nep-res New Economics Papers
on Resource Economics
Issue of 2014‒12‒24
thirteen papers chosen by
Maximo Rossi
Universidad de la República

  1. Does a Renewable Fuel Standard for Biofuels Reduce Climate Costs? By Greaker, Mads; Hoel, Michael; Rosendahl, Knut Einar
  2. The impacts of alternative policy instruments on environmental performance. A firm level study of temporary and persistent effects By Brita Bye; Marit E. Klemetsen
  3. Designing an Optimal 'Tech Fix' Path to Global Climate Stability: Integrated Dynamic Requirements Analysis for the 'Tech Fix' By Paul David; Adriaan van Zon
  4. The diffusion of patented oil and gas technology with environmental uses: a forward patent citation analysis By Maria Teresa Costa; Nestor Duch-Brown
  5. Essays in environmental and political economics By Sen, S.
  6. Policy implications of resource constraints on the European economy By Kurt Kratena; Mark Sommer
  7. Assessing temporal trends and industry contributions to air and water pollution using stochastic dominance By E. Agliardi; M. Pinar; T. Stengos
  8. Climate Change Adaptation: Lessons from Urban Economics By Matthew E. Kahn
  9. Measurement of use value and non-use value of environmental quality consistent with general equilibrium approach By Naoki Sakamoto; Kazunori Nakajima
  10. Impact Assessment of European Clean Air policies in a CGE framework By Zoi Vrontisi; Jan Abrell; Frederik Neuwahl; Bert Saveyn; Fabian Wagner
  11. Environmental protection between social responsibility, green investments and cultural values By Andrei, Jean; Panait, Mirela; Ene, Corina
  12. On Distributive Effects of Optimal Regulation for Power Grid Expansion By Juan Rosellon; Luis Herrera
  13. Are there Environmental Kuznets Curves for US State-Level CO2 Emissions? By Nicholas Apergis; Christina Christou; Rangan Gupta

  1. By: Greaker, Mads (Statstics Norway); Hoel, Michael (Dept. of Economics, University of Oslo); Rosendahl, Knut Einar (Norwegian Univeristy of Life Sciences)
    Abstract: Recent literature on biofuels has questioned whether biofuels policies are likely to reduce the negative effects of climate change. Our analysis explicitly takes into account that oil is a non-renewable natural resource. A blending mandate has no effect on total cumulative oil extraction. However, extraction of oil is postponed as a consequence of the renewable fuel standard. Thus, if emissions from biofuels are negligible, the standard will have beneficial climate effects. The standard also reduces total fuel (i.e., oil plus biofuels) consumption initially. Hence, even if emissions from biofuels are non-negligible, a renewable fuel standard may still reduce climate costs. In fact our simulations show that even for biofuels that are almost as emissions-intensive as oil, a renewable fuel standard has beneficial climate effects.
    Keywords: Renewable fuel standard; Blending mandate; Biofuels; Climate costs; Petroleum extraction profi…le
    JEL: Q30 Q40 Q50
    Date: 2014–04–23
  2. By: Brita Bye; Marit E. Klemetsen (Statistics Norway)
    Abstract: We study the effects of various environmental regulations on environmental performance measured as emission intensity. Moreover, we aim to test whether any such effects are persistent or only temporary. Conventional theory predicts that indirect regulations as opposed to direct regulations provide continuous dynamic incentives for emission reductions. Our unique Norwegian firm level panel data set allow us to identify effects from different types of regulations such as environmental taxes, non-tradable emission quotas and technology standards. The data includes information of different environmental regulations, all kinds of polluting emissions, and a large number of control variables for all polluting incorporated firms. Empirically we identify positive and significant effects from both direct and indirect policy instruments. We also investigate whether the regulations provide continuous dynamic incentives that lead to persistent effects. In contrast to what the literature suggests, we find evidence that direct regulations promote persistent effects. Indirect regulations will, on the other hand, only have potential persistent effects if environmental taxes are increasing over time.
    Keywords: environmental performance; emission intensity; environmental regulations; command-and-control; environmental taxes; long-run effects
    JEL: C01 C23 D04 D22 H23 L51 Q51 Q58
    Date: 2014–10
  3. By: Paul David (Stanford University); Adriaan van Zon (United Nations University)
    Abstract: This paper analyzes the requirements for a social welfare-optimized transition path toward a carbon-free economy, focusing particularly on the deployment of low-carbon technologies, and the roles of engineering upgrading of extant facilities, and directed R&D to enhancing their productivity. The goal in each case is to achieve timely supply-side transformations in the global production regime that will avert catastrophic climate instability, and do so in a manner that minimizes the social welfare costs of stabilizing the level of the atmospheric concentration of greenhouse gases (GHG). This “planning-model” approach departs from conventional IAM exercises by dispensing with the need to make (generally dubious) assumptions about the macro-level consequences of behaviors of economic and political actors in response to market incentives and specific public policy instruments, such as a carbon tax. It shifts attention instead to the need for empirical research on critical technical parameters, and problems of inter-temporal coordination of investment and capacity utilization that will be required to achieve a timely, welfare-optimizing transition. A suite of heuristic integrated models is described, in which global macroeconomic growth is constrained by geophysical system with climate feedbacks, including extreme weather damages from global warming driven by greenhouse gas emissions, and the threshold level GHG concentration beyond which the climate system will be “tipped into” catastrophic runaway warming. A variety of technological options are identified, each comprising an array of specific techniques that share a distinctive instrumental role in controlling the concentration level of atmospheric CO2. The development of low-carbon technologies through investment in R&D, and their deployment embodied in new physical capital formation, is explicitly modeled; as is the implementation of known engineering techniques to “upgrade” existing fossil-fueled production facilities. The social-welfare efficient exercise of the available technological options is shown to involve sequencing different investment and production activities in separate temporal “phases” that together form a transition path to a sustainable low-carbon economy— one in which gross CO2-emissions do not exceed the Earth’s “natural” abatement capacity. Parametric variations of the “tipping point” constraint in these models will permit exploration of the corresponding modification in the required sequencing and durations of investment and production in the phases that form the optimal transition path. The preliminary solutions (using mufti-phase optimal control methods) expose important dynamic complementarities among technological options that are often presented as substitutes by current climate policy discussions.
    Keywords: global warming, tipping points, catastrophic climate instability, technology fix options, R&D investments, capital-embodied innovations, optimal sequencing, IAM and DIRAM policy design approaches, multi-phase optimal control, sustainable endogenous growth
    JEL: Q54 Q55 O31 O32 O33
    Date: 2014–08
  4. By: Maria Teresa Costa (Universitat de Barcelona & IEB); Nestor Duch-Brown (Universitat de Barcelona & IEB)
    Abstract: Relevant advances in the mitigation of environmental impact could be obtained by the appropriate diffusion of existing environmental technologies. In this paper, we look at the diffusion of knowledge related to environmental technologies developed within the oil and gas industry. To assess knowledge spillovers from oil and gas inventions as a measure of technology diffusion, we rely on forward patent citations methodology. Results show that there is a strong likelihood that the citing patent will be eventually linked to environmental technologies if the original oil and gas invention has already environmental uses. Moreover, both intra and intersectoral spillovers produce a "turnabout" effect, meaning that citing patents show the opposite quality level of the cited patent. Our results support the idea that more sector-specific environmental policies, with an emphasis on diffusion, would significantly improve the use of environmental technologies developed within the oil and gas industry.
    Keywords: Forward patent citations, petroleum industry, environmental and technology policies
    JEL: Q4 Q55 O31
    Date: 2014
  5. By: Sen, S. (Tilburg University, School of Economics and Management)
    Abstract: Environmental pollution is among the main problems threatening a global sustainable future, and strongly intertwined with the unprecedented rise in economic prosperity since the industrial revolution. The first three chapters deal with two questions: The first question is: Does economic growth, without any intervention, eventually lead to lower levels of pollution? The second question is: If not, what are the strategies that should be followed? The last chapter focuses on another issue which is democratic transitions.
    Date: 2014
  6. By: Kurt Kratena; Mark Sommer
    Abstract: It is expected that binding biophysical constraints have the potential to slow growth and impede the improvement of other key macroeconomic variables. Using a DYNK (Dynamic New Keynesian) model of the EU27, we study two different environmental policy options and evaluate their impact on environmental as well as socio-economic targets (equity and employment). Macroeconomic simulation models are very useful to discuss alternatives to the status quo in economic theory and policy in the face of increasing resource scarcities and impacts. Scenarios of possible economic futures until 2050 generated on the basis of these models can provide very useful insights. Any feasible scenario that allows for achieving policy targets for resource use without completely failing on economic and social targets requires absolute decoupling of resource use from income or GDP. Therefore, a modelling approach that takes into account the full feedback between the physical flows that are to be reduced and the flows in the economic system needs to be applied. For Europe the reduction of resource use is linked to different policy goals. First of all, the European consumer is embedded into global value chains and thereby directly and indirectly contributes to global resource use. GHG emissions of Europe are still an important part of global emissions and emissions per capita are far beyond a sustainable global level. Security of supply and the risks attached to that are a further issue for a European resource policy. The political targets, formulated in roadmaps for GHG emission reduction and resource efficiency therefore describe significant reductions in resource use linked to domestic production (GHG emissions), as well as to domestic consumption (domestic material consumption, DMC). The main instrument discussed in this context is the introduction of prices/taxes for GHG emissions and for resources like construction minerals and metal ores. At the same time, the problem of 'leakage' is identified in a scenario of an isolated European policy. Higher costs for European producers due to these taxes may lead to relocation of energy and material intensive production. This in turn can hurt labour in Europe and on a global scale lead to the same or even higher resource use and GHG emissions. In the end, the genuine source of leakage is the consumers' demand in Europe. Given this demand, producers outside Europe increase their resource use, if the European producer of energy and material intensive products is not competitive. The socio-economic impact of two alternative policies ('classical green tax' reform, 'environmental fiscal devaluation') is analysed and compared.
    Keywords: Beyond GDP, Biophysical constraints, CGE models, Ecological innovation, Macroeconomic disequilibrium, Socio-ecological transition, Sustainable growth, Wealth
    JEL: H J68 O38 O44 Q48 Q54 Q58
    Date: 2014–11
  7. By: E. Agliardi; M. Pinar; T. Stengos
    Abstract: We employ a stochastic dominance (SD) approach to analyze the components that contribute to environmental degradation over time. The variables that are considered include countries’ greenhouse gas (GHG) emissions and water pollution. Our approach is based on pair-wise SD tests. First, we study the dynamic progress of each separate variable over time, from 1990 to 2005, within 5-year horizons. Then, pair-wise SD tests are used to study the major industry contributors to the overall GHG emissions and water pollution at any given time, to uncover the industry which contributes the most to total emissions and water pollution. We find that CO2 emissions not only contribute the most to the GHG emissions over time, but also increased within 15 year in the first-order SD sense. On the other hand, water pollution increased in a second-order SD sense. Pair-wise industry comparisons suggest that the major industry contributors to the CO2 emissions have always been the electricity and heat production sectors, while the transport sector has been the second contributor between 1990 and 2005. Finally, the food industry gradually became the major contributing industry for water pollution over time.
    JEL: C4 C5 C14 Q01 Q5 Q51
    Date: 2014–12
  8. By: Matthew E. Kahn
    Abstract: In an urbanizing world economy featuring thousands of cities, households and firms have strong incentives to make locational investments and self protection choices to reduce their exposure to new climate change induced risks. This pursuit of self interest reduces the costs imposed by climate change. This paper develops a dynamic compensating differentials model to explore how the “menu” offered by a system of cities insures us against emerging risks. Insights from urban economics offer a series of testable hypotheses concerning the economic incidence of spatially tied climate change risk.
    JEL: H41 Q5 R23 R3
    Date: 2014–11
  9. By: Naoki Sakamoto; Kazunori Nakajima
    Abstract: This paper proposes the consistent method with general equilibrium models to measure use value and non-use value of large-scale change in environmental quality. First, we develop a general equilibrium model that parameters of the utility function with environmental quality as a dependent variable can be estimated on the basis of the travel cost method and the contingent variation method. Second, we examine to identify the general equilibrium impact of environmental quality by a comparative static analysis. Third, considering change in prices and income, we decompose the benefits from change in environmental quality into use value and non-use value. JEL Classifications: C68, Q51, Q54 Keywords: Computable general equilibrium models;Use value; Non-use value
    JEL: C68 Q51 Q54
    Date: 2014–11
  10. By: Zoi Vrontisi (JRC IPTS , European Commission); Jan Abrell (ETH Zurich); Frederik Neuwahl (DG ENV, European Commission); Bert Saveyn (JRC IPTS, European Commission; JRC IPTS , European Commission); Fabian Wagner (IIASA)
    Abstract: In March 2014 the UN World Health Organization (World Health Organization, 2014), released a study reporting that in 2012 one in eight of global deaths were a result of air pollution exposure. As part of a long-term effort, in late 2013, the European Commission (EC) adopted the "The Clean Air Policy Package", where it proposes new air pollution reduction objectives for the period up to 2030, as well as instruments to deliver those objectives. This paper explains in detail the modelling conducted with a Computable General Equilibrium model, GEM-E3, for the EC Impact Assessment of this recent EU policy proposal along with an additional analysis of the benefits deriving from the proposed policies. We show that the expenditure on pollution abatement represents a cost for the abating sectors but also that the expenditure in abatement technologies is an economic opportunity for the sectors that produce these technologies.  Moreover, we find that the inclusion of benefits in our analysis, especially those related to health, can offset the resource costs and yield overall marginally positive macro-economic impacts on the European economy.
    Keywords: The Clean Air Policy Package, environmental policy, health, general equilibrium
    JEL: Q53 Q58 C68 H51
    Date: 2014–12
  11. By: Andrei, Jean; Panait, Mirela; Ene, Corina
    Abstract: In a well functional and competitive economy all the entrepreneurs are aware of the importance of protecting the environment, development of local communities and the good relations with stakeholders. The necessity imposed by a sustainable development has many influences on the company’s activities because in order to equilibrate their profit`s motivation with their social and environment implications. This article is focused on the way of different investors integrated in their strategies the environment preoccupations. The actions of companies are shaped by different stakeholders like consumers, public authorities, shareholders, international organizations and other entities.
    Keywords: Environment, cultural values, stakeholders, consumers, corporate social responsibility, green investment
    JEL: A1 M1 Q01
    Date: 2014–11–12
  12. By: Juan Rosellon (Division of Economics, CIDE); Luis Herrera
    Abstract: To date, the distributive implications of incentive regulation on electricity transmission networks have not been explicitly studied in the literature. More specifically, the parameters that a regulator might use to achieve distributive efficiency under price-cap regulation have not yet been identified. To discern these parameters is the motivation for the research presented in this paper. We study how different weight parameters affect the distributive characteristics of optimal price-cap incentive regulation for electricity transmission. We find that a regulator’s use of ideal (Laspeyres) weights tends to be more beneficial for the Transco (consumers) than for consumers (the Transco).
    Keywords: Electricity transmission, incentive regulation, distributive efficiency
    JEL: L50 L51 L94 Q40 Q42
    Date: 2013–11
  13. By: Nicholas Apergis (Department of Economics and Property, Curtin University, Australia and Department of Banking and Financial Management, University of Piraeus, Greece); Christina Christou (Department of Banking and Financial Management, University of Piraeus, Greece); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: The paper assesses the existence of the Environmental Kuznets Curve (EKC) hypothesis, across 48 contiguous states of the US, using recent advances in panel data techniques, given the existence of cross-sectional dependence, which in turn, makes reliance on time-series evidence biased. The Common Correlated Effects (CCE) estimation procedure of Pesaran,(2006), allows us to obtain state-level results, while staying in a panel set-up to accommodate for cross-sectional dependence, in the presence of cointegration in the relationship between emissions and a measure of output, and its squared value – a function that captures the inverted u-shaped relationship postulated by the EKC. Our results show that, the EKC hypothesis holds for only 10 of the 48 states, and hence implies that, the remaining 38 states should reform a number of their environmental regulatory policies to prevent environmental degradation, since otherwise, lower levels of emissions would only be possible at the expense of production.
    Keywords: ECO2 Emissions; Environmental Kuznets Curve; US States
    JEL: C33 Q53 Q56
    Date: 2014–11

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