nep-res New Economics Papers
on Resource Economics
Issue of 2005‒05‒07
two papers chosen by
Maximo Rossi
Universidad de la República

  1. A Tale of Two Communities: Explaining Deforestation in Mexico By Jennifer Alix-Garcia; Alain de Janvry; Elisabeth Sadoulet
  2. The Effect of Pollution Permit Allocations on Firm-Level Emissions By Meredith Fowlie; Jeffrey Perloff

  1. By: Jennifer Alix-Garcia (University of California, Berkeley); Alain de Janvry (University of California, Berkeley); Elisabeth Sadoulet (University of California, Berkeley)
    Abstract: Explaining land use change in Mexico requires understanding the behavior of the local institutions involved. We develop two theories to explain deforestation in communities with and without forestry projects, where the former involves a process of side payments to non-members of the community and the latter of partial cooperation among community members. Data collected in 2002 combined with satellite imagery are used to test these theories. For the forestry villages, we establish a positive relationship between the distribution of profits as dividends instead of public goods and forest loss. For communities not engaged in forestry projects, deforestation is largely related to the ability of the community to induce the formation of a coalition of members that cooperates in not encroaching. This happens more easily in smaller communities with experienced leaders. A disturbing result of the analysis is that deforestation is higher when a community engages in forestry projects, even after properly accounting for self-selection into this activity. This suggests that forestry projects as they now exist in Mexico are not sustainable and contribute to the deforestation problem.
    Keywords: deforestation, common property, partial cooperation,
    Date: 2003–11–07
    URL: http://d.repec.org/n?u=RePEc:cdl:agrebk:964&r=res
  2. By: Meredith Fowlie (University of California, Berkeley); Jeffrey Perloff (University of California, Berkeley, and Giannini Foundation)
    Abstract: According to the Coase theorem, if property rights to pollute are clearly established and emissions markets nearly eliminate transaction costs, the market equilibrium will be independent of how the permits are initially allocated across firms. Using panel data from Southern California's RECLAIM program, we find that initial allocations are a statistically significant determinant of firm-level emissions. This relationship between allocation and emissions is stronger among firms with relatively high transaction costs. Thus, care must be exercised in the initial allocation of permits to ensure efficiency.
    Keywords: emissions trading, transaction costs,
    Date: 2004–02–01
    URL: http://d.repec.org/n?u=RePEc:cdl:agrebk:968&r=res

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