nep-res New Economics Papers
on Resource Economics
Issue of 2016‒08‒21
four papers chosen by
Maximo Rossi
Universidad de la República

  1. The Consequences of Spatially Differentiated Water Pollution Regulation in China By Zhao Chen; Matthew E. Kahn; Yu Liu; Zhi Wang
  3. The Efficiency Cost of Protective Measures in Climate Policy By Christoph Böhringer; Xaquin Garcia-Muros; Ignacio Cazcarro; Iñaki Arto
  4. Regulatory Incentives for a Low-Carbon Electricity Sector in China By Flavio Menezes; Xuemei Zhang

  1. By: Zhao Chen; Matthew E. Kahn; Yu Liu; Zhi Wang
    Abstract: China’s environmental regulators have sought to reduce the Yangtze River’s water pollution. We document that this regulatory effort has had two unintended consequences. First, the regulation’s spatial differential stringency has displaced economic activity upstream. As polluting activity agglomerates upstream, more Pigouvian damage is caused downstream. Second, the regulation has focused on reducing one dimension of water pollution called chemical oxygen demand (COD). Thus, local officials face weak incentives to engage in costly effort to reduce other non-targeted but more harmful water pollutants such as petroleum, lead, mercury, and phenol.
    JEL: Q25 Q52
    Date: 2016–08
  2. By: Fulvio Castellacci (TIK Centre, University of Oslo); Christine Mee Lie (TIK Centre, University of Oslo)
    Abstract: The paper presents a new taxonomy of green innovators. We make use of firm-level data from the Korea Innovation Survey to investigate different types of eco-innovations, how these relate to each other, and what the main drivers and determinants are. Our empirical methodology is based on a combination of factor, cluster and multinomial logit analysis. The taxonomy points out four groups of green innovators: (1) CO2-reducing; (2) waste-reducing; (3) recycling innovators; (4) pollution-reducing. We also find that R&D policies are more relevant factors enhancing innovations in waste-reducing firms, whereas environmental taxes and regulations are more important drivers of technological change for pollution-reducing companies.
    Date: 2016–08
  3. By: Christoph Böhringer (University of Oldenburg, Department of Economics); Xaquin Garcia-Muros (Basque Centre for Climate Change (BC3), Bilbao, Spain); Ignacio Cazcarro (Basque Centre for Climate Change (BC3), Bilbao, Spain); Iñaki Arto (Basque Centre for Climate Change (BC3), Bilbao, Spain)
    Abstract: Despite recent achievements towards a global climate agreement, climate action to reduce greenhouse gas emissions remains quite heterogeneous across countries. Energy-intensive and trade-exposed (EITE) industries in industrialized countries are particularly concerned on stringent domestic emission pricing that may put them at a competitive disadvantage with respect to producers of similar goods in other countries without or only quite lenient emission regulation. This paper focuses on climate policy analysis for the United States of America (US) and compares the economic implications of four alternative protective measures for US EITE industries: (i) output-based rebates, (ii) exemptions from emission pricing, (iii) energy intensity standards, and (iv) carbon intensity standards. Based on simulations with a large-scale computable general equilibrium model for the global economy we quantify how these protective measures affect competitiveness of US EITE industries. We find that while protective measures can attenuate adverse competitiveness impacts measured in terms of common sector-specific competitiveness indicators, they run the risk of making US emission reduction much more costly than uniform emission pricing stand-alone. In fact, the cost increase is associated with negative income effects such that the gains of protective measures for EITE exports may be more than compensated through losses in domestic EITE demand.
    Keywords: Unilateral climate policy; competitiveness; computable general equilibrium
    JEL: D21 H23 D58
    Date: 2016–08
  4. By: Flavio Menezes (School of Economics, University of Queensland); Xuemei Zhang (School of Economics, Southwestern University of Finance and Economics)
    Abstract: This paper reviews the incentives for pursuing a low-carbon electricity sector that are embedded in China’s regulatory and policy framework. To do so, we first describe the industry structure and the regulatory framework. Second, we explicitly review the policies that were developed to promote energy efficiency and renewable energy. These policies range from the introduction of legal requirements to undertake particular actions to pricing mechanism and financial incentives. The paper reviews evidence that the various programs designed to replace less efficient with more efficient power generation units have already produced impressive results. In addition, there has been steady progress in reducing line losses. Thus, supply-side energy efficient initiatives have been, at least, moderately successful. In contrast, we show that demand-side energy efficiency initiatives seem to have gone nowhere. Finally, we tease out the challenges faced by a sector governed by a myriad of complex arrangements, different institutions and agents who face different and often conflicting incentives for pursuing environmental and energy efficiency objectives.
    Keywords: Regulatory Incentives, Energy Efficiency, Renewable Energy, Electricity Sector
    Date: 2016–08–08

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