nep-res New Economics Papers
on Resource Economics
Issue of 2007‒01‒23
six papers chosen by
Maximo Rossi
Universidad de la Republica

  1. The Internalization of Externalities in The Production of Electricity: Willingness to Pay for the Attributes of a Policy for Renewable Energy By Alberto Longo; Anil Markandya; Marta Petrucci
  2. Economy-Wide Estimates of the Implications of Climate Change: A Joint Analysis for Sea Level Rise and Tourism By Francesco Bosello; Andrea Bigano; Roberto Roson; Richard S.J. Tol
  3. Why Worry About Climate Change? A Research Agenda By Richard S.J. Tol
  4. Environmental Quality in a Differentiated Duopoly By Y. Hossein Farzin; Ken-Ichi Akao
  5. Renewable Resources, Pollution and Trade in a Small Open Economy By Horatiu A. Rus
  6. Cost Effectiveness in River Management: Evaluation of Integrated River Policy System in Tidal Ouse By Tao Wang

  1. By: Alberto Longo (Queen’s University Belfast and University of Bath); Anil Markandya (University of Bath and Fondazione Eni Enrico Mattei); Marta Petrucci (University of Bath)
    Abstract: This paper investigates the willingness to pay of a sample of residents of Bath, England, for a hypothetical program that promotes the production of renewable energy. Using choice experiments, we assess the preferences of respondents for a policy for the promotion of renewable energy that (i) contributes to the internalization of the external costs caused by fossil fuel technologies; (ii) affects the security of energy supply; (iii) has an impact on the employment in the energy sector; (iv) and leads to an increase in the electricity bill. Responses to the choice questions show that our respondents are in favour of a policy for renewable energy and that they attach a high value to a policy that brings private and public benefits in terms of climate change and energy security benefits. Our results therefore suggest that consumers are willing to pay a higher price for electricity in order to internalize the external costs in terms of energy security, climate change and air pollution caused by the production of electricity.
    Keywords: Non Market Valuation, Choice Experiments, Willingness to Pay, Renewable Energy, Energy Security, Greenhouse Gases Emissions
    JEL: Q42 Q48 Q51
    Date: 2006–11
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2006.132&r=res
  2. By: Francesco Bosello (Fondazione Eni Enrico Mattei and Ca’Foscari University of Venice); Andrea Bigano (Fondazione Eni Enrico Mattei and REF, Ricerche per l'Economia e la Finanza); Roberto Roson (Fondazione Eni Enrico Mattei and Ca’Foscari University of Venice); Richard S.J. Tol (Vrije Universiteit)
    Abstract: Climate change impacts on human life have well defined and different origins, nevertheless in the determination of their final effects, especially those involving social-economic responses, interactions among impacts are likely to play an important role. This paper is one of the first attempts to disentangle and highlight the role of these interactions. It focuses on the economic assessment of two specific climate change impacts: sea-level rise and changes in tourism flows. By using a CGE model the two impacts categories are first analyzed separately and then jointly. Comparing the results it is shown that, even though qualitatively joint effects follow the outcomes of the disjoint exercises, quantitatively impact interactions do play a significant role. Moreover it has been also possible to disentangle the relative contribution of each single impact category to the final result. In the case under scrutiny demand shocks induced by changes in tourism flows outweigh the supply side shock induced by the loss of coastal land.
    Keywords: Climate Change, Sea Level Rise, Tourism, Computable General Equilibrium Models
    JEL: C68 D58 Q25
    Date: 2006–11
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2006.135&r=res
  3. By: Richard S.J. Tol (Vrije Universiteit, Carnegie Mellon University and Economic and Social Research Institute)
    Abstract: Estimates of the marginal damage costs of carbon dioxide emissions suggest that, although climate change is a problem and some emission reduction is justified, very stringent abatement does not pass the cost-benefit test. However, current estimates of the economic impact of climate change are incomplete. Some of the missing impacts are likely to be positive and others negative, but overall the uncertainty seems to concentrate on the downside risks and current estimates of the damage costs may have a negative bias. The research effort on the economic impacts of climate change is minute, and should be strengthened, with a particular focus on the quantification of uncertainties; estimating missing impacts, interactions between impacts and higher-order effects; the valuation of biodiversity loss; the implications of extreme climate scenarios and violent conflict; and climate change in the very long term.
    Keywords: Climate Change, Impacts, Valuation, Cost-benefit Analysis
    JEL: Q54
    Date: 2006–11
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2006.136&r=res
  4. By: Y. Hossein Farzin (University of California); Ken-Ichi Akao (Waseda University)
    Abstract: In a duopoly industry with environmentally differentiated products, we examine the effects of introducing a mandatory environmental quality standard on firms’ environmental quality choices, profits, and the average environmental quality offered by the industry. We show that at low standard levels, both firms choose to overcomply regardless of the standard level. At intermediate levels, the mandatory standard can reduce the profit of the low-cost firm while increasing that of the high-cost firm, and that it can lower the industry’s average environmental quality below what it would be without the standard.
    Keywords: Duopoly, Environmental Quality, Mandatory Environmental Standard, Overcompliance, Product Differentiation
    JEL: Q58 L13 L51 D43
    Date: 2006–11
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2006.138&r=res
  5. By: Horatiu A. Rus (University of British Columbia)
    Abstract: Industrial pollution can have damaging effects on resource-based productive sectors. International trade creates opportunities for overexploitation of the open-access renewable resources but also for separating the sectors spatially. The paper shows that, depending on the relative damage inflicted by the two industries on the environment, it is possible that the production externality will persist and that specialization in the dirty good may not be the obvious choice from a welfare perspective. Also, the resource exporter does not necessarily have to lose from trade even when specializing incompletely, due to the partially offsetting external effects.
    Keywords: Renewable Resources, Pollution, Production Externalities, Environment, International Trade
    JEL: Q27 Q22 Q53
    Date: 2006–11
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2006.140&r=res
  6. By: Tao Wang (University of York)
    Abstract: The River Ouse forms a significant part of Humber river system, which drains about one fifth the land area of England and provides the largest fresh water source to the North Sea from UK. The river quality in the tidal river suffered from sag of dissolved oxygen (DO) during last few decades, deteriorated by the effluent discharges. The Environment Agency (EA) proposed to increase the water quality of Ouse by implementing more potent environmental policies. This paper explores the cost effectiveness of water management in the Tidal Ouse through various options by taking into account the variation of assimilative capacity of river water, both in static and dynamic scope of time. Reduction in both effluent discharges and water abstraction were considered along side with choice of effluent discharge location. Different instruments of environmental policy, the emission tax-subsidy (ETS) scheme and tradable pollution permits (TPP) systems were compared with the direct quantitative control approach. This paper at the last illustrated an empirical example to reach a particular water quality target in the tidal Ouse at the least cost, through a solution of constrained optimisation problem. The results suggested significant improvement in the water quality with less cost than current that will fail the target in low flow year.
    Keywords: Water Quality Management, Tradable Pollution Permits, Tax and Subsidy, Effluent Discharge, Water Abstraction, Dynamic Equilibrium, Integrated River Policy, Cost Effectiveness
    JEL: C31 C61 L51 R19
    Date: 2006–11
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2006.142&r=res

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