nep-res New Economics Papers
on Resource Economics
Issue of 2016‒03‒23
ten papers chosen by
Maximo Rossi
Universidad de la República

  1. Optimal environmental border adjustments under the General Agreement on Tariffs and Trade By Edward Balistreri; Daniel Kaffine; Hidemichi Yonezawa
  2. Do environmental policies affect global value chains?: A new perspective on the pollution haven hypothesis By Tomasz Koźluk; Christina Timiliotis
  3. Spatial Heat Transport, Polar Amplification and Climate Change Policy By Brock, W.; Xepapadeas, A.
  4. Economic growth and global particulate pollution concentrations By David I. Stern; Jeremy van Dijk
  5. Climate Change Policy under Polar Amplification By Brock, W.; Xepapadeas, A.
  6. Is California More Energy Efficient than the Rest of the Nation? Evidence from Commercial Real Estate By Matthew E. Kahn; Nils Kok; Peng Liu
  7. Transition to clean technology By Acemoglu, Daron; Akcigit, Ufuk; Hanley, Douglas; Kerr, William R.
  8. Simulating the Macroeconomic Impact of Future Water Scarcity: an Assessment of Alternative Scenarios By Roberto Roson; Richard Damania
  9. A Note on Pollution Regulation With Asymmetric Information By Pench, Alberto
  10. Sharing R&D Investments in Breakthrough Technologies to Control Climate Change By Santiago J. Rubio

  1. By: Edward Balistreri (Colorado School of Mines); Daniel Kaffine (University of Colorado Boulder); Hidemichi Yonezawa (ETH Zurich, Switzerland)
    Abstract: A country's optimal environmental border policy includes a strategic component that is inconsistent with commitments under the General Agreement on Tariffs and Trade (GATT). We extend the theory to include GATT compliance. Theory supports optimal border adjustments on carbon content that are below the domestic carbon price, because price signals sent through border adjustments encourage consumption of emissions intensive goods in unregulated regions. The theory is supported in our applied numeric simulations. Countries imposing border adjustments at the domestic carbon price will be extracting rents from unregulated regions at the expense of ecient environmental policy and consistency with international trade law.
    Keywords: climate policy, border tax adjustments, carbon leakage, trade and carbon taxes
    JEL: F13 F18 Q54 Q56
    Date: 2016–03
  2. By: Tomasz Koźluk; Christina Timiliotis
    Abstract: Increasing international fragmentation of production has reinforced fears that industrial activity may flee to countries with laxer environmental policies – in line with the so-called Pollution Haven Hypothesis (PHH). If PHH effects are strong, domestic responses to environmental challenges may prove ineffective or meet strong resistance. Using a gravity model of bilateral trade in manufacturing industries for selected OECD and BRIICS countries over 1990s-2000s, this paper studies how exports are related to national environmental policies. Environmental policies are not found to be a major driver of international trade patterns, but have some significant effects on specialisation. More stringent domestic policies have no significant effect on overall trade in manufactured goods, but are linked to a comparative disadvantage in “dirty” industries, and a corresponding advantage in “cleaner” industries. The effects are stronger for the domestic component of exports than for gross exports, yet notably smaller than the effects of e.g. trade liberalisation. Les politiques environnementales ont-elles une incidence sur les chaînes de valeur mondiales ? : Un nouveau point de vue sur l'hypothèse du havre de pollution La fragmentation internationale croissante de la production a renforcé les craintes de voir l’activité industrielle migrer vers des pays dotés de politiques environnementales plus laxistes – selon ce qu’il est convenu d’appeler « l’hypothèse du havre de pollution » (HHP). Si cette hypothèse se vérifie effectivement, les efforts déployés au niveau national pour faire face aux défis environnementaux pourraient se révéler inopérants ou se heurter à une forte résistance. À l’aide d’un modèle gravitationnel des échanges commerciaux bilatéraux appliqué aux industries manufacturières de certains pays de l'OCDE et des BRIICS sur la période 1990-2009, ce rapport étudie le lien entre les exportations et les politiques environnementales nationales. Il en ressort que les politiques environnementales n’ont pas d’incidence déterminante sur les exportations globales, mais ont un effet significatif sur le spécialisation. Cependant, en modifiant les prix relatifs des intrants, les politiques nationales plus rigoureuses vont de pair avec un désavantage comparatif dans les industries « polluantes », et un avantage correspondant dans les industries « plus propres ». Ces effets sont particulièrement perceptibles pour la composante de valeur ajoutée nationale des exportations, mais sensiblement moins que ceux de la libéralisation des échanges, par exemple.
    Keywords: trade, competitiveness, global value chains, comparative advantage, Pollution Haven Hypothesis, environmental policy stringency, chaînes de valeur mondiales, compétitivité, hypothèse du havre de pollution, échanges commerciaux, politique environnementale
    JEL: F14 F18 Q56 Q58
    Date: 2016–03–10
  3. By: Brock, W.; Xepapadeas, A.
    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 in- teractions 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, Environmental Economics and Policy, Q54, Q58, C61,
    Date: 2016–02–29
  4. By: David I. Stern (Crawford School of Public Policy, The Australian National University); Jeremy van Dijk (Australian Bureau of Agricultural and Resource Economics and Sciences, Australia)
    Abstract: Though the environmental Kuznets curve (EKC) was originally developed to model the ambient concentrations of pollutants, most subsequent applications focused on pollution emissions. Yet, previous research suggests that it is more likely that economic growth could eventually reduce the concentrations of local pollutants than emissions. We examine the role of income, convergence, and time related factors in explaining changes in PM2.5 pollution in a global panel of 158 countries between 1990 and 2010. We find that economic growth has positive but relatively small effects, time effects are also small but larger in wealthier and formerly centrally planned economies, and, for our main dataset, convergence effects are small and not statistically significant. There is no in-sample income turning point for regressions that include both the convergence variables and a set of control variables.
    Keywords: air pollution; economic growth; environmental Kuznets curve
    JEL: O44 Q53 Q56
    Date: 2016–02
  5. By: Brock, W.; Xepapadeas, A.
    Abstract: Polar amplification is an established scientific fact which has been associated with the surface albedo feedback and to heat and moisture transport from the Equator to the Poles. In this paper we unify a two-box climate model, which allows for heat and moisture transport from the southern region to the northern region, with an economic model of welfare optimization. Our main contribution is to show that by ignoring spatial heat and moisture transport and the resulting polar amplification, the regulator may overestimate or underestimate the tax on GHG emissions. The direction of bias depends on the relations between marginal damages from temperature increase in each region. We also determine the welfare cost when a regulator mistakenly ignores polar amplification. Finally we show the adjustments necessary to the market discount rate due to transport phenomena as well as how our two-box model can be extended to Ramsey-type optimal growth models. Numerical simulations confirm our theoretical results.
    Keywords: Polar Amplification, Spatial Heat and Moisture Transport, Optimal Policy, Emission Taxes, Market Discount Rate, Environmental Economics and Policy, Q54, Q58,
    Date: 2016–03–10
  6. By: Matthew E. Kahn; Nils Kok; Peng Liu
    Abstract: California’s per-capita electricity consumption is 50 percent lower than national per-capita consumption. Mild climate, deindustrialization, and its demographics explain part of this differential. California energy efficiency policy is often claimed to be another key factor. A challenge in judging this claim is the heterogeneity of the real estate capital stock. Residential homes differ along a large number of physical attributes. We access a proprietary dataset from a large hotel chain that allows us to evaluate the environmental performance of comparable commercial real estate across the United States. Controlling for climate conditions and geographic location, we document that California’s commercial real estate stock is the most energy efficient at a point in time but this differential is quantitatively small. However, over the years 2007 to 2013, California’s hotels achieved much greater energy efficiency progress than hotels in other states.
    JEL: Q41 Q48
    Date: 2016–01
  7. By: Acemoglu, Daron; Akcigit, Ufuk; Hanley, Douglas; Kerr, William R.
    Abstract: We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation–in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several rungs to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry and exit from the US energy sector. The model’s quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy makes heavy use of research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policies.
    Keywords: carbon cycle, directed technological change, environment, innovation, optimal policy
    JEL: O30 O31 O33 C65
    Date: 2015–12–10
  8. By: Roberto Roson (Department of Economics, University Of Venice Cà Foscari); Richard Damania (The World Bank, Washington DC)
    Abstract: In this paper we consider some of the economic implications of climate change scenarios as described in the Shared Socioeconomic Pathways (SSPs). By comparing potential water demand with estimates of (sustainable) water availability in different regions, we identify regions that are likely to be constrained in their future economic growth potential by the scarcity of water resources. We assess the macroeconomic impact of water scarcity under alternative allocation rules finding that, by assigning more water to sectors in which it has a higher value, shifting production to less water intensive sectors, and importing more water intensive goods, constrained regions can effectively neutralize these water related climate risks and adapt to a changing water environment. However, this adaptation effort is likely to imply some radical changes in water management policies.
    Keywords: Water, Economic Growth, Shared Socio-economic Pathways, Computable General Equilibrium, Virtual Water Trade
    JEL: C68 F18 F43 O11 Q01 Q25 Q32 Q56
    Date: 2016
  9. By: Pench, Alberto
    Abstract: The paper addresses the problem of information asymmetry between a regulator and the polluting firms and proposes a very simple mechanism where the regulator is free to choose, without communicating in advance to the firms, between two instruments: an effluent fee or a standard: as a result in a real world setting this uncertainty might induce firms to a truthful revelation. Moreover, under the assumption of linear marginal abatement or marginal social damage functions, in many cases the resulting optimal behaviour might be an under reporting for some firms and an over reporting for others so that the resulting marginal aggregate benefit function might be not so far from the true one and the aggregate pollution level attained by the mechanism not so far from optimal.
    Keywords: Effluent Fee, Standards, Asymmetric Information, Truthful Revelation, Public Economics, H23, Q5,
    Date: 2016–03–10
  10. By: Santiago J. Rubio (Department of Economic Analysis and ERI-CES, University of Valencia)
    Abstract: This paper examines international cooperation on technological development as an alternative to international cooperation on GHG emission reductions. In order to analyze the scope of cooperation, a three-stage technology agreement formation game is solved. First, countries decide whether or not to sign up to the agreement. Then, in the second stage, the signatories (playing together) and the non-signatories (playing individually) select their investment in R&D. In this stage, it is assumed that the signatories not only coordinate their levels of R&D investment but also pool their R&D efforts to fully internalize the spillovers of their investment in innovation. Finally, in the third stage, each country decides non-cooperatively upon its level of energy production. Emissions depend on the decisions made regarding investment and production. If a country decides to develop a breakthrough technology in the second stage, its emissions will be zero in the third stage. For linear environmental damages and quadratic investment costs, the grand coalition is stable if marginal damages are large enough to justify the development of a breakthrough technology that eliminates emissions completely, and if technology spillovers are not very important.
    Keywords: International Environmental Agreements, R&D Investment, Technology Spillovers, Breakthrough Technologies
    JEL: D74 F53 H41 Q54 Q55
    Date: 2016–01

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