nep-res New Economics Papers
on Resource Economics
Issue of 2015‒03‒13
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Carbon Pricing: Transaction Costs of Emissions Trading vs. Carbon Taxes By Coria, Jessica; Jaraite, Jurate
  2. Environmental and Economic Impacts of Growing Certified Organic Coffee in Colombia By Ibanez, Marcela; Blackman, Allen
  3. Doing good with other people’s money: an experiment on people's (un)willingness to grant others the freedom to choose By Fredrik Carlsson; Mitesh Kataria; Elina Lampi; Maria Vittoria Levati
  4. Is the income elasticity of the willingness to pay for pollution control constant? By Edward S. Barbier; Mikołaj Czajkowski; Nick Hanley
  5. Divergence in Stakeholders’ Preferences: Evidence from a Choice Experiment on Forest Landscapes Preferences in Sweden By Nordén, Anna; Coria, Jessica; Jönsson, Anna Maria; Lagergren, Fredrik; Lehsten, Veiko
  6. Sustainable growth and financial markets in a natural resource rich country By Emma Hooper

  1. By: Coria, Jessica (Department of Economics. School of Business, Economics and Law. University of Gothenburg); Jaraite, Jurate (CERE)
    Abstract: In this paper we empirically compare the transaction costs from monitoring, reporting and verification (MRV) of two environmental regulations directed to cost-efficiently reduce greenhouse gas emissions: a carbon dioxide (CO2) tax and a tradable emissions system. We do this in the case of Sweden, where a set of firms are covered by both types of regulations, i.e., the Swedish CO2 tax and the European Union’s Emissions Trading System (EU ETS). This provides us with an excellent case study as it allows us to disentangle the costs of each regulation from other firm-specific variables that might affect the overall cost of MRV procedures. Our results indicate that the MRV costs of CO2 taxation do not depend on firms’ emissions, while they do in the case of the EU ETS. For firms of equivalent emissions’ size, the MRV costs are lower for CO2 taxation than for the EU ETS, which confirms the general view that regulating emissions upstream by means of a CO2 tax yields lower transaction costs vis-á-vis downstream regulation by means of emission trading.
    Keywords: Carbon dioxide emissions; Carbon tax; Emissions Trading; EU ETS; Firm-level data; Sweden
    JEL: D23 H23 Q52 Q58
    Date: 2015–02–23
  2. By: Ibanez, Marcela; Blackman, Allen (Resources for the Future)
    Abstract: According to advocates, eco-certification can improve developing country farmers’ environmental and economic performance. However, these notional benefits can be undercut by self-selection: the tendency of relatively wealthy farmers already meeting eco-certification standards to disproportionately participate. Empirical evidence on this matter is scarce. Using original farm-level survey data along with matching and difference-in-differences matching models, we analyze the producer-level effects of organic coffee certification in southeast Colombia. We find that certification improves coffee growers’ environmental performance. It significantly reduces sewage disposal in the fields and increases the adoption of organic fertilizer. However, we are not able to discern economic benefits. The return on certified production is not significantly different from that on conventional production.
    Keywords: organic certification, coffee, Colombia, difference-in-differences matching
    JEL: Q13 Q20 O13 Q56
    Date: 2015–02–05
  3. By: Fredrik Carlsson (Department of Economics, University of Gothenburg, Sweden); Mitesh Kataria (Department of Economics, University of Gothenburg, Sweden); Elina Lampi (Department of Economics, University of Gothenburg, Sweden); Maria Vittoria Levati (Department of Economics (University of Verona))
    Abstract: We augment a standard allocation experiment to investigate how preferences for an environmental project relate to the willingness to limit others' choices. We ask the allocator to choose his own donation level, a donation level for him and his group, and the minimum donation level for the group members (excluding the allocator). We find that donations dictated to the whole group are, on average, lower than individual donations and that this decrease is consistent with the expectations of what others would like to donate. Moreover, most allocators force the others to donate a positive, though low, amount. Thus, unlimited freedom of choice is rejected by the majority of the subjects.
    Keywords: Allocation decisions; Charitable giving; Social preferences; Freedom of choice
    JEL: C92 D64 D70
    Date: 2015–03
  4. By: Edward S. Barbier (Department of Economics & Finance, University of Wyoming); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Nick Hanley (University of St Andrews, School of Geography and Sustainable Development)
    Abstract: This paper explores both theoretically and empirically whether or not the willingness to pay (WTP) for pollution control varies with income. Our model indicates that the income elasticity of the marginal WTP for pollution reduction is only constant under very restrictive conditions, which are not necessary for an environmental Kuznets curve relationship between pollution and income. Our empirical analysis tests the null hypothesis that the elasticity of the WTP for pollution control with respect to income is constant, employing a multi-country contingent valuation study of eutrophication reduction in the Baltic Sea. Our findings reject this hypothesis, and estimate an income elasticity of the WTP for eutrophication control of 0.1 - 0.2 for low-income respondents and 0.6 - 0.7 for high-income respondents. Thus, our empirical results suggest that the elasticity is not constant and always less than one.
    Keywords: Baltic Sea, benefit transfer, environmental Kuznets curve, eutrophication, income elasticity of willingness to pay, non-market valuation
    JEL: Q51 Q53 Q56
    Date: 2015
  5. By: Nordén, Anna (Department of Economics, School of Business, Economics and Law, Göteborg University); Coria, Jessica (Department of Economics, School of Business, Economics and Law, Göteborg University); Jönsson, Anna Maria (Lund University); Lagergren, Fredrik (Lund University); Lehsten, Veiko (Lund University)
    Abstract: A great deal of biodiversity can be found in private forests, and protecting it requires taking into consideration the preferences of key stakeholders. In this study, we examine and compare the valuation of forest attributes across the general public, private non-industrial forest owners and forest officials in Sweden by conducting a choice experiment. Our results indicate that citizens have a positive valuation of biodiversity protection. Moreover, their valuation is statistically higher than those of forest owners, implying that there is room for compensation. Interestingly, our results suggest that both forest owners and forest officials have a strong orientation towards production, with higher valuation than the general public of the common management practice of similar age and clear felling. Even though the Swedish Forestry Act regards production and environmental goals as equally important, we find that forest officials prefer management practices that promote production rather than biodiversity protection.
    Keywords: biodiversity; choice experiment; forest; preference divergence
    JEL: D61 Q23 Q51 Q58
    Date: 2015–03
  6. By: Emma Hooper (_Aix-Marseille University (Aix-Marseille School of Economics), CNRS, & EHESS)
    Abstract: We study the optimal growth path of a natural resource rich country, which can borrow from international financial markets. More precisely, we explore to what extent international borrowing can overcome resource scarcity in a small open economy, in order to have sustainable growth. First, this paper presents a benchmark model with a constant interest rate. We then introduce technical progress to see if the economy's growth can be sustainable in the long-run. Secondly, we analyse the case of a debt elastic interest rate, with a constant price of natural resources and then with increasing prices. The main finding of this paper is that borrowing on international capital markets does not permit sustainable growth for a country with exhaustible natural resources, when the interest rate is constant. Nevertheless, when we endogenize the interest rate the consumption growth rate can be positive before declining.
    Keywords: Exhaustible natural resources, exogenous growth, financial markets
    JEL: E20 O40 Q32 E44
    Date: 2015–02–15

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