nep-res New Economics Papers
on Resource Economics
Issue of 2015‒11‒07
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Modelling Household Cooking Fuel Choice: a Panel Multinomial Logit Approach By Alem, Yonas; Beyene, Abebe D.; Köhlin, Gunnar; Mekonnen, Alemu
  2. Spatial Heat Transport, Polar Amplification and Climate Change Policy By William Brock; Anastasios Xepapadeas
  3. Spatial Resource Management under Pollution Externalities By Anastasios Xepapadeas; Athanasios Yannacopoulos
  4. Architecture of the EU Emissions Trading System in Phase 3 and the Distribution of Allowance Asset Values By Löfgren, Åsa; Burtraw, Dallas; Wråke, Markus; Malinovskaya, Anna
  5. Residential Water Consumption in Chile: Economic Development and Climate Change By Fercovic, Juan; Foster, William; Melo, Oscar
  6. Climate Change Impacts: Response Options for Family Farmers in Brazil By Amanda Barroso Lima; Isadora Cardoso Vasconcelos; Pedro Vasconcelos Rocha

  1. By: Alem, Yonas (Department of Economics, School of Business, Economics and Law, Göteborg University); Beyene, Abebe D. (Environmental Economics Policy Forum, EDRI, Ethiopia); Köhlin, Gunnar (Department of Economics, School of Business, Economics and Law, Göteborg University); Mekonnen, Alemu (Department of Economics, Addis Ababa University, Ethiopia)
    Abstract: We use three rounds of a rich panel data set to investigate the determinants of household cooking fuel choice and energy transition in urban Ethiopia. We observe that the expected energy transition did not occur following economic growth in Ethiopia during the decade 2000-2009. Regression results from a random effects emultinomial logit model suggest that households’economic status, price of alternative energy sources, and education are important determinants of fuel choice in urban Ethiopia. The results also suggest the use of multiple fuels, or “fuel stacking behavior” by households. We argue that policy makers could target these policy levers to encourage transition to cleaner energy sources.
    Keywords: Ethiopia; urban; energy choice; random effects multinomial logit
    JEL: C25 O13 Q23 Q42
    Date: 2015–10
  2. By: William Brock; Anastasios Xepapadeas
    Abstract: This paper is, to our knowledge, the first paper in climate economics to consider the combination of spatial heat transport and polar amplification. We simplified the problem by stratifying the Earth into latitude belts and assuming, as in North et al. (1981), that the two hemispheres were symmetric. Our results suggest that it is possible to build climate economic models that include the very real climatic phenomena of heat transport and polar amplification and still maintain analytical tractability. We derive optimal fossil fuel paths under heat transport with and without polar amplification. We show that the optimal tax function depends not only on the distribution of welfare weights but also on the distribution of population across latitudes, the distribution of marginal damages across latitudes and cross latitude interactions of marginal damages, and climate dynamics. We also determine optimal taxes per unit of emission and show that, in contrast to the standard results suggesting spatially uniform emission taxes, poorer latitudes should be taxed less per unit emissions than richer latitudes.
    Keywords: Climate change, Heat transport, Polar Amplification, Welfare maximization, fossil fuels, optimal taxation.
    JEL: Q54 Q58 C61
    Date: 2015–10–25
  3. By: Anastasios Xepapadeas; Athanasios Yannacopoulos
    Abstract: Variables describing the state of an environmental system such as resources (renewable or exhaustible), pollutants, greenhouse gases have a profound spatial dimension. This is because resources or pollutants are harvested, extracted, emitted, or abated in a specific location or locations, the impacts of environmental variables, whether beneficial or detrimental, have a strong spatial dimension, and there is transport of environmental state variables across geographical space due to natural processes. In this paper we study dynamic optimization for the joint management of resources and pollution when pollution affects resource growth and when spatial transport phenomena both for the resources and the pollution are present. We present approaches that deal with dynamic optimization in infinite dimensional spaces which can be used as tools in environmental and resource economic. We also present methods which can be used to study the emergence of spatial patterns in dynamic optimizations models. Our methods draw on the celebrated Turing diffusion induced instability but are different from Turing�s mechanism since they apply to forward-optimization models. We believe that this approach provides the tools to analyze a wide range of problems with explicit spatial structure which are very often encountered in environmental and resource economics.
    Keywords: Spatial transport, renewable resource, pollution, optimization, infinite dimensional spaces, Tiring instability, patter formation, policy design
    JEL: C61 Q20 Q52
    Date: 2015–10–29
  4. By: Löfgren, Åsa (Department of Economics, School of Business, Economics and Law, Göteborg University); Burtraw, Dallas (Resources for the Future); Wråke, Markus (Energy Unit at IVL); Malinovskaya, Anna (Resources for the Future)
    Abstract: Recent changes to the EU Emissions Trading System introduce structural changes regarding the initial distribution of emissions allowances, which are worth tens of billions of euros. A key change is the expanding role for auctions, which account for about half of the allowance allocation now and will be a growing share going forward. The use of revenue from auctions is a decision left to EU Member States and appears increasingly important. Well over half of auction revenue to date has been directed to energy and climate related purposes. Further, we do not find evidence that Member States have used state aid to electricity-intensive firms to strategically support domestic industry. The trading system is evolving in a way that is likely to improve its performance, but there remain important questions related the future price of allowances and the distribution and use of asset value created under the trading system.
    Keywords: auction; cap and trade; European Union; EU ETS; allocation; climate change; policy
    JEL: H23 P48 Q54
    Date: 2015–10
  5. By: Fercovic, Juan; Foster, William; Melo, Oscar
    Abstract: The importance of competition between rural and urban uses for water will likely increase, especially in developing countries. We examine residential water demand in the context of a developing country facing the potential climate change effects, with significant changes in incomes, household size, poverty rates and levels of urbanization. Using Chilean municipal-level panel data (1998-2010), we estimate price and income elasticities, and the water-demand response to climate and socio-demographic variables. Impacts of variation in season averages of precipitation and temperature are statistically significant, but only the variation of seasonal average temperature, the temperature deviations about seasonal averages, and the average seasonal rainfall in northern Chile appear to be of practical, economic significance. More urbanized localities have higher per-household water use and reduced sensitivity to temperature variations. Projected water use on average would increase due to climate changes, but by small amounts in the order of one to two percent.
    Keywords: block pricing, Chile, climate change, residential water demand, Environmental Economics and Policy, International Development,
    Date: 2015
  6. By: Amanda Barroso Lima (IPC-IG); Isadora Cardoso Vasconcelos (IPC-IG); Pedro Vasconcelos Rocha (IPC-IG)
    Abstract: "Through the lens of the three dimensions of sustainable development?social, economic and environmental?it is possible to assess the options for family farming to respond to the adverse impacts of climate change in Brazil. As the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report indicates, climate change and/or extreme weather events such as severe droughts, heat waves and heavy rains could intensify the problems faced by family farmers." (?)
    Keywords: Climate Change Impacts, Response Options, Family Farmers, Brazil
    Date: 2015–11

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