nep-res New Economics Papers
on Resource Economics
Issue of 2009‒04‒18
four papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Technological choice under environmentalists’ participation in Emissions Trading Systems By Elias Asproudis; Maria José Gil-Moltó
  2. Greenhouse-gas Emission Controls and International Carbon Leakage through Trade Liberalization By Ishikawa, Jota; Okubo, Toshihiro
  3. Policy Instruments For Irrigation Water Demand Management: Flat Pricing, Volumetric Pricing and Quota regulations By António Cipriano Pinheiro; João Paulo Saraiva
  4. An Elaborated Global Climate Policy Architecture: Specific Formulas and Emission Targets for All Countries in All Decades By Jeffrey A. Frankel

  1. By: Elias Asproudis; Maria José Gil-Moltó
    Abstract: We model competition in an emissions trading system (ETS) as a game between two firms and environmental group. In a previous stage, firms endogenously choose their manufacturing technologies. Our results show that there is an inverted U-shape relationship between how polluting the chosen technology is and the degree of the environmentalists' impure altruism. Firms choose a less polluting technology in the presence of the environmentalists than in their absence only if they are characterised by intermediate degrees of impure altruism.
    Keywords: ETS; Technology Choice; Induced Technological Change; Impure Altruism
    JEL: L13 Q30 O31
    Date: 2009–04
  2. By: Ishikawa, Jota; Okubo, Toshihiro
    Abstract: This paper studies greenhouse-gas (GHG) emission controls in the presence of carbon leakage through international firm relocation. The Kyoto Protocol requires developed countries to reduce GHG emissions by a certain amount. Comparing emission quotas with emission taxes, we show that taxes coupled with lower trade costs facilitate more firm relocations than quotas do, causing more international carbon leakage. Thus, if a country is concerned about global emissions, emission quotas would be adopted to mitigate the carbon leakage. Firm relocation entails a trade-off between trade liberalization and emission regulations. Emission regulations may be hampered by trade liberalization, and vice versa.
    Keywords: trade liberalization, global warming, Kyoto Protocol, emission tax, emission quota, carbon leakage
    JEL: F18 Q54
    Date: 2008–11
  3. By: António Cipriano Pinheiro (Department of Economics, University of Évora); João Paulo Saraiva (Department of Environmental Science and Technoloy, Imperial College London)
    Abstract: In the fifty years since the foundation of the European Community, Europe has evolved in many fields. From being exclusively concerned with economic integration – reflected by policies to increase agricultural productivity and improvement of intra-communitarian trade –, nowadays, the European Union is gradually advancing towards a political integration, in the direction of common environmental values and towards the sustainability of natural resources. While in the Treaties of the European Community of Steel and Coal (1952) and Rome (1957) there is no direct reference to environmental issues, since the Treaty of Amsterdam this problematic issue has been a central theme of EU development, being clearly defined as one community objective to be reached. Frequently, in sustainability concepts only the degradation and misuse of natural resources are taken in account. This paper follows a different concept, where the discussion of sustainability is transferred to and placed in the context of a wider notion, integrating the political, social and economic dimensions of agricultural sustainability. Having this framework in mind, this paper analyses the major implications that an environmental policy, such as the EU Water Framework Directive, may have when different policy measures are adopted. To accomplish this goal, the irrigated region of Baixo Alentejo, Portugal, was taken as a case study, using as a policy analysis tool a Multi-Objective programming model, based on the Multi-Attribute Utility Theory and on goal programming techniques, reproducing farmers’ preferred behavior. The study focuses on the adoption and comparison of volumetric pricing and flat pricing policy measures, as well as on a consumption quota associated with the use of water resources
    Keywords: Water Framework Directive; Flat Pricing; Volumetric Pricing; Multi-Objective Programming; Goal Programming; Water Management
    JEL: Q28 Q12
    Date: 2009
  4. By: Jeffrey A. Frankel
    Abstract: This paper analyzes a detailed plan to set quantitative national limits on emissions of greenhouse gases, following along the lines of the Kyoto Protocol. It is designed to fill in the most serious gaps: the absence of targets extending as far as 2100, the absence of participation by the United States and developing countries, and the absence of reason to think that countries will abide by commitments. The plan elaborates on the idea of a framework of formulas that can assign quantitative limits across countries, one budget period at a time. Unlike other century-long paths of emission targets that are based purely on science (concentration goals) or ethics (equal rights per capita) or economics (cost-benefit optimization), this plan is based partly on politics. Three political constraints are particularly important. (1) Developing countries are not asked to bear any cost in the early years. (2) Thereafter, they are not asked to make any sacrifice that is different in kind or degree than was made by those countries that went before them, with due allowance for differences in incomes. (3) No country is asked to accept an ex ante target that costs it more than, say, 1% of GDP in present value, or more than, say, 5% of GDP in any single budget period. They would not agree to ex ante targets that turned out to have such high costs, nor abide by them ex post. An announced target path that implies a future violation of these constraints will not be credible, and thus will not provide the necessary signals to firms today.<br><br>The idea is that (i) China and other developing countries are asked to accept targets at BAU in the coming budget period, the same in which the US first agrees to cuts below BAU; and (ii) all countries are asked to make further cuts in the future in accordance with a formula which sums up a Progressive Reductions Factor, a Latecomer Catch-up Factor, and a Gradual Equalization Factor. The paper tries out specific values for the parameters in the formulas (parameters that govern the extent of progressivity and equity, and the speed with which latecomers must eventually catch up). The resulting target paths for emissions are run through the WITCH model. It does turn out to be possible to achieve the carbon abatement goal (concentrations of 500 PPM in 2100) while simultaneously obeying the economic/political constraint (no country suffers a disproportionate loss in GDP). Preliminary efforts to achieve a target of 450 ppm have so far been unable to do so without violating the cost constraint.
    JEL: Q54
    Date: 2009–04

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