nep-res New Economics Papers
on Resource Economics
Issue of 2015‒02‒28
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Designing an Optimal 'Tech Fix' Path to Global Climate Stability: Directed R&D and Embodied Technical Change in a Multi-phase Framework By Paul David ; Adriaan van Zon
  2. Environmental Policy and the Size Distribution of Firms By Coria, Jessica ; Kyriakopoulou, Efthymia
  3. Why is Pollution from U.S. Manufacturing Declining? The Roles of Trade, Regulation, Productivity, and Preferences By Joseph S. Shapiro ; Reed Walker
  4. Voting on Prices vs. Voting on Quantities in a World Climate Assembly By Martin L. Weitzman
  5. Pro-environmental households and energy efficiency in Spain By Ramos, Ana ; Labandeira, Xavier ; Löschel, Andreas

  1. By: Paul David (Stanford University ); Adriaan van Zon (SBE Maastricht University and United Nations University )
    Abstract: This paper reports research focused on the inter-temporal resource allocation requirements of a program of technological changes that would halt global warming by completing the transition to a "green" production regime (i.e., zero net CO2-emissions) within the possibly brief finite interval that remains before Earth’s climate is driven beyond a catastrophic tipping point. We formulate a multi-phase, just-in-time transition model incorporating carbon-based and carbon-free technical options that require physical embodiment in durable production facilities, and whose performance attributes can be enhanced by investment in directed R&D. Transition paths indicating the best ordering and durations of the distinct phases during which intangible and tangible capital formation is taking place and capital stocks of different types are being utilized in production (or scrapped when replaced types embodying socially more efficient technologies) are obtained as optimal solutions for each of a trio of related models in which the global macro-economy’s dynamics are coupled with the dynamics of the climate system. The climate-integrated (annual) discrete-time endogenous growth models envisage the implementation of different technology policy options, but, for comparability of their solutions, all three are calibrated to emulate the same global settings of the "transition planning" problem. Our dynamic integrated requirements analysis modeling (DIRAM) approach exposes the sensitivity of the specifics of alternative "tech fix" transition paths to parametric variations in key exogenous specifications. Of particular interest among the latter is the conjectured location of a pair of successive climate "tipping points", the first of which initiates higher expected rates of damage to the carbon-fueled capital stock due to more frequent extreme weather events being driven by the rising mean global temperature. The second, far more dangerous tipping point (at a still higher MGT) corresponds to the lowest conjectured level of atmospheric CO2 concentration that could trigger an irreversible climate catastrophe. Having to stop short of that point, in effect sets a "minimal regret" carbon budget for the optimal transition to a sustainable phase of global economic growth. Sensitivity analysis results are displayed to show how varying the catastrophic tipping point (and its implied carbon budget) alters the transition dynamics in each of the three models.
    Keywords: global warming, tipping point, catastrophic climate instability, extreme weather- related damages, R&D, directed technical change, capital-embodied technologies, optimal sequencing, multi-phase optimal control, sustainable endogenous growth
    JEL: Q54 Q55 O31 O32 O33 O41 O44
    Date: 2015–02
  2. By: Coria, Jessica (Department of Economics, School of Business, Economics and Law, Göteborg University ); Kyriakopoulou, Efthymia (Department of Economics, School of Business, Economics and Law, Göteborg University )
    Abstract: In this paper we analyze the e¤ects of environmental policies on the size distribution of firms. We model a stationary industry where the observed size distribution is a solution to the profit maximization problem of heterogeneous firms that di¤er in terms of their energy efficiency. We compare the equilibrium size distribution under emission taxes, uniform emission standards, and performance standards. Our results indicate that, unlike emission taxes and performance standards, emission standards introduce regulatory asymmetries favoring small firms. These asymmetries cause significant detrimental effects on total output and total welfare, yet lead to reduced emissions and help preserve small businesses.
    Keywords: Environmental regulations; energy efficiency; size distribution; emission taxes; emission standards; performance standards
    JEL: L25 Q55 Q58
    Date: 2015–02
  3. By: Joseph S. Shapiro ; Reed Walker
    Abstract: Between 1990 and 2008, emissions of the most common air pollutants from U.S. manufacturing fell by 60 percent, even as real U.S. manufacturing output grew substantially. This paper develops a quantitative model to explain how changes in trade, environmental regulation, productivity, and consumer preferences have contributed to these reductions in pollution emissions. We estimate the model's key parameters using administrative data on plant-level production and pollution decisions. We then combine these estimates with detailed historical data to provide a model-driven decomposition of the causes of the observed pollution changes. Finally, we compare the model-driven decomposition to a statistical decomposition. The model and data suggest three findings. First, the fall in pollution emissions is due to decreasing pollution per unit output within narrowly de ned products, rather than to changes in the types of products produced or changes to the total quantity of manufacturing output. Second, the implicit pollution tax that rationalizes rm production and abatement behavior more than doubled between 1990 and 2008. Third, environmental regulation explains 75 percent or more of the observed reduction in pollution emissions from manufacturing.
    JEL: F18 H23 Q56
    Date: 2015–01
  4. By: Martin L. Weitzman
    Abstract: This paper posits the conceptually useful allegory of a futuristic "World Climate Assembly" that votes on global carbon emissions via the basic principle of majority rule. Two variants are considered. One is to vote on a universal price (or tax) that is internationally harmonized, but the proceeds from which are domestically retained. The other is to vote on the overall quantity of total worldwide emissions, which are then distributed for free (via a pre-decided fractional subdivision formula) as individual allowance permits that are subsequently marketed in an international cap-and-trade system. The model of the paper suggests that the majority-voted price is likely to be less distortionary and easier to enact than the majority-voted total quantity of permits. While the study is centered on a formal model, the tone of the policy discussion resembles more an exploratory think piece.
    JEL: F51 H41 Q54
    Date: 2015–02
  5. By: Ramos, Ana ; Labandeira, Xavier ; Löschel, Andreas
    Abstract: The residential building sector is a major driver of current and future energy consumption and associated emissions, which can be potentially mitigated through significant energy-efficiency (EE) improvements in both emerging and developed countries. Yet, there are several persistent barriers that hinder the attainment of EE improvements in this area. Using data from a 2008 national representative survey of Spanish households, this paper is interested in the determinants of EE-related decisions. In particular, a discrete-choice model empirically analyzes whether proenvironmental households are more likely to invest in EE and to adopt daily energysaving habits. We show that households with eco-friendly behaviors are more likely to investment in well-differentiated EE measures as well as to steer daily habits towards energy savings. However, no effects are found for households with environmental attitudes based on stated willingness to pay to protect the environment. In addition to this, households belonging to higher income groups and education levels are more likely to invest in EE but not to adopt energy-saving habits; while households with older members are less likely to invest in EE and show fewer eco-friendly habits.
    Keywords: energy efficiency,investment,behavior,habits
    JEL: Q41 Q48 Q58
    Date: 2015

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