nep-res New Economics Papers
on Resource Economics
Issue of 2009‒04‒25
six papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Environmental Damage and Price Taking Behaviour by Firms and Consumers By Harold Houba; Hans Kremers
  2. Economic Growth and Climate Change: Cap-And-Trade or Emission Tax? By Edward Nell, Willi Semmler, and Armon Rezai
  3. Global Warming and Economic Externalities By Armon Rezai, Duncan K. Foley, and Lance Taylor
  4. Growth and Climate Change: Threshold and Multiple Equilibria By Alfred Greiner, Lars Grüne and Willi Semmler
  5. Farmers' Preferences for Crop Variety Traits: Lessons for On-Farm Conservation and Technology Adoption By Asrat, Sinafikeh; Yesuf, Mahmud; Carlsson, Fredrik; Wale, Edilegnaw
  6. Robust Control in Global Warming Management: An Analytical Dynamic Integrated Assessment By Hennlock, Magnus

  1. By: Harold Houba; Hans Kremers
    Abstract: Integrated assessment models lack a microeconomic foundation in modelling environmental damages to the economy. To overcome this, damage coefficients are incorporated in standard microeconomic models. Firms and consumers take both damages and prices as given. Demand, supply, profit and expenditure functions under damage coefficients are derived that allow easy implementation in applied economic models through appropriate price distortions related to such coefficients. For the consumer, Slutsky's equations are derived. The different speeds of equilibrium adjustment in economic and climate models is reconciled in the Recursive Equilibrium with Environmental Damages (REED). An exchange economy and Robinson Crusoe economy illustrate our approach.
    Keywords: environmental damage, substitution effects, income effects, Slutsky's equations, equilibrium
    JEL: Q41 Q51 Q52 D11 D12 D51
    Date: 2009
  2. By: Edward Nell, Willi Semmler, and Armon Rezai (New School for Social Research, New York, NY)
    Keywords: economic growth; climate change
    Date: 2009–02
  3. By: Armon Rezai, Duncan K. Foley, and Lance Taylor (New School for Social Research, New York, NY)
    Keywords: global warming; climate change
    Date: 2009–02
  4. By: Alfred Greiner, Lars Grüne and Willi Semmler (New School for Social Research, New York, NY)
    Keywords: climate change; global warming
    Date: 2009–03
  5. By: Asrat, Sinafikeh (International Food Policy Research Institute (IFPRI), Addis Ababa, Ethiopia); Yesuf, Mahmud (Environment for Development Centers in Ethiopia and Kenya); Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Wale, Edilegnaw (Bioversity International, Nairobi, Kenya)
    Abstract: Although in-situ conservation is increasingly considered an efficient way of conserving plant genetic resources, little is known about the incentives and constraints that govern conservation decisions among small farm holders in developing countries. Using a choice experiment approach, we investigate Ethiopian farmers’ crop variety preferences, estimate the mean willingness to pay for each crop variety attribute, and identify household specific and institutional factors that govern the preferences. We find that environmental adaptability and yield stability are important attributes for farmers’ choice of crop varieties. Farmers are willing to forgo some income or output in order to obtain a more stable and environmentally adaptable crop variety. Among other things, household resource endowments (particularly land holdings and livestock assets), years of farming experience, and contact with extension services are the major factors causing household heterogeneity of crop variety preferences. Based on our experimental results, we derive important policy implications for on-farm conservation, breeding priority setting, and improved variety adoption in Ethiopia.<p>
    Keywords: biodiversity; choice experiment; crop variety; random parameter logit
    JEL: Q18 Q51 Q57
    Date: 2009–04–20
  6. By: Hennlock, Magnus (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Knightian uncertainty in climate sensitivity is analyzed in a two sectoral integrated assessment model (IAM), based on an extension of DICE. A representative household that expresses ambiguity aversion uses robust control to identify robust climate policy feedback rules that work well over IPCC climate-sensitivity uncertainty range [1]. Ambiguity aversion, together with linear damage, increases carbon cost in a similar way as a low pure rate of time preference. Secondly, in combination with non-linear damage it makes policy responsive to changes in climate data observations as it makes the household concerned about misreading sudden increases in carbon concentration rate and temperature as sources to global warming. Perfect ambiguity aversion results in an infinite expected shadow carbon cost and a zero carbon-intensive consumption path. Dynamic programming identifies an analytically tractable solution to the model.<p>
    Keywords: robust control; climate change policy; carbon cost; Knightian uncertainty; ambiguity aversion; integrated assessment models
    JEL: C61 C73 Q54
    Date: 2009–04–17

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