nep-res New Economics Papers
on Resource Economics
Issue of 2014‒09‒05
seven papers chosen by

  1. Discounting Environmental Goods By Gareth Green; Timothy J. Richards
  2. Green Consumers, Greenwashing and the Misperception of Environmental Quality By L. Lambertini; G. Pignataro; A. Tampieri
  3. The Economy-Wide Impact of Increasing Natural Gas Production and Utilization on the Indonesian Economy By Djoni Hartono; Nurkholis; Aldi Hutagalung
  4. The relevance of carbon free production processes for carbon leakage and carbon border adjustment By Karl Steininger; Birgit Bednar-Friedl; Wolf Grossmann; Thomas Schinko
  5. Development of Environmental Laws and Jurisprudence in Pakistan By Asian Development Bank (ADB); ; ;
  6. A Research of the trades of multi-country-section carbon emissions and energy uses under the drive of the process-technology progress By Zheng Wang; GU Gaoxiang
  7. Going beyond tradition:Growth and Mitigation Policies with Uncertain Climate Damage By Lucas Bretschger; Alexandra Vinogradova

  1. By: Gareth Green; Timothy J. Richards
    Abstract: Environmental policy decisions are dynamic in nature. Assumptions on the functional structure and rate of discounting have significant impacts on policy decisions regarding when to act and how much to invest. Environmental benefit-cost analysis historically has employed exponential discounting structure and market discount rates for evaluating environmental policy. Though here has been significant research in the lab indicating that discount functions may be hyperbolic, the research has focused primarily on monetary rewards (Lowenstein and Prelec 2002; Benhabib, Bisin and Schotter 2010). However, there has only been limited research indicating that environmental goods may also be discounted in a hyperbolic manner (Viscusi and Huber 2008; Karp 2007). We examine the structure and rate of discount functions for a variety of environmental goods to determine if people discount different environmental goods differently. We estimate a flexible discount function (Prelec) that allows us to determine the structure and rate of discounting for different types of public goods. We employ a front-end delay in the reward, similar to Anderson et al, to insure that any evidence of hyperbolic discounting is not due to having an immediate payoff. Though there have been several studies that have looked at discounting of public goods (Viscusi, Huber and Bell) and public bads (Svenson and Karlson 1989; Nikolaij and Hendrickx 2003; Hendrickx and Nicoloaij 2004; and Bohm and Pfister 2005), we examine discounting behavior for different types of public goods within the same sample. We select the public goods such that benefits differ in their level of use value and time frame of occurrence. We use three different types of public goods: improvements in public parks, improvements in water quality for aquatic life, and reductions in carbon emissions. Improvements in parks and water quality are similar in time frame, but differ in use value. Improvements in water quality and reductions in carbon emissions are similar in use value, but differ in time frame. Examining these three different public goods with slightly different characteristics will allow us to determine how people discount different types of public goods, which critical to understanding public policy choices toward environmental goods. Preliminary results indicate that people discount different types of goods differently. Mainly that people place a higher discount rate on environmental goods with use value and a lower discount rate on environmental goods with non-use value. We also find that environmental discount rates are quasi-hyperbolic in structure.
    Keywords: United States, Energy and environmental policy, Agent-based modeling
    Date: 2013–06–21
  2. By: L. Lambertini; G. Pignataro; A. Tampieri
    Abstract: In this paper we analyse a setup where consumers are heterogeneous in the perception of environmental quality. The equilibrium is verified in a setting with horizontal and vertical (green) differentiation. Profits are increasing in the misperception of quality, while, the investment in green quality decreases the more the goods are substitutes. We further consider the introduction of either an emission tax or an environmental standard. The former rises the investment in environmental quality due to the higher cost of production, whereas in equilibrium quality always improves after the introduction of the latter. We show that an optimal environmental standard is an effective regulatory instrument against greenwashing and that the efficacy of the interventions is conditioned to the damage distribution and the aggregate level of emission.
    JEL: L13 L51 Q50
    Date: 2014–08
  3. By: Djoni Hartono; Nurkholis; Aldi Hutagalung
    Abstract: To be completed To be completed To be completed
    Keywords: Indonesia, Energy and environmental policy, Energy and environmental policy
    Date: 2014–07–03
  4. By: Karl Steininger; Birgit Bednar-Friedl; Wolf Grossmann; Thomas Schinko
    Abstract: Climate policy arrangements of partial regional coverage, as they seem to emerge from the UNFCCC process, might lead to carbon leakage and hence a broad literature has developed to quantify global leakage rates. While most of these analyses, are confined to consider combustion emissions only, Bednar-Friedl et al. (2012b) have pointed out the particular relevance of process emissions for both  leakage rates and effectiveness of border carbon adjustment. We use this expanded framework in considering both combustion and process emissions in a multi-sectoral multi-regional Computable General Equilibrium model and analyze the implications of carbon free processinnovations. As a medium-term alternative to border carbon adjustment, we find that such a technological switch, for example in the European steel industry towards low-carbon electrowinning, can effectively reduce global carbon leakage. For border carbon adjustment considerations this implies their setting including a phase-out, such that incentivesfor carbon free innovations are preserved. Note from admin: See full paper Note from admin: See full paper
    Keywords: Note from admin: See full paper, Energy and environmental policy, General equilibrium modeling
    Date: 2013–06–21
  5. By: Asian Development Bank (ADB); (Office of the General Counsel, ADB); ;
    Abstract: The Government of Pakistan has adopted laws to combat adverse environmental impacts of unsustainable development, but there are several issues that make effective implementation of these laws and adjudication of environmental disputes difficult. This report examines the state of environmental law, adjudication, and implementation in Pakistan, focusing on the provincial environmental protection acts of Pakistan and the institutional design, principles, and procedures provided under the law. It further examines the actual implementation of the law and the case law developed in this area with focus on the court’s interpretation and enforcement of the laws. The report also reviews the curriculum of law schools and judicial academies and suggests the future inclusion of environmental laws in their respective programs.
    Keywords: pakistan, punjab, balochistan, environmental law, environmental protection, law schools, environmental prosecution, environmental protection agency, environmental tribunals, green benches, green justice, adjudication, environmental disputes
    Date: 2013–11
  6. By: Zheng Wang; GU Gaoxiang
    Abstract: the process-technology progress which is caused by the improvement of the productive technologies can reduce the demands of the intermediate inputs in the productive process, and then reduce the energy demands and the carbon emissions. Thus, to improve the level of process technologies is an important way for the global carbon emission abatement. In this paper, based on Jin (2012)’s model, a general equilibrium model of multi-country-section economy was built. Coupled with the climate system of RICE model, a climate-economy integrated assessment model was built with the interactions between the economic system and the climate system.Coupled with the climate system of RICE model, a climate-economy integrated assessment model was built with the interactions between the economic system and the climate system.Based on this model, the carbon emissions and the energy demands of different countries and sections were studied. The simulated outcomes show that the process-technology progress can bring on early peaks of energy demands and carbon emissions. Under the three different scenarios, China will reach its carbon emission peak at year 2034, 2030, and 2022 respectively. In the more bold scenario 3, the accumulated carbon emission of China can reduce to 93GtC, accomplishing the abatement target of 100GtC. Besides, along with the progress of the process technologies, the developing countries like China and India have larger abatement potentials, which in the sections, the energy section and the service sections have larger abatement potentials.
    Keywords: China, US, EU, Japan, India and Russia, Energy and environmental policy, General equilibrium modeling
    Date: 2014–07–03
  7. By: Lucas Bretschger (ETH Zurich, Switzerland); Alexandra Vinogradova (ETH Zurich, Switzerland)
    Abstract: Climate physics predicts that the intensity of natural disasters will increase in the future due to climate change. One of the biggest challenges for economic modeling is the inherent uncertainty of climate events, which crucially affects consumption, investment, and abatement decisions. We present a stochastic model of a growing economy where natural disasters are multiple and random, with damages driven by the economy's polluting activity. We provide a closed-form solution and show that the optimal path is characterized by a constant growth rate of consumption and the capital stock until a shock arrives, triggering a downward jump in both variables. Optimum mitigation policy consists of spending a constant fraction of output on emissions abatement. This fraction is an increasing function of the arrival rate, polluting intensity of output, and the damage intensity of emissions. A sharp response of the optimum growth rate and the abatement share to changes in the arrival rate and the damage intensity justifies more stringent climate policies as compared to the expectation-based scenario. We subsequently extend the baseline model by adding climate-induced fluctuations around the growth trend and stock-pollution effects, demonstrating robustness of our results. In a quantitative assessment of our model we show that the optimal abatement expenditure at the global level may represent 0.9% of output, which is equivalent to a tax of $71 per ton carbon.
    Keywords: Climate policy; uncertainty; natural disasters; endogenous growth.
    JEL: O10 Q52 Q54
    Date: 2014–08

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