nep-res New Economics Papers
on Resource Economics
Issue of 2012‒12‒06
seven papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Use Less, Pay More: Can Climate Policy Address the Unfortunate Event for Being Poor? By Lucas Bretschger; Nujin Suphaphiphat
  2. The Political Economy of Government Revenues in Post-Conflict Resource-Rich Africa: Liberia and Sierra Leone By Victor A.B. Davies; Sylvain Dessy
  3. Endogenous Investment Decisions in Natural Gas Equilibrium Models with Logarithmic Cost Functions By Daniel Huppmann
  4. On the Spatial Economic Impact of Global Warming By Klaus Desmet; Esteban Rossi-Hansberg
  5. On the Spatial Economic Impact of Global Warming By Desmet, Klaus; Rossi-Hansberg, Esteban
  6. How Much Green for the Buck? Estimating Additional and Windfall Effects of French Agro-Environmental Schemes by DID-Matching By Chabé-Ferret, Sylvain; Subervie, Julie
  7. Regulation and Unintended Consequences By Färe, Rolf; Grosskopf, Shawna

  1. By: Lucas Bretschger; Nujin Suphaphiphat
    Abstract: The paper develops a two-region endogenous growth model with climate change affecting the countries' capital stocks negatively. We compare two different policies aimed at supporting less developed countries: climate mitigation by rich countries, which diminishes the increase in stock pollution and hence capital depreciation, and income transfers in the tradition of development aid. Under a mild set of assumptions we find that active climate policies are more efficient for rich economies and also, remarkably, better for poor countries than additonial development aid. The main reason is the difference between the two policies with respect to their effects on economic growth. The results are robust with respect to possible model extensions.
    Keywords: Climate policy, development aid, endogenous growth, stock pollution
    JEL: O10 Q52 Q54
    Date: 2012–06
    URL: http://d.repec.org/n?u=RePEc:eus:ce3swp:0412&r=res
  2. By: Victor A.B. Davies; Sylvain Dessy
    Abstract: This paper examines the post-war strategies of Liberia and Sierra Leone to generate revenues from their natural resources. We document the challenges faced by the government of the two countries, contrasting measures taken to address these challenges as well as the outcomes. We complement the analysis with an analytical model which explores the implications of exploiting natural resources in the aftermath of a civil conflict before public management institutions are developed, as observed in Liberia and Sierra Leone. The key lesson is that resource-rich countries emerging from conflict face a difficult trade-off between relatively large longer-term gains which accrue when institutional capacity is developed prior to exploiting the resources, and smaller short-term revenues that come with immediate exploitation of the resources. The findings call attention to the potential role of the international community in developing post-conflict countries’ natural resource and revenue institutional capacity, as well as transparent corporate and government institutions for resource management.
    JEL: O11
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:18539&r=res
  3. By: Daniel Huppmann
    Abstract: The liberalisation of the natural gas markets and the importance of natural gas as a transition fuel to a low-carbon economy have led to the development of several large-scale equilibrium models in the last decade. These models combine long-term market equilibria and investments in infrastructure while accounting for market power by certain suppliers. They are widely used to simulate market outcomes given different scenarios of demand and supply development, environmental regulations and investment options. In order to capture the specific characteristics of natural gas production, most of these models apply a logarithmic production cost function. However, no model has so far combined this cost function type with endogenous investment decisions in production capacity. Given the importance of capacity constraints in the determination of the natural gas supply, this is a serious shortcoming of the current literature. This paper provides a proof that combining endogenous investment decisions and a logarithmic cost function yields indeed a convex minimization problem, paving the way for an important extension of current state-of-the-art equilibrium models.
    Keywords: Natural gas, equilibrium model, endogenous investment, capacity expansion, logarithmic cost function
    JEL: C61 Q41 L71
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1253&r=res
  4. By: Klaus Desmet; Esteban Rossi-Hansberg
    Abstract: We propose a dynamic spatial theory to analyze the geographic impact of climate change. Agricultural and manufacturing firms locate on a hemisphere. Trade across locations is costly, firms innovate, and technology diffuses over space. Energy used in production leads to emissions that contribute to the global stock of carbon in the atmosphere, which affects temperature. The rise in temperature differs across latitudes and sectors. We calibrate the model to analyze how climate change affects the spatial distribution of economic activity, trade, migration, growth, and welfare. We assess quantitatively the impact of migration and trade restrictions, energy taxes, and innovation subsidies.
    JEL: E00 F10 R00
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:18546&r=res
  5. By: Desmet, Klaus; Rossi-Hansberg, Esteban
    Abstract: We propose a dynamic spatial theory to analyze the geographic impact of climate change. Agricultural and manufacturing firms locate on a hemisphere. Trade across locations is costly, firms innovate, and technology diffuses over space. Energy used in production leads to emissions that contribute to the global stock of carbon in the atmosphere, which affects temperature. The rise in temperature differs across latitudes and sectors. We calibrate the model to analyze how climate change affects the spatial distribution of economic activity, trade, migration, growth, and welfare. We assess quantitatively the impact of migration and trade restrictions, energy taxes, and innovation subsidies.
    Keywords: carbon; climate change; growth; international and regional trade; migration; mobility frictions; regional economics; space
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:9220&r=res
  6. By: Chabé-Ferret, Sylvain; Subervie, Julie
    Abstract: Agro-environmental schemes (AES), which pay farmers to adopt greener practices, are increasingly important components of environmental and agricultural policies both in the US and the EU. Here we study the French implementation of the EU AES program. We estimate additional and windfall effects of five AESs for a representative sample of individual farmers using Difference-In-Difference (DID) matching. We derive the statistical assumptions underlying DID-matching from a structural household model and we argue that the economics of the program make it likely that these assumptions hold in our data. We test the implications of the identifying assumptions, provide a lower bound using triple-difference matching, test for crossover effects and insert our estimates of both additionality and windfall effects into a cost-benefit framework. We find that the AESs promoting crop diversity have inserted one new crop into the rotation but on a small part of the cropped area. We also find that the AES subsidizing the planting of cover crops has increased cover crops by 10 hectares on the average recipient farm at the expense of almost 7 hectares of windfall effect. This AES does not appear to be cost effective. In contrast, we find that the AES subsidizing grass buffer strips could be socially efficient despite large windfall effects. We finally estimate that the AES subsidizing conversion to organic farming has low windfall effects and high additionality.
    Keywords: Agro-environmental Schemes - Additionality - Windfall Effects - Treatment Effects - Difference in Difference Matching - Agricultural Practices - Crop Diversity - Cover Crops - Grass Buffer Strips - Organic Farming.
    Date: 2012–07
    URL: http://d.repec.org/n?u=RePEc:tse:wpaper:26568&r=res
  7. By: Färe, Rolf (Dept. of Economics); Grosskopf, Shawna (CERE, Centre for Environmental and Resource Economics)
    Abstract: Production of desirable outputs such as Kwh of electricity are often accompanied by the production of undesirable or ‘bad’ outputs such as SO2. These undesirable outputs are frequently regulated in the sense that their production is not allowed to exceed certain amounts. In this paper we analyze what we call the unintended consequences of regulation of bads where that regulation limits the quantity of bads produced. We consider the simple case in which there is one good and one bad output. Under constant returns to scale we provide a theorem that characterizes the situation in which quantity regulation of the bad output restricts the production of the intended good output. Our theorem is in the spirit of Shephard’s proof of the Law of Diminishing Returns.
    Keywords: Regulation; Unintended Consequences
    JEL: Q40
    Date: 2012–11–20
    URL: http://d.repec.org/n?u=RePEc:hhs:slucer:2012_017&r=res

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