nep-res New Economics Papers
on Resource Economics
Issue of 2006‒08‒12
two papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Using a Hedonic Model of Solar Radiation to Assess the Economic Effect of Climate Change: The Case of Mosel Valley Vineyards By Orley Ashenfelter; Karl Storchmann
  2. Export Processing Zones and Environmental Policy By Noriko Yasuyuki Sugiyama

  1. By: Orley Ashenfelter; Karl Storchmann
    Abstract: In this paper we provide a simple, credible method for assessing the effects of climate change on the quality of agricultural land and then apply this method using a rich set of data on the vineyards of the Mosel Valley in Germany. The basic idea is to use a simple model of solar radiation to measure the amount of energy collected by a vineyard, and then to establish the econometric relation between energy and vineyard quality. Coupling this hedonic function with the elementary physics of heat and energy permits a straightforward calculation of the impact of any climate change on vineyard quality (and prices). We show that the variability in vineyard quality in this region is due primarily to the extent to which each vineyard is able to capture radiant solar energy, so that these data provide a particularly credible “experiment” for identifying and measuring the appropriate hedonic equation. Our empirical results indicate that the vineyards of the Mosel Valley will increase in value under a scenario of global warming, and perhaps by a considerable amount. Vineyard and grape prices increase more than proportionally with greater ripeness, so that we estimate a 3°C increase in temperature would more than double the value of this vineyard area, while a 1°C increase would increase prices by about 20 percent.
    JEL: C2 Q5
    Date: 2006–07
  2. By: Noriko Yasuyuki Sugiyama (Graduate School of Economics, Osaka University)
    Abstract: This paper investigates the relation between an export processing zone and a pollution quota in a small country. The model suppose that the pollution target is implemented with a marketable permit system, and the government sets the quota to maximize domestic welfare. Then we show that, if an increase in real income reduces marginal external damage, the pollution quota is relieved by the formation of an export processing zone. However, if the marginal damage is augmented with an increase in the income, the optimal quota might be strengthened by the formation of the zone.
    Keywords: export processing zone, international trade, environmental policy, pollution
    JEL: F18 O24
    Date: 2006–08

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