nep-res New Economics Papers
on Resource Economics
Issue of 2013‒05‒05
eight papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Four Changes to Trade Rules to Facilitate Climate Change Action By Aaditya Mattoo; Arvind Subramanian
  2. Supply Side Climate Policy and the Green Paradox By Hoel, Michael
  3. Directing Technical Change from Fossil-Fuel to Renewable Energy Innovation: An Empirical Application Using Firm-Level Patent Data By Joëlle Noailly; Roger Smeets
  4. Managing Ecosystem Services for Human Benefit: Economic and Environmental Policy Challenges By Tisdell, Clement A.; Xue, Dayuan
  5. Revisiting the Environmental Kuznets Curve in a Global Economy By Shahbaz, Muhammad; Ozturk, Ilhan; Afza, Talat; Ali, Amjad
  6. Linking Price and Quantity Pollution Controls under Uncertainty By Peter J. Wood; Peter Heindl; Frank Jotzo; Andreas Löschel
  7. Des modes de capture du carbone et de la compétitivité relative des énergies primaires By Amigues, Jean-Pierre; Lafforgue, Gilles; Moreaux, Michel
  8. Contagious Cooperation, Temptation, and Ecosystem Collapse By Andries Richter; Daan van Soest; Johan Grasman

  1. By: Aaditya Mattoo (World Bank); Arvind Subramanian (Peterson Institute for International Economics)
    Abstract: Generating technological progress requires deploying the full range of policy instruments, including those related to trade policy. The authors consider four areas: subsidization of green goods and technologies; border-tax adjustments (BTAs) related to carbon content; restrictions on the export of fossil fuels, especially natural gas; and intellectual property protection of new technologies and products related to climate change. They propose changes to trade rules that would promote climate change goals. The proposed changes have an underlying political economy logic and consistency. Changes would allow global environmental "bads" to be penalized (by permitting border taxes on less clean imports), global environmental goods and technologies to be promoted (by relaxing the constraints on the use of production and export subsidies and strengthening IPR protection), and prevent global environmental "goods" being penalized (by eliminating the export restrictions on natural gas).
    Date: 2013–04
  2. By: Hoel, Michael (Dept. of Economics, University of Oslo)
    Abstract: The focus of the green paradox literature has been either on demand-side climate policies or on effects of technological changes. The present paper addresses the question of whether there also might be some kind of green paradox related to supply-side policies, i.e. policies that permanently remove some of the carbon resources. The conclusion is that there will no green paradox if supply-side climate policies are aimed at high-cost carbon reserves. If instead low-cost reserves are removed, the possibility that both early and total emissions increase cannot be ruled out. Hence, "wrong" supply-side climate policies may give a supply-side green paradox.
    Keywords: Climate; Green paradox
    JEL: Q30 Q38 Q54 Q58
    Date: 2013–04–23
  3. By: Joëlle Noailly (CIES, Graduate Institute of International and Development Studies, Geneva, Switzerland and CPB Netherlands Bureau for Economic Policy Analysis, The Hague, The Netherlands); Roger Smeets (Rutgers Business School, Newark, USA)
    Abstract: This paper investigates the determinants of directed technical change in the electricity generation sector. We use firm-level data on patents led in renewable (REN) and fossil fuel (FF) technologies by about 7,000 European firms over the period 1978-2006. We separately study specialized firms that innovate in only one type of technology during the sample period, and mixed firms that innovate in both technologies. We find that for specialized firms the main drivers of innovation are fossil-fuel prices, market size, and firms' past knowledge stocks. Also, prices and market size drive the entry of new REN firms into innovation. By contrast, we find that innovation by mixed firms is mainly driven by strong path-dependencies since for these firms past knowledge stock is the major driver of the direction of innovation. These results imply that generic environmental policies that affect prices and energy demand are mainly effective in directing innovation by small specialized firms. In order to direct innovation e orts of large mixed corporations with a long history of FF innovation, targeted R&D policies are likely to be more effective.
    Keywords: Directed Technical Change, Energy, Patents, Firms' Dynamics
    JEL: Q4
    Date: 2013–04
  4. By: Tisdell, Clement A.; Xue, Dayuan
    Abstract: In the Millennium Ecosystem Assessment (2005), ecologists identified and pointed out a multitude of environmental and other benefits obtained by human-beings from ecosystem services. Frequently, these benefits are not fully recognized and they are not adequately taken into account in decision-making in contemporary economic and political systems for reasons outlined in this contribution. In particular, this adversely affects the optimal conservation of natural, near natural and unmanaged ecosystems. The human benefits from ecosystem services as set out in the Millennium Ecosystem Assessment are summarized and this assessment is examined critically. Economic views about the economic value of different types of ecosystems and forms of biosphere use are outlined and assessed. Determining the economic value of alternative forms of land-use (more generally biosphere-use) is extremely difficult because of knowledge constraints. Often the biophysical consequences, that is, variations in the supply of ecosystems services resulting from alterations in ecosystems, are poorly known. The economic valuation of changes in ecosystems (alterations in biosphere-use) is also hampered by poor information about the demand for these services (for example, the willingness of beneficiaries to pay for their supply) and the cost of replacing these services if they are lost (or diminished in availability) as a result of ecosystem change. While this limits the scope for economic valuation, it does not mean the rational valuation of biosphere use is impossible. It has been suggested that the supply of ecosystem services can be managed optimally, in some cases, if private landholders are paid for supplying these services. The benefits and drawbacks of this approach are discussed. China’s policies to restore the supply of particular ecosystem services, for example, its Grain-for-Green program, are used to illustrate some of these matters.
    Keywords: ecosystem services, China, Millennium Ecosystem Assessment, Environmental Economics and Policy, Q57,
    Date: 2013–04
  5. By: Shahbaz, Muhammad; Ozturk, Ilhan; Afza, Talat; Ali, Amjad
    Abstract: The present study deals with an empirical investigation between CO2 emissions, energy intensity, economic growth and globalization using annual data over the period of 1970-2010 for Turkish economy. We applied unit root test and cointegration approach in the presence of structural breaks. The direction of causality between the variables is investigated by applying the VECM Granger causality approach. Our results confirmed the existence of cointegration between the series. The empirical evidence reported that energy intensity, economic growth (globalization) increase (condense) CO2 emissions. The results also validated the presence of Environmental Kuznets curve (EKC). The causality analysis shows bidirectional causality between economic growth and CO2 emissions. This implies that economic growth can be boosted at the cost of environment.
    Keywords: Carbon dioxide emissions, EKC, economic growth
    JEL: Q5 Q56
    Date: 2013–04–05
  6. By: Peter J. Wood; Peter Heindl; Frank Jotzo; Andreas Löschel
    Abstract: This paper examines the linking of price-based and quantity-based provision of a public good by two parties in the example of pollution control under a global quantity constraint, using a stochastic partial-equilibrium model. One country chooses a price-based instrument (tax) and trades with another that lets its emissions price adjust. The expected cost for the price-setting country and the combined expected cost is higher than if both countries choose a quantity-based instrument, and the country with the quantity instrument stands to benefit in terms of expected net costs. The effect increases when the relative size of the country with the pice-based constraint increases; and increases with respect to the degree of correlation in ex-ante uncertain abatement costs. While the quantity-setting country benefits from lower expected costs in most circumstances, the variance in cost can be much higher if its costs are correlated with the pricesetting country. The optimal ex-ante tax rate differs from that under quantity-quantity linking. These results have important implications for instrument choice for the regulation of greenhouse gases and other pollutants and for the design of international agreements when there are domestic preferences for price
    Keywords: Instrument Choice; Linking; Climate Policy; Prices vs. Quantities
    JEL: Q52 H23 K32
    Date: 2013–04
  7. By: Amigues, Jean-Pierre; Lafforgue, Gilles; Moreaux, Michel
    Abstract: We characterize the optimal exploitation paths of two perfect substitute primary energy resources, a non-renewable polluting resource and a carbon-free renewable one. Both resources can supply the energy needs of two sectors. Sector 1 is able to reduce its carbon footprint at a reasonable cost owing to a CCS device. Sector 2 has only access to the air capture technology, but at a significantly higher cost. We assume that the atmospheric carbon stock cannot exceed some given ceiling. We show that it is optimal to begin by fully capturing the sector 1's emissions before the ceiling is reached and next, to deploy the air capture in order to partially abate sector 2’s emissions. The optimal carbon tax is first increasing during the pre-ceiling phase and next, it declines in stages down to 0.
    Keywords: Climate change, carbon capture and storage, non-renewable resources
    JEL: Q32 Q42 Q54 Q58
    Date: 2013–04
  8. By: Andries Richter (Centre for Ecological and Evolutionary Synthesis (CEES), University of Oslo, Norway, and Department of Mathematical Statistical Methods, Wageningen University, the Netherlands); Daan van Soest (Department of Spatial Economics and IVM, VU University Amsterdam, Department of Economics, Tilburg University, the Netherlands); Johan Grasman (Department of Mathematical and Statistical Methods, Wageningen University, the Netherlands)
    Abstract: Real world observations suggest that social norms of cooperation can be effective in overcoming social dilemmas such as the joint management of a common pool resource – but also that they can be subject to slow erosion and sudden collapse. We show that these patterns of erosion and collapse emerge endogenously in a model of a closed community harvesting a renewable natural resource in which individual agents face the temptation to overexploit the resource, while a cooperative harvesting norm spreads through the community via interpersonal relations. We analyze under what circumstances small changes in key parameters (including the size of the community, and the rate of technological progress) trigger catastrophic transitions from relatively high levels of cooperation to widespread norm violation – causing the social-ecological system to collapse.
    Keywords: Social Norms, Common Pool Resource, Co-Evolution, Resilience, Alternative Stable States
    JEL: C73 D62 D64 Q20
    Date: 2013–04

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