nep-res New Economics Papers
on Resource Economics
Issue of 2010‒05‒15
three papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Climate Change Disaster Management: Mitigation and Adaptation in a Public Goods Framework By Reviva Hasson; Åsa Löfgren; Martine Visser
  2. Renewable Energy Expansion and the Value of Balance Regulation Power By Försund, Finn; Hjalmarsson, Lennart
  3. Renewable Resources, Pollution and Trade in a Small Open Economy By Horatiu Rus

  1. By: Reviva Hasson; Åsa Löfgren; Martine Visser
    Abstract: This paper explores the collective action problem as it relates to climate change and develops two models that capture the mitigation/adaptation trade-off. The first model presents climate change as a certain disaster, while the second models climate change as a stochastic event. A one-shot public goods experiment with students reveals a relatively low rate of mitigation for both models. The effect of vulnerability towards climate change is also examined by varying the magnitude of the disaster across treatments. Our results find no significant difference between the high and low-vulnerability environments. This research contributes to the literature concerning public goods experiments as well as the analysis of climate change policy.
    Keywords: Public good; climate change; mitigation; adaptation; experiment; risk
    JEL: I21
    Date: 2010
  2. By: Försund, Finn (University of Oslo); Hjalmarsson, Lennart (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: To achieve a stable and reliable electricity supply, efficient provision of reserve capacity or, more generally, ancillary services is crucial. Because of the expansion of wind power with random variation in supply, and expected environmental restrictions in hydropower operation causing reductions in regulated hydropower capacity, the balancing power and system reliability issues have become topical in Scandinavia. Moreover, there seems to be a wide-spread opinion that increase in wind-power generation will lead to increased demand for regulating power, much higher prices for reserves and a much higher value of regulated hydro power. Thus, this chapter deals with the value of balance regulation power, or electricity reserves, in the Nordic electricity market, and we will address the issue of the future value of electricity reserves, hydro capacity in particular, that could be used either for energy production or to balance power production, and more generally discuss the value of balancing power in the Nordic electricity system. In the first, theoretical, part of this study we will apply a simple dynamic electricity generation model, involving hydropower, thermal power and wind power to derive the value of the water in a dam of a hydropower plant. In the second, more empirically oriented, part we will address a number of issues related to balance regulation and the value of balancing power with focus on the Nordic electricity market and against the background of an expanding generation capacity of intermittent renewable electricity, especially wind power.<p>
    Keywords: Electricity; ancillary services; reserve capacity; regulating power; wind power
    JEL: L94 Q40 Q51
    Date: 2010–05–04
  3. By: Horatiu Rus (Department of Economics, University of Waterloo)
    Abstract: Industrial pollution often exerts negative spillovers on resource-based productive sectors. International trade creates conditions for the overexploitation of an open-access renewable resource, but also provides opportunities for separating the productive sectors spatially. The existing literature suggests that a diversified exporter of the renewable resource good tends to lose from trade due to over-depletion, while the exporter of the non-resource good gains. This 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 manufacturing/dirty good may not be the optimal choice from a welfare perspective. In addition, the resource exporter does not necessarily have to lose from trade even when specializing incompletely, due to the partially offsetting external effects.
    JEL: Q27 Q22 Q53
    Date: 2010–05

This nep-res issue is ©2010 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.