nep-res New Economics Papers
on Resource Economics
Issue of 2009‒08‒08
eight papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Global Land Use and Greenhouse Gas Emissions Impacts of U.S. Maize Ethanol: The Role of Market-Mediated Responses By Hertel, Thomas; Golub, Alla; Jones, Andrew; O'Hare, Michael; Plevin, Richard; Kammen, Daniel
  2. Is a Sustainable Land-Use Policy in Germany Possible? By Beate Fischer; Frank Jöst; Bernd Klauer; Johannes Schiller
  3. Carbon Sequestration and Permit Trading on the Competitive Fringe By Arthur J. Caplan
  4. Matching Traders in a Pollution Market: The Case of Cub River, Utah By Arthur J. Caplan; Yuya Sasaki
  5. The Great Financial Crisis, Commodity Prices and Environmental Limits By Lopez, Ramon E.
  6. New Estimates of Efficient Approaches to the Control of Global Warming By William D. Nordhaus
  7. Pollution and International Trade in Services By Arik Levinson
  8. On the Truly Noncooperative Game of Life on Earth: In Search of the Unity of Nature & Evolutionary Stable Strategy By Funk, Matt

  1. By: Hertel, Thomas; Golub, Alla; Jones, Andrew; O'Hare, Michael; Plevin, Richard; Kammen, Daniel
    Abstract: With the recent adoption by the California Air Resources Board of California’s Low Carbon Fuel Standard, and USEPA’s Energy Independence and Security Act, greenhouse gas releases from indirect land use change triggered by crop-based biofuels have taken center stage in the debate over the role of biofuels in climate policy and energy security. This paper presents an analysis of these releases for US maize ethanol. Our analysis highlights the key role of market-mediated responses to biofuels mandates. Factoring these into our analysis reduces cropland conversion by 72%. As a consequence the associated GHG release estimated in our framework is just 800 g CO2 MJ -1y (27 g MJ-1 for 30 years of ethanol production). This figure is a quarter of the one previously published value. However, it is still large enough to eliminate the global warming mitigation benefits of most corn ethanol.
    Date: 2009
  2. By: Beate Fischer (University of Heidelberg, Alfred-Weber-Institut); Frank Jöst (University of Heidelberg, Alfred-Weber-Institut); Bernd Klauer (Helmholtz Centre for Environmental Research – UFZ); Johannes Schiller (Helmholtz Centre for Environmental Research – UFZ)
    Abstract: Land is an essential but limited natural resource. We employ the concept of stocks to analyse driving forces for land-use conversion and to assess, whether the German political “30- hectares-goal” is feasible given the current institutional setting. In this paper major driving forces for land-use conversion are identified and underlying stocks and persistent institutional structures as well as their dynamics are investigated. It will be shown that meeting the 30- hectares-goal is unlikely. We further argue that due to persistent stocks and institutional structures land-use conversion from agricultural into urbanised land takes place on smaller time scales than its reconversion. We conclude that demographic change and regional migration processes may result in further land-use conversion even with declining population. Economic structural change as well as an increasing traffic volume will likewise contribute to further land-use conversion.
    Keywords: Sustainability, Land use, Stocks, Institutional Reform
    JEL: Q24 Q56 R14 R52
    Date: 2009–07
  3. By: Arthur J. Caplan (Department of Applied Economics, Utah State University)
    Abstract: This paper makes two contributions to the carbon-sequestration literature. The first is the development of a theoretical framework in which sequestration and permit trading are analyzed jointly in the context of a competitive fringe model. The second is a numerical analysis demonstrating the role market structure, or market power, might play in the determination of an equilibrium sequestration allocation and carbon price. We present three comparative-static cases, the first two of which assess the impact of relative changes in the cost structures of the dominant firm and competitive fringe. For these two cases we find that the equilibrium allocation of sequestration aligns with a higher carbon price when the competitive fringe experiences an increase in its marginal cost parameter. Conversely, the carbon price falls when the dominant firm experiences a decrease in its marginal cost parameter. In a third case we evaluate the impact of stricter regulation on the abatement decisions of the polluting firm. Our results demonstrate the importance of incorporating into empirical supply-side models demand-side information that is reflective of an underlying market structure.
    Keywords: carbon sequestration; competitive fringe; abatement credits
    JEL: D43 L13 Q54
    Date: 2009–08–01
  4. By: Arthur J. Caplan (Department of Applied Economics, Utah State University); Yuya Sasaki (Department of Economics, Brown University)
    Abstract: This paper applies two recently developed trading algorithms to a water quality trading (WQT) market located in the Cub River sub-basin of Utah; a market that includes both point and nonpoint sources. The algorithms account for three complications that naturally arise in WQT markets: (1) combinatorial matching of traders, (2) trader heterogeneity, and (3) discreteness in abatement technology. The algorithms enable a full characterization of the market’s performance by distinguishing a specific pattern of trade among market participants, which in turn results in as detailed a reduced- cost trading benchmark as possible for the basin. Contrary to the commonly held belief that relatively high point-source abatement costs necessitate nonpoint-source abatement effort, we find that in a WQT market where each source is required to reduce its pollution loadings it may be cheaper for point sources to sell abatement credits to nonpoint sources.
    Keywords: advancement algorithm, retreat algorithm, water quality trading
    JEL: Q24 Q25 Q19
    Date: 2009–08–01
  5. By: Lopez, Ramon E.
    Abstract: This paper examines how certain new structural factors have contributed to the latest great financial crisis and world recession of 2008-09. We focus on three of these structural factors: (i) the incorporation of highly populated countries into the growth process; (ii) The increasing scarcity of the environment and certain natural resources; (iii) the unprecedented concentration of wealth and income in the advanced economies over the last three decades. These structural changes have significantly tightened the links between world growth and commodity prices, have made the world commodity supply to become increasingly inelastic, and have made growth to become more dependent on lax monetary policies, respectively. All this may make the recovery from the current crisis much more difficult, implying a deeper and more protracted crisis than most previous crises. With this framework in mind we focus on the likely affect of the financial crisis upon the natural resources in the developing world, by drawing implications from the 1995 Mexico-originated Peso crisis and the 1998-99 Asia crises. We find that the impact of the current crisis is likely to degrade further the environmental resources and the tightening of environmental policies in response to such degradation may make the commodity supply curve of commodities even steeper in the future.
    Keywords: Demand and Price Analysis, Environmental Economics and Policy, International Development, Resource /Energy Economics and Policy,
    Date: 2009–05
  6. By: William D. Nordhaus (Cowles Foundation, Yale University)
    Abstract: The present study extends earlier research by presenting the results of a new and updated version of the RICE model (Regional Integrated model of Climate and the Economy), labeled the RICE-2009 model. The model is a regionalized, dynamic model that incorporates an end-to-end treatment of economic growth, emissions, climate change, damages, and emissions controls. The model allows projections of what will occur with no policies, what an efficient set of policies would be, and how nations can undertake policies to limit climate change (in the current runs to 2 degrees C). These new estimates indicate that coordinated international policies have a substantial economic benefit. The optimal carbon tax is estimated to be $54 per ton carbon ($16 per ton CO_2) for 2010 in 2005 prices. The economic optimum would limit global temperature rise to an average of 2.1 degrees C over 1900 levels for the 22nd and 23rd century.
    Keywords: Climate change economics, Environmental policy, Economic growth
    JEL: Q54 Q5 O4
    Date: 2009–08
  7. By: Arik Levinson (Department of Economics, Georgetown University)
    Abstract: Two central topics in recent rounds of international trade negotiations have been environmental concerns, and services trade. While each is undoubtedly important, they are unrelated. In this paper I show that the services-environment link is small, for two reasons. First, services account for only a small fraction of overall pollution. For none of five major air pollutants does the service sector account for even four percent of total emissions; for three of the five services account for less than one percent. Second, those service industries that do pollute are the least likely to be traded internationally. Those services for which the U.S. collects and publishes international trade data - presumably those services that are traded internationally - are less polluting than services for which trade data do not exist - presumably because the services are not traded. Even if we limit attention to the services that are traded across borders, the service industries most intensively traded are the ones that pollute the least. The bottom line is simple. International services trade bears little relation to the environment, because services in general contribute relatively little to overall pollution, and those industries that are traded internationally are among the least polluting. Classification-JEL Codes: F18, D57, Q55, Q56
    Keywords: pollution havens, input-output, pollution intensity, TEAM
    Date: 2009–07–09
  8. By: Funk, Matt
    Abstract: The theory presented here was developed to address the problem of the long-term survival of the human species. This paper tables axioms which fruitfully model The Problem of Sustainable Economic Development, a theoretical framework which, reductio ad absurdum, falsifies many widely-held economic, evolutionary, and ecological principles, including the central thesis of ‘ecological economics’. This brief communiqué lays the foundation for an evolutionary stable, sustainable economic development strategy, and, thus, fosters national security, international cooperation, global threat mitigation, and, ultimately, survival of the human species.
    Keywords: Human survival; sustainable economic development; noncooperative games; problem of induction; natural selection; astrophysical and planetary phænomena; global threat mitigation; evolutionary stable strategy
    JEL: Q50 C20 Z10
    Date: 2009–07–04

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