nep-res New Economics Papers
on Resource Economics
Issue of 2015‒01‒03
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Informal environmental regulation of industrial air pollution: Does neighborhood inequality matter? By Klara Zwickl; Mathias Moser
  2. The green Paradox and Learning-by-Doing in the renewable energy sector By Nachtigall, Daniel; Rübbelke, Dirk
  3. Hedonic quality, social norms, and environmental campaigns By Andrea Mantovani; Ornella Tarola; Cecilia Vergari
  4. Transition to Clean Technology By Daron Acemoglu; Ufuk Akcigit; Douglas Hanley; William Kerr
  5. Optimal Pollution Standards and Non-Compliance in a Dynamic Framework By Arguedas, Carmen; Cabo, Francisco; Martín-Herrán, Guiomar
  6. Environmental Sustainability and Economic Development: Cost Benefit Analysis for Sustainable Development By Anastasios Xepapadeas

  1. By: Klara Zwickl (Department of Socio-Economics, Vienna University of Economics and Business); Mathias Moser (Department of Economics, Vienna University of Economics and Business)
    Abstract: This paper analyzes if neighborhood income inequality has an effect on informal regulation of environmental quality, using census tract-level data on industrial air pollution exposure from EPA’s Risk Screening Environmental Indicators and income and demographic variables from the American Community Survey and EPA’s Smart Location Database. Estimating a spatial lag model and controlling for formal regulation at the states level, we find evidence that overall neighborhood inequality – as measured by the ratio between the fourth and the second income quintile or the neighborhood Gini coefficient – increases local air pollution exposure, whereas a concentration of top incomes reduces local exposure. The positive coefficient of the general inequality measure is driven by urban neighborhoods, whereas the negative coefficient of top incomes is stronger in rural areas. We explain these findings by two contradicting effects of inequality: On the one hand, overall inequality reduces collective action and thus the organizing capacities for environmental improvements. On the other hand, a concentration of income at the top enhances the ability of rich residents to negotiate with regulators or polluting plants in their vicinity.
    Keywords: Informal Regulation, Income Inequality, Collective Action, Industrial Air Pollution Disparities, Risk–Screening Environmental Indicators, Spatial Lag Model
    JEL: D3 H4 Q5 R2
    Date: 2014–11
  2. By: Nachtigall, Daniel; Rübbelke, Dirk
    Abstract: The green paradox conveys the idea that climate policies may have unintended side effects when taking into account the reaction of fossil fuel suppliers. In particular, carbon taxes that will be implemented in the future induce resource owners to extract more rapidly which increases present carbon dioxide emissions and accelerates global warming. Our results suggest that future carbon taxes may even decrease present emissions if resource owners face increasing marginal extraction costs and if there is a clean energy source that is a perfect substitute and exhibits learning-by-doing (LBD). If the marginal extraction cost curve is sufficiently at, resource owners respond to a future carbon tax with lowering total extraction and only slightly increase present extraction. Moreover, taxation leads to higher energy prices which induces the renewable energy firms to increase output not only in the future, but also in the present because of the anticipated benefits from LBD. This crowds out energy from the combustion of fossil fuels and may outweigh the initial increase in present extraction, leading to less emissions in the present.
    Keywords: climate change,exhaustible resources,learning-by-doing,green paradox
    JEL: Q38 Q54 Q28 H23
    Date: 2014
  3. By: Andrea Mantovani (University of Bologna & IEB); Ornella Tarola (University of Rome "La Sapienza"); Cecilia Vergari (University of Bologna)
    Abstract: We analyse how market competition in a vertically differentiated polluting industry is affected by product variants that comply at different levels with "green" social norms. A green consumption behavior is considered as a byword of good citizenship. Consumer preferences depend on a combination of hedonic quality and compliance with social norms. Assuming that the high hedonic quality variant complies less with these norms than the low hedonic quality variant, we characterize different equilibrium configurations which appear as a result of both the intensity of such norms and the country-specific income dispersion. Then, we focus on the role that institutions may have in using these norms to reduce pollution emissions.
    Keywords: Hedonic quality, environmental quality, relative preferences, environmental campaign
    JEL: D62 L13
    Date: 2014
  4. By: Daron Acemoglu; Ufuk Akcigit; Douglas Hanley; William Kerr
    Abstract: We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation—in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several rungs to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry and exit from the US energy sector. The model's quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy makes heavy use of research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policies.
    JEL: C65 O30
    Date: 2014–12
  5. By: Arguedas, Carmen (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Cabo, Francisco (IMUVa: Departamento de Economía Aplicada (Matemáticas), Universidad de Valladolid); Martín-Herrán, Guiomar (IMUVa: Departamento de Economía Aplicada (Matemáticas), Universidad de Valladolid)
    Abstract: In this paper we present a Stackelberg differential game to study the dynamic interaction between a polluting firm and a regulator who sets pollution limits overtime. At each time, the firm settles emissions taking into account the fine for non-compliance, and balances current costs of investments in a capital stock which allows for future emission reductions. We show that the optimal effective pollution limit path, which is the pollution level above which the fine is truly imposed, decreases overtime, inducing a rise in capital stock and a decrease in both emissions and the level of non-compliance. If the effective pollution limit coincides with the pollution limit set by the regulator, we generally find a bounded value of the severity of the fine that maximizes social welfare. If the effective pollution limit is larger than the pollution limit set by the regulator due to fine discounts in exchange for firm’s investment in capital, the effect of a more severe fine depends on the magnitude of this discount. In the limiting scenario with a sufficiently large severity of the fine, emissions coincide with the effective pollution limit and no penalties are levied, since the firm shows adequate adaptation progress through capital investment.
    Keywords: non-compliance; fines; pollution standards; dynamic regulation; Stackelberg differential games.
    JEL: C61 C73 K32 K42 L51 Q28
    Date: 2014–11
  6. By: Anastasios Xepapadeas
    Abstract: Sustainable development, environmental sustainability, green economies and green growth are issues which are of great importance for both the research and the policy agenda. The present paper clearly defines the concepts of sustainability and environmental sustainability and provides a conceptual framework for developing sustainability-founded cost benefit rules. It shows that a certain policy cannot necessarily simultaneously satisfy sustainable development and environmental sustainability objectives, the development of green economies, and the attainment of development or green growth.This is important for decision makers because it suggests using more than one criterion depending on the combination of the objectives to be pursued.The cost benefit rules presented in this paper could provide a basis for a clear distinction among objectives and for project selection mechanisms that promote single or multiple objectives.
    Keywords: Sustainable development, wellbeing, comprehensive investment, accounting prices, cost benefit analysis, environmental sustainability, green economies, green growth
    Date: 2014–12–06

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