nep-res New Economics Papers
on Resource Economics
Issue of 2005‒01‒16
four papers chosen by
Maximo Rossi
Universidad de la República

  1. How Consistent are Alternative Short-Term Climate Policies with Long-Term Goals? By Valentina Bosetti; Marzio Galeotti
  2. Spatial Analysis: Development of Descriptive and Normative Methods with Applications to Economic-Ecological Modelling By Anastasios Xepapadeas; William Brock
  3. Costs of Climate Policy when Pollution Affects Health and Labour Productivity. A general Equilibrium Analysis Applied to Sweden By Östblom, Göran; Samakovlis, Eva
  4. Productivity Trends in Natural Resources Industries in Canada By Centre for the Study of Living Standards

  1. By: Valentina Bosetti (Fondazione Eni Enrico Mattei); Marzio Galeotti (Università di Milano and Fondazione Eni Enrico Mattei)
    Abstract: Choosing long-term goals is a key issue in the climate policy agenda. Targets should be easily measurable and feasible, but also effective in damage control. Once goals are set globally, given the uncertainty affecting long-term strategies and region-specific preferences for different policy instruments, policies will be better represented by a diversified portfolio to be revised over time, rather than “once and forever” decisions. It therefore becomes crucial to understand to what extent different strategies (or policy portfolios) are consistent with long-term targets, that is, when they imply emission paths which do not irreversibly diverge from globally set goals. The present paper aims to investigate emission paths implied by plausible policy scenarios against those derived by imposing alternative long-term targets, comparing, for example, differences in peak periods. Plausible policy scenarios are for instance Kyoto-type targets with or without participation by the U.S. and/or by developing countries. Different long-term targets considered focus on stabilisation of CO2 concentrations, radiative forcing and the increase in atmospheric temperature relative to pre-industrial levels. In order to account for the uncertainty surrounding the climate cycle, for each long-term goal multiple paths of emission - the most probable, the optimistic and the pessimistic ones - are considered in the comparison exercise. Comparative analysis is performed using a newly developed version of the FEEM-RICE model, a regional economy-climate model of optimal economic growth which is based on Nordhaus and Boyer’s RICE model crucially extended in order to account for induced technical change. In particular, both carbon and energy intensity are affected by a new endogenous variable – Technical Progress – which captures both the role of Learning by Researching and of Learning by Doing. These are in turn determined by the optimal levels of Research and Development and of Emission Abatement.
    Keywords: Climate policy, Long-term climate targets, Climate sensitivity uncertainty, capping radiative forcing
    JEL: H0 H2 H3
    Date: 2004–12
  2. By: Anastasios Xepapadeas (University of Crete); William Brock (University of Wisconsin)
    Abstract: This paper adapts Turing analysis and applies it to dynamic bioeconomic problems where the interaction of coupled economic and ecological dynamics over space endogenously creates (or destroys) spatial heterogeneity. It also extends Turing analysis to standard recursive optimal control frameworks in economic analysis and applies it to dynamic bioeconomic problems where the interaction of coupled economic and ecological dynamics under optimal control over space creates a challenge to analytical tractability. We show how an appropriate formulation of the problem reduces analysis to a tractable extension of linearization methods applied to the spatial analog of the well known costate/state dynamics. We illustrate the usefulness of our methods on bioeconomic applications, but the methods have more general economic applications where spatial considerations are important. We believe that the extension of Turing analysis and the theory associated with dispersion relationship to recursive infinite horizon optimal control settings is new.
    Keywords: Spatial analysis, Economic-ecological modelling
    JEL: Q2 C6
    Date: 2004–12
  3. By: Östblom, Göran (National Institute of Economic Research); Samakovlis, Eva (National Institute of Economic Research)
    Abstract: Much of the debate over global climate change involves estimates of the direct costs of global climate change mitigation. Recently this debate has included the issue of <p> ancillary benefits. These benefits consist mainly of health improvements. Although it is <p> generally acknowledged that air pollution affects respiratory health, and that valuations <p> of these impacts make up a significant proportion of the damage costs of air pollution, <p> these impacts are often neglected when evaluating the costs of climate policy. Since <p> reducing greenhouse gases has the effect of also reducing other pollutants affecting <p> human health and labour productivity these effects should be taken into consideration. <p> The analysis incorporates a linkage between air pollution and health effects into a <p> general equilibrium model for Sweden through a theoretical consistent framework. <p> Results from recent Swedish concentration-response and contingent valuation studies <p> are used to model direct disutility and indirect health effects that negatively affects the <p> productivity of labour. The costs of feedback effects on health and productivity are <p> compared in three different scenarios for attaining the Swedish carbon dioxide target <p> with alternative projected emission levels in the baseline scenario as well as alternative <p> harmful emission levels. Results show that not including feedback effects could mean <p> overstating the costs of climate policy. The magnitude of these effects are, however, <p> very sensitive to projected emission levels and to the judgement of harmful emission <p> levels.
    Keywords: air pollution; ancillary benefits; climate policy; general equilibrium; health
    JEL: D58 I10 Q52 Q53
    Date: 2004–12–28
  4. By: Centre for the Study of Living Standards
    Abstract: The objective of this report is to provide an overview of the evolution of productivity in the natural resources industries in Canada over the last 40 years. This report presents data and discusses trends in labour and total factor productivity for natural resources industries in Canada over the 1961-2000 period. It also examines the major determinants of these trends. Industries covered by the report are: the energy industries, including crude petroleum and natural gas extraction, refined petroleum and coal products, pipeline transport, and gas distribution systems; forest sector industries, including forestry and logging, wood products and paper products; mining; and manufacturing industries involved with the processing of mineral products, including primary metals, non-metallic mineral products, metal fabrication, and motor vehicle parts. The key conclusion of the report is that most natural resources industries have outperformed the all-industries average in terms of both labour productivity and total factor productivity since 1961.
    Keywords: Forestry, Mining, Electricity, Oil and Gas, Oil, Gas, Energy, Paper Products, Wood Products, Coal Mining, Gold Mining, Diamond Mining, Forest Products, Productivity, Productivity Growth, Labour Productivity, Total Factor Productivity, Multifactor Productivity, Natural Resources, Natural Resource Industries, Primary Industries, Human Capital, Capital Intensity, Economies of Scale, Foreign Direct Investment
    JEL: L71 L72 L73 O47 O51 J24 D24
    Date: 2003–02

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