nep-res New Economics Papers
on Resource Economics
Issue of 2013‒04‒06
nine papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Carbon Taxes, Path Dependency and Directed Technical Change: Evidence from the Auto Industry By Philippe Aghion; Antoine Dechezleprêtre; David Hemous; Ralf Martin; John Van Reenen
  2. ‘Green’ growth, ‘green’ jobs and labour markets By Alex Bowen
  3. Incidence and Environmental Effects of Distortionary Subsidies By Garth Heutel; David L. Kelly
  4. Prosperity with growth: Economic growth, climate change and environmental limits By Cameron Hepburn; Alex Bowen
  6. Violation of environmental regulations in Sweden: Economic motives, environmental attitudes, and social capital By Holstein, Fredrik; Gren, Ing-Marie
  7. Do market-based instruments really induce more environmental R&D? A test using US panel data By David Grover
  8. Uncertainty and Decision in Climate Change Economics By Geoffrey Heal; Antony Millner
  9. Energy Poverty Alleviation and Climate Change Mitigation: is There a Trade off? By Shoibal Chakravarty; Massimo Tavoni

  1. By: Philippe Aghion; Antoine Dechezleprêtre; David Hemous; Ralf Martin; John Van Reenen
    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 morein clean technologies when they face higher tax-inclusive fuel prices. Furthermore,there is path dependence in the type of innovation both from aggregate spillovers andfrom the firm’s own innovation history. Using our model we simulate the increasesin carbon taxes needed to allow clean to overtake dirty technologies
    Date: 2012–11
  2. By: Alex Bowen
    Abstract: The term ‘green jobs’ can refer to employment in a narrowly defined set of industries providing environmental services. But it is more useful for the policy-maker to focus on the broader issue of the employment consequences of policies to correct environmental externalities such as anthropogenic climate change. Most of the literature focuses on direct employment created, with more cursory treatment of indirect and induced job creation, especially that arising from macroeconomic effects of policies. The potential adverse impacts of green growth policies on labour productivity and the costs of employment tend to be overlooked. More attention also needs to be paid in this literature to how labour markets work in different types of economy. There may be wedges between the shadow wage and the actual wage, particularly in developing countries with segmented labour markets and after adverse aggregate demand shocks, warranting a bigger and longer-lasting boost to green projects with high labour content. In these circumstances, the transition to green growth and job creation can go hand in hand. But there are challenges, especially for countries that have built their industrial development strategies around cheap carbon-based energy. Induced structural change, green or otherwise, should be accompanied by active labour market policies.
    Date: 2012–04
  3. By: Garth Heutel; David L. Kelly
    Abstract: Government policies that are not intended to address environmental concerns can nonetheless distort prices and affect firms' emissions. We present an analytical general equilibrium model to study the effect of distortionary subsidies on factor prices and on environmental outcomes. We model an output subsidy, a capital subsidy, relief from environmental regulation, and a direct cash subsidy. In exchange for receiving subsidies, firms must agree to a minimum level of labor employment. Each type of subsidy and the employment constraint create both output effects and substitution effects on input prices and emissions. We calibrate the model to the Chinese economy, where government involvement affects emissions from both state-owned enterprises and private firms. Variation in production substitution elasticities does not substantially affect input prices, but it does substantially affect emissions.
    JEL: H23 Q52 Q58
    Date: 2013–03
  4. By: Cameron Hepburn; Alex Bowen
    Abstract: Debate about the relationship between environmental limits and economic growth has been taking place for several decades. These arguments have re-emerged with greater intensity following advances in the understanding of the economics of climate change, increases in resource and oil prices and the re-emergence of the discussion about “peak oil”. The economic pessimism created by the great recession of 2008-2012 has also put the spotlight back on the prospects for economic growth. This chapter provides a conceptual and synthetic analysis of the relationship between economic growth and environmental limits, including those imposed by climate change. It explores two related questions. Will environmental limits, including limits on the climate system, slow or even halt economic growth? If not, how will the nature of economic growth have to alter? It is concluded that continued economic growth is feasible and desirable, although not without significant changes in its characteristics. These changes need to involve ultimately the reduction of the rate of material output, with continued growth in value being generated by expansion in the ‘intellectual economy’.
    Date: 2012–10
  5. By: Moussa Diaby (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie); Hélène Ferrer (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie); Fabrice Valognes (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie)
    Abstract: We consider in the present paper an original approach to a decision making problem related to the management of a primary resource, namely the rubber tree. By using the social choice theory through approval voting, we show that it is possible to improve the return of the crop. Hence, by selecting the best varieties to be planted with respect to some environmental constraints, we demonstrate that approval voting can be easily used (opposed to classical operation research methods) by the African rubber tree planters in order to get a plantation at peak performance.
    Keywords: Natural resource management; Rubber tree; Social choice; Group decision making
    Date: 2013–03
  6. By: Holstein, Fredrik (Department of Economics, Swedish University of Agricultural Sciences); Gren, Ing-Marie (Department of Economics, Swedish University of Agricultural Sciences)
    Abstract: This paper tests the explanatory power of traditional enforcement instruments, environmental attitudes and abundance of social capital for violation of environmental regulations in Sweden. A count data model is used on a panel data set obtained from a survey to inspectors at the local and regional jurisdictions in Sweden. Regressions analyses are carried out for all firms but also for different firm categories depending on environmental impacts. The results indicate that traditional enforcement weapons, measured as number of inspection and a formal inspection style, curb violation by all types of firm categories. On the other hand, significant results are that environmental attitudes and abundance of social capital deter violation by large firms, but have no impact on violation by firms with minor environmental impacts.
    Keywords: environmental regulations; violation; economic motives; environmental attitudes; social capital; heterogeneous firms; count data model; Sweden
    JEL: K33 K42 Q58
    Date: 2013–03–27
  7. By: David Grover
    Abstract: National governments are considering increasing spending on greenhouse gas mitigation R&D by billions of dollars per year at a time when many nations face severe fiscal austerity. This study investigates empirically whether it is realistic to expect market-based environmental policy instruments to stimulate a lot of environmental R&D spending on their own. The hypothesis developed is that increasingly market-based forms of environmental regulation might bring a conditional reduction in the level of environmental R&D spending, all else being equal; and that increasingly market-based approaches to climate mitigation policy may not necessarily induce the large amounts of environmental R&D spending that some corners of the induced innovation literature might predict. The hypothesis is tested using panel data on environmental R&D spending for 30 industry groups over 22 years. The evidence suggests the degree to which the prevailing policy regime embraced market forces may have diminished the R&D-motivating effect of the environmental regulatory burden. This implies that the quest to raise environmental R&D spending may be a good thing in its own right, and that the quest to incorporate market principles and institutions into environmental policy design may also be a good thing, but that market-based policies may undermine the incentives that firms have to invest in environmental R&D.
    Date: 2013–01
  8. By: Geoffrey Heal; Antony Millner
    Abstract: Uncertainty is intrinsic to climate change: we know that the climate is changing, but not precisely how fast or in what ways. Nor do we understand fully the social and economic consequences of these changes, or the options that will be available for reducing climate change. Furthermore the uncertainty about these issues is not readily quantified and expressed in probabilistic terms: we are facing deep uncertainty or ambiguity rather than risk in the classical sense, rendering the classical expected utility framework of limited value. We review the sources of uncertainty about all aspects of climate change and resolve these into various components, commenting on their relative importance. Then we review decision-making frameworks that are appropriate in the absence of quantitative probabilistic information, including non-probabilistic approaches and those based on multiple priors, and discuss their application in climate change economics.
    JEL: D81
    Date: 2013–03
  9. By: Shoibal Chakravarty (Princeton University); Massimo Tavoni (Euro-Mediterranean Center for Climate Change (CMCC) and Fondazione Eni Enrico Mattei (FEEM))
    Abstract: Energy poverty alleviation has become an important political issue in the most recent years. Several initiatives and policies have been proposed to deal with poor access to modern sources of energy in many developing countries. Given the large number of people lacking basic energy services, an important question is whether providing universal access to modern energy could significantly increase CO2 emissions. This paper provides one of the few formal assessments of this problem by means of a simple but robust model of current and future energy consumption. The model allows mapping energy consumption globally for different classes of energy use, quantifying current and future imbalances in the distribution of energy consumption. Our results indicate that an energy poverty eradication policy to be met by 2030 would increase global final energy consumption by about 7% (or 19EJ). This is the same quantity of energy which would be added between now and 2030 by individuals with energy consumption above current European standards. The additional energy infrastructure needed to eradicate energy poverty would produce 16-131 GtCO2 over the 21st century and contribute at most 0.1C of additional warming.
    Keywords: Energy Poverty, Climate Change, Household Energy Consumption
    JEL: Q43 Q54
    Date: 2013–03

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