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on Resource Economics |
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Issue of 2013‒03‒16
eight papers chosen by |
| By: | Jonathan M. Harris |
| Abstract: | In the wake of the global financial crisis, Keynesianism has had something of a revival. In practice, governments have turned to Keynesian policy measures to avert economic collapse. In the theoretical area, mainstream economists have started to give grudging attention to Keynesian perspectives previously dismissed in favor of New Classical theories. This theoretical and practical shift is taking place at the same time that environmental issues, in particular global climate change, are compelling attention to alternative development paths. Significant potential now exists for “Green Keynesianism” -- combining Keynesian fiscal policies with environmental goals. But there are also tensions between the two perspectives of Keynesianism and ecological economics. Traditional Keynesianism is growth-oriented, while ecological economics stresses limits to growth. Expansionary policies needed to deal with recession may be in conflict with goals of reducing resource and energy use and carbon emissions. In addition, long-term deficit and debt problems pose a threat to implementation of expansionary fiscal policies. This paper explores the possibilities for Green Keynesianism in theory and practice, and suggests that these apparent contradictions can be resolved, and that Green Keynesian policies offer a solution to both economic stagnation and global environmental threats. |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:dae:daepap:13-02&r=res |
| By: | Donald N. Dewees |
| Abstract: | Economic evaluation of green or renewable power should compare the cost of renewable power with the cost savings from displaced fossil generation plus the avoided harm from reduced emissions of air pollution and greenhouse gases. We use existing estimates of the values of the harm and we calculate cost savings from renewable power based on wholesale spot prices of power in Ontario and steady-state estimates of the cost of new gas generation to estimate the value or affordability of various forms of renewable power in Ontario. We find that timing matters in evaluating intermittent renewable sources. Considering air pollution and greenhouse gases we find that coal generation is dominated by natural gas, supporting Ontario's policy of ending coal generation by 2014. Renewable power thus displaces gas. Dispatchable renewable generation sources, such as many biogas, biomass and some hydroelectric sites cause savings and reduced harm that can justify some of the Ontario Feed-in-Tariff prices up to $130/MWh; other FIT prices are too high. Wind and solar power are variable, so the value of their power depends on system marginal costs when they generate. Wind's displacement of gas capacity is low because it cannot be depended upon when demand is high and generation is needed, so it justifies prices of only $60 to $95/MWh, less than the FIT price of $115. Solar power justifies higher prices than wind, up to $152/MWh because solar generates in the daytime when prices are higher and when solar can fairly reliably displace gas capacity. Still, solar power falls far short of justifying the 2012 Ontario FIT prices of $347 to $549/MWh. Ontario's Feed-in-Tariff program costs more than necessary to achieve its environmental goals. |
| Keywords: | renewable energy, green energy, wind power, solar power, air pollution harm, greenhouse gases, feed-in-tariff, electricity generation externalities |
| JEL: | L94 Q42 Q51 Q52 Q53 Q54 Q58 |
| Date: | 2013–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-478&r=res |
| By: | Siqi Zheng; Matthew E. Kahn; Weizeng Sun; Danglun Luo |
| Abstract: | China’s extremely high levels of urban air, water and greenhouse gas emissions levels pose local and global environmental challenges. China’s urban leaders have substantial influence and discretion over the evolution of economic activity that generates such externalities. This paper examines the political economy of urban leaders’ incentives to tackle pollution issues. Based on a principal-agent framework, we present evidence consistent with the hypothesis that both the central government and the public are placing pressure on China’s urban leaders to mitigate externalities. Such “pro-green” incentives suggest that many of China’s cities could enjoy significant environmental progress in the near future. |
| JEL: | H23 H41 Q48 Q53 R5 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18872&r=res |
| By: | Paul A. David (Stanford Economics Department); Adriaan van Zon (SBE Maastricht University & UNU-MERIT (Maastricht, NL)) |
| Abstract: | The research reported here gives priority to understanding the inter-temporal resource allocation requirements of a program of technological changes that could halt global warming by completing the transition to a “green” (zero net CO2- emission) production regime within the possibly brief finite interval that remains before Earth’s climate is driven beyond a catastrophic tipping point. This paper formulates a multi-phase, just-in-time transition model incorporating carbon-based and carbon-free technical options requiring physical embodiment in durable production facilities, and having performance attributes that are amenable to enhancement by directed R&D expenditures. Transition paths that indicate the best ordering and durations of the phases in which intangible and tangible capital formation is taking place, and capital stocks of different types are being utilized in production, or scrapped when replaced types embodying socially more efficient technologies, are obtained from optimizing solutions for each of a trio of related models that couple the global macro-economy’s dynamics with the dynamics of the climate system. They describe the flows of consumption, CO2 emissions and the changing atmospheric concentration of green-house gas (which drives global warming), along with the investment dynamics required for the timely transformation of the production regime. These paths are found as the welfare-optimizing solutions of three different “stacked Hamiltonians”, each corresponding to one of our trio of integrated endogenous growth models that have been calibrated comparably to emulate the basic global setting for the “transition planning” framework of dynamic integrated requirements analysis modeling (DIRAM). As the paper’s introductory section explains, this framework is proposed in preference to the (IAM) approach that environmental and energy economists have made familiar in integrated assessment models of climate policies that would rely on fiscal and regulatory instruments -- but eschew any analysis of the essential technological transformations that would be required for those policies to have the intended effect. Simulation exercises with our models explore the optimized transition paths’ sensitivity to parameter variations, including alternative exogenous specifications of the location of a pair of successive climate “tipping points”: the first of these initiates higher expected rates of damage to productive capacity by extreme weather events driven by the rising temperature of the Earth’s surface; whereas the second, far more serious “climate catastrophe” tipping point occurs at a still higher temperature (corresponding to a higher atmospheric concentration of CO2). In effect, that sets the point before which the transition to a carbon-free global production regime must have been completed in order to secure the possibility of future sustainable development and continued global economic growth. |
| Keywords: | global warming, tipping point, catastrophic climate instability, extreme weatherrelated damages, R&D based technical change, embodied technical change, optimal sequencing, multi-phase optimal control, sustainable endogenous growth |
| JEL: | Q54 Q55 O31 O32 O33 O41 O44 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:sip:dpaper:12-013&r=res |
| By: | Walid Oueslati (Centre for Rural Economy, Newcastle University) |
| Abstract: | This paper examines the macroeconomic effects of an environmental tax reform in a growing economy. A model of endogenous growth based on human capital accumulation is used to numerically simulate the growth effects of different environmental tax reforms and compute their impact on welfare in the short and the long-term. Our results suggest that the magnitude of these effects depends on the type of tax reform. Thus, only environmental tax reform that aims to use the revenue from environmental tax to reduce wage tax and increase the proportion of public spending within GDP, enhances both growth and welfare in the long-term. However, the short-term effect remains negative. |
| Keywords: | Tax reform, Endogenous Growth, Human Capital, Environmental Externality, Transitional Dynamics, Welfare cost |
| JEL: | E62 I21 H22 Q28 O41 D62 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.09&r=res |
| By: | Christoper L Ambrey; Christopher M Fleming; Andrew Yiu-Chung Chan |
| Keywords: | Air pollution, happiness, Household Income and Labour Dynamics in Australia (HILDA), Geographic Information Systems (GIS), life satisfaction |
| JEL: | Q53 Q51 C21 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:gri:epaper:economics:201302&r=res |
| By: | Martinangeli, Andrea (Department of Economics, School of Business, Economics and Law, Göteborg University); Zoli, Mariangela (SEFEMEQ Department, University of Rome) |
| Abstract: | This paper contributes to the recent literature exploring the determinants of individual environmental behaviors. Contrary to many previous studies, which consider single items as proxies of individuals' overall environmental responsibility, we adopt a multidimensional perspective and derive composite indicators measuring individual performance on a set of distinct environmental dimensions. These indicators are then used to provide a more comprehensive picture of the complex mechanisms behind the formation of environmentally responsible behaviors. In addition to commonly investigated variables, we consider a richer set of determinants of green behaviors, nding that the level of public environmental protection expenditure, lifestyle satisfaction, individual worldviews and participation of dierent types of social actors all signi cantly aect the degree of environmental responsibility. Our empirical analysis is based on data from the British \Survey of Public Attitudes and Behaviours toward the Environment" for 2009. |
| Keywords: | public environmental expenditure; green behaviors; multidimensional analysis. |
| JEL: | A13 Q53 |
| Date: | 2013–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0561&r=res |
| By: | Wang, Min; Zhao, Jinhua; Bhattacharya, Joydeep |
| Abstract: | This paper shows how policies aimed at insuring health risks and those intended to improve the environment are (and should be) deeply intertwined. In the model economy, inspired by recent Chinese experience, pollution raises the likelihood of poor health in the future prompting agents to self insure against anticipated, rising medical expenses. The increased saving generates more capital while capital use by firms generates more pollution. Along the transition, sucha pollution-growth nexus may be attractive from a capital-accumulation perspective; however, rising pollution, via the health channel, definitely hurts welfare. Availability of private health insurance to top up pay-as-you-go coverage of medical bills together with a Pigouvian tax on emissions can replicate the first best. |
| Keywords: | pollution; health; overlapping generations model; saving |
| JEL: | E2 O13 |
| Date: | 2013–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:35994&r=res |