nep-res New Economics Papers
on Resource Economics
Issue of 2013‒08‒16
four papers chosen by
Maximo Rossi
Universidad de la Republica

  1. ENVIRONMENTAL REGULATION AND INDUSTRY EMPLOYMENT: A REASSESSMENT By Anna Belova; Wayne B. Gray; Joshua Linn; Richard D. Morgenstern
  2. Threshold Preferences and the Environment By Ingmar Schumacher; Benteng Zou
  3. Assessing and ordering investments in polluting fossil-fueled and zero-carbon capital By Oskar Lecuyer; Adrien Vogt-Schilb
  4. Transaction costs of low-carbon technologies and policies : the diverging literature By Mundaca, Luis; Mansoz, Mathilde; Neij, Lena; Timilsina, Govinda R

  1. By: Anna Belova; Wayne B. Gray; Joshua Linn; Richard D. Morgenstern
    Abstract: This paper examines the impact of environmental regulation on industry employment, using a structural model based on data from the Census Bureau’s Pollution Abatement Costs and Expenditures Survey. This model was developed in an earlier paper (Morgenstern, Pizer, and Shih (2002) - MPS). We extend MPS by examining additional industries and additional years. We find widely varying estimates across industries, including many implausibly large positive employment effects. We explore several possible explanations for these results, without reaching a satisfactory conclusion. Our results call into question the frequent use of the average impacts estimated by MPS as a basis for calculating the quantitative impacts of new environmental regulations on employment.
    Date: 2013–07
  2. By: Ingmar Schumacher (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, IPAG - Business School); Benteng Zou (CREA - Center for Research in Economic Analysis - Université du Luxembourg)
    Abstract: In this article we study the implication of thresholds in preferences. To model this we extend the basic model of John and Pecchenino (1994) by allowing the current level of environmental quality to have a discrete impact on how an agent trades off future consumption and environmental quality. In other words, we endogenize the semi-elasticity of utility based on a step function. We motivate the existence of the threshold based on research from political science, from arguments based on regulation and standards, cultural economics as well as ecological economics. Our results are that the location of the threshold determines both the potential steady states as well as the dynamics. For low (high) thresholds, environmental quality converges to a low (high) steady state. For intermediate levels it converges to a stable p-cycle, with environmental quality being asymptotically bounded below and above by the low and high steady state. We discuss implications for intergenerational equity and policy making. As policy implications we study shifts in the threshold. Our results are that, in case it is costless to shift the threshold, it is always worthwhile to do so. If it is costly to change the threshold, then it is worthwhile to change the threshold if the threshold originally was su ciently low. Lump-sum taxes may lead to a development trap and should be avoided if there are uncertainties about the threshold or the eff ectiveness of the policy.
    Keywords: Keywords: thresholds, endogenous preferences, environmental quality, policy intervention.
    Date: 2013–08–07
  3. By: Oskar Lecuyer (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales [EHESS] - Ecole des Ponts ParisTech - AgroParisTech); Adrien Vogt-Schilb (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales [EHESS] - Ecole des Ponts ParisTech - AgroParisTech)
    Abstract: Climate change mitigation requires to replace preexisting carbon-intensive capital with different types of cleaner capital. Coal power and inefficient thermal engines may be phased out by gas power and efficient thermal engines or by renewable power and electric vehicles. We derive the optimal timing and costs of investment in a low- and a zero-carbon technology, under an exogenous ceiling constraint on atmospheric pollution. Producing output from the low-carbon technology requires to extract an exhaustible resource. A general finding is that investment in the expensive zero-carbon technology should always be higher than, and can optimally start before, investment in the cheaper low-carbon technology. We then provide illustrative simulations calibrated with data from the European electricity sector. The optimal investment schedule involves building some gas capacity that will be left unused before it naturally depreciates, a process known as \textit{mothballing} or \textit{early scrapping}. Finally, the levelized cost of electricity (LCOE) is a misleading metric to assess investment in new capacities. Optimal LCOEs vary dramatically across technologies. Ranking technologies according to their LCOE would bring too little investment in renewable power, and too much in the intermediate gas power.
    Date: 2013–08–07
  4. By: Mundaca, Luis; Mansoz, Mathilde; Neij, Lena; Timilsina, Govinda R
    Abstract: Transaction costs are major challenge to moving forward toward low-carbon economic growth, as new technologies or policies tend to have higher transaction costs compared with those in the business as usual situation. However, neither a well-developed theoretical foundation nor a consensus interpretation is available for those transaction costs in the existing literature. The definitions and therefore the estimations of transaction costs vary across existing studies. The wide variations in the estimates could be attributed to several factors such as the very definitions and scope of transaction costs considered in the studies, the methodology for quantifying these costs, the type and size of low-carbon technologies, and complexities involved in the transactions. Nevertheless, the existing literature converges on addressing market failures, such as lack of information, in developing regulatory and institutional capacity to enhance private sector confidence in energy efficiency business as a key means to help reduce the transaction costs of low-carbon technologies.
    Keywords: E-Business,Environmental Economics&Policies,Energy Production and Transportation,Economic Theory&Research,Debt Markets
    Date: 2013–08–01

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