nep-res New Economics Papers
on Resource Economics
Issue of 2015‒08‒13
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Has trade openness reduced pollution in China? By Sandra PONCET; Laura HERING; José DE SOUSA
  2. On Abatement Services: Market Power and Efficient Environmental Regulation By Damien Sans; Sonia Schwartz; Hubert Stahn
  3. Do we care about sustainability? An analysis of time sensitivity of social preferences under environmental time-persistent effects. By Michela Faccioli; Nicholas Hanley; Catalina M. Torres Figuerola; Antoni Riera Font

  1. By: Sandra PONCET (Université de Paris I); Laura HERING (FERDI); José DE SOUSA (FERDI)
    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 to see whether the environmental repercussions from trade openness depend on whether the latter concerns processing or ordinary activities. In line with our theoretical predictions, we find a negative and signicant effect of trade on emissions that is larger for processing trade and activities undertaken by foreign firms: the environmental gains from either ordinary trade activities or domestic firms are much lower, even though these today represent the main drivers of China’s export and import growth. This result suggests some caution regarding pollution prospects in the context of the declining role of processing trade.
    JEL: F10 F14 O14
    Date: 2015–07
  2. By: Damien Sans (Aix-Marseille University (Aix-Marseille School of Economics), CNRS, & EHESS); Sonia Schwartz (CERDI, Université d’Auvergne); Hubert Stahn (Aix-Marseille University (Aix-Marseille School of Economics), CNRS, & EHESS)
    Abstract: In this paper, we study an eco-industry providing an environmental service to a competitive polluting sector. We show that even if this eco-industry is highly concentrated, a standard environmental policy based on a Pigouvian tax or a pollution permit market reaches the first-best outcome, challenging the Tinbergen rule. To illustrate this point, we first consider an upstream monopoly selling eco-services to a representative polluting firm. We progressively extend our result to heterogeneous downstream polluters and heterogeneous upstream Cournot competitors. Finally, we underline some limits of this result. It does not hold under the assumption of abatement goods or downstream market power. In this last case, we obtain Barnett's result.
    Keywords: environmental regulation, eco-industry, Imperfect Competition, abatement services
  3. By: Michela Faccioli (Universitat de les Illes Balears); Nicholas Hanley (University of St. Andrews); Catalina M. Torres Figuerola (Universitat de les Illes Balears); Antoni Riera Font (Universitat de les Illes Balears)
    Abstract: Environmental cost-benefit analysis has traditionally assumed that environmental policies’ social benefits are sensitive to the timing of the improvement. Indeed, it has relied on the idea that policies’ outcomes, taking place at different moments in the future depending on the intervention’s performance or on environmental dynamics, are preferred if occurring earlier. However, this assumption needs to be verified as it may lead to consider as socially desirable policies being less so. This is especially important when interventions aim at counteracting time-persistent environmental problems, whose impacts occur in the long- and very long-term, respectively involving the present and future generations. In this framework, with the objective to test for the role of sustainability concerns, this study analyzes the time sensitivity of social preferences for preservation policies of adaptation to climate change stresses. Results have shown that preferences are time insensitive due to sustainability issues, as current generations equally care about nature preservation in the long-term, when they will enjoy it, and in the very long-term, when future generations will. These outcomes are relevant to better inform policy-making in the face of time-persistent environmental problems, by pointing out that, to be welfare-maximizing, interventions also need to be sustainable.
    Keywords: time-persistent environmental problems, sustainability, preference analysis, choice experiment, time sensitivity, climate change.
    JEL: D6 D90 Q51 Q54 Q56
    Date: 2015

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