nep-res New Economics Papers
on Resource Economics
Issue of 2012‒02‒27
six papers chosen by
Maximo Rossi
Universidad de la Republica

  1. The SO2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation By Chan, Gabriel; Stavins, Robert; Stowe, Robert; Sweeney, Richard
  2. Regulating Greenhouse Gases from Coal Power Plants under the Clean Air Act By Linn, Joshua; Mastrangelo, Erin; Burtraw, Dallas
  3. From Growth to Green Growth - a Framework By Stéphane Hallegatte; Geoffrey Heal; Marianne Fay; David Treguer
  4. Strategic Interactions in Environmental Regulation Enforcement: Evidence fromChinese Provinces By Mary-Françoise RENARD; Hang XIONG
  5. Are clean technology and environmental quality conflicting policy goals? By Thierry Brechet; Guy Meunier
  6. Determinants of Environmental Expenditure and Investment: Evidence from Sweden By Jaraite, Jurate; Kažukauskas, Andrius; Lundgren, Tommy

  1. By: Chan, Gabriel (Harvard University); Stavins, Robert (Harvard University); Stowe, Robert (Harvard University); Sweeney, Richard (Harvard University)
    Abstract: The introduction of the U.S. SO2 allowance-trading program to address the threat of acid rain as part of the Clean Air Act Amendments of 1990 is a landmark event in the history of environmental regulation. The program was a great success by almost all measures. This paper, which draws upon a research workshop and a policy roundtable held at Harvard in May 2011, investigates critically the design, enactment, implementation, performance, and implications of this path-breaking application of economic thinking to environmental regulation. Ironically, cap and trade seems especially well suited to addressing the problem of climate change, in that emitted greenhouse gases are evenly distributed throughout the world's atmosphere. Recent hostility toward cap and trade in debates about U.S. climate legislation may reflect the broader political environment of the climate debate more than the substantive merits of market-based regulation.
    JEL: Q52 Q55 Q58
    Date: 2012–01
  2. By: Linn, Joshua (Resources for the Future); Mastrangelo, Erin; Burtraw, Dallas (Resources for the Future)
    Abstract: The Clean Air Act has assumed the central role in U.S. climate policy, directing the Environmental Protection Agency to develop regulations governing the emissions of greenhouse gases from existing coal-fired power plants. The cost and environmental effectiveness of policy options depend on abatement costs, the magnitude of emissions reduction opportunities, and the sensitivity of plant utilization. This paper examines the operation of electricity-generating units over 25 years to estimate the marginal costs and potential magnitude of emissions reductions that could result from improvements in their operating efficiency. We find that a 10 percent increase in coal prices causes a 0.3 to 0.9 percent heat rate reduction, broadly consistent with engineering assessments of abatement costs and opportunities. We also find that coal prices have a significant effect on utilization, but that will vary depending on the policy design. The results are used to compare cost-effectiveness of alternative policies.
    Keywords: efficiency, regulation, greenhouse gas, carbon dioxide, coal, performance standards
    JEL: L94 Q54
    Date: 2012–01–10
  3. By: Stéphane Hallegatte; Geoffrey Heal; Marianne Fay; David Treguer
    Abstract: Green growth is about making growth resource-efficient, cleaner and more resilient without slowing it. This paper aims at clarifying this in an analytical framework and proposing foundations for green growth. This framework identifies channels through which green policies can potentially contribute to economic growth. Finally, the paper discusses the policies that can be implemented to capture co-benefits and environmental benefits. Since green growth policies pursue a variety of goals, they are best served by a combination of instruments: price-based policies are important but are only one component in a policy tool-box that can also include norms and regulation, public production and direct investment, information creation and dissemination, education and moral suasion, or industrial and innovation policies.
    JEL: D90 Q01 Q32 Q4
    Date: 2012–02
  4. By: Mary-Françoise RENARD (Centre d'Etudes et de Recherches sur le Développement International); Hang XIONG
    Abstract: This paper studies whether Chinese provinces set strategically their environmental stringency when faced with interprovincial competition for mobile capital. Using Chinese provincial data and spatial panel econometric models, we find that Chinese provinces do engage in this kind of strategic interaction, particularly among those with similar industrial structure. Furthermore, we haven't found evidence of asymmetric responsiveness suggested by the race to the bottom theory. Finally, the one-sided fiscal decentralization is likely to strengthen the strategic behavior. These empirical results call for a skeptical attitude towards China's decentralization of environment policy implementation as well as its fiscal arrangements.
    Keywords: China, strategic interaction, pollution, spatial panel
    JEL: C2 Q5 H7 R5
    Date: 2012
  5. By: Thierry Brechet; Guy Meunier
    Abstract: In this paper we analyze the effects of an environmental policy on the diffusion of a clean technology in an economy where firms compete on the output market. We show that the share of adopting firms is non-monotonic with the stringency of the environmental policy, and that the adoption of the clean technology may well increase the pollution level. We also compare the effects of an emission tax and tradable pollution permits on welfare, technology adoption, and pollution level. We show that, depending on the stringency of the policy, either the tax or the permits can yield a higher degree of technology adoption and pollution. Actually, technology adoption and environmental quality may be conflicting in discriminating among the instruments.
    Keywords: innovation, technology adoption, environmental regulation
    JEL: H23 Q55 Q58
    Date: 2012–02–06
  6. By: Jaraite, Jurate (CERE, Centre for Environmental and Resource Economics); Kažukauskas, Andrius (CERE, Centre for Environmental and Resource Economics); Lundgren, Tommy (CERE, Centre for Environmental and Resource Economics)
    Abstract: This paper provides new evidence on the determinants of environmental expenditure and investment. Also, by employing the Heckman selection models, we study how environmental expenditure and investment by Swedish industrial firms responded to the national and international policies directed to mitigate air pollution during the period 1999 through 2008. We find that firms that use carbon intensive fuels such as oil and gas are more likely to spend to and invest in the environment. Larger, more profitable and more energy intensive firms are more likely to incur environmental expenditure/investment. Overall, an important finding of our econometric analysis is that environmental regulation both on the national and international levels are highly relevant motivations for environmental expenditure and investment.
    Keywords: environmental expenditure and investment; environmental policy; EU ETS; panel data
    JEL: C23 Q52 Q58
    Date: 2012–02–17

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