nep-res New Economics Papers
on Resource Economics
Issue of 2015‒06‒05
four papers chosen by

  1. Cooperation and Competition in Climate Change Policies: Mitigation and Climate Engineering when Countries are Asymmetric By Vassiliki Manoussi; Anastasios Xepapadeas
  2. Revisiting the Conflicts between ‘Environmental Taxes vs Standard’ in the Context of International Trade: The Role of Waste Recycling By Chatterjee, Nilendu; Gupta, Kausik; Chatterjee, Tonmoy
  3. Heterogeneous firms and the environment: a cap-and-trade program By Lisa Anouliès
  4. Valuing the environment: Happiness and willingness-to-pay By Cheng, Zhiming; Wang, Ben

  1. By: Vassiliki Manoussi; Anastasios Xepapadeas
    Abstract: We study a dynamic game of climate policy design in terms of emissions and solar radiation management (SRM) involving two heterogeneous countries or group of countries. Countries emit greenhouse gasses (GHGs), and can block incoming radiation by unilateral SRM activities, thus reducing global temperature. Heterogeneity is modelled in terms of the social cost of SRM, the environmental damages due to global warming, the productivity of emissions in terms of generating private benefits, the rate of impatience, and the private cost of geoengineering. We determine the impact of asymmetry on mitigation and SRM activities, concentration of GHGs, and global temperature, and we examine whether a tradeoff actually emerges between mitigation and SRM. Our results could provide some insights into a currently emerging debate regarding mitigation and SRM methods to control climate change, especially since asymmetries seem to play an important role in affecting incentives for cooperation or unilateral actions.
    Keywords: Climate change, mitigation, solar radiation management, cooperation, differential game, asymmetry, feedback Nash equilibrium
    JEL: Q53 Q54
    Date: 2015–05–25
  2. By: Chatterjee, Nilendu; Gupta, Kausik; Chatterjee, Tonmoy
    Abstract: The present paper throws light on the famous “tax versus standard” debate in the sphere of environmental economics by using general equilibrium framework and tries to examine which of the two, i.e., tax or standard is the better way to deal with pollution. The present paper has done so in the presence of a waste recycling sector which is the unique feature of it and has shown the impact of tax and standard separately on different polluting and non-polluting sectors of the economy. The paper has developed a unique as well as an interesting result that in the presence of a waste recycling sector in the economy, both pollution tax and environmental standard have the same impact.
    Keywords: Environmental Regulation, Green Capital, Waste Management and General Equilibrium
    JEL: D58 F11 F18 Q52 Q53
    Date: 2015–05
  3. By: Lisa Anouliès (Université Paris-Sud, RITM)
    Abstract: Cap-and-trade programs are presently the cornerstone of climate change policies and proposals in many countries. I investigate the economic and environmental effects of different designs for this policy in a general equilibrium setting when firms are heterogeneous and in monopolistic competition. This study first predicts that the cap on emissions perfectly defines the environmental quality but has no effect on firms’ profits and decisions to enter or exit the market. On the contrary, increasing the share of free allocation of emissions allowances reallocates resources among firms toward the most productive ones: the initial allocation of allowances therefore impacts firms’ entry and exit decisions and aggregate economic variables but not the environment. Firm heterogeneity magnifies this economic effect of a change in the initial allocation of allowances.
    Keywords: Emissions trading, Heterogeneous firms, Monopolistic competition
    JEL: Q58 D43 H23
    Date: 2015–05
  4. By: Cheng, Zhiming; Wang, Ben
    Abstract: This paper examines the impacts of subjective and objective measures of environmental quality on happiness and willingness to pay higher prices in China. We find that a higher level of happiness is associated with better air quality, but not necessarily with better water quality. The government can encourage willingness to pay for the former, but can only substitute it for the latter. Although perceived environmental quality is important for willingness-to-pay, it plays little role in rating happiness. However, a more highly perceived government effort increases both people’s life satisfaction and willingness-to-pay.
    Keywords: China; happiness; willingness-to-pay; environmental issues
    JEL: O13 Q53
    Date: 2015–05

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