy can be realised in

developing countries. The pro j e c t

was evaluated and passed the

t h reshold for funding, and we are

now waiting to hear when and if

funding will actually be provided.

FEEM is submitting a new pro p o s a l

for a Coordinated Action (CA) to the

E u ropean Commission. The pro j e c t

(CASES - Coordination Action on

Sustainable Energy Systems) is a

major effort to take the re s e a rch that

has been done on the costs of

energy and use it to provide a sound

comparative cost basis for all EU

countries, as well as selected

countries outside the EU (China,

India, Brazil). It is fair to say that more

e ffort has been devoted in re c e n t

years to the estimation of the

e x t e rnal costs of energy (see e.g. the

results of projects like Extern E ,

NewExt, ExternE-Pol, DIEM, ECOSIT,

INDES; and the ongoing projects like

MAXIMA). Recently more attention

is being paid to the examination of

both the private and external costs in

one framework (e.g. the NEEDS

p roject). For policy-makers, however,

both sets of numbers are important

and they are aware that the dividing

line between the two is not always

clear cut. More o v e r, both costs are

dynamic – they are changing with

time, as technologies develop,

knowledge about impacts of energy

use on the environment incre a s e s

and individual pre f e rences for certain

e n v i ronmental and other values

change. Hence a major part of this

p roject will have to build on the

integration of private and

external costs within one dynamic

framework. This will re q u i re active

collaboration between ‘public’ sector

energy specialists and firms that are

involved in the generation and use of

energy –something that has been a

weakness of previous projects in this

a re a .

The other ma jor gap in the

comparative cost assessment lies

a c ross countries. The ‘old’ EU gro u p

has, more or less, agreed ranges of

external costs for most energy

s o u rces. But these values do not

always agree with those used in other

OECD countries; and they do not

extend to the new and aspiring

member states. Nor are they dire c t l y

relevant to developing countries

w h e re energy use has significant

e x t e rnal costs. Of course work has

been done in these other countries

on external costs but a full

assessment of the comparative state

of knowledge and the gaps that need

to be filled remains to be carried out.

Perhaps the area of external cost

that is least well and systematically

International Energy Markets

Anil Markandya

Research Programme Co-ordinator

covered is that related to energy

security. Even within one country

estimates of the energy security

costs of different types of energy

remain somewhat elusive. A

common methodology has not

been applied to derive estimates for

a range of countries. Yet this is a

major area of policy debate and

major decisions are being taken to

increase energy security and reduce

dependence on foreign sourc e s .

The project will, therefore, without

undertaking primary re s e a rch in

terms of data collection, devote

significant re s o u rces in applying

existing models across a range of

countries to arrive at a common set

of estimates of the costs of energy

insecurity, as defined by a common

set of parameters.

These data will be combined with

p rojections of energy demand by

energy source and country to

conduct a sveirs of policy analyses,

which form the second major

objective of the CA. The policy

analysis part will use the comparative

cost data in a concerted effort to

a d d ress a set of clearly defined goals.

The major areas of investigation will

b e :

• Comparative assessment of

investment and operational costs of

d i ff e rent energy options taking

account of only private costs and

taking account of private plus

e x t e rnal costs. This assessment will

be dynamic and will provide the

implications of diff e rent levels of

i n t e rnalisation on the investment

decisions and on key social

i n d i c a t o r s .

• Impact of the use of diff e re n t

methods of decision-making on the

selection of projects – e.g. cost-

benefit analysis with ‘extern a l i t y

adders’ versus multi-criteria decision

analysis tools.

• Im pli ca t i ons of d i f f e re n t

taxes/charges on energy and on

emissions on (a) the degree of

i n t e rnalisation and (b ) the

comparative cost comparisons, now

and over time.

• Implications of diff e rent policies

to reduce energy insecurity on (a) the

d e g ree to which energy security

c o n c e rns are internalised and (b) the

comparative costs of diff e rent energy

s o u rces, now and over time.

• Comparison of the eff e c t i v e n e s s

of emissions trading instruments for

i n t e rnalising externalities versus the

use of externality-based taxes.

• C omp ari so n of d i f f e re n t

instruments to promote re n e w a b l e

energy sources, in terms of the

d e g ree to which they internalise the

positive externalities associated with

renewable energy use.

In addition to looking at how much

of the external costs each policy

option internalises, the project will

look at a broad set of variables

of interest. In addition to the

e n v i ronmental impact it will ask the

question, what impact will the policy

have on the use of diff e rent types of

energy? What social and fiscal

implications will such measures have,

especially on poor and vulnerable

g roups? In turn, the question of how

the instrument can be modified to

a d d ress the externality question,

while also contributing to these

other goals will be posed and

a n s w e red.

The third part of the CA will be

that devoted to dissemination. As

stated at the outset, there is a

t remendous amount of good and

useful material out there. Once it

has been evaluated and bro u g h t

in to a coh erent f ramework,

the results o f the diff e re n t

components of the project will be

of great interest to the energy

sector producers and users, as

well as the policy-making

c o m m u n i t y. Dissemination will

consist of books and articles

published in the peer re v i e w e d

l i t e r a t u re (more policy –oriented

rather than purely scientific);

seminars and presentation of key

results to policy makers in each

country covered by the CA as well

as to the EC; and by pre s e n t a t i o n s

and open discussions with energy

p roducers and user organisations.

The other areas of activity of the

p rogramme have consisted of :

i) initiating a study of the links

between climate policy in Russia and

E u ropean energy markets, as part of

the Italy-USA Cooperation on

Science and Technology of Climate

Change pro j e c t ;

ii) re s e a rch on energy security and

energy markets, which was initiated

under the INDES project and which is

continuing to study the issues, partly

in the context of climate change

discussions. Results from this were

p resented at the University of Ve n i c e -

MIT seminar on Broadening Climate

Discussions: The Linkage of Climate

Change to Other Policy Areas. The

Paper was titled, Energy Security.

iii) re s e a rch on the dynamics of

energy efficiency in transition

economies and convergence toward

the EU average.

NEEDS - New Energ y

E x te r n a l i t i e s

D eve lopments fo r

S u sta i n a b i l i t y

Funded by the European

Commission, FP6, Sustainable

Energy Systems, 2004-2008

Co-ordinator: Anyl Markandya

Researcher: Andrea Bigano

This Integrated Project will continue

to develop the work on the extern a l

costs of energy use. The stream that

FEEM will lead on is the one dealing

with the externalities arising from the

extraction and transport of energy. In

particular it will (a) deepen the

methodology and the assessment of

those activities that have not been

adequately analysed in the past, like

oil and gas extraction and transport,

electricity transport, transport of

h y d rogen etc.; and (b) make a

realistic quantitative assessment of

e x t e rnalities associated with the

u p s t ream activities (extraction and

transport) of the fuel chain. Of

particular interest will be the valuation

of accidents involving tanker vessels,

the transport of oil and gas over long

distances and an assessment of the

risk reduction potential from new

technology and re g u l a t i o n .

The methodology that will be used is

the same as in ExternE: the care f u l

modelling of the impact pathway by

which emissions from an activity

a re dispersed in the ambient

e n v i ronment, an assessment of these

impacts and their valuation in

quantitative terms. The pro j e c t ,

coordinated by ISIS, Italy, involves

circa 80 participating institutions

and started in summer 2004.

Volatility in Oil and

P roduct Financial Returns

Funded by FEEM

Co-ordinators: Alessandro Lanza

and Matteo Manera

Researchers: Alessandro Cologni,

Michael McAleer, Marianna Russo

Substantial re s e a rch has been

undertaken on spot, forward and

futures markets of both physical

and financial commodities. Much

of the research on analysing the

connection between spot, forward

and futures pr i ces , and the i r

a s so c ia t e d re t u r ns , h as

concentrated on the unbiasedness

or efficient market hypothesis and,

when such prices are non-

s t a t i o n a r y, on co-integration

among these variables. Hypotheses

re g a rding efficient markets are

important for understanding

optimal decision making in terms

of hedging and speculation. They

are also crucial for making financial

decisions about the optimal

allocation of portfolios of assets in

terms of their multivariate returns

and their associated risks. However,

little or no re s e a rch has been

undertaken on analysing the

volatilities (or risks) associated with

these portfolios of returns at the

multivariate level. Shocks to

re t u rns can be decomposed

into predictable and unpredictable

components. There are two

predictable components in these

shocks to returns, namely the serial

c o r relation in shocks to the

conditional mean and the volatility

in the conditional variance. These

volatilities can vary over time, either

c o n d i t i o n a l l y, as in GARCH-type

models, or randomly, as in

St o ch as t i c Vo la t i l i t y ( S V )

models. SV models are typically

computationally intensive even at

the univariate level. Extensions to

multivariate SV models are

presently at a relatively early stage

of development. On the other

hand, univariate and multivariate

GARCH models have become

widely established in theore t i c a l

and empirical finance and financial

econometrics. The structural and

statistical properties have been fully

developed, and the computational

re q u i rements are not generally

b u rdensome, except in special

c i rcumstances. In the case of

modelling multivariate re t u rn s ,

such as the returns on the forward

and futures prices of diff e re n t

maturities in the market for WTI oil,

the shocks to returns not only have

dynamic interdependence in risks,

but also in the conditional

correlations. This is an extension of

the constant (or static) conditional

correlation approach to analysing

multivariate risks associated with

portfolios of assets. This project

estimates the dynamic conditional

correlations in the returns on oils

and products spot, forward and

f u t u res prices, using re c e n t l y

developed multivariate conditional

volatility models. The dynamic

correlations enable a determination

of whether the forward and various

futures returns are substitutes or

complements, which are crucial for

deciding whether or not to hedge

against unforeseen circumstances.

Price Asymmetries in

International Oil Products

Markets

Funded by FEEM

Co-ordinator: Matteo Manera

This project re-examines the issue of

asymmetries in the transmission of

shocks to crude oil prices onto the

retail price of gasoline. Relative to the

p revious literature, the distinguishing

f e a t u res of the project are: i) use of

updated and comparable data

to carry out an intern a t i o n a l

comparison of gasoline markets; ii)

two-stage modelling of the

transmission of oil price shocks to

gasoline prices (first refinery stage

and second distribution stage), in

o rder to assess possible asymmetries

at either one or both stages; iii) use

of alternative and competing models

to distinguish between asymmetries

that arise from short-run deviations

in input prices and from the speed at

which the gasoline price reverts to its

long-run level. In contrast to several

p revious findings, the re s u l t s

generally point to widespre a d

d i ff e rences in both adjustment

speeds and short-run re s p o n s e s

when input prices rise or fall.

Long-run Models of Oil

S tock Price s

Funded by FEEM

Co-ordinators: Alessandro Lanza

and Matteo Manera

The identification of the forces that

drive oil stock prices is extre m e l y

important given the size of the

Oil&Gas industry and its links with

the energy sector and the

e n v i ronment. In the next decade oil

companies will have to deal with

i n t e rnational policies to contrast

climate change. This issue is likely

to a ffect companies’ share h o l d e r

values. This project focuses on the

long-run financial determinants of

the stock prices of six major oil

companies (Bp, Chevro n - Te x a c o ,

Eni, Exxon-Mobil, Royal Dutch,

Total-Fina-Elf) using multivariate

cointegration techniques and vector

e r ror correction models. Weekly oil

stock prices are analysed together

with the relevant stock market

indexes, exchange rates, spot and

f u t u re oil prices. The empirical re s u l t s

confirm the statistical significance of

the major financial variables in

explaining the long-run dynamics of

oil companies’ stock values.

The Impact of Oil Price

Shocks on Italian Business

C yc le

Funded by FEEM

Co-ordinator: Matteo Manera

Researcher: Alessandro Cologni

The last thirty years have seen a

number of oil price changes. The fact

that these oil price increases pre c e d e d

most of the recessions in the US

added impetus to the re s e a rch in the

field. While a number of studies have

investigated the channels thro u g h

which oil price shocks are transmitted

to economic activity, other authors

have investigated why rising oil prices

appear to delay aggregate economic

activity more than falling oil prices

stimulate it. At last, some economists

pointed at the possibility of a

weakening relationship between oil

price fluctuations and aggre g a t e

economic activity. It is the aim of this

re s e a rch project to evaluate the

impact of oil price shocks on Italian

m a c roeconomic variables since 1980.

In doing so we examine the existence

(or lack thereof) of Granger- c a u s a l

relationships between two measure s

of oil price changes and several Italian

m a c roeconomic variables. As a

second step this project investigates

the role of oil price changes in a

simple SVAR (Structural Ve c t o r

A u t o re g ression) model designed to

detect the impact of diff e rent shocks

to the Italian Business Cycle.

E conometric Models of

Asymmetric Price

Tra n s m i ssion Mechanisms

Funded by FEEM

Co-ordinator: Matteo Manera

Researcher: Giliola Frey

Consumers are generally very

c o n c e rned when retailers decide to

vary the prices of their products as a

consequence of variations of the

wholesales prices. Generally the

analysis of price transmission

asymmetries raises at least thre e

questions: i) if the empirical evidence

in favour of (or against) price

asymmetries is, as one could expect,

not model-invariant, what are the

most popular models used in the

l i t e r a t u re to investigate the input-

output price transmission mechanism?

ii) does the term “price asymmetries”

define a homogeneous concept, or

can alternative types of asymmetries

be identified? iii) would it be possible

to classify the models currently used in

the empirical work in terms of their

ability to describe specific types of

asymmetries? This re s e a rch pro j e c t

answers the above questions by

p resenting a detailed and updated

survey of the existing empirical

l i t e r a t u re .

I n fe re n ce in Asymmetric

E r ror Correction Models

for oil and product price s

Funded by FEEM

Co-ordinator: Matteo Manera

Researcher: Marianna Russo

Monte Carlo simulations indicate

that the asymptotic tests for

asymmetric adjustment in an Error

Correction Model have low power

in rejecting the null of symmetric

adjustment with small sample data.

The limitations of the asymptotic

distribution theory in specific finite

sample situations re q u i re a

c o r rection factor depending on

sample size for improving the

performances of the standard tests.

The aim of this research project is to

illustrate, theoretically justify and

empirically evaluate diff e re n t

c o r rection factors to standard

likelihood-ratio-type test statistics.

Publications

• A. Markandya and D. Rübbelke.

Ancillary Benefits of Climate Policy,

Jahrbücher für Nationalökonomie

und Statistik, 224, 4, 488-503

(2004)

• A. Markandya, Pedroso and

S t remikiene, “Energy Intensity in

Transition Economies: Is There

Convergence To w a rds the EU

Average?” (FEEM DP)

• A. Markandya, A. Golub And S.

P e d roso, Empirical Analysis of

National Income and SO2 Emissions

in Selected European Countries

(FEEM DP)

• D. Dudek, A. Golub, A.

Markandya, E. Strukova, Will the

Kyoto Protocol Cost Too Much and

C reate Unbreakable Barriers for

Economic Gro w t h ?

Seminars and conferences

• June 9-11, XXII MIT Global

Change Forum & 6th FEEM Climate

Policy Workshop, Bro a d e n i n g

Climate Discussions: The Linkage of

Climate Change to Other Policy

A re a s .

Researchers

Giliola Frey joined the FEEM

p rogramme on International Energy

Markets in Milan in May 2004.

Giliola graduated in Statistics and

Economics at the University of Milan-

Bicocca in April 2004.

Since the early 90’s FEEM has been

acting as a pioneer in the field

of companies’ enviro n m e n t a l

management and communication,

through national and international

research projects. In the last few

years, the Research Pro g r a m m e

Corporate Social Responsibility and

Sustainable Management has been

part of a fast and challenging

evolution of both theoretical and

practical approaches towards ethical,

social and environmental issues.

F rom one side, corporate social

responsibility is becoming a core

element in companies govern a n c e :

ethics and sustainability are now

c o n s i d e red as success keys, which can

a s s u re long term development to

business in society and real corporate

citizenship. On the other side, social

responsibility is no longer associated

only to companies behaviors and

performances. Public bodies, non

p rofit organisations and NGOs have

understood the importance of

considering themselves in an ethical

perspective and of analysing their

impact on environment and society,

trying to find their own way toward s

s u s t a i n a b i l i t y. Last but not least,

s tak eho lde rs d i a lo gue a nd

participation are assuming a gro w i n g

role in rethinking decision making

p rocesses, in what re s e a rchers define

a “networking glocal society”.

In this context, the work of the

R e s e a rch Programme is becoming

b roader and deeper. Ethics and

Sustainability have to be analysed in a

national and international perspective,

which involves a growing number of

industrial sectors, economic activities,

p rofit and non profit, public and private

points of view. At the same time, a

deep analysis of instruments, tools and

practices is necessary, in order to define

specific processes for specific needs

and organisations.

The Observatory on Enviro n m e n t a l

and Social Communication gathers,

classifies and performs benchmarking

on environmental, social, sustainability

and CSR reports, published by

companies, organisations and public

authorities. The state-of-the-art and

the major trends of reporting activities

a re evaluated on the basis of detailed

analyses of the huge number of

documents and data, collected in ten

years both at national and

i n t e rnational level. Research focuses

also on intangible assets, in order to

evaluate natural stock and cultural

heritage and to measure the values of

intellectual properties and of

relationships.

The branch is actually involved in an

i n t e rdisciplinary re s e a rch pro j e c t

c o n c e rning the analysis of Corporate

Social Responsibility in the Euro p e a n

Union. This project aims to gain

t h e o retically and empirically based

evidence on the sustainability-

relevant impacts of CSR practices

and instruments, diff e re n t i a t i n g

“rhetoric” from “realities” and

identifying success factors. It will

take into account both the micro -

level of companies and the macro -

level of social, political and economic

e ffects, with focus on a selection of

d i ff e rent economic sectors and policy

fields and with final cro s s - i n s i g h t s .

Ethical codes and codes of conduct

a re studied and proposed from the

point of view of concerted actions

and par t i c ipat i on schemes.

The stakeholders’ analysis and

consultation, connected to the central

issues of Corporate Govern a n c e ,

legitimacy and re p resentation is one

of our main focuses, also in a trans-

national context. As a matter of fact,

in the effort to meet the expectations

of the stakeholders, multi-national

companies often face some ethical

c o n c e rns paving the way to a so-

called moral divide. The gap existing

between We s t e rn enterprises’

business practices and local ethical

s t a n d a rds can result in disruptive

strategies and impacts. The practical

aim of the study is to provide some

suggestions about how to deal with

ethical concerns in diff e rent parts of

the world, underlining the re l e v a n c e

of CSR for global issues and

i n t e g r a t i o n .

RARE – Rhetoric and

realities - Analy s i n g

co r p o ra te social

Responsibility in Euro p e

Funded by the European

Commission, DG Research, Citizens

and Governance in a knowledge

based society

Co-ordinator: Federica Vigan�

Researchers: Daniele Nicolai,

Ludovico Ferraguto

The project aims at improving the

understanding of how Corporate

Social Responsib ili ty can be

Corporate Social Responsibility andSustainable Management

Sabina Ratti

Research Programme Co-ordinator

enhanced in Europe: as societies face

s e v e re challenges to adopt a more

sustainable development, the

contribution of many actors,

including corporate ones, is

demanded. In Europe, a gro w i n g

number of companies is committed

to Corporate Social Responsibility.

With diff e rent instruments and

m e a s u res businesses voluntarily go

beyond legal obligations in the social

and environmental realm. The

E u ropean Union is pre s e n t l y

considering a common CSR strategy:

“CSR public policies may help shape

globalisation in a positive way by

p romoting good company practices

that complement public efforts for

sustainable development… there is a

role for Community action to

facilitate convergence in the

instruments used in the light of the

need to ensure a proper functioning

of the internal market and the

p reservation of a level playing field.”

The project coordinator is the Öko-

Institut/ Institute for Applied Ecology,

while FEEM is the Italian partner. The

first goal of the project is to analyse

existing CSR activities of enterprises

and i n some si tuat ions thei r

re p resenting associations in diff e re n t

economic sectors: the oil industry, the

banking sector as well as the fisheries

and fish processing industries. The

t h ree sector surveys will cover some

20 multinationals each and, by way of

a complementary study, the pro j e c t

will provide also insights into the

performance of European small and

medium-sized companies in the field

of Corporate Social Responsibility.

These analyses will be carried out

using a specially developed tool, CSR

Impact Assessment, so that the

rhetoric of CSR should be separated

f rom its factual and positive impacts.

The Impact Assessment takes into

consideration both the micro-level of

companies and the macro-level of

economic and social-political eff e c t s .

On the social-political level, where

the focus of analysis lies, the

project team strives to evaluate the

contribution of companies’ CSR

m e a s u res to the achievement of the

E u ropean Union’s policy goals in four

a reas of sustainable development –

e n v i ronmental protection (climate

and chemicals policies), re s o u rc e

management, gender equality and

the fight against bribery.

The empirical analysis tackles the

impact of CSR and its govern a n c e

capacity on the companies, the

societal and the political levels: on the

company level, it focuses on causes

and effects on business development,

competitiveness and accountability;

on a societal and political level, it

focuses on the contribution of CSR in

achieving political goals defined at

EU level in four policy fields.

F u r t h e r m o re, it will involve analysing

the role of CSR in changing re l a t i o n s

between the public and the private

s e c t o r, also in the wider perspective

of EU enlargement.

In the last months of 2004 a

comprehensive background paper

on the theoretical, empirical and

policy oriented dimensions of

Corporate Social Responsibility has

been completed. The research team

is now involved in the design of the

success factors model, which will

be delivered together with an

elaborate paper on the success

factors of CSR.

ESCO - Observa tory on

E n v i ro n m e n tal and Social

C o m m u n i cation

Funded by FEEM

Co-ordinator: Ilaria Lenzi

Researchers: Chiara Raffaelli,

Piergiorgio Viaconzi

The Observatory on Environmental

and Social Communication was

established by FEEM in 1994. Since

then, an extensive archive with

e n v i ro n m e n t a l , s o c i a l a n d

sustainability reports published by

Italian and foreign companies has

been created. Nowadays, the

Observatory is composed by more

than one thousand documents,

belonging to both Italian and

international organisations.

Reports are collected and evaluated in

o rder to identify best practices and

general trends. The main aim of the

Observatory is to get a diachronic and

exhaustive overview of Social

Responsibil ity communication.

M o re o v e r, the ultimate objective of the

Observatory is to promote the practice

of reporting and communicating social

and environmental commitment to

social actors l ike companies,

public authorities and non-pro f i t

organisations, increasing stakeholders

dialogue and participation.

The Ob servat ory ha s be en

reorganised, in order to record the

constantly increasing number of

documents and to respond to the

needs of internal and extern a l

consultation: reports are open for

consultation by both FEEM and

external researchers, in order to

su ppor t an d re i n f o r ce t he

es tab l i s hm e nt of r e s e a rc h

networks. The Observatory web

page has recently been launched

( h t t p : / / w w w. f e e m - s r v. n e t / o s s e r v a t o r i o /

default.htm).

Assessment criteria, on the basis of

which all the reports are classified

and evaluated, have been developed

and updated by FEEM in accord a n c e

with the most recent results both at

national and international level. A

team of re s e a rchers from diff e re n t

b a c k g rounds (engineering, economic,

social and natural sciences) has been

working in the last few months on

a redefinition of the evaluation

checklist: the aim was to intro d u c e

innovative contributions and

a p p roaches in the monitoring system

of the Observatory, using a

multidisciplinary approach.

To this re g a rd, it is worth noting that

the Observatory is taking under

consideration new aspects of the

e n v i ronmental and social re p o r t i n g

practice. In the last few years, new

actors, such as public authorities,

non profit organisations and

communi ties (fo r example,

homogenous industrial districts) have

started to communicate their

e n v i ronmental, social and economic

performances and pro g re s s e s ,

finding their own way and shaping

the inputs coming from the

corporate world in order to adapt

them to their contexts and needs.

M o re o v e r, Social Responsibility

communication is exploring both the

possibility of intangibles assets

evaluation and the dissemination

opportunities off e red by the ICT

means, integrating the traditional

paper reports with means such as

the web and videos that reach a

larger number of stakeholders.

The monitoring activity of the

Observatory also takes these re c e n t

developments into account.

A particular focus is devoted to social

reporting in public authorities: on a

national level, the Observatory

c ont r ibuted to the pro j e c t

“Accountability and social re p o r t i n g

in public authorities” promoted by

the Public Affairs Department of the

Italian Government. The handbook

p roduced by the working group was

published in May, 2004.

In December 2003, the Observatory

was asked to join an intern a t i o n a l

working group aimed to elaborate

the Public Agencies Supplement of

the Global Reporting Initiative. A

draft edition of this GRI document

has been published at the end of

2004. FEEM will host one of the first

dissemination events, during which

the Supplement will be presented to

the Italian Public Agencies and

discussed.

PARCO - Pro te c ted Are a s

s u stainability Reporting

and COmmunica t i o n s

Funded by FEEM and the Beigua

Regional Natural Park

Co-ordinators: Rosanna Dursi,

Sabina Ratti

Researchers: Ilaria Lenzi,

Francesca Palmisani, Maria Paola

Marchello

Sustainability reporting consists of

the “triple bottom line” appro a c h ,

integrating environmental, social and

economic aspects. This approach is

i n t roducing significant challenges

in organisation strategies and

management. At the same time,

Corporate Social Responsibility

values and practices are becoming

strategic assets not only in corporate

g o v e rnance, but also in Public

Agencies, NGOs and other kinds of

social actors.

In this context, communication is

becoming more and more important

as a tool to increase stakeholder

dialogue and participation. To this

aim, Public Agencies are elaborating

specific media to communicate their

social re s p o n s i b i l i t y, such as the

i n t e rnational experience of the

Sustainability Supplement Wo r k i n g

G roup for Public Agencies held by

the Global Reporting Initiative (GRI,

2003) and the national pro j e c t

work p romoted by Cantieri per

l’Innovazione, Dipartimento della

Funzione Pubblica.

P rotected Areas are adopting

strategies aimed to improve their

i n t e rnal governance (Agenda 21

and Environmental Management

Systems) and to establish national

and international networks in order

to exchange sustainability best

practices, as well. As a re s u l t ,

stakeholder identification and

participation are becoming key

issues to achieve these proposals.

Thus, there is a need to create specific

tools for Social, Enviro n m e n t a l and

Sustainability Reporting to be used

in this framework.

The project is carried out in

collaboration with the DIPTERIS,

Genoa University; its first step was to

back up a methodology for Public

Agencies, reviewing existing literature ,

taking into account the experiences

already achieved and identifying

m a c ro groups of indicators adapted

for the Public Agencies framework,

working on a multidisciplinary

a p p roach and at both intern a t i o n a l

and national levels.

T h e re f o re, a practical adaptation of

the methodology should be pro v i d e d

for the specific context of the Beigua

Regional Natural Park, using the set

of chosen indicators, adjusted for the

methodology and integrated

t h rough the elaboration of new

indicators specifically for the

c o n s i d e red area. The following step

f o resees the data treatment and the

organisation of documents for the

release of “Number Zero” of the

B e i g u a ’s Sustainability Report. The

document re p resents the starting

point for the implementation of

participatory process and initiatives

between the Park and its

stakeholders concerning Social

Responsibility major issues.

These the following outputs:

¸ defining a Sustainability Reporting

Methodology for Protected Areas;

¸ analyzing documents and data for

the release of the Beigua’s

Sustainability Report;

¸ implementing a participatory

p rocess between the Park and its

s t a k e h o l d e r s .

The project can be developed

t h rough the cooperation with

F e d e r p a rchi. The first output will be

the organisation of a dissemination

worksh op on Sus ta inab i l i t y

Repor t ing and S ta keho l der

Consultation for Protected Areas, to

be held in FEEM Milan headquarters

in the early months of 2005.

Ethics and Ente r p r i s e s

Co-ordinator: Giulio Sapelli

Corporate governance and

accounting scandals have been a

s t rong incentive for the adoption of

codes of corporate conduct and

ethics all over the world. Having a

code of professional conduct has

thus become one part of the a wider

self regulatory effort displayed by

most professional organisations and

companies.

The “Ethics and Enterprises” re s e a rc h

p roject has a twofold aim. On the

one hand it aims at deepening the

t h e o retical framework of corporate

codes analysing documents,

c o m p rehensively capturing the

complexities inherent in most ethical

codes and developing an on-going

applied project. On the other hand,

the focus is on the management of

“ o t h e rness” in mul tinational

companies and on the so-called

Moral Divide.

1) Codes of conduct for Corporate

Governance

R e s e a rc h e rs : Ve ro n i ca Nobi li ,

Sabina Nicolella

Intensified media scrutiny caused an

i n c reasing quest for transparency in

business transactions and a pre s s u r i n g

demand for social, environmental and

labour regulations. These are only

some of the major forces urging

enterprises to adopt corporate social

responsibility practices. Such re q u e s t s

go far beyond the Friedmanian logic

of increasing business profits and

urging managers to embrace new

models of corporate govern a n c e .

As a consequence, ethical codes and

corporate codes of conduct have

become major concerns for

enterprises as they illustrate social,

moral and ethical corporate

imperatives. More o v e r, the legal

interventions related to D.lgs

231/2001 ask companies for

immediate and sound re s p o n s e s .

This research project intends to

promote a strong link between

corporate social responsibility and

sustainability policies/programmes

and their operational side. It aims at

elaborating codes and formal

re f e rees for employees, management

and employers. Benchmarking

p rogrammes, stakeholders’ analysis,

concerted actions, negotiation and

participation schemes are the

operational tools implemented as

basis for the development of codes.

The value of codes formulated

t h rough negotiations processes is

high, not only because they would

better reflect the history, the culture ,

the valorial framework of the

organisation. Such a view is

ultimately based upon the perc e p t i o n

that concerted codes may better

respond to the concrete needs of

i n t e rnal and external stakeholders

and that social moral sanctions have

better results than legal punishment

in forcing enterprises to comply with

national and international standard s .

This theoretical background is

practically developed in order to build

up the business principles and the

code of conduct, formulated thro u g h

negotiations processes, for a primary

Italian bank that holds a huge

number of international branches.

An interdisciplinary working-team,

composed by FEEM researchers

together with internal stakeholders

has been created. This team carried

out an extensive benchmarking

analysis on Italian and intern a t i o n a l

ethics codes, both from the banking

sector and from other industrial and

service sectors and is currently

involved in a deep and wide analysis

of ethical dilemmas within banking

activities. At the same time, in depth

top-management interviews were

pursued together with focus-gro u p s

for the consultation of the most

important stakeholders, while

analyses and debates were carried

on, relative to all the relevant issues

from the point of view of the

operational activities, of the legal

re q u i rements and of the intern a l

v a l u e s .

However important for good

business practices, ethics concern s

every other sector of society. Aiming

at getting a more accurate

p e rception of the links between

d i ff e rent initiatives within business,

civil society, public administration

and other important parts of society,

the unit is currently investigating the

role played by ethics within re s e a rc h

institutes and focusing upon tools

commonly used by enterprises

adopting CSR programs, applied to

such institutes.

2) Bridging the Moral Divide:

managing Corporate Social

Responsibility world-wide

Researcher: Nicoletta Ferro

As business spans the globe, very

few companies can be defined truly

global in their approach, since

moving to foreign countries to

relocate subsidiary pro d u c t i o n

means, for most multinational

and transnational corporations,

transplanting their own We s t e rn

c u l t u re and mind set, together with

their staff and production. The

cultural shock caused by

“ o t h e rness” related to ethnic

d i ff e rences includes also diff e re n c e s

related to the distinctive set of moral

values and standards, we refer to as

the moral divide. The moral divide

issue, causing cross-cultural ethical

conflicts, will be analysed in detail,

t h rough the description of the

managerial areas affected. Among

others, a special deal of attention

will be reserved to the corporate

re spons i b i l i t y a re a and i ts

implications with the moral divide. In

the effort of meeting people’s

expectations and act as good

corporate citizens, multinational

companies o ften fa i l to take

s u fficient account of the complexity

of the place they work in, turning to

“corporate irresponsible practices”.

The message this re s e a rch wants to

p rovide is that a rigid appro a c h

t o w a rd otherness, especially in

dealing with social responsibility is no

longer possible. As a consequence

corporate executives should learn

how to successfully manoeuvre the

disturbing trends that lie at the

intersections of diff e rent culture s

thus turning “diff e rences” into

s t rengths for enterprises who want

to be ethical on a world-wide scale.

Universalism and relativism, the

competitive approaches traditionally

adopted by business people in

dealing with cross-cultural ethical

conflicts, will be described.

Some steps will be suggested both

f rom a structural and managerial

point of view, in order to foster

ethnic and ethics awareness within

companies.

S u stainability Ass e ss m e n t

and CSR disclo s u re

Co-ordinator: Raffaella Bordogna

Researchers: Mara Ottin Bocat,

Chiara Raffaelli, Luca Rizzi,

Massimo Rovatti, Alex Stillavato,

Massimo Tavoni, Piergiorgio

Viaconzi, Giorgio Vicini

The aim of the sustainability

assessment and CSR disclosure

p rojects is to evaluate the status of

the CSR in the frontiers context in all

industrial activities. The assessment

of a company from a sustainable

point of view re q u i res an extensive

evaluation of the social, economic

and environmental integrated eff e c t s

of all company-related activities. The

purpose of the project is to evaluate

the status of CSR issues in companies

and to define the priority actions in

the fields, first of all disclosure .

Another purpose of the project is to

define the priority actions in the CSR

field and to report CSR at the local

level. Specific reports will be done for

Nigeria, Kazakhstan, Sakhalin and

P e r u .

P rojects are implemented at the

national and international level with

the direct cooperation of companies,

public administrations and local

institutions. Intangible assets, as

natural stock and cultural heritage,

have been been valuated at the

national and international level in

co-operation with other research

institutions in Italy.

In partnership with local authorities

and the local enviro n m e n t a l

agency, detailed analyses of the

e n v i ronmental, social and

economic impacts of a refinery and

of an oil import terminal, both

located in northern Italy, have been

carried out. The aim of this study is

the evaluation of the environmental

and social impacts of the activities

on the territory.

Two new projects have just begun;

the first one with the exploration and

p roduction division of an oil

c o m p a n y, in order to implement its

CSR disclosure at the local

level. The other one re g a rds the

implementation of the health, safety

and environmental policies of a

marketing company in the oil sector,

t h rough specific communications

a d d ressed to the employees and the

dealers: a specific web site has been

c reated and an environmental re p o r t

on the distribution system will be

drawn up soon.

Publications

• N. Ferro. (2004). “Riding the

waves of reforms in corporate law.

Recent improvements in Italian

corporate codes of conduct, limits

and future challenges” to be

published in Corporate Govern a n c e ,

The International Journal of Business

in Society.

• N . Ferro (2004) “Standard

internazionali per la responsabilità

d’impresa”. FEEM Rapporto sullo

Sviluppo Sostenibile.

• N. Ferro (2005) “Cro s s - c o u n t r y

ethical dilemmas in business, a

descriptive framework” will be

included in “Ethical Boundaries of

capitalism” to be published by

Ashgate (The Corporate Responsibility

S e r i e s ) .

Seminars and conferences

• On May 12-15, 2004, Nicoletta

F e r ro attended the Intern a t i o n a l

C o n f e rence on “Voluntary codes

of conduct for mul t inational

corpo rat ion s” promi ses and

challenges held in New York and

organised by the Intern a t i o n a l

Center for Corporate Accountability

(ICCA), Baruch College, New Yo r k .

• On June 2004, Nicoletta Ferro

attended a course organised by the

Ethics Officers Association and held

at the Center for Business Ethics, the

Bentley College, Wa l t h a m .

• On October 12-14, 2004, Frankfurt,

Federica Viganò presented FEEM

re s e a rch activities in RARE at the

Workshop “Rhetoric and Realities of

Gender Impacts on CSR”

• On October 28, 2004, FEEM and

M i n i s t e ro Attività Produttive, Milano,

“ Tematiche trans-culturali nelle

organizzazioni” first of a seminars

cycle for the OCSE Guidelines Italian

Contact Point.

• On November 4-5, 2004, Milano,

2nd RARE Project Meeting.

• O n N o v e m b e r 1 9 , 2 0 0 4 ,

A s s o c i a z i o n e Analisti Ambientali,

Milano, Sabina Nicolella pre s e n t e d

“ O l t re la comunicazione ambientale:

l’esperienza del Programma di ricerc a

Corporate Social Responsibility and

Sustainable Management della

FEEM”

Researchers

Some new collaborators have joined

the programme, while Federica

Ranghieri left FEEM in July 2004.

Federica Viganò took up the

c o o rdination of the RARE pro j e c t :

Ph.D in Philosophy, she teaches in

Pescara (Facoltà di Economia e

Scienze manageriali) and her pre s e n t

i n t e rests are Cultural Economics,

cultural districts and CSR topics. Tw o

other re s e a rchers are working full-

time on RARE since June 2004:

Daniele Nicolai, who graduated in

Economics in Venice and holds a

Master on CSR in Ve rona, and

Ludovico Ferraguto, a stageur fro m

the Maste r in Env i ro n m e n t a l

Economics of Bocconi University.

Maria Paola Marchello graduated in

Economic Sciences (University L.

Bocconi of Milan), with a final

dissertation on “The Strategic

E n v i ronmental Assessment in the

context of Tu r i n ’s Winter Olympic

Games 2006”. She’s completing an

I n t e rdisciplinary Master course on

E n v i ronmental Management at the

Scuola Superiore Sant’Anna in Pisa.

She joined FEEM in June 2004 where

s h e ’s involved in the re s e a rch pro j e c t

“ PA R C O ” .

Chiara Raffaelli graduated in Fore i g n

Languages and Communications

with a final dissertation on

“ E n v i ronmental and Social

Communication. Case history:

Enichem and Solvay”. Massimo

Tavoni holds an undergraduate

( l a u rea cum laude) in Engineering

f rom the University of Bologna, and

a postgraduate (MSc) in Economics

and Finance from the London School

of Economics. Before joining FEEM,

he was a re s e a rcher for an economic

and financial consultancy. Alex

Stillavato graduated in Economics at

Bocconi University with a final

dissertation on “The Kyoto Pro t o c o l

Implementation and the Euro p e a n

Emission Trading Scheme: a Case

Study”. They joined Feem in summer

2004 and are presently involved

in the re s e a rch on Sustainability

Assessment, focusing on the energy

sector and on the climate change

i s s u e s .

Privatisation is a world-wide

phenomenon, which is curre n t l y

resuming after the dip in global equity

markets. Between 1977 and 2003,

m o re than 2000 companies have

been privatised in more than 100

countries in 3,780 deals bringing

g o v e rnment revenues of over 1,329

billion US dollars. The phenomenon,

which grew exponentially, involved

m o re than 150 countries and all the

sectors in which State-owned

enterpri ses usually operate:

a g r i c u l t u re and industry, finance,

telecommunications, energy and

services of public utility. The structural

changes that privatisation involves call

for a systematic inquiry about some

fundamental policy issues such as:

• the diff e rent objectives and

methods of privatisation, the

profound causes of divestiture, and

the efficiency of newly privatised firms;

• the new role of the State as a

regulator in sectors like public

utilities and infrastructure;

• the corporate governance of

firms operating in an environment

with an enhanced private sector.

This is the ambitious agenda of our

research programme.

Privatization Barometer

Funded in co - o p e ration with IRI Fo u n d a t i o n

Co-ordinator: Bernardo Bortolotti

Researchers: Luca Farinola,

Valentina Milella, Roberto Molteni,

Ettore Panetti

The “Privatization Barometer - PB” is a

joint project by Fondazione IRI and

Fondazione Eni Enrico Mattei to cre a t e

the first Internet portal dedicated to

privatisation processes in the enlarged

Europe. The goal of the project is to

p rovide academics, re s e a rc h e r s ,

financial analysts, institutional investors,

i n t e rnational agencies, policy-makers

and media operators, with a focal point

on privatisation issues managed by an

independent source. The PB content

will be organised in five sections:

• The Atlas of privatisation, the first

avai lable on-line, including 25

c o m p rehensive country sheets with

the history of the process, statistics,

c u r rent outlook and legal framework,

along with the govern m e n t ’s

portfolio of state-owned enterprises

and related documents;

• The Database of privatisation

transactions from 1977 to pre s e n t ,

the core of privatization data, updated

quarterly and fully searchable on-line;

• The PB News, offering a re a l - t i m e

coverage 24 hours a day on

privatisation news (in co-operation

with MF/DowJones News);

• The Newsletter, a report in

electronic format on recent deals,

t rends and statistics, plus contributed

articles by top international re s e a rc h e r s,

under the scientific co-ordination of

Prof. W.L. Megginson (University of

Oklahoma);

• The Archive, containing an e-

library of selected academic working

papers, a section with legal and

regulatory documents and tender

announcements by country.

M o re o v e r, PB developed in co-

operation with Lehman Brothers a

composite financial indicator, the

Privatisation Index, tracking the

performance of shares of Euro p e a n

privatised companies , to provide a new

instrument for analysts and investors.

The site has been launched in July

2004 and its content is available for

free to registered users. PB also

became official provider of

privatisation data to OECD.

The http addresses are :

w w w. p r i v a t i z a t i o n b a ro m e t e r. n e t

w w w. p r i v a t i z a t i o n b a ro m e t e r. i t

AMD - Auctions and

M a r ket Design: Theory,

E v i d e n ce and Applica t i o n s

Funded by the European

C o m m i ssion, DG Research, Improv i n g

the Human Po tential and the Socio-

Economic Knowledge Base- High

Level Conferences, 2001-2004

Co-ordinator: Bernardo Bortolotti

The AMD Project consists of a cycle

of three Euro Conferences on

Auctions and Market Design (AMD):

T h e o r y, Evidence, and Applications

taking place in a period of 36

months, to be hosted by FEEM.

This cycle of Conferences aims at

c reating a stable network of

re s e a rchers engaged in studying

the economics of auctions and how

auctions contribute to the design of

efficient markets.

The programme of the three Euro

Conferences intends to broaden as

much as possible the scope of the

issues covered within the unifying

theme of auctions and market

design. The basic structure of the

Privatisation, Regulation, Antitrust

Bernardo Bortolotti

Research Programme Co-ordinator

Conference and the titles of the

sessions are therefore the same for

all the three events. The objective

of this strategy is to foster the

interaction of researchers working

in adjacent areas of the field, so

that the annual AMD Euro

Conference event is considered a

focal meeting point for European

re s e a rchers working in auctions

and market design.

One of the main objectives of the

Conference is to maximise the

feedback for young re s e a rchers fro m

experts in the field. This interaction

will be particularly useful for young

PhD students. The speakers

p resenting the papers are normally

selected among the young and senior

re s e a rchers responding to the call for

papers of the Euro C o n f e rence, which

a re published as widely as possible.

The project provides a list of e-mail

a d d resses to get in touch with young

re s e a rchers who might be intere s t e d

in, but who are not aware of the

initiative. The conferences are advertised

in due time on the widely read electro n i c

publications of the Economics Researc h

Network, and in various specialised

international journals.

The papers for the Confere n c e s

a re selected by the Pro g r a m m e

Committee, whose members are

the following:

L a w rence Ausubel: University of

M a r y l a n d

Bruno Biais: Université de To u l o u s e

and CEPR

Victor Ginsburgh: Université Libre

de Bruxelles and CORE, Universitè

Catholique de Louvain

Philippe Jehiel: University College

London and CEPR

Elmar Wo l f s t e t t e r : H u m b o l d t -

University, Berlin

Each conference lasts three days: day 1

for “theory”, day 2 for “evidence and

applications in auctions and market

design”, and day 3 for “auctions and

financial markets design” and

“ I n t e rnet auctions and digital

markets”. The structure of the thre e

c o n f e rences is the same for all of them;

however the discipline advances, and

as economic problems evolve some

adjustments may be necessary and

large flexibility is granted.

The first Conference took place on

26-28 September 2002

The second Conference took place

on 25-27 September 2003

The third Conference was a joint

event with Consip Spa, the Italian

P ro c u rement Agency, and it was held

in Rome, on 23-25 September 2004.

P rogrammes and papers of

C o n f e rences 1 and 2 are available for

download on FEEM’s web site at

h t t p : / / w w w. f e e m . i t / F e e m / P u b /

P ro g r a m m e s / P r i v a t i s a t i o n + R e g u l a t i o n

+A n t i t r u s t / A c t i v i t i e s / A M D . h t m

EU-DEEP - The birth of a

E u ropean dist r i b u te d

E n e rgy Pa r t n e rship that

will help the larg e - s ca le

i m p le m e n tation of

d i st r i b u ted energ y

re s o u rces in Euro p e

Funded by the European Commiss i o n ,

DG Research, Sustainable Energy

Systems, 2004-2009

C o - o rd i n a tor: Bernardo Borto lo t t i

R e s e a rc h e rs: Per Agrell, Daniele

B e n i n tendi, Nicolas Bocca rd, Pe te r

B o g e toft, Fra n co Pe cc h i o

EU-DEEP aims at developing business

models for the deployment of DER

(Distributed Energy Resources) in the

E u ropean Market. The project has an

i n t e rdisciplinary approach mixing

engineering and economics both in

t h e o retical and applied contexts. The

role of FEEM in the project is to

c o o rdinate all the activities related to

Regulation and Market Design.

FEEM studies the analysis of the

demand for energy with the aim

to characterise the group of

customers (market segments),

which have the most favourable

characteristics to exploit the DER

potential. The results are used to

select at least five technologies,

which will be tested under a series

of specific conditions given by the

study of the load pro f i l e s .

The data are provided by the

Utilities participating in EUDEEP

and involve around 70 million

E u ropean consumers. These are

going to be integrated by public

data and by additional field

s t u d i e s .

FEEM then estimates the size of

each relevant group of customers

and the consistency of data with

respect to regulatory environments.

The first is necessary to understand

the commercial potential of a

business model, the second to

allow the comparisons acro s s

different systems. FEEM also studies

the integration of DER in the

electricity system, focusing on

networks regulation and the issues

concerning market integration.

The study of networks is going to

develop innovative re g u l a t i o n

based on an accurate analysis of

available technical solutions, a

knowledge provided by the

co ns t an t in te r ac t i on w i t h

techn ica l par tners . The main

challenge is to characterise

solutions to allow the distributing

sector to undertake the optimal

inves tments t o expand and

u pgr a de th e ne t wor k to

accommodate DER.

Market integration studies the

interaction of DER with the

trading mechanisms; it pro v i d e s

technical support concerning the

functioning of power exchanges

and the technical solution to

implement demand re s p o n s i v e

trading schemes. The final target

is to build models of industrial

organisation in order to eff i c i e n t l y

exploit the DER characteristics.

SUSTELNET - Policy and

Regulatory Roadmaps for

the Integration of

Distributed Generation

and the Development of

Sustainable Electricity

Networks

Funded by the European

Commission, DG Research, Energy,

Environment and Sustainable

Development Programme, 2002-

2004

Co-ordinator: Bernardo Bortolotti

Researchers: Daniele Benintendi,

Nicolas Boccard

Technological developments and

EU targets for penetration of

renewable energy sources (RES)

and greenhouse gas (GHG)

reduction are decentralising the

electricity infrastructure and

services. Although liberalisation

and internationalisation of the

E u ropean electricity market has

resulted in efforts to harmonise

transmission pricing and regulation,

no initiative exists to consider the

opening up and regulation of

distribution networks to ensure

effective participation of RES and

distributed generation (DG) in the

internal market.

Within the SUSTELNET re s e a rc h

p roject, a consortium of 10

research organisations analyses the

technical, socio-economic and

institutional dynamics of the

E u ropean electricity system and

markets. This increases the

understanding of the structure of

the current European electricity

sector and its socio-economic and

institutional environment.

By analysing the technical, socio-

economic and institutional

dynamics of the Euro p e a n

electricity system and markets, the

SUSTELNET project has identified

the underlying patterns that

p rovide the boundary conditions

and levers for policy development

to reach long term targets for

electricity from renewable energy

sources (RES) and greenhouse gas

emission reduction (2020- 2030

time frame). Principles and criteria

for a regulatory framework for

sustainable electricity systems

a re presented, as well as the

development of medium to long-

term transition strategies/roadmaps

for network regulation and market

transformation to facilitate the

integration of RES and decentralised

electricity generation into electricity

supply systems.

Based on the analysis of the long-

term historical and future technical,

socio-economic and institutional

dynamics of European electricity

supply systems and markets, the

SUSTELNET pro jec t deve lops

scenarios for future electricity

supply systems in EU Member

States and Newly Associated States

(NAS). These scenarios provide a

background for the development of

regulatory road maps, which can be

used as a tool to map out a

regulatory strategy, facilitating the

transition of current regulation into

a regulatory framework that is

re q u i red for future sustainable

electricity supply systems.

The project develops the basic ideas

of an “adequate” re g u l a t o r y

framework for distribution network

operators (DNOs). The focus point

is to define what “adequate”

means with respect to a level

playing field between centralised

power generation and distributed

generation (DG), and how this

could be operationalised. The

results give guidance for an ideal

regulatory framework which will be

the long-run target of national

roadmaps for the transition to an

electricity market and network

structure that creates the desired

level playing field.

The project performs a comparative

review of the regulatory regimes for

the 9 countries participating in the

SUSTELNET project: Denmark (DK),

the Czech Republic (CR), Germany

(DE), The Netherlands (NL), Poland

(PL), Slovakia (SK), Hungary (HU),

Italy (IT) and the United Kingdom

(UK). The review presents the

motivation, the objective and the

actors involved, the operators of

distributed generation and the

distributed network operators. The

project then identifies the criteria

against which national policies are

benchmarked against using the

roadmap typology for the 2020

horizon discriminating market

access issues from network

regulation.

The Political Economy of

Privatisation

Funded by FEEM

Co-ordinator: Bernardo Bortolotti

Researchers: Luca Farinola, Paolo

Pinotti, Ettore Panetti

The project has developed a new

political institution index, the FEEM

DPI with continuous and time-

varying measures of the political-

institutional setting, and of the

par t isan or ienta ti on of the

executive.

Then the project analyses the

role of pol it ical institutions in

privatisation. Using panel data for

21 industrialised countries in the

1977-1999 period, first we show

the likelihood, timing and the

extent of privatisation to be

strongly and positively associated

with majoritarian political systems.

On the contrary, in consensual

democracies privatisation seems

delayed by a “war of attrition”

among diff e rent political actors.

Second, we identify a partisan

determinant of the choice of the

privatisation method, with right

wing governments more willing to

s p read share ownersh ip to

domest i c vote r s . Resu lt s a re

obtained in maximum likelihood

panel estimations trying to take

into account the possible reverse

causality between privatisation and

electoral outcomes.

Source of value in

Mergers and Acquisitions

(M&A)

Co-ordinator: Bernardo Bortolotti

Researcher: Marinella Leone

The project aims at identifying the

major trends in the M&A processes at

the gloabl scale. First, evidence is

p rovided about the sectoral and

geographical distribution of the deals,

identifying conglomeral and cro s s -

b o rder deals. Second, this aggre g a t e

evidence is related to the existing

l i t e r a t u r e f o c u s i n g o n t h e

determinants of M&A activity. Finally,

the pre versus post M&A performance

of selected companies will examined

e m p i r i c a l l y, in order to identify possible

s o u rces of value in the pro c e s s .

Publications

• B. Bortolotti, L. Farinola, V.

Milella “Privatization in We s t e rn

E u rope: Issues and Agenda”,

forthcoming in IPD-OUP volume

• B. Bortolotti, “Italian privatization

p rocess and its implications for

C h i n a ”

Seminars and conferences

• June 26, 2004, Columbia

U n i v e r s i t y, New York. Kick-off

meeting of IPD privatization

taskforce

• June 28, Washington, The

World Bank, “Privatization Policy:

an International Perspective”

• S e p t e m b e r, 23-25, Consip,

Rome “Auctions and Market

Design: Theory, Evidence and

Applications”

• November, 9-10 Capitalia, Rome

EU-DEEP general meeting

Researchers

Mar ine l la Leon e l e ft a sse t

management operations to join

the unit to work on M&A pro j e c t s .

Starting from July, 16, 2004 the

website Privatisation Barometer is

o fficially on line. The Privatisation

B a rometer is the first Internet portal

on privatisation and its most re c e n t

evolution in Old and New Euro p e

(first 10 CEC accession countries are

included).

O ve r v i ew

Aims of the project are :

• To c r e a t e a u n i q u e a n d

independent source on privatisation

reporting comprehensive information

on the historical process, and most

recent and future tre n d s .

• To provide a focal point for an

i n t e rnational audience of re s e a rc h e r s ,

enterprises, analysts, consultants,

i n t e rnational agencies, govern m e n t s ,

policy-makers, and media.

• To establish an open forum

on privati sation choices and

consequences strongly based on

re s e a rch outputs.

PB is a comprehensive source of

information and is made of various

sections. PB Atlas is the first atlas of

privatisation available on-line. For

each of the 25 countries covered it

o ffers detailed reports on the

privatisation process, main privatised

companies, statistics, current outlook,

legal framework, State portfolio

and useful links to agencies and

ministries. PB covers the evolution of

the process in real-time pro v i d i n g

selected news from MF/Dow Jones

News with 24h a day coverage. PB

makes freely available a fully

s e a rchable database of privatisation

transactions from 1977 to pre s e n t ,

which is regularly updated.

PB presents a rich archive containing

an e-library of selected academic

working papers, privatisation

prospectuses, legal and regulatory

documents, tender announcements,

and the PB Newsletters, a re p o r t

published in electronic format on

recent deals, trends and statistics,

plus contributed articles by top

i n t e rnational re s e a rc h e r s .

The PB Indexe s

Several studies in finance have

p roved that idiosyncratic factors

a ffect the behaviour of privatised

firms. These firms tend on average to

overperform benchmarks in the

medium and long run, and share

issue privatisations are often more

s t rongly under-priced than public

o fferings by private companies.

F u r t h e r m o re, it has been re c e n t l y

documented that ownership and

c o n t rol structures of privatised and

private companies do not converge,

and that privatising govern m e n t s

have often transferred ownership

rights but retained control. This

typically occurs by exerting their

rights as large shareholders, or by

wielding power via additional contro l

devices such as golden share s .

I m p o r t a n t l y, in strategic sectors such as

e n e r g y, utilities, telecommunications,

a e rospace and defence, where the

largest and most valuable firms

operate, company performance is

a ffected by the outcome of a

regulatory game where govern m e n t s ,

regulators, politicians, and various

stakeholders are involved.

Privatised companies are thus likely

to be diff e rent animals from private

listed companies. For this re a s o n ,

their financial performance warrants

systematic attention.

The PB In dex i s des igned as

a benchmark for tracking the

performance of privatised companies.

It serves primarily as:

• Benchmark for portfolio managers

and investors who invest in privatised

c o m p a n i e s .

• Per f ormance yards t ick f or

g o v e rnments and investment banks

floating shares of state-owned

c o m p a n i e s .

• Vehicle for attracting attention to

privatisation in European equity

m a r k e t s .

The PB Index tracks the performance

of shares of privatised companies

that are listed for trading in domestic

stock markets of the enlarged

E u ropean Union. It is subject to

periodic review by the PB Index

A d m i n i s t r a t o r, who ensures the

overall consistency with the purposes

of the Index.

The PB Index is capital isation

weighted, and denominated in Euro s .

The Index is restricted to ord i n a r y

s h a res of privatised companies

trading in the stock exchanges of the

E u ropean Union, including the ten

new accession countries.

www.privatizationbarometer.netLaunching PB, the website on privatisation inEurope

Bernardo Bortolotti*

*FEEM

The constituents of the indexes are

the shares of companies privatised

f rom January 1977 to date. A

privatisation is defined as a transfer

of ownership or voting rights fro m

the central or local government, or

f rom bodies of the public

administration, to private investors.

Eligible securities are also traded

s h a res of equity carve-outs fro m

state-owned enterprises or privatised

companies. Transactions involving

the transfer of shares to private

companies or financial institutions

fully owned by public share h o l d e r s

a re not considered privatisations.

Privatisation transactions are identified

f rom the Global New Issues Database

of Securities Data Corporation.

Index maintenance implements the

adjustment for company additions

and deletions and stock price

adjustments due to corporate

actions and merger and acquisitions

(M&A) activity.

If the privatised company merges or is

a c q u i red, its share price is replaced by

the one of the resulting company in

case of merger, and by the one of the

a c q u i ror in case of a tender offer or an

acquisition, if these companies are

listed in the same stock market where

the privatised company was initially

traded. If the privatised company is

a c q u i red by a foreign company and

then de-listed from the domestic

exchange, it is deleted from the Index.

The index is capitalisation-weighted,

and calculated with the Laspeyre s

formula, which measures price

changes against a fixed base

quantity weight. The index is

calculated on a price only basis

excluding the dividend yield, and

uses daily data and closing prices of

the stocks at the base date and at

each date. The source of price and

quantity data is Datastre a m .

In addition to the Composite, two

regional (one including EU15 and

one the ten new accession countries)

sub- ind exes are cons truct ed ,

together with two sub-indexes

including companies with and

without any direct ownership stake

by the government or public entities

(partially versus fully privatised).

The PB Index Composite includes

203 stocks. The two re g i o n a l

indexes include 153 companies of

EU15 countries and 50 companies

of the ten new accession countries

of Eastern Europe. The two sub

indexes Partially and Fully Privatised

include 101 and 100 stocks,

respectively.

We now briefly describe the

return characteristics of privatised

companies over the past year,

starting from July 1, 2003.

F i g u re 1 refers to the PB Composite

Index, which includes the whole set

of privatised companies for which

we track performance. The figure

shows that, had one invested 100

Figure 1. The Performance of the PB Index Composite

Source: Datastream

million euros in this index, the

investment would now be worth

123.12 million euro s .

The overall performance of the

composite index is quite in line

with the one of Eurostoxx 600,

which we use as benchmark.

T h e P B C o m p o s i t e I n d e x

underperformed substantially the

benchmark during Q4 2003,

rapidly catching up in the first

semester 2004.

The similar behaviour of the PB

Composite Index and of the

benchmark is not particularly

Figure 3. The Volatility of the PB Index New Europe

Source: Datastream

Figure 2. The Performance of the PB Index New Europe

Source: Datastream

surprising, given that both indexes

a re capitalisation-weighted and that

several privatised companies are the

largest listed companies. It is

t h e re f o re likely that more weight is

given in the benchmark to the

constituents of our PB Composite

I n d e x .

Stark diff e rences in performance

appear when we analyse the

PB regional Indexes. Higher

performance is found for stocks of

privatised companies of New

E u rope, which yielded a 13.72

p e rcent abnormal re t u rn relative to

the Eurostoxx 600 (Figure 2). On

average, higher re t u rns were in

general accompanied by overall

higher volatility. However, the high

relative performance reported in the

first semester of 2004 is associated

with a substantial decrease in

volatility (Figure 3). This suggests

that privatised companies of New

E u rope have likely yielded a positive

(risk-adjusted) abnormal re t u rn over

that period.

N o te

PB is currently funded in cooperation

with Fondazione IRI (a non-pro f i t

independent re s e a rch institution

founded in 2002 by the former State

Holding Company IRI) and supported

by Lehman Bro t h e r s .

This article is based on:

ECONOMIC AND

E N V I R O N M E N TAL EFFECTIVENESS

OF A TECHNOLOGY- B A S E D

C L I M ATE PROTOCOL

Barbara Buchner and Carlo Carraro

Nota di Lavoro 61.2004 - CCMP

MODESTY PAYS: SOMETIMES!

Michael Finus

Nota di Lavoro 68.2004 - CG

C L I M ATE AGREEMENTS AND

TECHNOLOGY POLICY

Michael Hoel and Rolf Golombek

Nota di Lavoro 90.2004 - CG

ISSUE: Why do some enviro n m e n t a l

a g reements work and others don't?

How can international enviro n m e n t a l

t reaty design be improved? Could a

generalised global agreement on

technological cooperation be the

right approach to deal with climate

change control?

F INDINGS: A se l f -enforc i n g

i n t e rnational agreement is more likely

to emerge when countries cooperate

on environmental technological

innovation and diffusion than when they

cooperate on emissions abatement.

H o w e v e r, although technological

cooperation without emission

abatement commitments incre a s e s

economic growth and welfare, this

strategy may not lead to a suff i c i e n t

abatement of greenhouse gas

concentrations. Including technological

policies even in an imperfect manner

in international climate change

a g reement may be superior to

a g reements that ignore them.

POLICY IMPLICAT I O N S : R e p l a c i n g

the Kyoto Protocol with a technology-

based protocol does not seem to be

e n v i ronmentally effective. Rather,

technological cooperation should be

c o n s i d e red as an element of a more

c o m p rehensive strategy thro u g h

which emission reductions are

achieved at the global level, with the

contribution of most of the world’s

countries.

USEFUL READINGS

• A l d y, J. E., Barrett, S., and R. Stavins,

2003. “Thirteen Plus One: A

Towards a more effective climate treaty

R e s e a rch talks to policy:

in this section of the

n ew s le t ter we rev i ew

ex te n s i ve ly six policy

re levant working papers

c i rc u l a ted during the last

term in the FEEM series

“ N o te di Lavo ro”. These

rev i ews we re pre p a red by

E n r i ca Cro d a .

Comparison of Global Climate

Policy Arc h i t e c t u res” Climate Policy,

pp. 373-397. Critical review of policy

a l t e rnatives to deal with global

climate change.

• Baumert, K., Blanchard, O., Llosa,

S. and Perkaus, J., eds., 2002.

Building on the Kyoto Pro t o c o l :

Options for Protecting the Climate,

World Resource Institute. Collection

of papers discussing diff e rent policy

a l t e rnatives to promote long-term

climate pro t e c t i o n .

• B a r rett, S., 2002, Enviro n m e n t

and Statecraft: The Strategy of

E n v i ronmental Treaty-Making, Oxford

University Press, Oxford. Analysis

of environmental tre a t y - m a k i n g

containing also a detailed review of

t reaties currently in forc e .

REVIEW

The last decades have witnessed a

soaring number of intern a t i o n a l

e n v i ronmental agreements, pro m p t e d

by the dramatic spread of the

e n v i ronmental impact of human

a c t i v i t y. Environmental pro b l e m s

like global climate change and

stratospheric ozone depletion can

only be remedied if as many

countries as possible cooperate.

E ffective cooperation needs to be

achieved through intern a t i o n a l

a g reements among countries

because we do not have a super-

national authority that can enforc e

e n v i ronmental regulations on a

global scale.

Some international treaties succeed.

Others, however, fail to alter

countries’ behaviour appre c i a b l y. For

instance, consider the Montre a l

P rotocol to protect the earth's ozone

layer and the Kyoto Protocol to

reduce greenhouse gases emissions.

The Montreal Protocol has been a

success. Only a handful of countries

have not signed it. The build-up of

ozone-depleting chemicals in the

a t m o s p h e re peaked in 1994 and is

now falling. The ozone layer is now

on track to re c o v e r, and the

concentration of ozone in the

s t r a t o s p h e re should be back to its

p re-1980 level by mid-century.

In contrast, the Kyoto Pro t o c o l ,

possibly entering into force in the

next months, will have only limited

e n v i ronmental effectiveness, mainly

because the world's biggest emitter,

the United States, has refused to

sign it. Even though some 125

countries have ratified it, these

countries are mainly those countries

not re q u i red to mitigate their

emissions. So the world output of

carbon dioxide may end up busting

the Kyoto targets and continuing to

do so for some time to come.

Why do some env i ro n m e n t a l

a g reements work and others don't?

How can international enviro n m e n t a l

t reaty design be improved? Thre e

recent FEEM working papers addre s s

these issues focusing more specifically

on climate regimes.

In a successful treaty each country

p refers to restrain its behavior than

to accept the consequences if

everyone goes at it alone. Thus, in

o rder to work, international tre a t i e s

must include incentives to persuade

countries to adjust their behavior

and must be self-enforcing in the

sense that they must rule out

incentives to free ride, namely to

take the gains without paying the

costs. Unfortunately, when the gains

f rom co-operation are large, the

incentives to free-ride are also

s t rong, and this makes punishing

f ree-riders hard e r, because the

cooperating countries usually suff e r

too.

One option could consist of scaling

down the abatement targets. This is

the alternative contemplated by

Finus’ paper which shows that it is

possible to increase the number of

countries participating to an

i n t e rnational environmental agre e m e n t

and at the same time reduce the

f ree-riding problem, by having the

signatories agree on modest emission

targets rather than ambitious ones.

This may sufficiently increase the

number of countries participating to

a treaty so that to improve its success

at reducing global emissions and

i n c reasing world welfare. In this

sense, modesty may pay. However,

the level of world welfare attainable

t h rough such a treaty would be

lower than the level attainable if all

countries implemented the ambitious

emission control agre e m e n t .

M o re radical alternatives pro p o s e

technologically based protocols in

the context of climate change

c o n t rol. These alternatives are

motivated by the recent pro l i f e r a t i o n

of bilateral and multilateral

a g reements on technology and

scientific cooperation thro u g h o u t

the world. For example, the

E u ropean Union cooperates on

i n t e rnational scientific policy with

almost 30 countries. The US is

engaged in a large number of joint

technology projects as well. The fact

that these agreements manage to be

implemented shows that agre e m e n t s

on environmental technological

cooperation are easier to achieve

than agreements on emission

abatement. This is not surprising

because cooperation on

t e c h n o l o g i c a l innovation and

d i ffusion is less affected by fre e -

riding incentives than cooperation

on emission abatement. Could a

generalised global agreement on

technological cooperation be the

right approach to deal with climate

change contro l ?

Buchner and Carraro investigate the

idea of replacing intern a t i o n a l

cooperation on greenhouse gas

emission control with intern a t i o n a l

cooperation on climate-re l a t e d

technological innovation and diff u s i o n .

Specifically they use a numerical

model developed at FEEM to evaluate

whether a climate regime based o n

cooperation on technological

innovation and d i ffusion alone,

wi thout emiss ion mi t igat ion

commitments, could actually lead to

a reduction of global emissions.

They find that, on the one hand, a

s e l f - e n f o rcing agreement is more

likely to emerge when countries

cooperate on enviro n m e n t a l

technological innovation and

d i ffusion than when they cooperate

on emissions abatement. However,

although technological cooperation

without emission abatement

commitments increases economic

g rowth and welfare, this strategy

does not lower global emissions and

t h e re f o re may not lead to a suff i c i e n t

abatement of greenhouse gas

concentrations. On the one hand,

technological innovation re d u c e s

emissions per unit of output by

making climate-friendly technologies

available and by reducing their costs.

On the other hand, investments in

re s e a rch and development (R&D)

and technological diffusion incre a s e

emissions by fostering economic

g rowth. This is particularly true in the

absence of any emission re d u c t i o n

targets. There f o re, replacing of the

Kyoto Protocol by a technology-

based protocol does not seem to be

e n v i ronmentally effective. In ord e r

to p rovide a satisfactory degre e

of environmental eff e c t i v e n e s s ,

t e c h n o l o g i c a l cooperation alone

wont’ t do. It appears that, in

addition to technological cooperation,

some emission reduction policies are

likely to be needed.

As the authors point out, these

conclusions do not re p resent a

s t rong rejection of a technology-

based protocol. Rather, they imply

that technological cooperation

should be considered as an element

of a more comprehensive policy

strategy through which emission

reductions are actually achieved at

the global level, possibly in a cost-

e ffective way and with the

contribution of most of the world’s

countries.

Golombeck and Hoel complement

Buchner and Carraro ’s results by

studying what happens when

countries subsidize domestic R&D

investments to compensate for

international technology spillovers

in the presence of intern a t i o n a l

e n v i ronmental agreement contro l l i n g

emission abatements. They conclude

that including R&D policies even in

an imperfect manner in intern a t i o n a l

e n v i ronmental agreement re g u l a t i n g

emissions directly through emission

quotas, may be superior to agre e m e n t s

that ignore them.

This article is based on:

WILLINGNESS TO PAY FOR

A G R I C U LT U R A L

E N V I R O N M E N TAL SAFETY:

EVIDENCE FROM A SURVEY OF

MILAN, ITA LY, RESIDENTS

Chiara M. Travisi and Peter Nijkamp

Nota di Lavoro 100.2004 - SIEV

A META - A N A LYSIS OF THE

WILLINGNESS TO PAY FOR

REDUCTIONS IN PESTICIDE RISK

E X P O S U R E

Chiara M. Travisi, Raymond J. G. M.

Florax, and Peter Nijkamp

Nota di Lavoro 101.2004 - SIEV

WILLINGNESS TO PAY TO

REDUCE MORTALITY RISKS:

EVIDENCE FROM A THREE-

C O U N T RY CONTINGENT

VA L U ATION STUDY

Anna Alberini, Anil Markandya and

Alistair Hunt

Nota di Lavoro 111.2004 - SIEV

I S S U E S

The policy evaluation of enviro n m e n t a l

p rograms often re q u i res estimates of

the benefits associated with re d u c i n g

the risk of dying or the risk of being

exposed to some pollutant.

What is the monetary value to society

of reducing these types of risks?

In particular, what is the monetary

value of saving a human life (‘value

of a statistical life”)?

Should we value diff e rently the lives

of people of diff e rent age and health

status? How about the lives of

people in diff e rent EU countries?

What is the value of extending life

e x p e c t a n c y ?

What is the monetary value of

reducing the risk of exposure to

p e s t i c i d e s ?

F I N D I N G S

A c c o rding to a survey of thre e

E u ropean countries, the UK, Italy and

France, the value of a statistical life

ranges between 1 and 2.3 million

e u ros. It does not vary appre c i a b l y

with age, but it is higher among

those respondents who have

recently been admitted to the

hospital or have visited an

emergency room for card i o v a s c u l a r

or respiratory illnesses. The estimates

i n c rease gradually with income levels

a c ross the EU countries. The value of

loosing one year’s life expectancy is

estimated to be between 55,000

and 142,000 euro s .

A survey of Milan’s households shows

that on average they are willing to

pay 24 euros per month to avoid

losing one species of farmland bird

Valuing Risk to Life and Health

b i o d i v e r s i t y, 15 euros per month to

avoid the contamination of one

p e rcent of farmland soil and aquifer,

and 3 euros per month to pre v e n t

one case per year of human ill-health.

POLICY IMPLICAT I O N S

The design of environmental policies

and their evaluation should take into

account benefits associated with

reducing the risk of dying or the risk

of being exposed to pesticides.

The value of a statistical life does not

need to be adjusted for the age of

people whose lives are saved by

e n v i ronmental policies. The evidence

re g a rding adjustments by health

status is weak.

USEFUL READINGS

• Krupnick, A., 2002. Va l u i n g

Health Outcomes. Policy Choices and

Technical Issues, Resources for the

F u t u re. Washington, DC. Report on

a l t e rnative health valuation measure s

for policy-making and on the

techniques to derive them.

• Pimentel, D., ed., 1997. Te c h n i q u e s

For Reducing Pesticide Use. Economic

And Environmental Benefits, John

Wiley and Sons, New Yo r k .

Collection of papers on techniques

for reducing pesticide use and the

associated environmental and

economic benefits.

• Viscusi, K., 1992. Fatal Tr a d e o ff s .

Public and Private Responsibilities for

Risk, Oxford University Press, Oxford .

Basic re f e rence for re s e a rch on the

value of life and risk re g u l a t i o n .

• Viscusi, K., 1993. "The Value of

Risk to Life and Health", Journal of

Economic Literature, pp. 1912-1946.

Influential review of statistical life

re s e a rc h .

R E V I E W

E n v i ronmental regulation re q u i re s

the analysis of the costs and

benefits associated with

implementing a specific policy.

Possibly the most important

benefit of many enviro n m e n t a l

policies is the saving of human

lives. However, depending on the

policy under consideration, other

benefits may be linked to a

reduction in certain enviro n m e n t a l

risks, such as the risk of exposure

to pesticides, for instance. Thre e

recent FEEM working papers deal

with these issues.

What is the monetary value of

saving a human life? In policy

evaluation, the focus is not on the

market value of a specific human

life, but rather on the value of a

statistical life to society as a

whole. This is what is meant by

the notion of 'value of a statistical

life'. For example, consider a

g roup of 10,000 individuals,

w h e re each of them faces a risk of

death of 1 in 10,000 and is willing

to pay 500 euros to eliminate that

risk. In this context, the value of a

statistical life would be 5 million

e u ros, which is the amount that

could be raised collectively to

p revent one death to the gro u p ' s

members.

Most of the available estimates of

values of statistical life are not

well suited for the evaluation of

e n v i ronmental programs because

they come from labor market

studies which focus on the wage

p remium paid to workers for risky

jobs. In contrast, most of the lives

saved by environmental pro g r a m s

a re lives of people that are not

likely to be in the work force, such

as the elderly or people with

c h ronic health problems. For

instance, decreasing sulfur oxide

emissions will primarily eliminate

respiratory ailments among the

very senior members of the

population and reduce their

associated risk of dying.

Should we attach the same value

to saving the lives of individuals

with relatively little life left to live

and to saving the lives of people

that are expected to live longer?

Should saving a person's life fro m

a risk of death at age 20 have the

same value as saving that person's

life from the risk of death at age

90? How does the value of lives of

people in poor health compare to

the value of lives of healthy

people?

The current practice of the US

E n v i ronmental Protection Agency

consists of using an estimate of

value of a s ta ti s t i ca l l i fe o f

about 6 mi l l ion US do ll ars .

DG Envi ronment , on i ts par t,

recommends a central value of a

statistical life figure of 1 million

e u ros and adjusts its value of a

statistical life for age, using a

c o r rection factor of 0.7 for older

people, and for cancer- re l a t e d

deaths. DG Environment faces yet

another challenge, namely,

whether the value of a statistical

life should be adjusted to re f l e c t

the diff e rent incomes of the

various populations with the

E u ropean Union.

Alberini, Markandya and Hunt

conducted a contingent valuation

survey in three Euro p e a n

countries, the UK, Italy and

France, to elicit their people's

willingness to pay for re d u c t i o n s

in one's risk of death. The survey

is a so-called contingent valuation

s u r v e y, where participants are

asked explicitly how much they

a re willing to pay under diff e re n t

scenarios. Individuals older than

40 where interviewed and asked

how much they were willing to

pay to for several reductions in the

chance of death in diff e re n t

situations, distinguished by

d i ff e rent likelihood and time of

death. The authors estimate that

in these countries the value of a

statistical life ranges between 1

and 2.3 million euros. These

f i g u res are within (and on the low

end of) the range re c o m m e n d e d

by DG Environment. However,

they do not find any evidence that

the value of a statistical life is

lower for older persons. But it is

higher among those re s p o n d e n t s

who have recently been admitted

to the hospital or have vis ited

a n e m e r g e n c y r o o m f o r

c a rdiovascular or re s p i r a t o r y

illnesses. More o v e r, people who

have or have had cancer seem to

be willing to pay more to re d u c e

their risk of dying, but this positive

relationship is not significant fro m

the statistical point of view. These

results indicate that there is no

empirical evidence in favor of

adjusting the value of a statistical

life used in environmental policy

analyses for the age of people

whose lives are saved by

e n v i ronmental policies. They also

do not strongly support the

practice of imputing lower values

for persons with a compro m i s e d

health status.

In the sur veyed count r ies ,

wealthier people are willing to pay

m o re and the estimates of the

willingness to pay incre a s e

gradually with income levels

a c ross the EU countries.

When pollution exposures are

sustained over a long period of

time, they cause changes in the

life expectancies of the exposed

populations. The responses to the

willingness to pay questions allow

the authors to estimate that the

value of a loss of one year’s life

expectancy is between 55,000

and 142,000 euro s .

Death is an extreme outcome.

Travisi and Nijkamp study the

willingness to pay to reduce risks

related to exposure to pesticides.

Pesticides can contaminate drinking

water and food crops. Using high-

dosage pesticide in the pro d u c t i o n

of fruits and vegetables may

induce serious health hazards to

consumers and to the farmers

themselves. In recent years,

i n c reasing public awareness for

food safety and improvements in

the environmental sustainability of

a g r i c u l t u re have lead to the design

and application of new policy

instruments, such as eco-labeling

of fresh produce, rules and

regulations for the proper use of

pesticides, and pesticide taxes.

The design of these types of policy

instruments re q u i res re l i a b l e

monetary estimates of the

i n d i v i d u a l ’s willingness to pay for

pesticide risk reductions.

In the paper with Florax, Tr a v i s i

and Nijkamp review existing

estimates of the willingness to pay

to reduce the risk of being

exposed to pesticide. Not

s u r p r i s i n g l y, these estimates,

mostly based on US data, suggest

that the willingness to pay is

g reater the greater is the level of

the risk, and is quite sensitive to

income variations. However, there

a re diff e rent estimates, depending

on the re s e a rch design of the

underlying studies, geographical

d i ff e rences , and behavi ora l

aspects.

Against this background, in a

separate paper, Travisi and

Nijkamp report on a survey

recently done in Milan to estimate

the value of reducing the impact

of pesticide use. They focus on

t h ree aspects of the risk of

pesticide exposure: the re d u c t i o n

of farmland biodiversity, the

con tami nat ion of so i l a nd

g roundwater in the agricultural

land, and the health effects of

pesticides on the general public.

The impact on biodiversity is

quantified in terms of the number

of farmland endangered bird

species. The impact on soil and

g roundwater is measured using

the percentage of farmland are a s

contaminated by pesticides. The

impact on human health is

m e a s u red in terms of cases per

year of acute intoxication because

of work and domestic exposure .

The various enviro n m e n t a l

impacts of pesticide use are

p resented as attributes of the

f o o d s t u ff. Respondents are asked

to take into account these

attr ibutes in their purc h a s e

decision. Basical ly, they are

p roposed to choose hypothetically

b e t w e e n d i f f e r e n t f o o d -

b a s k e t c h a r a c t e r i s e d b y

d i ff e rent combinations of these

attributes. Finally, they are asked

their maximum willingness to pay

for eliminating all the negative

e n v i ronmental impacts under

consideration. Not surprisingly,

respondents are against cheaper

shopping that have heavier eff e c t s

on biodiversity and human health,

and are less attracted to food

shopping if the food pro d u c t i o n

p rocess causes pollution of the

g roundwater to increase. Perhaps

m o re importantly, re s p o n d e n t s

show they are willing to pay to

i m p rove agricultural enviro n m e n t a l

s a f e t y. On average, they are

willing to pay non-trivial amounts

of money for agricultural foodstuff

p roduced in env iro n m e n t a l l y

be n i gn w ay s . The a ut hor s

estimate that Milan’s households

a re on average willing to pay 24

e u ros per month to avoid losing

one species of farmland bird

b i o d i v e r s i t y, 15 euros per month

to avoid the contamination of one

p e rcent of farmland soil and

a q u i f e r, and 3 euros per month to

p revent one case per year of

h u m a n i l l - h e a l t h . M i l a n ’s

respondents seem to perc e i v e

s t rongly the possible risks for

human health related to pesticides

u s e .

The Master in Integrated Logistics

has been designed to provide young

university graduates and expert

logistics operators with the know-

h o w, the competence and confidence

necessary for the planning and

implementation of logistical pro j e c t s

both at the strategic and at the

operational level.

It is organised by FEEM, by the Eni

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the University of Genoa, the Sogea

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support of Genoa Assindustria and

the Genoa Port Authority.

The participants develop a broad

logistical culture based upon

technical, economic and managerial

k n o w l e d g e .

The course has been held since 1998.

It is divided in two phases, consisting

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The next course - the sixth edition –

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S u sta i n a b le eco - tourism

This year’s first topic of the School

of Environmental Communication

and Management

Establishing trustful re l a t i o n s h i p s

with stakeholders is critical when

dealing with environmental issues.

This means that companies have to

define a correct and understandable

e n v i ronmental communication,

which takes into account the

d i ff e rent objectives and language of

the interlocutors (specialists, media,

political authorities, population) and

a p p roaches them with adequate

communication strategies and tools.

The course includes methodological

contributions and sharing practical

experience, with the maximum

interaction between and among

participants and trainers.

The first two editions focused on

E n v i ronmental Communications and

on the Decision-Making Process in

the environmental field.

The next course will deal with

Sustainability in Eco-Tourism, which

is defined as tourism in ecologically

sensitive areas that contributes both

to the protection of the enviro n m e n t

and to the wellbeing of the local

c o m m u n i t y.

Among others, the agenda includes

the following topics:

• S o c i a l , e c o n o m i c a n d

e n v i ronmental impact of eco-tourism

• Development, implementation

and sustainable management of eco-

t o u r i s m

• P romotion, marketing and

communication of eco-tourism

p ro j e c t s

• Monitoring of costs and benefits

• Good practices (with real life

testimonials and case studies)

The course is aimed at persons

i n t e rested in implementing eco-

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other person interested in this

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6th edition of the MASTER in Inte g ra ted Logist i c s

Rosanna Dursi*

*FEEM

Since the year 2000, the Euro p e a n

Association of Environmental and

R e s o u rce Economists (www. e a e re . o r g ) ,

the Fondazione Eni Enrico Mattei

( w w w.feem.it) and the Ve n i c e

I n t e rnational University (www. u n i v i u . o r g )

have been jointly running their

annual European Summer School

in Resource and Enviro n m e n t a l

Economics. Summer Schools usually

take place in the campus of the

Venice International University on

the Island of San Servolo, just in

f ront of Saint Mark’s Square, in

Venice, Italy.

The main aim of the EAERE-FEEM-

VIU Summer School is to pro v i d e

advanced training for Ph.D. students

in Environmental and Resourc e

Economics by bringing together

postgraduate students with leading

re s e a rchers to teach the latest

developments in their field of

specialisation. The Summer School

aim is also to allow postgraduate

students to meet other postgraduate

students working in closely re l a t e d

topics to both learn what re s e a rch is

being undertaken elsewhere that

they might not otherwise be aware

of, and to share experiences of doing

re s e a rch.

The Summer School is open for 20

Ph.D. students from all over the

world. Selected students should

have completed enough of their

PhD to have form ulated a

programme of research and to be

able to make a presentation on it

and should be working explicitly in

the field of environmental and

resource economics.

The Summer School focuses on

a specific topic in the f ield of

e n v i ronmental and re s o u rce economics

which varies each year, and re f l e c t s

issues that are currently lively are a s

of new re s e a rch and policy intere s t .

The topic of the last edition of the

Summer School, held on July 1st-

7th, 2004 was Dynamic Models in

Economics and the Enviro n m e n t .

The School was brilliantly co-

o rdinated by Prof. Aart de Zeeuw,

f rom Tilburg University. The five

l e c t u rers comprising the faculty

p resented some state-of-the-art in

two lectures of one and a half hour

each. Prof. Aart de Zeeuw talked

about how to handle non-

convexities in optimal control and

d i ff e rential games. Prof. Partha

Dasgupta from the University of

Cambridge discussed the concept of

social capital with the purpose of

relating it to more standard concepts

in economic theory, such as re s o u rc e

allocation mechanisms. Prof. Larry

Karp from the University of

C a l i f o rnia at Berkeley discussed two

topics in environmental contro l :

hyperbo lic discounting and

anticipated learning. Prof. Anastasios

Xepapadeas from the University of

C rete introduced a relatively new

topic: robust control. Prof. Sjak

Smulders from Tilburg University

p resented the state-of-the-art for the

topic growth and environment. The

l e c t u re notes and the students’

p resentations are available on the

2004 Summer School web-site at

h t t p : / / w w w. f e e m . i t / e s s 0 4 .

The next Summer School will take

place on July 3rd-9th, 2005, under

the co-ordination of Prof. Karl-

Gustaf Löfgren from the University

of Umeå. Prof. Löfgren, Prof. Thomas

A ronsson and Prof. Kenneth Backlund

f rom the University of Umeå, Pro f .

John Hartwick from Queen’s

U n i v e r s i t y, and Prof. Chuan-Zhong Li

f rom Uppsala University, will give

l e c t u res on We l f a re Measure m e n t

and Cost Benefit Analysis in Dynamic

General Equilibrium. One of the

2005 Summer School’s major

purposes is to derive exact welfare

m e a s u res in imperfect market

economies and compare them with

their counterparts in a first best

equilibrium. Using numerical

analysis, an attempt will be made to

pass from theory to practical

application by measuring the

empirical importance of market

imperfections. Such analysis will

p rovide the tools for examining

whether ‘real life’ approximations of

the welfare contribution of extern a l

e ffects, such as information collected

by using the willingness-to-pay

method, actually captures true and

accurate values. Finally, the School

will address the theory of

cost–benefit analysis, in terms of

e n v i ronmental and other public

policies, in dynamic general

equilibrium models.

Applications for the 2005 EAERE-

FEEM-VIU must arrive to the

Summer Schoo l Sec re t a r i a t

(angela.marigo@feem.it) by February

1st, 2005. Further information is

available in the Summer School web-

site: http://www. f e e m . i t / e s s 0 5 .

EAERE - FEEM - VIU. European Summer Schoolsin Research and Enviro n m e n tal Eco n o m i c s

Angela Marigo*

*FEEM

The MAEM/MEMA project was

o fficially concluded on October 31,

2004. The project, financially

supported by the Euro p e a n

Commission INTERREG III B Medocc

P rogramme, both through Euro p e a n

and National funds of the Countries

involved (France, Italy and Spain),

and the local administration

partners, aimed at establishing a

Consortium of Universities and

academic insti tutions fro m

Mediterranean countries of both the

n o r t h e rn and southern shores, in

o rder to create long-term re l a t i o n s

for co-operation.

The final output of the pro j e c t

was the establishment of the

MAEM/MEMA Network, which will

be responsible for the launch of the

first edition of the Master. To this

aim an Agreement between the

Universities and academic institutions

involved in the initiative was off i c i a l l y

signed at the project-concluding

event held in Florence on October 28,

2004, organised by the Regione

Toscana, co-ordinator of the pro j e c t .

Representatives of the partner

Universities and academic institutions

attended the meeting, which was

i n t roduced by a press conference of

the Education Alderman of the

Regione Toscana, Paolo Benesperi.

To date, 14 institutions have signed

the Agreement. Other institutions

a re expected to join the Network in

due course, fol lowing the

administrative formalities re q u i red by

the institutions internal pro c e d u re.

The project started in 2001. During

the three years of project activities,

the partner Universities and

academic institutions worked on the

definition of the Master pro g r a m m e

focusing on the development of

knowledge and skills on Euro -

Mediterranean issues. Following the

meetings of the Directive and Pilot

Committees, responsible for the

strategic decisions related to the

p roject implementation, seven

Working Groups have been set up to

a d d ress the following tasks:

Academic affairs; Te a c h i n g

methodology and instruments;

Administrative affairs; Sponsorship;

Co-operation between Universities

an d re gion a l g overn m e n t s ;

Workshops for trainers; Strategic

financial planning. Results of the

activities of these working gro u p s

have been discussed and validated

by the Project Directive and Pilot

C o m m i t t e e s .

The project was co-ordinated by

the Regione Toscana and involved

37 partners from the following

Mediterranean countries: Italy (18),

Spain (7), France (3), Turkey (3),

Egypt (1), Greece (1), Lebanon (1),

Malta (1), Morocco (1), and

Palestine (1).

The role of FEEM was to support

the Regione Toscana in the co-

ordination of the project. To this

aim a Project Management Unit

(PMU) based in Florence was set

up. The PMU was made of five

collaborators: Imco Bro u w e r, the

project director, Tina Cuffari, Chiara

Del Sordo Daniela Filistrucchi and

Marialisa Masseti, pro v i d i n g

scientific and technical assistance.

A n d rea Marsanich, Va l e r i a

Papponetti, Dino Pinel li, and

R i c c a rdo Ta rquini from FEEM

headquarters in Milan complete the

team.

MAEM/MEMA - Master in Euro-MediterraneanAffairs

Riccardo Tarquini*

*FEEM

Following its long time tradition of

successful international post-graduate

and doctoral training, thro u g h

i n t e rnships, fellowships and longer

term re s e a rch contracts, Fondazione

Eni Enrico Mattei has been

acknowledged as a Marie Curie

Training Site, under the FP5 Marie

Curie Fellowships’ framework of the

E u ropean Commission. Marie Curie

Fellowships support the training and

mobility of re s e a rchers thro u g h o u t

E u rope. To benefit of a Marie Curie

Fellowship, re s e a rchers are re q u i red to

move to another country to carry out

their training. A Marie Curie Tr a i n i n g

Site is a re s e a rch institution holding

the characteristics to provide top-level

training to young re s e a rchers who

wish to pursue their doctoral studies

within a well defined and specialised

a rea of re s e a rch in a country other

than their own. To benefit of this

o p p o r t u n i t y, young re s e a rchers are

invited to apply directly to the selected

host organisations. The organisation is

also asked to bear responsibility for

the evaluation and selection of

fellows according to the eligibility

conditions and rules set out by the

Commission, whereas the

Commission is asked to confirm the

selection of the fellows, verifying their

e l i g i b i l i t y. The Training Site of FEEM is

c u r rently being implemented thro u g h

two Projects: INTEGRA (Integrated

Analysis on Environmental Policies,

2002-2006) and ENVIRON (Decision

P roblems in Environmental Planning,

2 0 0 3 - 2 0 0 7 ) .

INTEGRA Training Site

The programme is articulated as

follows.

T h ree projects address vertical

themes. They are: Climate change

modelling and policies, Integrated

analysis of water management and

Sustainable development in the

Mediterranean coastal areas. Wi t h i n

each project, policies based on

traditional command-and-contro l

instruments are studied along

with those based on economic

instruments; voluntary appro a c h e s

and policy mixes, in line with the EU

priority of broadening the range of

instruments. Within each pro j e c t ,

integrated evaluation of policies and

actions is pursued in line with the EU

priority of developing a common

basis for policy design and

implementation and sectoral policy

c o h e rence (Consultation Paper for

the Preparation of a Euro p e a n

Union strategy for Sustainable

Development, European Commission,

2001).

Two horizontal themes complete the

re s e a rch programme. The first theme,

The use of voluntary agreements in

e n v i ronmental policies, focuses

on a particular instrument of

e n v i ronmental pol icy that is

i n c reasingly applied to many issues;

the second, The use of economic

valuation in the elaboration of

e n v i ronmental policies and actions,

focuses on a tool, such as the

economic valuation, that is mostly

needed in order to assess costs and

benefits of any environmental action.

Two selections were addressed in

2002. A third selection was carried

out in July 2003, and a fourth and

final selection was carried out in

2004.

First Selection

Jacobo Feas (University of Santiago

de Compostela, Spanish nationality)

and Adrian Stanica (National Institute

of Marine Geology and Geoecology,

Romanian nationality) were selected

to carry out re s e a rch on the

Integrated analysis of water

management and on the Sustainable

development in the Mediterranean

coastal areas, re s p e c t i v e l y.

Both the fellowships started in

October 2002 and lasted 8 months.

J a c o b o ’s fellowship was then

extended for other 4 months, until

31 October 2003. After the end of

his Fellowship, Jacobo continued to

work within the Natural Resourc e s

Management Research Pro g r a m m e

of FEEM until September 2004.

Second Selection

Four fellows were selected in

December 2002, for fellowships

starting in spring 2003.

Manuel Cabugueira (Universidade

Portucalense, Portuguese nationality)

and Ve ronika Nemes (University of

M e l b o u rne, Hungarian nationality)

carried out re s e a rch on The use

of voluntary agreements in

e n v i ronmental policies.

Marian Mraz (Manheim University,

Slovakian nationality) and Katrin

Rehdanz (Centre for Marine and

Cl imate Research - Ham burg

Enhancing Human Resources at FEEM

Marie Curie Training Site

Valeria Papponetti, Riccardo Tarquini*

*FEEM

U n i v e r s i t y, German nationality)

carried out re s e a rch on Climate

change modelling and policies.

Third Selection

In the 2003 call for applications, the

Fellow Marek Giergiczcny (Wa r s a w

C e n t re for Ecological Economics of

the University of Wa r s a w, Polish

nationality) was selected to carry out

re s e a rch activities on The use of

economic valuation in the elaboration

of environmental policies and actions

(horizontal theme 1). His fellowship

started on 1 November 2003 and

lasted 10 months, until 31 August

2 0 0 4 .

Fourth Selection

Two additional Fellows were selected

in 2004 to carry out re s e a rch on

Climate change modelling and

p o l i c i e s : A n n a K u k l a - G r y z

( Warsaw University, Department

of Economics, Polish nationality) and

Laurent Gilotte (PhD student at

CERMICS, Ecole nationale des ponts

et chaussés, Paris and Associated

re s e a rcher at CIRED-CNRS, Fre n c h

nationality). Both fellowships

a d d ressed the theme Climate change

modelling and policies (vertical

theme 1). Anna’s fellowship lasted six

months (1 March-31 August 2004),

whereas Laurent’s lasted three

months (1 May-31 July 2004).

ENVIRON Training Site

The proposed programme addre s s e s

the following re s e a rch themes:

i) environmental decision making

and computerised decision support

systems, including group decision

making techniques;

ii) European water policies and

particularly issues related to the

implementation of the EC Wa t e r

Framework Directive and the role of

DSS tools for the involvement of

stakeholders;

iii) GIS based hydrological modelling.

Depending on the backgro u n d ,

fellows focus on the training course

that best matches their PhD study

among the following:

a) the interface between public

participation and decision methods

in Integrated Water Resourc e s

Management;

b) European water poli cies:

challenges, pro g ress and barriers of

their implementation and available

methodologies and tools;

c) advanced spatially distributed

models and Geographic Information

Systems for environmental decision

m a k i n g .

H o w e v e r, f e l l o w s u s e a n

i n t e rdisciplinary approach and benefit

f rom the surrounding interd i s c i p l i n a r y

e n v i ronment of FEEM.

The first selection was carried out in

July 2003. The second and final

selection has been carried out in July

2004.

First Selection

Two fellows were selected: Elke

Petersson (Centre for Interd i s c i p l i n a r y

studies of Technology of the

Darmstadt University of Te c h n o l o g y,

German nationality) focusing on

E n v i ronmental decision making and

computerised decision support

systems, including group decision

making techniques; and Ire n a

V l a d i m i rova (University of Arc h i t e c t u re ,

Civil Engineering and Geodesy of

Sofia , Bu lgarian nat ional i ty )

focusing on GIS Based Hydrological

Modelling. Both fellowships lasted

six months. Elke’s fellowship started

on 26 September 2003 until 25

M a rch 2004. Ire n a ’s started on 1

December 2003 and lasted until 31

May 2004. In both cases the fellows

extended their stay at FEEM. In

p a r t i c u l a r, Irena joined FEEM in

October 2004 for a two-month

collaboration aimed to conclude her

PhD thesis at FEEM.

Second Selection

Two fellows have been selected:

Miguel Jimenez Bello (Polytechnic

University of Valencia, Hydraulic

Engineering and Enviro n m e n t

department) focusing on GIS based

h y d rological modelling; and Anna

Lasut (University of Science and

Technology of Krakow, Faculty of

Management) focusing on Euro p e a n

Water Policies and the issues re l a t e d

to the implementation of the EC

Water Framework Directive and the

role of DSS tools for the involvement

of stakeholders, both fellowships

lasting 6 months.

Anna started to work at FEEM on 1

October 2004, whereas Miguel will

jo in the Natural Resourc e s

Management Programme in Ve n i c e

in late January 2005.

Useful Info r m a t i o n

At present, there is no vacancies’

availability at FEEM under the Marie

Curie Training Site scheme.

H o w e v e r, FEEM is p ro v i d i n g

support to individual experienced

r e s e a r c h e r s m e e t i n g t h e

re q u i rements of the FP6 Marie

Curie Actions Programme. The aim

is to develop research proposals for

a Marie Curie Individual Fellowship

at FEEM.

The Marie Curie Actions Pro g r a m m e

p rovides three types of Individual

F e l l o w s h i p s :

• MC Intra-European Fellowships

• MC Outgoing Intern a t i o n a l

Fellowships

• MC Incoming Intern a t i o n a l

Fellowships

Opportunities vary according to the

country of residence: re s e a rc h e r s

f rom a Member State or Associated

State may opt for an Intra-Euro p e a n

or an Outgoing Intern a t i o n a l

Fellowship; re s e a rchers from third

countries may only opt for an

Incoming International Fellowship.

Candidates must have at least 4

years of research experience (full-

time equivalent) since gaining a

university diploma giving access to

doctoral studies or must be in

possession of a doctoral degree.

Researchers must be nationals of a

State other than that of the host

organisation and must not have

resided or carried out their main

activity in the country of the host

organisation for more than 12

months in the 3 years immediately

prior to the start date. Therefore,

re s e a rchers of Italian nationality

and/or re s e a rchers of another

nationality having carried out their

main activity in Italy are not eligible

for these Fellowships at FEEM.

If you are interested in exploring the

opportunities off e red by the Marie

Curie Actions to work at FEEM,

please submit your CV on line

t h rough the link on FEEM’s web site:

w w w.feem.it .

• More information on the Marie

Curie Actions and on the call for

p roposals is available on the

CORDIS web site: www.cordis.lu/

fp6/mobility.htm and on the Marie

Curie Actions web site, at: http://euro p a .

e u . i n t / c o m m / re s e a rc h / f p 6 / m a r i e c u r

ie-actions/indexhtm_en.html

• For information on the Marie

Curie activities of FEEM, please

contact Valeria Papponetti:

v a l e r i a . p a p p o n e t t i @ f e e m . i t

Anna Kukla

Marie Curie Training Site

Fe l lowship INTEGRA

FEEM Milan, March-August 2004

First thing I have asked myself after

landing at Malpensa Airport was:

w h e re am I going to sleep tonight?

Just before leaving Poland I had

received an e-mail: “I am sorry, the

room you have booked (almost one

month earlier!) has just been taken.

Have a nice time in Milan!”.

Although ironic, the wish came true

and I had a great time in Milan. Wi t h

the help of FEEM’s staff I found a

very nice room after two days. The

only other troubles I had were

obtaining a tax number and the

f o reigners’ permit to stay. The latter

was a nightmare because Poland

was classified as a so-called “no-

member country”. But after May 1

the queue “reduced” from almost

six hours to less than one hour. So, I

also finally got a permit to stay.

Working at FEEM was a gre a t

p l e a s u re and opportunity. I could

write quite a long essay now,

describing all the kindness of each

person I have met in FEEM. During

my fellowship I focused most of all

on the Climate Change Modelling

and Policy. I was working on

implementation of the so-called

backstop technologies and

opportunity costs into the FEEM-RICE

Model. Valentina Bosetti, whom I

was working with and whom I was

asking – especially at the beginning -

m o re than twenty questions a day

(!), was very patient with me. She

was answering and teaching me

whenever I had any problem. I was

also very lucky to be supervised by

P rof. Marzio Galeotti. Apart from a

g reat educational support he was

also a great teacher of Italian culture .

For example, it’s how I learnt how

the Marocchino coffee tastes like.

Working with the FEEM-RICE Model

I learnt – among other things -

GAMS software, which is now very

useful for my re s e a rch.

In addition, my re s e a rch focused on

Structural Equation Modelling (SEM).

Thanks to the great help of Pro f .

Matteo Manera I learned the theory

of SEM and I also implemented it in

empirical analysis. As a result, I gave

a seminar after which I receved very

useful comments.

B e f o re finishing I would like to

mention just one more thing: I am

still eating lunch at one o’clock and I

am finishing it with an Espre s s o

c o ff e e .

L a u rent Gilo t te

Marie Curie Training Site

Fe l lowship INTEGRA

FEEM Milan, May-July 2004

Every environmental economist

p resumably knows that FEEM is one

of the best places to be for

advancing one's re s e a rch. But there

still remains a distance from opinion

to experience, a distance that I have

been lucky enough to travel during

t h ree great months spent in Milan.

My work focused on integrated

assessment modelling of the climate

and the economy, which is a FEEM

s p e c i a l i t y. In my re s e a rch, I developed

an alternative re p resentation of the

endogenous evolution of carbon

i n t e n s i t y, which can be implemented

in a compact model of optimisation

under uncertainty. Since some of my

ideas were exploratory, there was a

high risk of going too much into the

wild. But I was able to improve and

s t rengthen them in great lengths

thanks to the shrewd and

u n c o m p romising comments of Dr

Valentina Bosetti and Prof Marzio

G a l e o t t i .

Now the first thing to be experienced

when you enter the Palazzo delle

Stelline, where FEEM stands in Milan,

is a sense of balance. Here people

work, and work hard, but they

behave relaxed. And this in spite of

the amazing number of caffè they

can accommodate within a day. I

quickly discovered that this work-

h a rd-but-stay-cool attitude was also

s h a red by the rest of the city, and

arriving there from stressed Paris, it

was a nice and beneficial cultural

change.

FEEM for School

Eniscuola.net has been re c e n t l y

renewed and it has acquired an

i n c reasingly important role in

schoo ls . S ta r t ing f rom the

beginning of November the new

www.eniscuola.net portal is on line.

The new site offers teachers and

students a very extensive sourc e

of information and educational

material on the topics of energy and

the environment. Collecting and

developing the information available

on the portal is simple because of the

e fficient technical and graphical

solutions chosen for the site which

has become more dynamic and

easier to surf.

The main characteristic of the new

Eniscuola portal is its multimediality.

The possibility of viewing thematic

films and following the activities of

educational laboratories guided by a

tutor who supervises all the stages of

the scientific experiments are

innovative activities with an

important educational value that

complete the experiences pro p o s e d

in the classroom and at home.

G reat care has been devoted to

making the approach amusing and

attractive even for the younger

students. Learning science is fun

when the knowledge is acquire d

t h rough a number of interactive

games to be played alone or in

g ro u p .

T h rough the eniscuola.net portal,

students and teachers have free

access to a very extensive archive

which is available and updated all

the time: texts, images, graphs and

tables, f ilms and interactive

experiences. More o v e r, for all the

subjects discussed there is a number

of selected and commented links

(which are a big help in the search of

useful sources for teachers and

students). There is a new section

devoted to news: it is always up-to-

date and it provides the latest news

on the most interesting discoveries

and projects in the fields of

science, research, energy and the

environment.

In the new site we tried to highlight

the importance of sustainable

development in the management of

re s o u rces: for each topic pre s e n t e d

t h e re is an in-depth analysis of the

impact of human activities on the

e n v i ronment and on the re s o u rc e s ,

contributing to the development of a

responsible awareness of the

meaning of the term “sustainable

development”.

The portal has an efficient searc h

engine to make the search simpler

and quicker.

For years, in addition to the new

technologies, Eniscuola has

p roposed a more traditional but

always effective educational tool:

posters dealing with important

themes with a simple, direct and

amusing approach. We have now

p roduced seven posters on the

c u r rent themes of energy and the

e n v i ronment. (water, air, soil, energy,

animals, flora, hydro g e n ) .

C o n f e re n c e s :

confirming its commitment to the

educational and scientific sphere, on

November 27 2004 in Genoa the

“Energy and the Environment at

school” project, has organised two

c o n f e rences on the topics that are

most frequently debated at school.

Educating to sustainability: what

a re the key words to explain

sustainability to young people?

Cooperating whi le playing:

sustainable development and

cooperati ve education, new

scenarios, examples of using

the internet to teach sustainability

while playing.

The C ul ture Fac to ries of the

Fondazione Eni Enrico Mattei are the

result of the evolution of the

Multimedia Libraries. The activities of

the Culture Factories started in

January 2004, and are mainly

focused on services and pro j e c t s

aimed at extending the culture of

university students in terms of

E u ropean culture, knowledge and

competencies in view of the new

opportunit ies off e red by the

E u ropean Union.

In addition to language courses,

cultural events, seminars and

workshops, Culture Factories hold

p reparatory computer courses for

the European Computer Driving

Licence, which is a licence re c o g n i s e d

as a re f e rence standard in Euro p e

confirming a fair knowledge of the

most frequently used software .

These courses are very popular, and

considering the increasing interest in

e - l e a rning and the need to

disseminate this knowledge, in

November we decided to start a new

training project: e-lios.

The e-lios Pro j e c t

The e-lios project consists of

computer courses carried out on an

e - l e a rning basis. The courses are

organised so that the students can

benefit from both the assistance

and communication characteristics

typical of normal classroom lessons

coupled with the timetable flexibility

o ff e red by e-learning. In addition to

the internet access to the contents of

the courses at all times, e-lios

includes lessons in the classro o m ,

forums and e-mail help from an IT

tutor every aftern o o n .

The courses are organised to include

all the seven modules of the

E u ropean Computer Driving Licence

(Basic Theoretical Concepts;

Use of the Computer and File

Management; Wo rd Pro c e s s i n g ;

E l e c t ronic Spreadsheets; Databases;

P resentation Tools; Computer

Networks) in specific lessons divided

into chapters with final tests.

Practical lessons and a technical

glossary are also included in the

p a c k a g e .

The courses are designed to have a

high visual impact. This makes the

explanations clearer and easier to

re m e m b e r. This result is obtained

with a mixed contents technique (a

short theoretical section supported

by images and connections). In view

of making users familiar with the

p rogramme, the courses include

lessons where the students can

practise the recently acquired theory.

The first lesson is in the classro o m

w h e re the organisation of the

course is explained. After the first

lesson, all the students of the five

c u l t u re factories become part of a

Culture Factory

Linda Isola*

*FEEM

virtual class that follows the course

for one month. During this time the

students can keep in touch with the

tutor by e-mail and with the other

students through a special forum.

The tutor of one of the five factories

is at the students’ disposal every

d a y. The tutor answers e-mails,

writes on the forum and monitors

the work of the students in order to

o ffer them help, encouragement

and supervision. The forum was

developed to improve participation

and to encourage exchanges

among the students, even if only on

a virtual basis, useful to enhance

l e a rning and participation. After

one month the students re t u rn to

their classroom with their tutor for a

global test on the course’s contents,

simulating the exam they will have

to take to obtain the ECDL.

The first co u rse: Exce l

The first e-lios course was on Excel

and it started in November. The

p roject aroused a lot of intere s t

especially among the students who

could not attend the lessons held in

the Culture Factory classes due to

timetable clashes. E-learning pro v e d

to be a really interesting opportunity,

and many students contacted us

when the subscriptions opened.

The course started with a total of 81

students from the five culture

factories. 35% of the students were

less than 25 years old and there were

five foreign students.

20 students came from the faculty of

Political Sciences, 8 from Economics

and Foreign Languages an d

L i t e r a t u re and 6 from Psychology and

Arts and Philosophy: there were only

2 Engineering students.

The course lasted one month and

finished on December 15 with a

lesson in each of the Culture Factory

classes where a test was held to

check the pro g ress of the students.

C o n fe re n ces and Wo r k s h o p s

January, 6 - 8 2005 Botswana

RESEARCH WORKSHOP ON ECOSYSTEMS AND TOURISM IN SOUTHERN AFRICA: ECONOMIC AND

ECOLOGICAL RESILIENCE

Organisation FEEM, ICTP, The Beijer Institute

Information Monica Eberle monica.eberle@feem.it

http://www.ictp.trieste.it/~eee/workshops.htm

January, 28 - 29 2005 Paris, France

10TH COALITION THEORY NETWORK WORKSHOP: COALITIONS, DECENTRALIZATION AND PUBLIC POLICIES

Organisation EUREqua

Information Silvia Bertolin silvia.bertolin@feem.it

April, 11 - 13 2005 Trieste, Italy

3RD WORKSHOP ON SPATIAL DYNAMIC MODELS OF ECONOMICS AND ECO-SYSTEMS

Organisation FEEM, ICTP, The Beijer Institute

Information Monica Eberle monica.eberle@feem.it

http://www.ictp.trieste.it/~eee/workshops.htm

April, 13 - 15 2005 Trieste, Italy

WORKSHOP ON INFECTIOUS DISEASE: THEORETICAL ECOLOGICAL AND ECONOMIC APPROACHES

Organisation FEEM, ICTP, The Beijer Institute

Information Monica Eberle monica.eberle@feem.it

http://www.ictp.trieste.it/~eee/workshops.htm

June, 6 - 10 2005 Trieste, Italy

RESEARCH VISIT FOLLOW-UP OFTHE TEACHING WORKSHOP ON ACCOUNTING FOR URBAN ENVIRONMENT

Organisation FEEM, ICTP, The Beijer Institute

Information Monica Eberle monica.eberle@feem.it

http://www.ictp.trieste.it/~eee/workshops.htm

June, 20 - 21 2005 Venice, Italy

POST 2012 CLIMATE POLICY ARCHITECTURES AND PARTICIPATION SCENARIOS

Organisation FEEM, Exxon, Stanford, RFF

Information Angela Marigo angela.marigo@feem.it

June, 11 2005 Venice, Italy

EDUCATION AND TRAINING IN EUROPE

Organisation FEEM, Fondazione Giorgio Cini, Fondazione Rodolfo Debenedetti

Information Angela Marigo angela.marigo@feem.it

Roberta Ranzini roberta.ranzini@feem.it

Training Cours e s

July, 3 - 9 2005 Venice, Italy

EUROPEAN SUMMER SCHOOL 2005

"WELFARE MEASUREMENT AND COST BENEFIT ANALYSIS IN DYNAMIC GENERAL EQUILIBRIUM"

Organisation FEEM, EAERE and VIU

Information Angela Marigo angela.marigo@feem.it

http://www.feem.it/ess05/

FEEM’s Future Conferences

At present the Fondazione has

three Editorial Series:

1. Edward Elgar Publishing

Ltd./FEEM Series on

“Economics and the

Environment”*

Editorial Board: Kenneth Arro w,

William Baumol, Partha Dasgupta,

Karl- Göran Mäler , Ignazio Musu,

Henry Tulkens, Carlo Carraro (Series

Editor)

2. Oxford University

Press/FEEM Series on

“Studies in Economics”

Editorial Board: Partha Dasgupta,

David Landes, James Markusen,

Domenico Siniscalco, Guido Ta b e l l i n i ,

Jacques-François Thisse, Jean Ti ro l e ,

Gianmarco I. P. Ottaviano (Series

E d i t o r )

3. Il Mulino/FEEM Series on

“Ambiente e Sviluppo”

(Environment and

Development)

Editorial Board: Bern a rdo Bortolotti,

Carlo Carraro, Marzio Galeotti,

Carlo Giupponi, Andrea Marsanich,

G i a n m a rco I.P. Ottaviano, Dino Pinelli,

Marialuisa Tamborra, Alessandro Lanza

(Series Editor).

*The FEEM Series with Edward

Elgar Publishing replaces the

p revious Series with Kluwer

Academic Publishers.

In special cases, the Fondazione

also publishes with diff e re n t

publishers.

FEEM is sues a P u b l i c a t i o n s

C a t a l o g u e organised in information

sheets containing the publication

details and abstracts of all of its

books. The Publications Catalogue is

updated with new book information

sheets on a yearly basis.

Books are available for consultation at

FEEM's locations.

Books CANNOT be ordered directly from

Fondazione Eni Enrico Mattei.

P lease address the publisher/s

d i rectly (see the link ORDER FORM

on our web si te w w w.feem.it or

contact workingpapers@feem.it).

Other FEEM publica t i o n s

FEEM c ircu la tes a seri es o f

Working Papers in English (FEEM

Note di Lavoro) collecting the

output of research in the field of

econo mi cs, energy and the

environment and the presentations

made at international workshops

and congresses. FEEM Note di

L a v o ro are included in the

Economics Research Institutes

Paper Series of SSRN and in Econlit.

FEEM also circulates a series of

working papers in Italian (FEEM

R a p p o r t i s u l l o s v i l u p p o

s o s t e n i b i l e) focused on the issue

of sustainable development.

FEEM Note di Lavoro and Rapporti

sullo sviluppo sostenibile are

downloadable from our web site

w w w. feem. i t . For add i t i ona l

i n format ion p lease co ntac t

w o r k i n g . p a p e r s @ f e e m . i t.

In 1997 FEEM started a cooperation

with the publisher “Il Mulino” for

the publication of the journ a l

“Equilibri”, which is published in

Italian and deals with sustainable

deve lopment. “Equ il ib r i” i s

published three times a year.

Twice a year FEEM publishes a

T R I P report in Italian (To u R i s m

International Panel), based on a

f o recast model developed in

cooperation with CISET- U n i v e r s i t y

Venice, with the goal to provide

short- and medium-term forecasts

of international tourist flows.

FEEM’s Publications