nep-res New Economics Papers
on Resource Economics
Issue of 2006‒01‒24
two papers chosen by
Maximo Rossi
Universidad de la República

  1. Environmental policy and speculation on markets for emission permits By Paolo, COLLA; Marc, GERMAIN; Vincent, VAN STEENBERGHE
  2. A Spatial Model of Dolphin Avoidance in the Eastern Tropical Pacific Ocean By Robert L. Hicks; Kurt Schnier

  1. By: Paolo, COLLA; Marc, GERMAIN (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics); Vincent, VAN STEENBERGHE
    Abstract: Tradable emission permits share many characteristics with financial assets. As on financial markets, speculators are likely to be active on large markets for emission permits such as those developing under the Kyoto Protocol. We show how the presence of speculators on a market for emission permits affects the price of these permits when firms face risk aversion. The agency in charge of the optimal environmental policy should account for the presence of speculators when determining the total amount of permits to issue.
    Date: 2005–10–15
  2. By: Robert L. Hicks (Department of Economics, College of William and Mary); Kurt Schnier (Department of Environmental and Natural Reseource Economics, University of Rhode Island)
    Abstract: This paper examines the impact of dolphin-safe eco-labeling and how it fundamentally altered the spatial distribution of fishing effort and fishermen's willingness to pay to avoid dolphins. To do this, a dynamic discrete choice econometric model is applied to the Eastern Tropical Pacific tuna fishery. This econometric approach combines a dynamic programming component with the static discrete site choice model. This estimator couples the current period projected profits associated with fishing a specific site with the value of all future location choices on the cruise, assuming choices are made optimally. The key feature of this model is that it recovers behavioral parameters and solves the dynamic programming problem recursively. The dynamic site choice model reveals a markedly higher impact on producers as compared to the commonly used static model following the labeling regime. Further, in all but a few cases the common practice in dynamic choice models of setting discount factors equal to one is rejected.
    Keywords: location choice, dynamic random utility modeling, dolphin-safe eco-labeling
    JEL: C35 Q20 Q58
    Date: 2006–01–12

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