nep-res New Economics Papers
on Resource Economics
Issue of 2013‒12‒29
seven papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Environmental regulation of a global pollution externality in a bilateral trade framework: The case of global warming, China and the US By Gwatipedza, Johnson; Barbier, Edward B.
  2. Environmental policies in competitive electricity markets. By Langestraat, R.
  3. Policy-induced environmental technology and inventive efforts: Is there a crowding out? By Hottenrott, Hanna; Rexhäuser, Sascha
  4. Environmental Federalism: A Survey of the Empirical Literature By Millimet, Daniel L.
  5. Tail-effect and the Role of Greenhouse Gas Emissions Control By In Chang Hwang; Richard S.J. Tol; Marjan W. Hofkes
  6. The Impact of Green Innovation on Employment Growth in Europe By Georg Licht; Bettina Peters
  7. How Green are Exporters? By Sourafel Girma; Aoife Hanley

  1. By: Gwatipedza, Johnson; Barbier, Edward B.
    Abstract: Bilateral trade and capital flows have increased substantially between the United States and China yielding economic gains to both countries. However, these beneficial bilateral relations also bring about global environmental consequences including greenhouse gas emissions. We develop a footloose capital model of international trade between the North (United States) and the South (China) in the presence of a global pollution externality. Each country's share of global pollution depends on its share of world capital. We show that, if the disutility of pollution in the United States is high, there will be pressure on the US to raise environmental regulations on industry. Capital will move to China. Because the increased pollution in China has global effects, the US may not benefit from the environmental restrictions and a joint regulation of pollution by both parties may be a preferred outcome. We also show that the implementation of differential control policies by the parties may also be optimal. --
    Keywords: global pollution externality,agglomeration,environmental regulation,global warming,greenhouse gas emissions
    JEL: D43 Q54 F18
    Date: 2013
    URL: http://d.repec.org/n?u=RePEc:zbw:ifwedp:201360&r=res
  2. By: Langestraat, R. (Tilburg University)
    Abstract: Abstract: In this thesis we model and analyze several environmental policies in an existing mathematical representation of a perfectly competitive electricity market. We contribute to the literature by theoretically and numerically establishing a number of effects of environmental policies on investment strategies and prices. We provide a theoretical benchmark for environmental regulators aiming to achieve certain policy goals, and present a way to use numerical tools in case a complete theoretical analysis cannot be obtained. Two policies that charge firms for their carbon emissions, namely cap-and-trade and carbon taxation, are modeled into both a stylized deterministic and a two-stage stochastic framework. In the former we characterize equilibria, leading to key results on the dispatching order of technologies and identification of unused technologies. The latter framework is analyzed through a sampling study and focuses on the effectiveness of the policies in the presence of network limitations. We successively study a renewable energy obligation, which indirectly subsidizes electricity production from renewable resources through green certificates. We additionally explore the effects of technology banding, meaning that different renewable technologies are eligible for a different number of certificates. To account for some of the drawbacks of the existing UK technology banding system, we introduce an alternative banding policy. Finally, a feed-in tariff (FIT) is a direct subsidy on electricity production from renewable resources. In a stochastic framework we derive analytically that under linear cost assumptions, this price based instrument cannot guarantee that quantity based policy targets are met. Assuming non-linear convex cost, we find that the opposite holds and that a regulator has the freedom to set FITs in such a way that any desired mixture of renewable technologies can be attained at equilibrium. These FITs are derived analytically or, when necessary, estimated using the numerical tools that we propose.
    Date: 2013
    URL: http://d.repec.org/n?u=RePEc:ner:tilbur:urn:nbn:nl:ui:12-5930365&r=res
  3. By: Hottenrott, Hanna; Rexhäuser, Sascha
    Abstract: Significant policy effort is devoted to stimulate the development, adoption and diffusion of environmentally- friendly technology. Sceptics worry about the effects of regulation-induced environmental technology on firms' competitiveness. Since innovation is a crucial productivity driver, a potential crowding out of inventive efforts could increase the cost of mitigating environmental damage. Using matching techniques, we study the short-term effects of regulation-induced environmental technology on non-green innovative activities for a sample of firms in Germany. We find indeed some evidence for a crowding out of the firms' in-house R&D. The estimated treatment effect is larger for firms that are likely to face financing constraints. However, we do not find negative effects on the number of ongoing R&D projects, investments in innovation-related fixed assets or on the outcome of innovation projects. Likewise, for firms with subsidy-backed environmental innovations no crowding out is found. --
    Keywords: Environmental Policy,Regulation,R&D,Technological Change,Innovation,Crowding Out
    JEL: O32 O33 Q55
    Date: 2013
    URL: http://d.repec.org/n?u=RePEc:zbw:dicedp:128&r=res
  4. By: Millimet, Daniel L. (Southern Methodist University)
    Abstract: Environmental federalism refers to the debate over the 'optimal' level of government at which to delegate environmental policymaking. Although this issue receives widespread attention across the globe, opinions run the gamut. The diversity of views plays out in practice as well as different federations have 'resolved' the issue differently. With the United States alone, environmental authority has oscillated between periods of relatively greater centralized and decentralized control. This article seeks to accomplish two objectives in order to advance the literature. The first objective is to provide a brief overview of the two primary theoretical frameworks – Tiebout (1956) and models of interjurisdictional competition – used to explore the effects of the decentralization of policy decisions such as taxes, expenditures, environmental standards, etc. The reason for doing so is to illuminate the issues that play a fundamental role in conclusions regarding the 'optimal' allocation of environmental authority. The second objective is to then provide a comprehensive survey of the relevant empirical literatures. By doing so, the goal is to limit the scope of the debate over environmental federalism moving forward, as well as make clear where the gaps in empirical knowledge exist.
    Keywords: environmental regulation, federalism, Tiebout, interjurisdictional competition
    JEL: H77 Q58
    Date: 2013–12
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7831&r=res
  5. By: In Chang Hwang (Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands); Richard S.J. Tol (Department of Economics, University of Sussex, Falmer, United Kingdom; Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands; Faculty of Economics and Business Administration, Vrije Universiteit, Amsterdam, The Netherlands; Tinbergen Institute, Amsterdam, The Netherlands; CESifo, Munich, Germany); Marjan W. Hofkes (Faculty of Economics and Business Administration, Vrije Universiteit, Amsterdam, The Netherlands; Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands)
    Abstract: This paper investigates the role of emissions control on reducing the tail-effect of the fat-tailed distribution of the climate sensitivity. Through a simple analysis on temperature distributions and some numerical simulations using the well-known DICE model, we find that the option for emissions control effectively prevents the tail-effect. Climate policy based on HARA utility is less sensitive to fat tails than climate policy based on CRRA utility.
    JEL: Q54 Q58 H23
    Date: 2013–12
    URL: http://d.repec.org/n?u=RePEc:sus:susewp:6613&r=res
  6. By: Georg Licht; Bettina Peters
    Abstract: This paper studies the impact of environmental innovation on employment growth using firmlevel data for 16 European countries and the period 2006-2008. It extends the model by Harrison et al (2008) in order to distinguish between employment effects of environmental and non-environmental product as well as process innovation. By looking at country and sector level differences, it also generates new insights into the heterogeneity of the environmental innovation-employment growth link along different dimensions. The results demonstrate that both environmental and non-environmental product innovations are conducive to employment growth in European firms. We estimate a gross employment effect of product innovation for both types of product innovators that is very similar in nearly all countries and sectors. That is, in most cases a one-percent increase in the sales due to new products for environmental product innovators also increases gross employment by one percent. This implies that there is no evidence that environmentally-friendly new products are produced with higher or lower efficiency than old products. Yet, we observe differences in the contribution of environmental and non-environmental product innovation to employment growth across countries or sectors that are the result of differences in the average innovation engagement and innovation success across countries or sectors. The absolute contribution to employment growth is positive for both types of new products. However, we find mixed evidence for the relative importance. In manufacturing the contribution of environmental product innovators was larger than that of non-environmental product innovators in half of the countries. In services, however, non-environmental product innovators matters more for growth in the vast majority of countries. In contrast, environmental and non-environmental process innovation plays only a little role for employment growth.
    Keywords: Environmental innovation, employment growth, Europe
    JEL: O33 J23 L80 C21 C23
    Date: 2013–12
    URL: http://d.repec.org/n?u=RePEc:feu:wfewop:y:2013:m:12:d:0:i:50&r=res
  7. By: Sourafel Girma; Aoife Hanley
    Abstract: There is a well-established theoretical and empirical literature that shows that exporters are more innovative than otherwise equivalent non-exporters. In this paper we ask whether this is also true when it comes to the effects of adopting greener production techniques. Using an instrumental variables strategy based on UK firm level data, we find robust evidence that exporters are more likely to report their innovation as having a ‘high/very high’ environmental effect
    Keywords: Environment and Trade, Technological Innovation
    JEL: Q56 Q55
    Date: 2013–12
    URL: http://d.repec.org/n?u=RePEc:kie:kieliw:1887&r=res

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