nep-res New Economics Papers
on Resource Economics
Issue of 2014‒09‒29
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. Tax Policy in a Simple General Oligopoly Equilibrium Model with Pollution Permits By Bertrand Crettez; Pierre-André Jouvet; Ludovic A. Julien
  2. The green side of the International Codes of Conduct for Business By Daniel Iglesias Márquez
  3. Leveling the Field for Renewables : Mexico's New Policy Framework for Incorporating External Costs of Electricity Generation By World Bank
  4. Does Firm Heterogeneity Impact the Effectiveness of Carbon Taxes? Experiments in Argentina and Mexico By Omar O. Chisari; Sebastián J. Miller
  5. A household survey of the cost of illness due to air pollution in Beijing, China By Timothy Swanson; Chiara Ravetti; Yana Popp Jin; Mu Quan; Zhang Shiqiu
  6. Tail-Hedge Discounting and the Social Cost of Carbon By Weitzman, Martin L.
  7. Public goods and ethnic diversity: evidence from deforestation in Indonesia By Alberto Alesina; Caterina Gennaioli; Stefania Lovo

  1. By: Bertrand Crettez; Pierre-André Jouvet; Ludovic A. Julien
    Abstract: We introduce a pollution permits market in a general oligopoly equilibrium model. Specifically, we consider a two-commodity economy with one productive sector. The first commodity is inelastically supplied by a set of competitive traders. The second commodity is produced by a set of strategic traders, using the first commodity as an input. The production of the second commodity is a polluting activity. Introducing a competitive emissions permits market solves the pollution control problem but is not sufficient to eliminate market distortions and to reach a Pareto optimal allocation. We study the conditions under which a subsidy to the strategic agents, financed by a tax on the competitive agents, is welfare increasing.
    Keywords: oligopoly equilibrium, taxation policy, pollution.
    JEL: D43 D51 H2
    Date: 2014
  2. By: Daniel Iglesias Márquez
    Abstract: Multinational corporations (MNCs) benefit from globalization, they have emerged as major actors of the global economy and expanded their activities worldwide. Meanwhile, international society has become increasingly concerned about environmental issues and, therefore, a considerable number of international instruments providing environmental protection have been adopted. Moreover, various groups across the social and economic spectrum have expressed their concerns about environmental degradation caused by industrial activities and demanded greater awareness with respect to business decisions that might have a potential impact on the environment. Since the 1970s, several attempts have been made to adopt instruments regulating multinational corporations conduct at the international level. The result has been a number of codes of conduct at international and regional level focused on the impact of MNCs in two main areas: social conditions and the environment. Among the codes of conduct are: the OECD Guidelines for Multinational Enterprises, the UN Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights, the Global Compact and, the most recent attempt in this field, the Guiding Principles on Business and Human Rights: Implementing the United Nations 'Protect, Respect and Remedy' Framework proposed by UN Special Representative John Ruggie. These codes are voluntary in nature and have no enforcement mechanism. This paper examines the environmental approaches of the above mentioned codes. The guiding question is whether environmental issues included in the international codes of conduct fall within the principles of international environmental law in order to encourage a more environmentally friendly behavior of MNCs (green businesses). The first part of this paper provides an overview of the relationship between business and the environment and, moreover, the impact of industrial activities on the environment. The second part analyses the environmental content of the above mentioned codes of conduct. It also identifies the principles of international environmental law that are included in these codes. The third part examines how MNCs apply these codes, either for reducing their impact on the environment or making use of them as a green marketing strategy. Finally, conclusions are drawn as to the effectiveness and influence of these codes over company management and environmental behavior of MNCs.
    Keywords: Globalization, Multinational Corporations, Environment, Codes of Conduct
    Date: 2014–09
  3. By: World Bank
    Keywords: Environment - Climate Change Mitigation and Green House Gases Macroeconomics and Economic Growth - Climate Change Economics Transport Economics Policy and Planning Energy - Energy Production and Transportation Environmental Economics and Policies Transport
    Date: 2014–04
  4. By: Omar O. Chisari; Sebastián J. Miller
    Abstract: This paper examines the effectiveness of carbon taxes on macroeconomic performance when manufacturing firms have the opportunity to change their scale of operation and degree of formality. The hypothesis is that when tax evasion or elusion is possible, it cannot be ruled out that emissions increase rather than decrease due to the reallocation of resources from the rest of manufacturing towards informal small-scale firms. When informality is high, industry could adapt to carbon taxes by reducing the scale of operation of big firms and increasing the number of small firms. However, when taxes are enforceable in all types of firms, there is a cost in terms of GDP and employment, since small-scale firms are more labor intensive. For numerical experiments, two CGE models calibrated for Argentina and Mexico are used. The 'domestic leakage' is found to be more relevant for Argentina than for Mexico.
    Keywords: Environmental taxes, Tax evasion, Taxation, Argentina, Mexico, Informality, Carbon taxes, General Equilibrium Model (CGE)
    Date: 2014–08
  5. By: Timothy Swanson; Chiara Ravetti; Yana Popp Jin; Mu Quan; Zhang Shiqiu (Centre for International Environmental Studies, IHEID, The Graduate Institute of International and Development Studies, Geneva)
    Abstract: This paper examines with a case study of Beijing, China, the health benefits that could be reaped from urban air quality improvements. The study implements a household survey to collect information about the yearly medical expenditures and lost days of work, to estimates the total costs of illness (COI) borne by a typical individual due to airborne diseases. The results of this survey provide a lower bound for the health costs borne by the urban population of Beijing due to air pollution. We find that the average individual COI in our sample is more than 3000 yuan per year, corresponding to almost one month of the average wage (slightly more than 500 US$ per year). This is quite sizeable, considering that it represents just the minimum benchmark for the damages caused by pollution to health. This result indicates that Beijing could benefit quite substantially from reducing air pollution in terms of health costs: if it could completely eliminate pollution, the savings in terms of COI would range in an order of magnitude of 21 million yuan per year only from hospitalized cases.
    Keywords: Cost of Illness, Air pollution, Household survey, Insurance
    JEL: Q53 I13 C83
    Date: 2014–09–12
  6. By: Weitzman, Martin L.
    Abstract: The choice of an overall discount rate for climate change investments depends critically on how different components of investment payoffs are discounted at differing rates reflecting their underlying risk characteristics. Such underlying rates can vary enormously, from ≈1 percent for idiosyncratic diversifiable risk to ≈7 percent for systematic nondiversifiable risk. Which risk-adjusted rate is chosen can have a huge impact on cost-benefit analysis. In this expository paper, I attempt to set forth in accessible language with a simple linear model what I think are some of the basic issues involved in discounting climate risks. The paper introduces a new concept that may be relevant for climate-change discounting: the degree to which an investment hedges against the bad tail of catastrophic damages by insuring positive expected payoffs even under the worst circumstances. The prototype application is calculating the social cost of carbon.
    Date: 2013
  7. By: Alberto Alesina; Caterina Gennaioli; Stefania Lovo
    Abstract: We show that the level of deforestation in Indonesia is positively correlated with the degree of ethnic fractionalization of the communities. We explore several channels that may link the two variables. They include the negative effect of ethnic fractionalization on the ability to coordinate and organize resistance against logging companies and a higher level of corruption of politicians less controlled in more fragmented communities.
    Date: 2014–09

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