nep-res New Economics Papers
on Resource Economics
Issue of 2010‒06‒04
seven papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Climate change data for Austria and the period 2008-2040 with one day and km^2 resolution By Franziska Strauss; Herbert Formayer; Veronika Asamer; Erwin Schmid
  2. The Illusory Leader: Natural Resources, Taxation and Accountability By Eoin F. McGuirk; Eoin F. McGuirk
  3. International carbon emissions trading and strategic incentives to subsidize green energy By Thomas Eichner; Rüdiger Pethig
  4. What is the best environmental policy? Taxes, permits and rules under economic and environmental uncertainty By Konstantinos Angelopoulos; George Economides; Apostolis Philippopoulos
  5. Catastrophic Natural Disasters and Economic Growth By Eduardo Cavallo; Sebastian Galiani; Ilan Noy; Juan Pantano
  6. The Effect of Allowance Allocations on Cap-and-Trade System Performance By Hahn, Robert W.; Stavins, Robert N.

  1. By: Franziska Strauss (Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna); Herbert Formayer (Institute of Meteorology, University of Natural Resources and Applied Life Sciences, Vienna); Veronika Asamer (Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna); Erwin Schmid (Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna)
    Abstract: We have developed climate change data for Austria and the period from 2008 to 2040 with temporal and spatial resolution of one day and one km^2 based on historical daily weather station data from 1975 to 2007. Daily data from 34 weather stations have been processed to 60 spatial climate clusters with homogeneous climates relating to mean annual precipitation sums and mean annual temperatures from the period 1961-1990. We have performed regression model analysis to compute a set of daily climate change data for each climate cluster. The integral parts of our regression models are i) the extrapolation of the observed linear temperature trend from 1975 to 2007 using an average national trend of ~0.05 °C per year derived from a homogenized dataset, and ii) the repeated bootstrapping of temperature residuals and of observations for solar radiation, precipitation, relative humidity, and wind to ensure consistent spatial and temporal correlations. The repeated bootstrapping procedure has been performed for all weather parameters based on the observed climate variabilities from the period 1975-2007. To account for a wider range of precipitation patterns, we have also developed precipitation scenarios including higher or lower annual precipitation sums as well as unchanged annual precipitation sums with seasonal redistribution. These precipitation scenarios constitute together with the bootstrapped scenarios of temperature, solar radiation, relative humidity and wind our climate change spectrum for Austria until 2040. These climate change data are freely available and we invite users to apply and comment on our high resolution climate change data.
    Keywords: regional climate change data; statistical climate change model; uncertainty spectrum; temperature trend; Austria.
    JEL: Y1 Y9 Z0
    Date: 2010–05
  2. By: Eoin F. McGuirk (Institute for International Integration Studies, Trinity College Dublin); Eoin F. McGuirk
    Abstract: This paper proposes and tests a mechanism through which the natural resource curse can operate. I posit that, in the presence of high natural resource rents, leaders lower the burden of taxation on citizens in order to reduce the demand for democratic accountability. The theory is tested using micro-level data from public opinion surveys across 15 sub-Saharan countries, in addition to country-level data on natural resource rents, taxation and election proximity. It is found that an increase in natural resource rents decreases perceived tax enforcement, which in turn reduces the demand for regular, open and honest elections. Results are robust to alternative specifications. A supplementary analysis reveals that, consistent with the two-period model proposed, the effects are more acute closer to national elections. The findings support political-economy explanations of how natural resources affect economies, in which resource rents are purported to influence the decisions of the political elite through increased returns to staying in power.
    Keywords: Democracy; Political Economy; Natural Resources; Curses; Africa
    JEL: D73 O13 O55
    Date: 2010–05
  3. By: Thomas Eichner; Rüdiger Pethig
    Abstract: This paper examines strategic incentives to subsidize green energy in a group of countries that operates an international carbon emissions trading scheme. Welfare-maximizing national governments have the option to discriminate against energy from fossil fuels by subsidizing green energy, although in our model green energy promotion is not efficiency enhancing. The cases of small and large countries turn out to exhibit significantly differences. While small countries refrain from subsidizing green energy and thus implement the efficient allocation, large permit-importing countries subsidize green energy in order to influence the permit price in their favor.
    Keywords: emissions trading, black energy, green energy, energy subsidies
    JEL: H21 Q42 Q48
    Date: 2010
  4. By: Konstantinos Angelopoulos; George Economides; Apostolis Philippopoulos
    Abstract: We welfare rank different types of second-best environmental policy. The focus is on the roles of uncertainty and public finance. The setup is the basic stochastic neoclassical growth model augmented with the assumptions that pollution occurs as a by-product of output produced and environmental quality is treated as a public good. To compare different policy regimes, we compute the welfaremaximizing value of the second-best policy instrument in each regime. In all cases studied, pollution permits are the worst recipe, even when their revenues are used to finance public abatement. When the main source of uncertainty is economic, the best recipe is to levy taxes (on pollution or output) and use the collected tax revenues to finance public abatement. However, when environmental uncertainty is the dominant source of extrinsic uncertainty, Kyoto-like rules for emissions, being combined with tax-financed public abatement, are better than taxes. Finally, comparing pollution and output taxes, the latter are better
    Keywords: General equilibrium; uncertainty; environmental policy.
    JEL: C68 D81 H23
    Date: 2010–04
  5. By: Eduardo Cavallo (Inter-American Development Bank, Research Department); Sebastian Galiani (Washington University in St. Louis); Ilan Noy (University of Hawaii, Department of Economics); Juan Pantano (Washington University in St. Louis)
    Abstract: We examine the short and long run average causal impact of catastrophic natural disasters on economic growth by combining information from comparative case studies. We assess the counterfactual of the cases studied by constructing synthetic control groups taking advantage of the fact that the timing of large sudden natural disasters is an exogenous event. We ?find that only extremely large disasters have a negative effect on output both in the short and long run. However, we also show that this result from two events where radical political revolutions followed the natural disasters. Once we control for these political changes, even extremely large disasters do not display any signi?cant effect on economic growth. We also fi?nd that smaller, but still very large natural disasters, have no discernible effect on output in the short run or in the long run.
    Keywords: Natural Disasters, Political Change, Economic Growth and Causal Effects.
    JEL: O40 O47
    Date: 2010–04–28
  6. By: Hahn, Robert W. (Sustainable Consumption Institute, University of Manchester and Georgetown Center for Business and Public Policy, Georgetown); Stavins, Robert N. (Harvard U and Resources for the Future)
    Abstract: We examine an implication of the "Coase Theorem" which has had an important impact both on environmental economics and on public policy in the environmental domain. Under certain conditions, the market equilibrium in a cap-and-trade system will be cost-effective and independent of the initial allocation of tradable rights. That is, the overall cost of achieving a given aggregate emission reduction will be minimized, and the final allocation of permits will be independent of the initial allocation. We call this the independence property. This property is very important because it allows equity and efficiency concerns to be separated in a relatively straightforward manner. In particular, the property means that the government can establish the overall pollution-reduction goal for a cap-and-trade system by setting the cap, and leave it up to the legislature--such as the U.S. Congress--to construct a constituency in support of the program by allocating the allowances to various interests without affecting either the environmental performance of the system or its aggregate social costs. Our primary objective in this paper is to examine the conditions under which the independence property is likely to hold--both in theory and in practice. A number of factors can call the independence property into question theoretically, including market power, transaction costs, non-cost-minimizing behavior, and conditional allowance allocations. We find that, in practice, there is support for the independence property in some, but not all cap-and-trade applications.
    JEL: H11 L51 Q58
    Date: 2010–03
  7. By: Ashenfelter, Orley; Storchmann, Karl
    Abstract: In this paper we measure the effect of year to year changes in the weather on wine prices and winery revenue in the Mosel Valley in Germany in order to determine the effect that climate change is likely to have on the income of wine growers. A novel aspect of our analysis is that we compare the estimates based on auction, retail, and wholesale prices. Although auction prices are based on actual transactions, they provide a thick market only for high quality, expensive wines and may overestimate climateâs effect on farmer revenues. Wholesale prices, on the other hand, do provide broad coverage of all wines sold and probably come closest to representing the revenues of farmers. Overall, we estimate a 1°C increase in temperature would yield an increase in farmer revenue of about 30 percent.
    Keywords: wine, global warming, auction prices, retail prices, wholesale prices, Demand and Price Analysis, Environmental Economics and Policy,
    Date: 2010–05

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