nep-res New Economics Papers
on Resource Economics
Issue of 2007‒07‒13
three papers chosen by
Maximo Rossi
Universidad de la Republica

  1. The Political Economy of Environmental Regulations and Industry Compensation By Barbara Stoschek
  2. Coastal Groundwater Management with Nearshore Resource Interactions By Sittidaj Pongkijvorasin; James Roumasset; Thomas Kae’o Duarte
  3. How does the design of international environmental agreements affect investment in environmentally friendly technologies ? By Basak Bayramoglu

  1. By: Barbara Stoschek
    Abstract: This paper uses a political-economy framework to analyze what consequences the exogenous introduction of a quantitative restriction on total emissions in a small open economy has on the stringency of domestic trade policy. The question is whether and to what extent the government, if it takes different lobby groups´ interests into consideration, has an incentive to compensate the polluting industry for stricter environmental regulations by granting higher protection to it. It turns out that the government will indeed tend to increase subsidization of the industry affected by environmental regulation. This compensation will even be more than complete as long as environmental interests are taken into account. Hence, contrary to what might be expected, a net benefit for the polluting sector arises from environmental restrictions.
    Keywords: Environmental Regulations; International Competitiveness; Political
    JEL: F18 Q52 Q58
    Date: 2007–06–26
  2. By: Sittidaj Pongkijvorasin (Department of Economics, University of Hawaii at Manoa); James Roumasset (Department of Economics, University of Hawaii at Manoa); Thomas Kae’o Duarte (Department of Botany, University of Hawaii at Manoa)
    Abstract: This paper develops a regional hydrologic-ecologic-economic model of groundwater use and a nearshore ecosystem. Particularly, we model coastal groundwater management and its effects on discharge, nearshore water quality, and marine biota (e.g., indigenous marine algae). We show that incorporating the external effects on nearshore resources increases the optimal steady-state head level. Numerical simulations are illustrated using data from the Kuki’o region on the island of Hawaii. Two different approaches for incorporating the nearshore resource are examined. We find that including algae’s market value directly in the objective function calls for lower, albeit slightly lower, water extraction rate in all periods. If a minimum constraint is placed on the stock of the keystone species, greater conservation may be indicated. The constraint also results in non-monotonic paths of water extraction, head level, and water price in the optimal solution.
    Keywords: groundwater management, submarine groundwater discharge, stock externality, nearshore resources, safe minimum standard, marine algae, dynamic optimization model
    JEL: Q25 Q28 C61 D62
    Date: 2007–07–07
  3. By: Basak Bayramoglu (PSE - Paris-Jourdan Sciences Economiques - [CNRS : UMR8545] - [Ecole des Hautes Etudes en Sciences Sociales][Ecole Nationale des Ponts et Chaussées][Ecole Normale Supérieure de Paris], CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I])
    Abstract: This paper studies the link between the design of international environmental agreements and the incentives for the private sector to invest in cleaner technologies. More specifically, it compares the performance, in the Paretoo sense, of two types of agreement : an agreement on a uniform standard with transfers and an agreement on differentiated standards without transfers. To achieve this goal, we use a multi-stage game where the private sector anticipates its irreversible investment given the expected level of abatement standards, resulting from future bilateral negotiations. Our findings indicate that whenever countries are able to partially commit, the agreement on a uniform standard may be preferable, as it creates greater incentives for firms to invest in costly abatement technology. This result relies on the low level of the set-up cost of this technology. If this level is sufficiently high, the announcement and implementation of the agreement on a uniform standard with transfers is not optimal, because it takes away the incentive of all firms to invest in a new abatement technology.
    Keywords: agreements, standards, transfers, technology adoption, irreversible investment, bargaining, transboundary pollution.
    Date: 2007–07–03

This nep-res issue is ©2007 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.