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on Resource Economics |
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Issue of 2013‒02‒16
six papers chosen by |
| By: | Garth Heutel; Carolyn Fischer |
| Abstract: | Environmental economics has traditionally fallen in the domain of microeconomics, but recently approaches from macroeconomics have been applied to studying environmental policy. We focus on two macroeconomic tools and their application to environmental economics. First, real business cycle models can incorporate pollution and pollution policy and be used to answer several questions. How can environmental policy adjust to business cycles? How do different types of policies fare in a context with business cycles? Second, endogenous technological growth is an important component of environmental policy. Several studies ask how policy can be designed to both tackle emissions directly and influence the adoption of clean technologies. We focus on these two aspects of environmental macroeconomics but emphasize that there are many other potential applications. |
| JEL: | E32 O44 Q50 Q55 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18794&r=res |
| By: | Elettra Agliardi (Department of Economics, University of Bologna, Italy; The Rimini Centre for Economic Analysis, Italy); Luigi Sereno (Department of Economics, University of Bologna, Italy) |
| Abstract: | We develop a model on the optimal timing of switching from non-renewable to renewable energy sources with endogenous extraction choices under emission taxes, subsidies on renewable resources and abatement costs. We assume that non-renewable resources are "dirty" inputs and create environmental degradation, while renewable resources are more environmentally friendly, although they may be more or less productive than the exhaustible resources. The value of the switching option from non-renewable to renewable resources is characterized. Numerical applications show that an increase in emission taxes, abatement costs or demand elasticity slows down the adoption of substitutable renewable resources, while an increase in the natural rate of resource regeneration, the stock of renewable resources or the relative productivity parameter speeds up the investment in the green technology. |
| Keywords: | Non-renewable resources; Renewable resources; Environmentally friendly technologies; Abatement costs; Subsidies; Taxes; Optimal switching time; Real options |
| JEL: | D81 H23 Q28 Q38 Q40 Q50 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:11_13&r=res |
| By: | Goeschl, Timo; Heyen, Daniel; Moreno-Cruz, Juan |
| Abstract: | Solar radiation management (SRM) technologies are considered one of the likeliest forms of geoengineering. If developed, a future generation could deploy them to limit the damages caused by the atmospheric carbon stock inherited from the current generation, despite their negative side effects. Should the current generation develop these geoengi-neering capabilities for a future generation? And how would a decision to develop SRM impact on the current generation's abatement efforts? Natural scientists, ethicists, and other scholars argue that future generations could be more sanguine about the side effects of SRM deployment than the current generation. In this paper, we add economic rigor to this important debate on the intergenerational transfer of technological capabilities and pollution stocks. We identify three conjectures that constitute potentially rational courses of action for current society, including a ban on the development of SRM. How-ever, the same premises that underpin these conjectures also allow for a novel possibility: If the development of SRM capabilities is sufficiently cheap, the current generation may for reasons of intergenerational strategy decide not just to develop SRM technologies, but also to abate more than in the absence of SRM. |
| Keywords: | Geoengineering; Climate Change; Intergenerational Issues; Strategic Behavior. |
| Date: | 2013–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0540&r=res |
| By: | Peter Egger (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Sergey Nigai (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | We develop a general equilibrium model of trade with multiple countries and industries in the spirit of Eaton and Kortum (2002) and Bernard, Eaton, Jensen, and Kortum (2003). We structurally estimate the parameters of the model and calibrate it to data on 33 OECD countries and one country that covers the rest of the world. Industries differ by their relative energy intensity and the level of pollution. Accordingly, the implementation of policy instruments to reduce pollution at the country level induces heterogeneous effects across industries within and across countries. We utilize the model to compare alternative environmental tax instruments and to evaluate their consequences for the level of carbon emissions, welfare costs, industry-specific prices and demand in various policy scenarios. Among the latter, we particularly distinguish between policies that are implemented in isolation (by single countries) or en bloc (in groups of countries or even world wide). This study pays specific attention to the implementation of various energy policies, in particular, in Switzerland. Beyond implementation of the Copenhagen Accord pledges, the study quantifies an implementation of extra taxes on carbon emissions at the amount of 1,140 Swiss Francs per ton of carbon and the substitution of nuclear energy production. |
| Keywords: | Carbon taxation, Energy policy, International trade |
| JEL: | F11 F14 Q43 Q48 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:13-327&r=res |
| By: | Grischa Perino (University of East Anglia) |
| Abstract: | Private provision of public goods can only supplement government provision if individual actions affect the level of the public good. Cap-and-trade schemes reduce the overuse of common resources such as a stable climate or fish stocks by imposing a binding cap on total use by regulated agents. Any private contributions provided by means of e.g. green consumerism or life-style choices within such a scheme only impacts on who uses the resource but leaves total use unaffected. Perfect offsetting of marginal contributions is a key design element of cap-and-trade schemes. As real world cap-and-trade policies like the EU Emission Trading System have incomplete coverage, understanding what they cover is crucial for individuals aiming to contribute. Otherwise contribution efforts backfire. |
| Keywords: | cap-and-trade, green consumerism, emissions tax, crowding-out of private contributions, carbon labelling |
| JEL: | H23 H31 D64 H41 Q54 Q58 |
| Date: | 2013–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:uea:wcbess:13-01&r=res |
| By: | Zivkovic, Sanja; Hudson, Darren |
| Abstract: | Increased concentration of greenhouse gases in the atmosphere, especially of carbon dioxide, has led to attempts to implement carbon policies in order to limit and stabilize gases at acceptable levels. Agricultural activities increase greenhouse gases in the atmosphere, but they can also mitigate concentration of carbon dioxide by sequestering additional carbon. This study evaluated carbon emissions and carbon sequestration and examined the impacts of payments for sequestration and taxes on carbon emissions on cropping choices, profitability, and water consumption in the Texas High Plains. The results showed that reduction of total carbon emissions to 15% of a baseline and imposing a tax reduced the amount of water consumed for irrigation, by about 20% and 16%, respectively. However, payment for sequestration did not affect reduction of carbon emissions, water consumption nor the product mix. |
| Keywords: | agriculture, carbon emissions, carbon sequestration, profit, Texas High Plains, water consumption, Crop Production/Industries, Environmental Economics and Policy, Production Economics, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea13:142991&r=res |