nep-res New Economics Papers
on Resource Economics
Issue of 2014‒04‒11
nine papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Environmental Policy and Growth in a Model with Endogenous Environmental Awareness By Karine Constant; Marion Davin
  2. Role of laboratories for adapting product-related environmental regulations (PRERs) By Sau Soon, Chen; Mohd Helan, Mohd Helme bin; Ujang, Zunairah; Michida, Etsuyo; Nabeshima, Kaoru
  3. International Capital Markets, Oil Producers and the Green Paradox By Rick Van der Ploeg; Gerard van der Meijden; Cees Withagen
  4. Impact on Asian firms of product-related environmental regulations through global supply chains : a study of firms in Malaysia By Michida, Etsuyo; Ueki, Yasushi; Nabeshima, Kaoru
  5. Exploring the optimality of cyclical emission rates By George Halkos; George Papageorgiou
  6. Environmental provisions in Japanese regional trade agreements with developing countries By Yanai, Akiko
  7. The policy impact of product-related environmental regulations in Asia By Michida, Etsuyo
  8. Guidelines for Exploiting Natural Resource Wealth By Rick Van der Ploeg
  9. Household Fuel Choice in Urban Ethiopia: A Random Effects Multinomial Logit Analysis By Alem, Yonas; Beyene, Abebe D.; Kohlin, Gunnar; Mekonnen, Alemu

  1. By: Karine Constant (AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM)); Marion Davin (AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM))
    Abstract: This paper examines the relationship between environmental policy and growth when green preferences are endogenously determined by education and pollution. The government can implement a tax on pollution and recycle the revenue in public pollution abatement and/or education subsidy (influencing green behaviors). When agent's preferences for the environment are highly sensitive to environmental damages, the economy can converge to a balanced growth path equilibrium with damped oscillations. Therefore, we identify two objectives that environmental policy seeks to address: remove oscillations, source of intergenerational inequalities, and enhance the long-term growth rate. We show that a tighter tax allows to achieve both objectives when the tax revenue is well allocated between education and direct environmental protection.
    Keywords: environmental policy; endogenous growth; environmental awareness; education
    Date: 2014–03
  2. By: Sau Soon, Chen; Mohd Helan, Mohd Helme bin; Ujang, Zunairah; Michida, Etsuyo; Nabeshima, Kaoru
    Abstract: This paper examines how a country which has been successful in creating agglomeration of a manufacturing industry has faced various types of product-related environmental regulations. Then the paper shows how the government and testing laboratory have taken measures to adapt to PRERs overseas in response to the needs by firms affected by regulations. In reaction to the introductions of PRERs overseas, Malaysia also has introduced equivalent policies domestically, proving that PRERs have spread to Malaysia.
    Keywords: Malaysia, Environmental policy, Industrial standards, Manufacturing industries, International trade, Trade and the environment, Product-related environmental regulations (PRERs)
    JEL: F18 O2
    Date: 2014–03
  3. By: Rick Van der Ploeg; Gerard van der Meijden; Cees Withagen
    Abstract: In partial equilibrium a rapidly rising carbon tax encourages oil producers to extract fossil fuels more quickly, giving rise to the Green Paradox. General equilibrium analysis for a closed economy shows that a rapidly rising carbon tax negatively affects the interest rate, which tends to weaken the Green Paradox. However, in a two-country world with an oil-importing and an oil-exporting region the Green Paradox may be amplified in general equilibrium if exporters are relatively patient. On the contrary, if oil exporters are relatively impatient, the Green Paradox might be reversed. Furthermore, general equilibrium effects tend to weaken the link between a capital asset tax and the time profile of resource extraction so that the capital asset tax becomes less useful as an instrument to offset the Green Paradox effect associated with the announcement of a future carbon tax. Taking exploration costs into account, we show that the effect of both policy instruments on cumulative extraction is of opposite sign as the effect on current extraction. Moreover, if the change in current extraction is amplified or reversed in general equilibrium, so will be the change in cumulative extraction.
    Keywords: Green Paradox, Hotelling rule, oil importers, oil producers, investment, capital markets, carbon tax, asset holding tax
    JEL: D81 H20 Q31 Q38
    Date: 2014–01–31
  4. By: Michida, Etsuyo; Ueki, Yasushi; Nabeshima, Kaoru
    Abstract: This paper sheds light on the important role played by global supply chains in the adaptation to product-related environmental regulations imposed by importing countries, with a focus on chemicals management. By utilizing a unique data collected in Penang, Malaysia, we depict the supply chain structures and how differences among firms in participation to global supply chain link to differences in chemical management. We found that firms belonging to a supply chain are in a better position to comply with these regulations because information and requirements are transmitted through global supply chains. In contrast, those firms that are neither exporters nor a part of a global supply chain lack the knowledge and information channels relevant to chemical management in a product.
    Keywords: Malaysia, Environmental protection, International trade, Industrial standards, Foreign investments, Global supply chain, FDI, Product-related environmental regulation, REACH, RoHS
    JEL: F18 O14
    Date: 2014–03
  5. By: George Halkos; George Papageorgiou
    Abstract: In this paper, one of the basic assumptions is that the environment provides two different kinds of services. First, the environment may serve as an input to the production of conventional goods. For example, the exploitation of an oil source from which one firm extracts the oil which in turn is used as a fossil fuel for an industry. In the worst case, the use of the environment for industrial purposes will negatively affect the environment, e.g. the water quality of a paper mill along a river. Nevertheless, the possibility to pollute, i.e., to save abatement costs, lowers production costs. Hence, firms and consumers evaluate this service positively. Second, the environment itself-clean air, natural creeks and rivers instead of paper mills, hydro power plants, etc.-provides amenities and thus a second service that is different, because enjoying this service does not degrade environmental quality. As it is intuitively clear, the environment provides consumptive and non-consumptive uses. In renewable resources means, the environmental stock may be harvested and used as an input for conventional goods� production but provides simultaneously a positive externality. The purpose of this paper is to study the dynamics of pollution and the possibility of cycles and instability, while the major findings of this paper are the following: First, taking the simplest pollution model with one state and one control variables and extending it into two state variables, equilibrium may change from the fixed point into a limit cycle equilibrium, i.e. the optimal emissions rate may be cyclical. Second, taking the conflicting case as a differential game we found again the conditions under which the richer limit cycle equilibrium takes place.
    Keywords: Renewable resources; environmental economics; pollution management
    JEL: C61 C62 D43 H21
    Date: 2014–04–01
  6. By: Yanai, Akiko
    Abstract: With the growing interest in environmental issues in the global community, recently concluded regional trade agreements (RTAs) have introduced environmental provisions. These RTAs will help achieve sustainable development at the intersection of trade liberalization and ever-increasing environmental concerns. However, environmental provisions are not incorporated into all RTAs. For example, Japanese RTAs often incorporate environmental issues only in the preamble or relevant articles. As the first step in examining the environmental provisions in RTAs, this paper focuses on the RTAs that Japan has concluded with developing countries. The main characteristic of environmental provisions in Japanese RTAs is that there are very few relevant provisions. All Japanese RTAs has neither environmental chapters nor side agreements. However, the attitude toward the environment in Japanese RTAs has gradually changed since the signing of the Japan-Chile EPA in 2007, in which a joint environmental statement was adopted. Although Japanese RTAs have environmental provisions, environmental problems originating from the RTAs may occur. One of the possible causes is a lack of environmental impact assessment. Japanese RTAs need to incorporate an environmental impact assessment system in order to identify environmental problems resulting from its RTAs, and to enable the country to take appropriate measures at the appropriate time.
    Keywords: Developing countries, Japan, Environmental protection, International trade, FTA, International agreements, Sustainable development, Regional trade agreement, Environmental provisions, Trade and the environment, RoHS, REACH
    JEL: F18
    Date: 2014–03
  7. By: Michida, Etsuyo
    Abstract: This paper focuses on EU chemical regulations, RoHS and REACH, and shows these EU regulations have driven Asian countries to introduce regulations that are similar yet modified versions to the EU regulations. Asia as the world manufacturing center has extensive production networks where parts and components of a final good are traded across borders. We discuss how product-related environmental regulations could impact on firms' activities then show that if Asian countries with complex supply chains introduce different product related chemical regulations without coordinating with neighboring countries, it could work as trade barrier for manufacturing activities in the region.
    Keywords: Asia, Europe, Environmental protection, Manufacturing industries, Industrial standards, Environmental policy, International trade, Product-related environmental regulation, Trade, RoHS, REACH
    JEL: F18 O2
    Date: 2014–03
  8. By: Rick Van der Ploeg
    Abstract: The principles of how best to manage the various components of national wealth are outlined, where the permanent income hypothesis, the Hotelling rule and the Hartwick rule play a prominent role. As far as managing natural resource wealth is concerned, a case is made to use an intergenerational sovereign wealth fund to smooth consumption across generations, a liquidity fund for the precautionary buffers to deal with commodity price volatility, and an investment fund to park part of the windfall until the country is ready to absorb extra spending on domestic investment. Capital scarcity implies that a positive part of the windfall should be spent on domestic investment. The conclusions highlight the political economy problems that will have to be tackled with these normative proposals for managing wealth.
    Keywords: permanent income, Hotelling rule, Hartwick rule, precaution, capital scarcity, absorption constraints, Dutch disease, investing to invest, political economy
    JEL: E21 E22 D91 Q32
    Date: 2013–12–31
  9. By: Alem, Yonas; Beyene, Abebe D.; Kohlin, Gunnar; Mekonnen, Alemu
    Abstract: We use three rounds of a rich panel data set to investigate the determinants of household fuel choice and energy transition in urban Ethiopia. We observe that energy transition did not occur following economic growth in Ethiopia during the past decade. Regression results from a random effects multinomial logit model, which controls for unobserved household heterogeneity, show that households’ economic status, price of alternative energy sources, and education are important determinants of fuel choice in urban Ethiopia. The results also suggest the use of multiple fuels, or “fuel stacking behavior.” We argue that policy makers could target these variables to encourage transition to cleaner energy sources.
    Keywords: urban Ethiopia, energy choice, random effects multinomial logit
    JEL: C25 Q23 Q42 O13
    Date: 2013–10–10

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