nep-res New Economics Papers
on Resource Economics
Issue of 2015‒06‒27
five papers chosen by

  1. Green Cities? Urbanization, Trade and the Environment By Borck, Rainald; Pflüger, Michael P.
  2. Environmental Benefits from Driving Electric Vehicles? By Stephen P. Holland; Erin T. Mansur; Nicholas Z. Muller; Andrew J. Yates
  3. Cournot Competition and “Green” Innovation: An Inverted-U Relationship By Luca Lambertini; Joanna Poyago-Theotoky; Alessandro Tampieri
  4. Pushing the Tipping in International Environmental Agreements By Lorenzo Cerda Planas
  5. Equitable and effective climate policy: Integrating less developed countries into a global climate agreement By Lucas Bretschger; Alexandra Vinogradova

  1. By: Borck, Rainald (University of Potsdam); Pflüger, Michael P. (University of Würzburg)
    Abstract: This paper establishes a simple theoretical framework which comprises key forces that shape the structure and interrelation of cities to study the interdependencies between urban evolution and the environment. We focus on the potential of the unfettered market forces to economize on emissions. A key finding is that these forces alone may suffice to generate an urban Environmental Kuznets Curve. In particular, reducing trade costs increases per capita incomes and generates a U-shaped evolution of emissions in the process of agglomeration and redispersion. Another key result is that agglomeration per se is typically not a boon for the environment, as total emissions in the total city system are likely to rise.
    Keywords: city structure, city systems, environmental pollution, global warming, Environmental Kuznets Curve, trade costs, commuting costs, housing
    JEL: F18 Q50 R11 R12
    Date: 2015–06
  2. By: Stephen P. Holland; Erin T. Mansur; Nicholas Z. Muller; Andrew J. Yates
    Abstract: Electric vehicles offer the promise of reduced environmental externalities relative to their gasoline counterparts. We combine a theoretical discrete-choice model of new vehicle purchases, an econometric analysis of the marginal emissions from electricity, and the AP2 air pollution model to estimate the environmental benefit of electric vehicles. First, we find considerable variation in the environmental benefit, implying a range of second-best electric vehicle purchase subsidies from $3025 in California to -$4773 in North Dakota, with a mean of -$742. Second, over ninety percent of local environmental externalities from driving an electric vehicle in one state are exported to others, implying that electric vehicles may be subsidized locally, even though they may lead to negative environmental benefits overall. Third, geographically differentiated subsidies can reduce deadweight loss, but only modestly. Fourth, the current federal purchase subsidy of $7500 has greater deadweight loss than a no-subsidy policy.
    JEL: D62 H23 Q53 Q54
    Date: 2015–06
  3. By: Luca Lambertini (Department of Economics, University of Bologna, Italy; The Rimini Centre for Economic Analysis, Italy); Joanna Poyago-Theotoky (School of Economics, La Trobe University, Australia; The Rimini Centre for Economic Analysis, Italy); Alessandro Tampieri (Faculty of Law, Economics and Finance, University of Luxembourg, Luxembourg)
    Abstract: We examine the relationship between competition and innovation in an industry where production is polluting and R&D aims to reduce emissions (“green” innovation). We present an n-firm oligopoly where firms compete in quantities and decide their investment in “green” R&D. When environmental taxation is exogenous, aggregate R&D investment always increases with the number of firms in the industry. Next we analyse the case where the emission tax is set endogenously by a regulator (committed or time-consistent) with the aim to maximize social welfare. We show that an inverted-U relationship exists between aggregate R&D and industry size under reasonable conditions, and is driven by the presence of R&D spillovers.
    Date: 2015–06
  4. By: Lorenzo Cerda Planas (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics)
    Abstract: This paper intends to provide an alternative approach to the formation of International Environmental Agreements (IEA). The existing consensus within the literature is that there are either too few signatories or that the emissions of signatories are almost the same as business as usual (BAU). I start from a well-known model (Barrett 1997), adding heterogeneity in countries' marginal abatement costs (low and high) and in damages suffered (or corresponding environmental concern). I also allow for technological transfers and border taxes. I show that using either mechanism one at a time, does not change the results. But if both are used in a strategic manner, a grand (and abating) coalition can be reached, while minimizing transfers.
    Date: 2015–03
  5. By: Lucas Bretschger (ETH Zurich, Switzerland); Alexandra Vinogradova (ETH Zurich, Switzerland)
    Abstract: The paper derives general rules for equitable burden sharing in international climate policy. The focus is on a new social climate contract between developed and less developed countries (LDCs) which preserves competitiveness of the former and the ”right to development” of the latter. We formally derive conditions under which an LDC keeps the ”right to development” but voluntarily agrees to participate in stringent international climate policy. Two types of policies are analyzed, one with a predefined transfer and the other with a transfer that is tied to emissions-control efforts. We show that offering only one or the other option is inefficient. Chances for a comprehensive agreement are higher when a menu of policy options is available. The number and diversity of LDCs willing to join a global climate treaty is higher when a variety of policy alternatives is available.
    Keywords: Climate policy, less developed countries, equitable burden sharing, right to development, international climate agreement.
    JEL: Q43 O47 Q56 O41
    Date: 2015–06

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