nep-res New Economics Papers
on Resource Economics
Issue of 2015‒01‒31
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. Global environmental agreements and international trade: Asymmetry of countries matters By Thomas Eichner ; Rüdiger Pethig
  3. On the effects of unilateral environmental policy on offshoring in multi-stage production processes By Schenker, Oliver ; Koesler, Simon ; Löschel, Andreas
  4. Forging a global environmental agreement through trade sanctions on free riders? By Thomas Eichner ; Rüdiger Pethig
  5. Property Rights, Regulatory Capture, and Exploitation of Natural Resources By Christopher Costello ; Corbett Grainger
  6. A Dynamic Game of Emissions Pollution with Uncertainty and Learning By Nahid Masoudi ; Marc Santugini ; Georges Zaccour

  1. By: Klara Zwickl (Vienna University of Economics and Business, Welthandelsplatz 1, 1020 Vienna, Austria ); Mathias Moser (Vienna University of Economics and Business, Welthandelsplatz 1, 1020 Vienna, Austria )
    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 En- vironmental 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, wend 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
    Date: 2014–11
  2. By: Thomas Eichner ; Rüdiger Pethig
    Abstract: We investigate the formation of global climate agreements (= stable grand climate coalitions) in a model, in which climate policy takes the form of carbon emission taxation and fossil fuel and consumption goods are traded on world markets. We expand the model of Eichner and Pethig (2014) by considering countries that are identical within each of two groups but differ across groups with respect to climate damage or fossil fuel demand. Our numerical analysis suggests that climate damage asymmetry tends to discourage cooperation in the grand coalition. The effects of fuel-demand asymmetry depend on fossil fuel abundance. If fuel is very abundant, the grand coalition fails to be stable independent of the degree of fuel demand asymmetry. If fuel is sufficiently scarce, low degrees of fuel demand asymmetry discourage cooperation whereas higher degrees of asymmetry stabilize the grand coalition.
    Keywords: fuel demand, climate damage, international trade, asymmetry, stability, grand coalition
    JEL: C72 F02 Q50 Q58
    Date: 2014
  3. By: Schenker, Oliver ; Koesler, Simon ; Löschel, Andreas
    Abstract: In the last decades supply chains emerged that stretch across many countries. This has been explained with decreasing trade and communication costs. We extend the literature by analyzing if and how unilateral environmental regulation induces offshoring to unregulated jurisdictions. We first apply an analytical partial-equilibrium model of a two-stage production process that can be distributed between two countries and investigate unilateral emission pricing and its supplementation with border carbon taxes. To get a more comprehensive picture, we subsequently apply a computable general equilibrium model that includes a better representation of international supply chains. We find heterogeneous, but mostly positive effects of a unilateral carbon emission reduction by the European Union on the degree of vertical specialisation of European industries and explain these differences by heterogeneity in the emission-intensity and pre-policy vertical specialisation of sectors. Border taxes are successful in protecting upstream industries, but with negative side effects for downstream industries.
    Keywords: Unilateral Climate Policy,Border Carbon Taxes,Vertical Specialisation,Offshoring,Outsourcing,Computable General Equilibrium
    JEL: C68 F12 F18 Q58
    Date: 2014
  4. By: Thomas Eichner ; Rüdiger Pethig
    Abstract: This paper studies the formation of self-enforcing global environmental agreements in a world economy with international trade and two groups of countries that differ with respect to fuel demand and environmental damage. It investigates whether the signatories’ threat to embargo (potential) free riders secures all countries’ participation in the agreement. Resorting to numerical analysis, we find that an embargo may be unnecessary, ineffective or even counterproductive - depending on the degree of asymmetry and other parameters. On some subset of parameters, the embargo stabilizes the otherwise unstable global agreement, but the threat of embargo is not credible. However, in some of these cases credibility can be restored by suitable intra-coalition transfers.
    Keywords: embargo, trade, asymmetry, free rider, fuel demand, climate damage
    JEL: F02 Q50 Q58
    Date: 2014
  5. By: Christopher Costello ; Corbett Grainger
    Abstract: We study how the strength of property rights to individual extractive firms affects a regulator’s choice over exploitation rates for a natural resource. The regulator is modeled as an intermediary between current and future resource harvesters, rather than between producers and consumers, as in the traditional regulatory capture paradigm. When incumbent resource users have weak property rights, they have an incentive to pressure the regulator to allow resource extraction at an inefficiently rapid rate. In contrast, when property rights are strong, this incentive is minimized or eliminated. We build a theoretical model in which different property right institutions can be compared for their incentives to exert influence on the regulator. The main theoretical prediction - that stronger individual property rights will lead the regulator to choose more economically efficient extraction paths - is tested empirically with a novel panel data set from global fisheries. Exploiting the variation in timing of catch share implementation in our panel data, we find that regulators are significantly more conservative in managing resources for which strong individual property rights have been assigned to firms; this is especially pronounced for resources that have been overexploited historically.
    JEL: H23 H41 L2 Q2 Q22
    Date: 2015–01
  6. By: Nahid Masoudi ; Marc Santugini ; Georges Zaccour
    Abstract: We introduce learning in a dynamic game of international pollution, with ecological uncertainty. We characterize and compare the feedback non-cooperative emissions strategies of players when the players do not know the distribution of ecological uncertainty but they gain information (learn) about it. We then compare our learning model with the benchmark model of full information, where players know the distribution of ecological uncertainty. We find that uncertainty due to anticipative learning induces a decrease in total emissions, but not necessarily in individual emissions. Further, the effect of structural uncertainty on total and individual emissions depends on the beliefs distribution and bias. Moreover, we obtain that if a player’s beliefs change toward more optimistic views or if she feels that the situation is less risky, then she increases her emissions while others react to this change and decrease their emissions.
    Keywords: Pollution emissions, Dynamic games, Uncertainty, Learning
    JEL: Q50 D83 D81 C73
    Date: 2015

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