nep-res New Economics Papers
on Resource Economics
Issue of 2014‒03‒15
seven papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Trade Liberalization and Environmental Taxation in Federal Systems By Per G. Fredriksson; Xenia Matschke
  2. R&D for green technologies in a dynamic oligopoly: Schumpeter, Arrow and inverted-U’s By G. Feichtinger; L. Lambertini; G. Leitmann; S. Wrzaczek
  3. The Effect of Renewable Energy Development on Carbon Emission Reduction: An Empirical Analysis for the EU-15 Countries By Shahrouz Abolhosseini; Almas Heshmati; Jorn Altmann
  4. Public Transit Bus Procurement: The Role of Energy Prices, Regulation and Federal Subsidies By Shanjun Li; Matthew E. Kahn; Jerry Nickelsburg
  5. Trade, externalities, and the impact of asymmetric information on trade policy By G. F. Gori; L. Lambertini
  6. Natural Resources, R&D and Economic Growth By Thanh Le; Cuong Le Van
  7. Waste, Recycling and Entrepreneurship in Central and Northern Europe, 1870-1940 By Geoffrey G. Jones; Andrew Spadafora

  1. By: Per G. Fredriksson; Xenia Matschke
    Abstract: The literature on trade liberalization and environment has not considered federal structures. This paper shows how the design of environmental policy in a federal system has implications for the effects of trade reform. Trade liberalization leads to a decline in pollution taxes regardless of whether pollution taxes are set at the federal (centralized) or local (decentralized) level, and it increases social welfare. The effect under a decentralized system is smaller than if these taxes are set by the federal government, and pollution emissions therefore decline in this case. Moreover, majority bias interacts with trade liberalization if federal taxes are used.
    Keywords: trade and environment, environmental policy, trade liberalization, environmental federalism, political economy, majority bias, social welfare
    JEL: F1 H2 H7 Q2
    Date: 2014
  2. By: G. Feichtinger; L. Lambertini; G. Leitmann; S. Wrzaczek
    Abstract: We extend a well known differential oligopoly game to encompass the possibility for production to generate a negative environmental externality, regulated through Pigouvian taxation and price caps. We show that, if the price cap is set so as to fix the tolerable maximum amount of emissions, the resulting equilibrium investment in green R&D is indeed concave in the structure of the industry. Our analysis appears to indicate that inverted-U-shaped investment curves are generated by regulatory measures instead of being a ‘natural’ feature of firms’ decisions.
    JEL: C73 L13 O31
    Date: 2014–03
  3. By: Shahrouz Abolhosseini (College of Engineering, Seoul National University); Almas Heshmati (Department of Economics, Sogang University); Jorn Altmann (College of Engineering, Seoul National University)
    Abstract: The increased concerns about climate change have made renewable energy sources an important topic of research. Several scholars have applied different methodologies to examine the relationships between energy consumption and economic growth of individual and groups of countries and to analyze the environmental effects of energy policies. Previous studies have analyzed carbon emission savings, using renewable energy usage as an individual source or in combination with traditional sources of energy (e.g., hybrid plants) in connection with life-cycle analysis methods. It is shown that after a certain period, economic growth leads to the promotion of environmental quality. However, econometric modeling critiques have opposed the results of these studies. One reason is that the effectiveness of governance-related parameters has previously been neglected. In this research, we analyze the impact of renewable energy development on carbon emission reduction. We estimate a model to evaluate the effectiveness of renewable energy development, technological innovation, and market regulations in carbon emission reduction. The empirical results are based on a panel data estimation using the EU-15 countries data observed from 1995 to 2010. The elasticities of CO2 emissions are estimated, in order to evaluate the effectiveness of each parameter. The finding show that the effects of a negative climate change could be mitigated by governance-related parameters instead of economic development..
    Keywords: Renewable Energy, Technological Innovation, Environmental Tax, Carbon Emission, Economic Growth.
    JEL: D62 H23 N50 O13 O14
    Date: 2014–03
  4. By: Shanjun Li; Matthew E. Kahn; Jerry Nickelsburg
    Abstract: The U.S. public transit system represents a multi-billion dollar industry that provides essential transit services to millions of urban residents. We study the market for new transit buses that features a set of non-profit transit agencies purchasing buses primarily from a few domestic bus makers. Unlike private vehicles, the fuel economy of public buses is irresponsive to fuel price changes. To understand this finding, we build a model of bus fleet management decisions of local transit agencies that yields testable hypotheses. Our empirical analysis of bus fleet turnover and capital investment suggests that transit agencies: (1) do not respond to energy prices in either their scrappage or purchase decisions; (2) respond to environmental regulations by scrapping diesel buses earlier and switch to natural gas buses; (3) prefer purchasing buses from manufacturers whose assembly plants are located in the same state; (4) exhibit significant brand loyalty or lock-in effects; (5) favor domestically produced buses when they have access to more federal funding.
    JEL: R41 R48
    Date: 2014–03
  5. By: G. F. Gori; L. Lambertini
    Abstract: This paper investigates the relationship between trade liberalisation, consumers' environmental awareness and a negative environmental externality in consumption. We adopt an international Hotelling duopoly setup, where firms are located in two asymmetric countries. We find that, if the intensity of environmental externality is common knowledge for country governments, this setup delivers no need of accompanying trade policies in order to enforce trade liberalisation. In the opposite case, in which information is asymmetric, i.e., the small country's Government cannot observe the positive enviromental effects of its firm's exports to foreign consumers, we find that: (i) the Pareto optimum is always enforced, since the brown country always relaxes the distortionary trade policy, and (ii) cheating on the environmental externality allows the brown country's government to extract extra surplus from the green country. Allowing for trade in green technology delivers opposite conclusions: the externality is minimised and welfare is maximised in equilibrium if information is symmetric while trade liberalisation with asymmetric information always entails a second best outcome.
    JEL: F12 L13 H23
    Date: 2014–03
  6. By: Thanh Le; Cuong Le Van
    Abstract: This paper studies the long-run economic impact of natural resources by constructing a Schumpeterian endogenous growth model that incorporates an upstream resource intensive sector. Natural resources are extracted, processed and utilized to produce intermediate capital goods which are essential inputs for producing a ffnal consumption good. R&D activities are targeted at improving the quality of existing intermediate products. In this context, we characterize balanced growth paths and examine the issues of sustainability and long-run growth associated with these compet- itive equilibrium solution trajectories. The analysis is conducted through the comparison of the two natural resource types: renewable versus non- renewable and two optimal equilibrium conditions: social versus private. We show that negative growth is possible, however, only applied to an economy that is endowed with non-renewable resources. In addition, we derive conditions under which an economy experiences permanent stag- nant growth. We also show that having a strong innovative sector is essential for escaping this stagnant growth trap. We then identify condi- tions under which growth is larger under renewable resources as compared to their non-renewable counterpart and vice versa.
    Keywords: non-renewable resources, renewable resources, R&D-based growth,stagnant growth, vertical innovation.
    JEL: O13 O31 O41
    Date: 2014–02–25
  7. By: Geoffrey G. Jones (Harvard Business School, General Management Unit); Andrew Spadafora (Harvard Business School)
    Abstract: This working paper examines the role of entrepreneurs in the municipal solid waste industry in industrialized central and northern Europe from the late nineteenth century to the 1940s. It explores the emergence of numerous German, Danish and other European entrepreneurial firms explicitly devoted to making a profitable business out of conserving and returning valuable resources to productive use, while maintaining public sanitation and in many cases offering nascent environmental protections. These ventures were qualitatively different from both earlier small-scale private waste traders, and the late twentieth-century integrated waste management firms, and have been neglected in an era that historians have treated as a period of municipalization. These entrepreneurs sometimes had strikingly modern views of environmental challenges and the need to overcome them. They initiated processes for sorting and recycling waste materials that are still employed today. Yet it proved difficult to combine making profits and achieving social value in accordance with the "shared value" model of today. As providers of public goods such as health and sanitation and a cleaner environment the entrepreneurs were often unable to capture sufficient profits to sustain businesses. Recycled-goods markets were volatile. There was also a tension between the constant waste stream on the collection side and a seasonal/cyclical demand for recycled products. The frequent failure of these businesses helps to explain why in more recent decades private waste companies have been associated with late entry into recycling, often trailing municipal governments and non-profit entities.
    Keywords: Environmental Entrepreneurship, business history;
    Date: 2014–03

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