nep-ene New Economics Papers
on Energy Economics
Issue of 2006‒11‒04
six papers chosen by
Roger Fouquet
Imperial College, UK

  1. On Technical Change in the Elasticities of Resource Inputs By Jakub, GROWIEC; Ingmar, SCHUMACHER
  2. Puzzling tax attitudes and labels By Löfgren, Åsa; Nordblom, Katarina
  3. Technology Transfers and the Clean Development Mechanism in a North-South General Equilibrium Model By Aronsson, Thomas; Backlund, Kenneth; Sahlén, Linda
  4. Modeling Timber Supply, Fuel-Wood, and Atmospheric Carbon Mitigation By Kenneth Lyon
  5. Unraveling the worldwide pollution haven effect By Grether, Jean-Marie; Mathys, Nicole A.; de Melo, Jaime
  6. The Assignment of Property Rights on the Western Frontier: Lessons for Contemporary Environmental and Resource Policy By Gary D. Libecap

  1. By: Jakub, GROWIEC (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE)); Ingmar, SCHUMACHER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE))
    Abstract: This article considers an economy whose production function takes both renewable and non-renewable resources as inputs. We extend the current literature by allowing for exogneous technical change in the elasticity of subsstitution between these two types of resources. In addition, we study the consequences of biased technical change which alters the resources’ relative productivities. We derive long-run asymptotic results, which we use to compare several cases. In the benchmark case of no technical change, our results are close to those obtained by Dasgupta and Heal (1974). In the case of technical change helps obtain positive long-run production despite the depletion of non-renewable resources. In the biased technical change case, long-run production is only possible either if non-renewable resources are non-essential or if biased technical change is quick enough to compensate for the decreasing flow of non-renewable resources. We embed our production function in an optimal model and study its dynamics. As a steady state (or a balanced growth path) is only attainable as time goes to infinity, we resort to numerical simulations to convey what is happening during the short and medium run. Our results provide new considerations for the debate on natural resources. We suggest that technical change should be directed to the resource which is most important for production.
    Keywords: Elasticity of substitution, Technical change, Biased technical change, Non-renewable resources, Renewable resources
    JEL: Q20 Q30 O30
    Date: 2006–06–29
  2. By: Löfgren, Åsa (Department of Economics, School of Business, Economics and Law, Göteborg University); Nordblom, Katarina (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: We find that through labeling one can significantly affect attitudes towards a tax. The gasoline tax meets a stronger reluctance than virtually the same tax when it is called the CO2 tax on gasoline. <p>
    Keywords: Gasoline tax; CO2 tax on gasoline; attitude; framing
    JEL: H23 Q58
    Date: 2006–10–18
  3. By: Aronsson, Thomas (Department of Economics, Umeå University); Backlund, Kenneth (Department of Economics, Umeå University); Sahlén, Linda (Department of Economics, Umeå University)
    Abstract: This paper analyzes the potential welfare gains of introducing a technology transfer from Annex I to non-Annex I in order to mitigate greenhouse gas emissions. Our analysis is based on a numerical general equilibrium model for a world economy comprising two regions, North (Annex I) and South (non-Annex I). As our model allows for labor mobility between the formal and informal sectors in the South, we are also able to capture additional aspects of how the transfer influences the Southern economy. In a cooperative equilibrium, a technology transfer from the North to the South is clearly desirable from the perspective of a ‘global social planner’, since the welfare gain for the South outweighs the welfare loss for the North. However, if the regions do not cooperate, then the incentives to introduce the technology transfer appear to be relatively weak from the perspective of the North; at least if we allow for Southern abatement in the pre-transfer Nash equilibrium. Finally, by adding the emission reductions associated with the Kyoto agreement to an otherwise uncontrolled market economy, the technology transfer leads to higher welfare in both regions.
    Keywords: Climate policy; technology transfer; Kyoto protocol; general equilibrium; clean development mechanism
    JEL: D58 D62 Q52
    Date: 2006–11–01
  4. By: Kenneth Lyon
    Abstract: There is general agreement that global warming is occurring and that the main contributor to this probably is the buildup of green house gasses, GHG, in the atmosphere. Two main contributors are the utilization of fossil fuels and the deforestation of many regions of the world. This paper examines a number of current issues related to mitigating the global warming problem through forestry. We use discrete time optimal control to model a simplified carbon cycle. The burning of fossil fuels increases atmospheric carbon while the burning of fuel-wood along with its forest source maintain an atmospheric carbon level. The standing timber in the forests is a carbon sink, as are wood buildings and structures, and fossil fuel in the ground. Through time the buildings and structures decay and release carbon to the atmosphere. We also present a numerical example to help illustrate the characteristics of the model. The conclusions are that the forest sector can have a significant impact.
    Date: 2004–12
  5. By: Grether, Jean-Marie; Mathys, Nicole A.; de Melo, Jaime
    Abstract: This paper contributes to the debate on the existence of pollution haven effects by systematically measuring the pollution content of trade (measured by the pollution content of imports, PCI) and decomposing it into three components-a " deep " component (unrelated to the environmental debate but including variables traditionally present in the gravity model) and two components (factor endowments and environmental policies) that occupy center stage in the debate on trade and the environment. The decomposition is carried out for 1986-88 for an extensive data set covering 10 pollutants, 48 countries, and 79 ISIC 4-digit sectors. Illustrative decompositions presented for three of the 10 pollutants in the data set indicate a significant pollution haven effect which increases the PCI of the North because of stricter environmental regulations in the North. At the same time, the factor endowment effect decreases the PCI of the North as the North is relatively well-endowed in capital and pollution-intensive activities are also capital-intensive. On a global scale, because the bulk of trade is intraregional with a high North-North share, these effects are small relative to the " deep " determinants of the worldwide pollution content of trade. In sum, although the impact has been stronger on vertical (North-South) trade flows, differences in factor endowments and environmental policies have only marginally affected the pollution content of world trade during the 1986-88 period.
    Keywords: Environmental Economics & Policies,Water and Industry,Brown Issues and Health,Transport Economics Policy & Planning,Water Resources Assessment
    Date: 2006–11–01
  6. By: Gary D. Libecap
    Abstract: In addressing environmental and natural resource problems, there is a move away from primary reliance upon centralized regulation toward assignment of property rights to mitigate the losses of open-access. I examine the assignment of private property rights during the 19th and early 20th centuries to five natural resources, mineral land, timberland, grazing and farm land, and water on federal government lands in the Far West. The region was richly endowed with natural resources, but assigning property rights to them required adaptation from established, eastern practices as defined by the federal land laws. The property rights that emerged and their long-term welfare effects provide a laboratory for examining current questions of institutional design to address over-fishing, excessive air pollution, and other natural resource and environmental problems. A major lesson is that property rights allocations based on local conditions, prior use, and unconstrained by outside government mandates were most effective in addressing not only the immediate threat of open-access, but in providing a longer-term basis for production, investment, and trade. Another lesson is how hard it is to repair initial faulty property allocations. Accordingly, path dependencies in property rules are real, and they have dominated the economic history of resource use in the West.
    JEL: K11 N21 N22 N5 Q15 Q2 Q28 Q3 Q32
    Date: 2006–10

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