nep-res New Economics Papers
on Resource Economics
Issue of 2016‒06‒25
four papers chosen by
Maximo Rossi
Universidad de la República

  1. Directed Technical Change and Economic Growth Effects of Environmental Policy By Peter K. Kruse-Andersen
  2. Environmental Taxation By Roberton C. Williams III
  3. Assessment of the Admissibility of the Horizontal Co-Operation Agreements in the Context of Environmental Externalities By Pavlova, N.S.; Baulina, A.A.; Shastitko, Andrey E.
  4. Biofuel Mandating and the Green Paradox By Okullo, Samuel; Reynes, F.; Hofkes, M.

  1. By: Peter K. Kruse-Andersen (Department of Economics, University of Copenhagen)
    Abstract: A Schumpeterian growth model is developed to investigate how environmental policy affects economic growth when environmental policy also affects the direction of technical change. In contrast to previous models, production and pollution abatement technologies are embodied in separate intermediate good types. A set of stylized facts related to pollution emission, environmental policy, and pollution abatement expenditures is presented, and it is shown that the developed model is consistent with these stylized facts. It is shown analytically that a tightening of the environmental policy unambiguously directs research efforts toward pollution abatement technologies and away from production technologies. This directed technical change reduces economic growth and pollution emission growth. Simulation results indicate that even large environmental policy reforms have small economic growth effects. However, these economic growth effects have relatively large welfare effects which suggest that static models and exogenus growth models leave out an important welfare effect of environmental policy.
    Keywords: Directed technical change, endogenous growth, pollution, environmental policy, Schumpeterian growth model
    JEL: O30 O41 O44 Q55 Q58
    Date: 2016–06–14
  2. By: Roberton C. Williams III
    Abstract: This paper examines potential environmental tax policy reforms. It focuses primarily on a carbon tax, but also more briefly considers a range of other possible changes. These include revising or eliminating various energy and environmental tax credits and deductions (many of which might become unnecessary in the presence of a carbon tax), as well as changes to energy taxes that have substantial environmental implications (such as the federal gasoline tax). The paper draws on recent theoretical and empirical research to evaluate the effects of such reforms on tax revenue, pollution emissions, economic efficiency, and income distribution.
    JEL: H21 H22 H23 Q50 Q58
    Date: 2016–06
  3. By: Pavlova, N.S. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Baulina, A.A. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Shastitko, Andrey E. (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The paper analyzes the issue of the integration of environmental factors in the assessment of agreements on co-operation between competitors in terms of the admissibility of the antimonopoly legislation. The existing institutional environment determines how the different characteristics of different types of environmental externalities affect the possibility of taking them into account, and, ultimately, on their role in deciding on the admissibility of the cooperation agreements. As a result, the positive externalities that have the properties of public goods can be provided into account only to a limited extent, which may lead to type I error when making the antimonopoly authority on the admissibility of horizontal agreements decisions.
    Keywords: environmental factors, assessment of agreements, antimonopoly legislation
    Date: 2016–05–04
  4. By: Okullo, Samuel (Tilburg University, Center For Economic Research); Reynes, F.; Hofkes, M.
    Abstract: The theory on the green paradox has focused primarily on the consumption of a clean substitute produced using a static technology. In reality, we observe the gradual accumulation of the clean substitute’s capacity, suggesting that supply decisions for the clean substitute and finite carbon resource should both be treated as dynamic. This paper shows that when climate policy is preannounced, and with simultaneous consumption of a finite carbon resource and a clean substitute, myopia in the supply of the latter leads to the green paradox. When clean substitute producers can accumulate capacity and are forward looking, the green paradox may or may not arise, however. In this setting, its occurrence depends on both the size of the discount rate and the remaining stock of carbon resource. These and other drivers of the green paradox are investigated in a multi-producer game-theoretic model calibrated to real-world global oil market data. The timing of mandating policy is shown to be the single most important variable for mitigating the green paradox. Moreover, for EU-2020 and US-2022 style biofuel mandating targets, a rather robust 0.3% decline in production is observed during the premandate phase, suggesting that concerns over the green paradox may be seriously overstated.
    Keywords: green paradox; climate change; peak oil; biofuel mandates; unconventional crude oil
    JEL: C61 C70 H25 H32 Q28 Q42 Q58
    Date: 2016

This nep-res issue is ©2016 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.