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on Resource Economics |
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Issue of 2013‒03‒30
seven papers chosen by |
| By: | Kathy Baylis; Don Fullerton; Daniel H. Karney |
| Abstract: | We extend the model of Fullerton, Karney, and Baylis (2012 working paper) to explore cost-effectiveness of unilateral climate policy in the presence of leakage. We ignore the welfare gain from reducing greenhouse gas emissions and focus on the welfare cost of the emissions tax or permit scheme. Whereas that prior paper solves for changes in emissions quantities and finds that leakage may be negative, we show here that all cases with negative leakage in that model are cases where a unilateral carbon tax results in a welfare loss. With positive leakage, however, a unilateral policy can improve welfare. |
| JEL: | Q27 Q28 Q56 Q58 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18898&r=res |
| By: | Pilon , André Francisco |
| Abstract: | Problems of difficult settlement or solution in the world cannot be solved by segmented academic formats, market-place interests or mass-media headlines; instead of dealing with taken for granted issues (the apparent “bubbles” in the surface), public policies, research and teaching programmes should detect the issues and deal with them deep inside the boiling pot. Policy discussions and policy making require new paradigms of growth, power, wealth, work and freedom embedded into the cultural, social, political and economical institutions (more critical than individual motives and morals). Urban planning cannot be subordinated to the interests of business corporations, cities cannot remain as privileged centers for profit and capital accumulation, transforming citizens in mere users and consumers, but must preserve and develop mankind heritage, encompassing history, values, architecture, landscapes, the arts, the letters. Being-in-the-world is more than living on it, it demands an ecosystemic approach, the construction of a new social fabric, as new structures emerge in the socio-cultural learning niches and develop critical capacities to operate changes in the system. Problem solving implies dynamic and complex configurations intertwining four dimensions of being-in-the-world, as they combine, as donors and recipients, to induce the events (deficits and assets), cope with consequences (desired or undesired) and contribute for change (diagnosis and prognosis): intimate (subject’s cognitive and affective processes), interactive (groups’ mutual support and values), social (political, economical and cultural systems) and biophysical (biological endowment, natural and man-made environments). An integrated ecosystemic approach to education, culture, environment, health, politics, economics and quality of life should develop the connections and seal the ruptures between the different dimensions of being-in-the-world, in view of their mutual support and dynamic equilibrium. |
| Keywords: | culture, politics, economics, environment, ecosystems, education |
| JEL: | I00 Q28 Q51 Q56 Q58 Z1 Z13 |
| Date: | 2013–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:45360&r=res |
| By: | Gurkan, G.; Langestraat, R.; Ozdemir, O. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract Introducing a ceiling on total carbon dioxide (CO2) emissions and allowing polluting industries to buy and sell permits to meet it (known as a cap-and-trade system) affects investment strategies, generation quantities, and prices in electricity markets. In this paper we analyze these effects under the assumption of perfect competition and make a comparison with another potential way of reducing CO2 emissions, namely a fixed carbon tax charged per unit emission. We deal with an energy only market and model it as a two-stage game where capacities are installed in the first stage and production takes place in the future spot market. For a stylized version of this model (with no network effects and deterministic demand), we show that at the equilibrium either one or a mixture of two technologies is used. Such a mixture consists of a relatively clean and a relatively dirty technology. In the absence of a ceiling on total emissions, marginal operating costs of different technologies form a fixed merit order; that is, the marginal costs are ordered in an ascending fashion. Based on the observed demand, this fixed merit order is used to determine the total number of technologies used so that all demand is satisfied. We show that, as long as there is enough capacity in the system, when a fixed maximum allowance level is introduced, different demand levels impose different prices for a unit of emission allowance, and consequently there is no fixed merit order on the technologies. Therefore, for different levels of observed demand one can find a different optimal mixture. We develop an algorithm for finding the induced optimal mixture in a systematic way. We show that the price of electricity and the price of allowances increase as the maximum allowance level decreases. When, in comparison, a fixed tax is charged for the emissions, the merit order is fixed for all demand levels and the first technology in the merit order is the only generating unit. By means of a numerical study, we consider a more general version of the model with stochastic demand and observe that a broader mixture of technologies is used to satisfy the uncertain demand. We show that if there is a shortage of transmission capacity in the system, only introducing financial incentives and instruments (such as taxation or a cap-and-trade system) neither is sufficient to curb CO2 levels nor 1 necessarily induces investment in cleaner technologies. |
| Keywords: | investment modeling in electricity markets;energy policy;carbon tax;emission allowances;perfect competition equilibrium |
| JEL: | C61 C63 H23 Q58 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2013015&r=res |
| By: | Brock Smith (Department of Economics, University of California Davis) |
| Abstract: | This paper evaluates the impact of major natural resource discoveries since 1950 on GDP per capita and other economic and social indicators. Using panel fixed-effects estimation ad resource discoveries in countries that were not previously resource-rich, I find a positive effect on GDP per capita following extraction that persists in the long term, in contrast with much of the resource curse literature that uses cross-sectional designs. I also find positive effects on education levels, reductions in infant mortality, and negative effects on democratic institutions. I further test these outcomes with synthetic control analysis, yielding results consistent the fixed-effects model. |
| Keywords: | Resource Curse, Oil, Economic Growth |
| JEL: | O44 Q32 |
| Date: | 2013–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:cda:wpaper:13-3&r=res |
| By: | John Foster |
| Abstract: | It is argued that the explosive growth experienced in much of the World since the middle of the 19th Century is due to the exploitation and use of fossil fuels which, in turn, was made possible by capital good innovations that enabled this source of energy to be used effectively. Economic growth, it is argued, has been due to an autocatalytic co-evolution of energy use and the application of new knowledge relating to energy use. A simple 'evolutionary macroeconomic' model of economic growth is developed and tested using almost two centuries of British data. The empirical findings strongly support the hypothesis that growth has been due to the presence of a 'super-radical innovation diffusion process.' Also, the evidence suggests that large and sustained movements in energy prices have had a very significant long term role to play. The paper concludes with an assessment of the implications of the findings for the future prospects of economic growth in Britain and the possible lessons that can be learned about the future of the global economy. |
| Date: | 2013–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2013-01&r=res |
| By: | Gurkan, G.; Langestraat, R. (Tilburg University, Center for Economic Research) |
| Abstract: | Keywords: investment modeling in electricity markets, energy policy, renewable energy obligations, green certificates, technology bandings, perfect competition equilibrium |
| JEL: | C61 C63 H23 Q58 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2013016&r=res |
| By: | Charles A. Holt (University of Virginia); William M. Shobe (University of Virginia) |
| Abstract: | The state of California has implemented an economy-wide program to regulate its greenhouse gas emissions. A significant share of the emission reductions will be obtained via a cap and trade program with a mix of auctioning and free allocation of allowances. This program has a number of novel design features including, among other things, a price containment reserve, a limit on ownership of allowances, and the forced consignment to auction of some of the share of freely allocated allowances. We use a series of laboratory experiments to test the influence of two of these design features on the performance of the emissions market. We test the effect of holding limits and of the new three-tier price containment sale mechanism. We find that tight holding limits used to prevent market dominance reduce liquidity and appear to harm market efficiency and price discovery. The price containment sale mechanism reduces price spikes during periods of high allowance demand and has different effects on market performance than releasing the price containment reserve as part of the auction of allowances. We discuss the implications for the design of price containment reserves. |
| Keywords: | Emission markets; experiments; cap and trade; greenhouse gas emissions; market design |
| Date: | 2013–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:vac:report:rpt13-01&r=res |