nep-res New Economics Papers
on Resource Economics
Issue of 2013‒01‒07
five papers chosen by
Maximo Rossi
Universidad de la Republica

  1. The Environmental Regulation Paradox for Clean Tech Ventures By Erik Stam; Neil Thompson; Andrea Herrmann; Marko Hekkert
  2. Climate Change - Predictions, Economic Consequences, and the Relevance of Environmental Kuznets Curves By Tisdell, Clement A.
  3. Climate change policies and employment in Eastern Europe and Central Asia By Oral, Isil; Santos, Indhira; Zhang, Fan
  4. Carbon Taxes, Path Dependency and Directed Technical Change: Evidence from the Auto Industry By Aghion, Philippe; Dechezleprêtre, Antoine; Hemous, David; Martin, Ralf; Van Reenen, John
  5. The insurance value of forests in supplying climate regulation By Eugenio Figueroa B.; Roberto Pasten C.

  1. By: Erik Stam; Neil Thompson; Andrea Herrmann; Marko Hekkert
    Abstract: Traditionally, regulations are seen as harmful for the starting and growing of firms. However, strict environmental regulation can also trigger the discovery and introduction of clean technologies, and this innovation might improve the competitiveness of the firm (the so-called Porter hypothesis). This project focuses on the environmental regulation paradox in the context of new venture growth. The key questions are: 1) to what extent do new ventures perceive environmental regulation to be a bottleneck; and 2) how does environmental regulation affect the growth of clean tech ventures? The characteristics of a panel of new ventures are analyzed during their emergence, and in particular the effect of environmental regulation on the subsequent growth of these new ventures. These analyses are also performed on a subsample of firms that is especially liable to environmental regulations, namely clean tech ventures. The empirical evidence shows the paradox of environmental regulation for clean tech ventures: they more often perceive this to be a bottleneck, but environmental regulation also seems to drive their growth. Our interpretation of the environmental regulation paradox is that environmental regulation should be treated as a barrier to growth: entrepreneurs that aim to expand their business in markets that are sensitive to environmental regulation face these regulations as a bottleneck for their activities, but this necessary evil informs them how to successfully expand in these markets giving them a competitive edge over other less well informed firms. Without this hurdle they would probably not be sufficiently informed about the possibilities and impossibilities in these markets. This especially counts for clean tech ventures, but also for the group of non-clean tech ventures that is active on markets liable to environmental regulations. This interpretation does justice to the initial Porter hypothesis - environmental regulation can trigger innovation that may partially or more than fully offset the costs of complying with them – as environmental regulation is both perceived as a cost, but in the end seems to more than fully offset these costs indicated by the growth inducing effect of environmental regulation.  
    Date: 2012–12–18
  2. By: Tisdell, Clement A.
    Abstract: Summarises some of the predicted natural consequences of increasing concentrations of greenhouse gases in the atmosphere. Changes in temperature, climates, physical and chemical impacts on the biosphere as well as biodiversity loss are considered. Then some of the expected social and economic consequences of global warming are discussed. Subjects considered are the impacts of global warming on bio-industries and social conditions, the economic costs of greenhouse gas emissions and the effects of climate change. Attention subsequently turns to the environmental Kuznets curve and the inappropriate use of the relationship. For example, it is stressed that reducing the intensity of greenhouse gas emissions in relation to GDP does not necessarily reduce total greenhouse gas emissions. Furthermore, even if they are reduced, greenhouse gases can continue to accumulate in the atmosphere. Some suggestions are then made about how the global warming problem might be addressed.
    Keywords: adaptation to global warming, biodiversity loss, bio-industries, climate change, economics costs of global warming, environmental Kuznets curve, global warming., Environmental Economics and Policy, Q01, Q54, Q57,
    Date: 2012–12
  3. By: Oral, Isil; Santos, Indhira; Zhang, Fan
    Abstract: This paper analyzes the differential impact of climate change policies on employment in Eastern Europe and Central Asia. In particular, the paper examines (i) how vulnerable labor markets are in Eastern European and Central Asian countries to future carbon regulation, and (ii) what countries can do to mitigate some of the potential negative effects of these regulatory changes on employment. In many aspects, the nature of the shock associated with climate regulation is similar to that associated with an increase in energy prices. Constraints on carbon emissions put a price on climate-damaging activities and make hydrocarbon-based energy production and consumption more expensive. As a result, firms in energy-intensive industries may react to higher energy prices by reducing production, which in turn would lead to lower employment. In the presence of frictions in labor markets, these sector shifts will cause resources to be unemployed, at least in the short term. Using principal component analysis, the paper finds that Eastern European and Central Asian countries vary greatly in their vulnerability and adaptability of employment to carbon regulation. Since the economy takes time to adjust, policy-makers will need to ensure that the incentives are there for new firms to emerge and employ workers, and that workers have the skills to respond to that demand. Moreover, governments have a role to play in ensuring that workers that are displaced have a proper safety net that will not only help in protecting their welfare, but will also allow workers to make more efficient labor market transitions.
    Keywords: Labor Markets,Energy Production and Transportation,Markets and Market Access,Labor Policies,Climate Change Economics
    Date: 2012–12–01
  4. By: Aghion, Philippe; Dechezleprêtre, Antoine; Hemous, David; Martin, Ralf; Van Reenen, John
    Abstract: Can directed technical change be used to combat climate change? We construct new firm-level panel data on auto industry innovation distinguishing between "dirty" (internal combustion engine) and "clean" (e.g. electric and hybrid) patents across 80 countries over several decades. We show that firms tend to innovate relatively more in clean technologies when they face higher tax-inclusive fuel prices. Furthermore, there is path dependence in the type of innovation both from aggregate spillovers and from the firm's own innovation history. Using our model we simulate the increases in carbon taxes needed to allow clean to overtake dirty technologies.
    Keywords: automobiles; Climate Change; Directed Technical Change; Innovation
    JEL: L62 O13 O3
    Date: 2012–12
  5. By: Eugenio Figueroa B.; Roberto Pasten C.
    Abstract: This brief paper proposes an analytical method for estimating the economic value of forest ecosystems in supplying climate regulation. If, as argued by several authors, forests ecosystems serve as hedging against climatic risk, then natural ecosystems may act as substitutes for market insurance. This ecosystem service of climate regulation can be economically valued by the marginal reduction in the willingness of risk-averse individuals to pay to avoid risk. We formally develop this novel methodology. As an illustration, we provide an estimate of the insurance value of climate regulation provided by forests using data on insurance premiums paid by local Chilean farmers. The insurance value of climate regulation is estimated to be approximately USD 0.0733 per hectare of forest. The framework that is proposed in this paper is useful and relevant for the cost-benefit analysis of natural resource conservation investments.
    Date: 2012–12

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