nep-res New Economics Papers
on Resource Economics
Issue of 2012‒12‒10
four papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Do institutional factors matter for improved solid waste management? By Yalew, Amsalu Woldie
  2. Effects of corporate social responsibility and irresponsibility policies By Armstrong, J. Scott; Green, Kesten C.
  3. Emissions trading with offset markets and free quota allocations By Rosendahl, Knut Einar; Strand, Jon
  4. Carbon management: Evidence from case studies of German firms under the EU ETS By Heindl, Peter; Lutz, Benjamin

  1. By: Yalew, Amsalu Woldie
    Abstract: There is non-changing behavior of residents in cooperating and contributing for improved solid waste management in spite of increasing provision of solid waste management services in many urban areas. This paper starts from a hypothesis that institutional factors (interventions) are missing. We considered the case of issuing laws and creating awareness about the health and economic burdens due to improper waste management. We applied a paired-t test to test our hypothesis. We find that institutional factors, creating awareness and introducing rules, significantly increase household’s willingness to pay for improved solid waste management services. We find also increasing awareness is more influential than issuing laws. The findings do have important policy implications in reducing not only solid waste management problems but also many other environmental problems in developing countries.
    Keywords: Solid waste management; Rules; Awareness; experimental research; t-test
    JEL: Q53
    Date: 2012–11–20
  2. By: Armstrong, J. Scott; Green, Kesten C.
    Abstract: This article reviews experimental evidence on the effects of policies intended to promote behavior by firms that is more socially responsible and less socially irresponsible. Corporate social responsibility (CSR) can provide firms with opportunities for profit, but changes are likely to increase total welfare only if firms adopt them freely and without taxpayer subsidies. Mandated CSR circumvents people’s own plans and preferences, distorts the allocation of resources, and increases the likelihood of irresponsible decisions. Evidence that government policies will increase welfare and a compelling argument that proven benefits justify reductions in freedom are necessary in order to justify CSR mandates. To date, this has apparently not been achieved. Corporate social irresponsibility (CSI) is concerned with whether firms undertake harmful actions that managers would be unwilling to undertake acting for themselves, or that a reasonable person would expect to cause substantive net harm when all parties are considered. Markets in which stakeholders are free to make decisions in their own interests provide some protection against CSI. Tort and contract law provide additional protection. Nevertheless, managers sometimes act irresponsibly. Codes of ethics that require fair treatment of stakeholders while pursuing long-term profit reduce the risk of irresponsible decisions. Management support and stakeholder accounting are important for successful implementation. Firms may wish to consider these measures; many already have.
    Keywords: accountability; affirmative action; decision making; ethics; externalities; free markets; minimum wage; paternalism; principal-agent problem; regulation; seer-sucker theory; stakeholder accounting; stakeholder theory; sustainability
    JEL: L51 L21 H23
    Date: 2012–12–01
  3. By: Rosendahl, Knut Einar; Strand, Jon
    Abstract: This paper studies interactions between a"policy bloc's"emissions quota market and an offset market where emissions offsets can be purchased from a non-policy"fringe"of countries (such as for the Clean Development Mechanism under the Kyoto Protocol). Policy-bloc firms enjoy free quota allocations, updated according to either past emissions or past outputs. Both overall abatement and the allocation of given abatement between the policy bloc and the fringe are then inefficient. When the policy-bloc quota and offset markets are fully integrated, firms buying offsets from the fringe, and all quotas and offsets, must be traded at a single price; the policy bloc will either not constrain the offset market whatsoever, or ban offsets completely. These cases occur when free allocation of quotas is less (very) generous, and the offset market delivers large (small) quota amounts. Governments of policy countries would instead prefer to buy offsets directly from the fringe at a price below the policy-bloc quota price. The offset price is then below the marginal damage cost of emissions and the quota price in the policy bloc is above the marginal damage cost. This is also inefficient as the policy bloc, acting as a monopsonist, purchases too few offsets from the fringe.
    Keywords: Climate Change Economics,Climate Change Mitigation and Green House Gases,Markets and Market Access,Energy Production and Transportation,Carbon Policy and Trading
    Date: 2012–11–01
  4. By: Heindl, Peter; Lutz, Benjamin
    Abstract: This paper examines the management practices of German firms with obligations under the EU Emissions Trading Scheme (EU ETS) based on six structured in-depth interviews with managers of firms from different industries and based on survey data. The paper sheds light on management and trading practices, abatement behaviour, and the impact of the EU ETS on long-term decisions, such as investment decisions or innovative capacity. The aim is to provide information on firm-internal management processes related to the EU ETS and to strengthen intuition for microeconomic consequences of greenhouse gas regulation in a cap-and-trade scheme. The analysis reveals that management practices in the EU ETS are mainly driven by emission levels, firm size, pre-existing management structures and production patterns. While larger emitters (about 100,000 tCO2 per year or larger) are perfectly capable to carry out all relevant tasks, smaller emitters behave more passively due to transaction costs and lower expected return of transactions. Our analysis suggests that institutional responds to regulation should be taken into account for the design of greenhouse gas regulation. --
    Keywords: Carbon Management,Emissions Trading,EU ETS
    JEL: L60 Q50 M11
    Date: 2012

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