nep-res New Economics Papers
on Resource Economics
Issue of 2014‒11‒12
four papers chosen by
Maximo Rossi
Universidad de la República

  1. A weighted location differential tax method in environmental problems By Halkos, George; Kitsou, Dimitra
  2. Directed Technical Change With Capital-Embodied Technologies: Implications For Climate Policy By James A. Lennox; Jan Witajewski
  3. On the interrelation between carbon offsetting and other voluntary climate protection activities: Theory and empirical evidence By Andreas Lange; Claudia Schwirplies; Andreas Ziegler
  4. Controlling polluting firms: Nash and Stackelberg strategies By Halkos, George; Papageorgiou, George

  1. By: Halkos, George; Kitsou, Dimitra
    Abstract: Relying on Pigou's view, environmental taxes increase the costs of polluting activities reflecting in this way the true social cost imposed to society by the caused environmental damage by these activities. The total pollution cost (TPC) is defined by adding up the marginal abatement (MAC) and the marginal damage (MD) costs. That is the random variable TPC includes the social costs associated with pollution. We relate this with contaminated locations and propose a weighted location differentiated tax and a corresponding index that adjusts taxation to the damages caused. It is clear that the value of the expected total pollution (social) cost, E(TPC), would be of interest and therefore we proceed to the evaluation through the use of the γ-order Generalized Normal. The value of the variance, Var(TPC), is also evaluated and we provide a generalized form of the E(TPC) as far (i) the form of TPC and (ii) the probability density function.
    Keywords: Weighted-location adjusted differential tax; pollution related social cost; expected value; technology; probability density function.
    JEL: C02 C60 Q50 Q53 Q58
    Date: 2014–10–26
  2. By: James A. Lennox (Fondazione Eni Enrico Mattei (FEEM)); Jan Witajewski (Fondazione Eni Enrico Mattei (FEEM))
    Abstract: We develop a theoretical model of directed technical change in which clean (zero emissions) and dirty (emissions-intensive) technologies are embodied in long-lived capital. We show how obsolescence costs generated by technological embodiment create inertia in a transition to clean growth. Optimal policies involve higher and longer-lasting clean R&D subsidies than when technologies are disembodied. From a low level, emissions taxes are initially increased rapidly, so they are higher in the long run. There is more warming. Introducing spillovers from an exogenous technological frontier representing non-energy-intensive technologies reduces mitigation costs. Optimal taxes and subsidies are lower and there is less warming.
    Keywords: Climate Change Mitigation, Directed Technical Change, Capital-Embodiment, Investment-Specific Technological Change, Obsolescence
    JEL: O33 O44 Q54 Q55 Q58
    Date: 2014–08
  3. By: Andreas Lange (University of Hamburg); Claudia Schwirplies (University of Kassel); Andreas Ziegler (University of Kassel)
    Abstract: This paper provides theoretical and empirical insights on the extent to which the availability of carbon offsetting may substitute the individual use of other carbon-reducing measures. Theoretically, we demonstrate an ambiguous impact of offsetting on the use of other measures and derive conditions under which both are substitutes or complements. We then empirically test our predictions using data from representative surveys among more than 2000 citizens in Germany and the U.S. Considering seven measures that can be taken by individuals to direct-ly reduce greenhouse gas emissions, our empirical evidence is consistent with the theoretical predictions that substitution occurs particularly if individuals lay a sufficiently large weight on environmental preference or if offsetting is perceived to be relatively effective in providing the public good climate protection. Complementary effects are shown to exist for a perceived intermediate effectiveness of offsetting activities.
    Keywords: On the interrelation between carbon offsetting and other voluntary climate protection activities: Theory and empirical evidence
    JEL: C25 Q54 Q58
    Date: 2014
  4. By: Halkos, George; Papageorgiou, George
    Abstract: In this paper we model the conflict between the group of polluting firms of a country and the social planer of the same country which attempts to control the volume of emissions generated during the production process. Both players of the game have their own control policies which are the rate of emissions on behalf the polluting firms and the rate of pollution control (e.g. abatement or taxation) on behalf the home country. The common state variable of the model is the number of the polluting firms, which is better to minimized through the country’s control policy, but beneficial to maximized on the polluters’ side. From the game theoretic point of view the model setup is very simple and belongs in to the special class of differential games also called state separable differential games. An important property for these games is that the open-loop Nash equilibrium coincides with the Markovian (closed-loop) equilibrium and in the case of hierarchical moves the analytical solutions are easy obtained. The game proposed here is analyzed for both types of equilibrium, i.e. Nash and Stackelberg. In the simultaneous move game (i.e. the Nash game) we find the equilibrium analytical expressions of the controls for both players as well as the steady state stock of the polluting firms. A sensitivity analysis of the crucial variables of the model takes place. In the hierarchical move game (i.e. the Stackelberg game) we find the equilibrium values of the controls as well as of the state variable. As a result a comparison between the two types of equilibrium for the game takes place. The analysis of the comparison reveals that the conflict is more intensive (since both controls have greater values) for the case in which the polluting firms play as the leader of the hierarchical move game.
    Keywords: Pollution control; Environmental Economics; Differential games.
    JEL: C61 C62 D43 H21 Q50 Q52 Q53
    Date: 2014–09

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