nep-res New Economics Papers
on Resource Economics
Issue of 2011‒05‒30
four papers chosen by
Maximo Rossi
Universidad de la Republica

  1. What is the best environmental policy?Taxes, permits and rules under economic and environmental uncertainty By Konstantinos Angelopoulos; George Economides; Apostolis Philippopoulos
  2. Attitudes to Personal Carbon Allowances By Andersson, David; Löfgren, Åsa; Widerberg, Anna
  3. Can Strategic Environmental and Social Assessment of REDD+ Improve Forest Governance? By Slunge, Daniel; Ekbom, Anders; Loayza, F.; Guthiga, P.; Nyangena, Wilfred
  4. An Electricity Trading System with Tradable Green Certificates and CO2 Emission Allowances By Widerberg, Anna

  1. By: Konstantinos Angelopoulos (University of Glasgow); George Economides (Athens University of Economics and Business); Apostolis Philippopoulos (Athens University of Economics and Business, University of Glasgow and Visiting Scholar at the Bank of Greece)
    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 welfare-maximizing 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: 2010–10
  2. By: Andersson, David (Physical Resource Theory, Dept of Energy and Environment, Chalmers University of Technology); Löfgren, Åsa (Department of Economics, School of Business, Economics and Law, Göteborg University); Widerberg, Anna (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: A personal carbon allowance (PCA) scheme targets emissions from individual consumption and allocates allowances directly to individuals by dividing the carbon budget on a per capita basis. In this study we analyse the results of a survey sent out to a representative sample of the Swedish population regarding attitudes to a potential PCA scheme. The distinctive design of a PCA scheme is likely to give rise to specific factors affecting individuals attitudes, such as the perceived fairness of the allocation of allowances and corresponding redistribution of wealth, as well as the perceived complexity of the scheme. We perform an ordered probit analysis with attitude to PCAs as the dependent variable, controlling for a number of variables potentially affecting such attitudes. Interestingly, our findings indicate that the most important variable explaining attitudes to the scheme is the perception of respondents that this type of policy instrument seems very complex. <p>
    Keywords: Attitudes; Climate change; Environment; Fairness; Personal carbon allowances; Public opinion; Tradable energy quotas
    JEL: D12 D60 H23 Q48 Q58
    Date: 2011–05–19
  3. By: Slunge, Daniel (Department of Economics, School of Business, Economics and Law, Göteborg University); Ekbom, Anders (Department of Economics, School of Business, Economics and Law, Göteborg University); Loayza, F. (The World Bank, Environment Department); Guthiga, P. (Kenya Institute for Public Policy Research and Analysis (KIPPRA), Kenya); Nyangena, Wilfred (Kenya Institute for Public Policy Research and Analysis (KIPPRA), Kenya)
    Abstract: The Forest Carbon Partnership Facility has recently proposed the application of strategic environmental social assessment (SESA) for incorporating environmental and social considerations in the preparation of REDD+ initiatives. This paper discusses the potential contribution of SESA to REDD+ initiatives drawing on experiences from earlier attempts to large scale forestry sector reforms and a recent World Bank pilot program on strategic environmental assessment. The paper suggests that SESA can be a useful approach for strengthening institutions and governance needed for managing diverse environmental and social impacts related to REDD+. More specifically, SESA can enhance policy making and governance through raising attention to environmental and social priorities, strengthening constituencies for policy change and improving social accountability. In order for SESA to contribute to these outcomes it needs to be assured that broad national “ownership” is achieved and that it becomes part of a long-term policy learning process with repeated and sustained stakeholder interaction. Through strengthening constituencies in policy reform SESA can potentially reduce the risk of regulatory capture of REDD+ by vested interests and make institutional checks and balances more effective. An analysis of Kenyas process of preparing a national REDD+ strategy is used to illustrate our case in the paper. <p>
    Keywords: REDD; forest management; GHG emissions; governance; stakeholder participation; World Bank
    JEL: Q23 Q28 Q54
    Date: 2011–04–26
  4. By: Widerberg, Anna (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Combinations of various policy instruments to deal with the threat of climate change are used throughout the world. The aim of this article is to investigate an electricity market with two di¤erent policy instruments, Tradable Green Certi…cates (TGCs) and CO2 emission allowances (an Emission Trading System, ETS). We analyze both the short- and long-run e¤ects of a domestic market and a market with trade. We …nd that increasing the TGC quota obligation will decrease the electricity produced using non-renewable sources as well as the long-run total production of electricity. For the electricity produced using renewable energy sources, an increase in the quota obligation leads to increased production in almost all cases, with assumptions based on historical data. The impacts of the ETS price on the electricity production are negative for all electricity production, which is surprising. This means that the combination of ETS and TGCs gives unexpected and unwanted results for the electricity production using renewable sources, since an increase in the ETS price leads to a decrease in this production. <p>
    Keywords: Climate change; Tradable green certi…cates; Emission allowances; Electricity
    JEL: Q40 Q42 Q48
    Date: 2011–05–19

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