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on Environmental Economics |
| By: | Q. Farooq Akram (Norges Bank) |
| Abstract: | This paper addresses the so-called natural resource curse by devising a rule that can reduce macroeconomic costs associated with the consumption of revenues from natural resources. It assumes that such macroeconomic costs are mainly brought about by changes in the real exchange rate, which adjusts in order to maintain external balance. Thus it derives a consumption rule, denoted as the efficient consumption rate, that would make the behaviour of the real exchange rate mimic that of the real exchange rate in the absence of natural resources. Accordingly, growth of exports and imports of traditional goods and services, and implicitly the sectoral composition of the economy, become largely immune to the consumption of natural resources. The theoretical framework is applied to estimate and evaluate an efficient consumption rate for Norway’s sizeable petroleum revenues. |
| Keywords: | Natural resources, Dutch disease, real exchange rate. |
| JEL: | Q38 F17 F41 F47 |
| Date: | 2005–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:bno:worpap:2005_01&r=env |
| By: | Vollebergh,Herman R.J.; Dijkgraag,Elbert; Melenberg,Bertrand (Tilburg University, Center for Economic Research) |
| Abstract: | We explore the emissions income relationship for CO2 in OECD countries using various modelling strategies. Even for this relatively homogeneous sample, we find that the inverted-U-shaped curve is quite sensitive to the degree of heterogeneity included in the panel estimations. This finding is robust, not only across different model specifications but also across estimation techniques, including the more flexible non-parametric approach. Differences in restrictions applied in panel estimations are therefore responsible for the widely divergent findings for an inverted-U shape for CO2. Our findings suggest that allowing for enough heterogeneity is essential to prevent spurious correlation from reduced-form panel estimations. Moreover, this inverted U for CO2 is likely to exist for many, but not for all, countries. |
| JEL: | C33 Q50 Q50 O50 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200525&r=env |
| By: | Arguedas,Carmen (Tilburg University, Center for Economic Research) |
| Abstract: | We investigate the features of optimal regulatory policies composed of pollution standards and probabilities of inspection, where fines for non-compliance depend not only on the degree of violation but alson on nongravity factors. We show that optimal policies can induce either compliance or noncompliance with the standards, the latter being more plausible when monitoring costs are large and, surprisingly, when gravity-based fines are large. Also, both tghe convexity of the sanctions and the level of the non-gravity-based penalties play a key role as to whether optimal policies induce noncompliance. |
| JEL: | D82 K32 K42 L51 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:20059&r=env |
| By: | Ujjayant Chakravorty; Céline Nauges |
| Abstract: | The US Clean Air Act allows individual states to implement their own clean fuel programs to address local or regional air quality concerns. These regulations have led to a proliferation of fuel blends known as “boutique fuels.” For each of the three grades of gasoline, more than 15 types of boutique fuels are currently in use, leading to about 45 different fuel blends in use nationally. These fuels are costly to produce, but they also segment the market and increase the market power of refiners. Using measures that differentiate gasoline regulation in a given state from those in neighboring states, we find that both cost and market segmentation significantly affect wholesale gasoline prices. In particular, the greater the regulatory “distance” between a state and its neighboring states, the higher the wholesale price in that state. Simulations suggest that for some states regulating a single boutique fuel nationally may lead to a counter-intuitive outcome: gasoline prices may decline, even though a larger share of their market will be under regulation. |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:emo:wp2003:0511&r=env |
| By: | Hellström, Jörgen (Department of Economics, Umeå University); Nordström, Jonas (Department of Economics, Umeå University) |
| Abstract: | In this paper we present a non-linear demand system for households' joint choice of number of trips and days to spend at a destination. The approach, which facilitates welfare analysis of exogenous policy and price changes, is used empirically to study the effects of an increased CO2 tax. In the empirical study, a bivariate zero-inflated Poisson lognormal regression model is introduced in order to accommodate the large number of zeroes in the sample. The welfare analysis reveals that the equivalent variation (EV) measure, for the count data demand system, can be seen as an upper bound for the households welfare loss. Approximating the welfare loss by the change in consumer surplus, accounting for the positive effect from longer stays, imposes a lower bound on the households welfare loss. From a distributional point of view, the results reveal that the CO2 tax reform is regressive, in the sense that low income households carry a larger part of the tax burden. |
| Keywords: | demand analysis; welfare effects; count data; bivariate zero inflation |
| JEL: | C15 C34 C35 C51 D12 |
| Date: | 2005–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0648&r=env |
| By: | Feng, HongLi |
| Abstract: | Carbon sequestration is a temporal process in which carbon is continuously being stored/released over time. Different methods of carbon accounting can be used to account for this temporal nature, including annual average carbon, annualized carbon, and ton-year carbon. In this paper, starting by exposing the underlying connections among these methods, we examine how the comparisons of sequestration projects are affected by these methods and the major factors affecting them. We explore the empirical implications for carbon sequestration policies by applying these accounting methods to the Upper Mississippi River Basin, a large and important agriculture area in the United States. We find that the differences are significant in terms of the location of land that might be chosen and the distribution of carbon sequestration over the area, although the total amount of carbon sequestered does not differ considerably across programs that use different accounting methods or different values of the major factors. |
| Date: | 2005–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12258&r=env |