nep-res New Economics Papers
on Resource Economics
Issue of 2015‒07‒18
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Has trade openness reduced pollution in China? By José de Sousa; Laura Hering; Sandra Poncet
  2. An analysis of the effects of policies; the case of coal By Massimo Di Matteo; Silvia Ferrini; Virna Talia
  3. Going Green for Esteem: An Extended Uzawa-Lucas Model with Status Driven Environmentalism By Zhou, Sophie Lian
  4. Effects of fossil fuel prices on the transition to a low-carbon economy By Franco Ruzzenenti; Andreas A. Papandreou
  5. Mining and Quasi-Option Value By Christopher Costello; Charles D. Kolstad
  6. Environmental Effects of a Vehicle Tax Reform: Empirical Evidence from Norway By Ciccone, Alice

  1. By: José de Sousa; Laura Hering; Sandra Poncet
    Abstract: We use recent detailed Chinese data on trade and pollution emissions to assess the environmental consequences of China’s integration into the world economy. We rely on a panel dataset covering 235 Chinese cities over the 2003-2012 period and examine whether environmental repercussions from trade openness depends on whether it emanates from processing or ordinary activities. In line with our theoretical predictions, we find a negative and significant effect of trade on emissions that is magnified for processing trade and activities undertaken by foreign firms: much lower environmental gains result from either ordinary trade activities or domestic firms, even though these are today the main drivers of China’s export and import growth. This result invites caution about the prospects for pollution in a context of decline role of processing trade.
    Keywords: Trade openness;Pollution;SO2 emissions;China
    JEL: F10 F14 O14
    Date: 2015–07
  2. By: Massimo Di Matteo (Department of Political Science and International studies, University of Siena.); Silvia Ferrini (Department of Political Science and International studies, University of Siena.); Virna Talia (Department of Political Science and International studies, University of Siena.)
    Abstract: The shift to more sustainable energy regimes requires the implementation of the right mix of policy options to internalize fossil fuel externalities. In this paper the attention is dedicated to the coal. Coal is the main fossil fuel for energy production and also the key driver of emerging economies (China, India). On the other end, the coal has been the driver of developed economies (EU, US) and a systematic review of policy options can offer several insights on the path to sustainability. Whereas coal combustion externalities (mainly CO2) are well regulated, policies for coal mining externalities are mainly neglected. Policy options present several characteristics and a formal discussion of the nexus externality and efficiency is provided. The result of a systematic web search for the coal mining externalities is presented. The strength of this search is to review several national and international reports/papers on coal mining effects. Policies for environmental and societal externalities are reviewed. Results show that the command and control is still the most popular instrument. However, mature economies (e.g. US) have successfully shifted towards voluntary agreements. These instruments promote efficiency and minimize distributional effects. It also emerges that landscape and biodiversity lost are not well regulated.
    Keywords: Externalities, Redistributive Effects, Valuation of Environmental Effects, Valuation of Environmental Policies Correlation Index
    JEL: Q51 Q58 H23 Q48
    Date: 2015–01–01
  3. By: Zhou, Sophie Lian
    Abstract: Conspicuous conservation is a newly emerged phenomenon of status driven environmentalism, where individuals undertake publicly visible conservation activities for the purpose of gaining social esteem. This paper studies the role of conspicuous conservation as an additional means of regulating environmental issues in an extended Uzawa-Lucas model with leisure choice, environmental externality and social status. Particular attention is paid to the long-term impact of conspicuous conservation on environmental quality, production culture, and the overall welfare along the balanced growth path (BGP) in a decentralized economy. Conspicuous conservation is found to aid pollution taxation and always increase environmental quality by providing additional incentives for pollution abatement. It however also increases the dirtiness of the aggregate technology, and encourages the use of the polluting factor. The overall welfare impact is positive when pollution control is absent or weak, but eventually turns negative as pollution taxation becomes increasingly stringent. The numerical example further suggests that strong status comparison is generally undesirable except at zero or extremely low pollution control.
    Keywords: Conspicuous conservation, social status, pollution, economic growth, Environmental Economics and Policy, Institutional and Behavioral Economics, Resource /Energy Economics and Policy, Q50, D62, D91, O41, O44,
    Date: 2015–06–30
  4. By: Franco Ruzzenenti (University of Siena); Andreas A. Papandreou (National and Kapodistrian University of Athens)
    Abstract: The purpose of this paper is to shed light on the role that fossil fuel prices have in bringing about a transition to a low carbon economy. This is a very broad, complex and potentially ambiguous question. It requires a good understanding of the factors that can shape long run fossil fuel price trends as well as an understanding of how energy transitions take place, and more specifically how an unprecedented policy-driven global energy transition can be orchestrated. The paper starts with the theory and historical evidence of resource and energy prices with a key message that over the very long run prices of energy services have shown a steady decline. The paper explains why a focus on oil is warranted, discusses the key determinants of oil prices and presents a brief history of recent oil price patterns. It also considers the connection of oil prices with recessions, what the future might bring for fossil fuel prices, and the potential implications of an end to cheap oil for the transition to a low-carbon economy. Finally, it looks into some facets of the interaction between fossil fuel prices and climate policy with a special focus on the role of carbon prices and how these must ultimately be part of a much broader strategy for an effective transition to a low carbon economy that is robust to alternative oil price trajectories.
    Keywords: oil prices, energy prices, energy policy, climate change policy, carbon prices, green paradox, socio-economic transitions, low-carbon economy
    JEL: L98 O13 Q32 Q38 Q41 Q43 Q47 Q48 Q54
    Date: 2015–01–01
  5. By: Christopher Costello; Charles D. Kolstad
    Abstract: We study the timing-of-extraction problem facing a decentralized mine owner when extraction entails environmental damage. As expected, when the environmental damage from mining is known, the socially optimal timing will depend on the magnitude of the damage relative to these costs in the rest of the world. But when environmental damage is uncertain, and these costs are revealed over time, a quasi-option value arises. We show that even if expected environmental costs are identical to those in the rest of the world, any uncertainty over these costs will cause the social planner to optimally delay mining until better information arrives. We show conditions under which it is optimal to postpone the mining decision indefinitely, and conditions when it is optimal to postpone only for a finite duration. The analysis leverages a crucial observation that distinguishes the non-renewable resource problem from the traditional quasi-option value framework. In the traditional framework, the presence of an irreversible investment and uncertainty can help nudge the decision maker to preserve an option, but it by no means implies the decision maker should always preserve the option. In contrast, for a non-renewable resource model, the arbitrage condition underpinning the Hotelling rule suggests that in the absence of uncertainty, the marginal mine owner is completely indifferent between mining immediately and at any point in the future. Thus, for our problem, any uncertainty will convince her to defer the mining decision.
    JEL: Q31 Q32 Q38 Q52
    Date: 2015–07
  6. By: Ciccone, Alice (Dept. of Economics, University of Oslo)
    Abstract: In 2007, the Norwegian government reformed the vehicle registration tax in order to reduce the carbon intensity of the new car fleet by incentivizing the purchase of more fuel efficient cars. This paper identifies the impact of the new tax structure on three main dimensions: (i) the average CO2 emissions intensity of new registered vehicles, (ii) the relative change in sales between low and high polluting cars and (iii) the market share of diesel cars. A Difference in Difference approach is employed to estimate the short run effects on each outcome variable of interest. The results show that the average CO2 intensity of new vehicles was reduced in the year of the implementation of the reform by about 7.5 g of CO2/km. This reduction is the result of a 12 percentage points drop in the share of highly polluting cars and of an increase of about 20 percentage points in the market share of diesel cars.
    Keywords: CO2 emissions intensity; New vehicles; Vehicle registration tax; Tax reform; Norway; Diesel
    JEL: H25 L62 Q51 Q53 Q54 R48
    Date: 2015–02–11

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