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on Resource Economics |
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Issue of 2016‒10‒16
four papers chosen by |
| By: | Dragan Ilic (University of Basel, Switzerland); Janick Christian Mollet (ETH Zurich, Switzerland) |
| Abstract: | The rationale of voluntary corporate initiatives is often explained with anticipation of future regulation. We test this hypothesis for the Chicago Climate Exchange (CCX) and the Climate Leaders (CL), two popular voluntary US environmental programs to curb carbon emission that were operating during a decisive regulatory event. In 2009 the Waxman-Markey Bill surprisingly passed the House of Representatives and brought the US economy a big step closer to a nationwide CO2 emission trading system. In an event study we assess how the stock market adjusted prices when the likelihood of CO2 regulation unexpectedly increased. We develop a simple model to investigate the empirical results. Our findings suggest that only membership in the CCX was considered beneficial, an initiative whose market oriented design happened to dovetail with the bill’s. Earlier stock market reactions to membership announcements in these voluntary programs paint a complementary picture. But membership alone cannot account for the entire price adjustments. Our results show that a substantial part of the market reaction can be traced back to industry-wide effects. |
| Keywords: | Voluntary markets, permit markets, climate change, greenhouse gas emissions, CO2, corporate social responsibility, shareholder wealth |
| JEL: | G38 Q53 Q54 Q58 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:16-261&r=res |
| By: | Lucas Bretschger (ETH Zurich, Switzerland) |
| Abstract: | The paper develops an integrated baseline model to assess the trade-offs be- tween the natural environment and economic growth. Consumption growth is considered under welfare and sustainability aspects. The framework features capital accumulation and the sectoral structure of the economy as key elements to cope with resource scarcity and pollution. Model extensions varying the num- ber of sectors and inputs, changing central functional forms, and introducing poor input substitution and population growth are presented. The setup high- lights the dual role of used inputs as a source of environmental problems and a part of the solution; it also discusses uncertainty and momentum effects. The paper concludes that the environment and economic growth can be compatible but that small deviations from the optimal paths my entail unsustainable de- velopment. Critical issues for sustainability are insufficient foresight, increasing damage intensity, and suboptimal policy making while population growth and poor input substitution are not necessarily precarious for future development. |
| Keywords: | Natural environment, endogenous growth, multisector model, poor substitution, population growth |
| JEL: | Q43 O47 Q56 O41 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:16-260&r=res |
| By: | Halkos, George; Papageorgiou, George |
| Abstract: | In this paper we consider a dynamic nonzero-sum game between the polluting firms and the authorities. Although the proposed game is not easily solvable for the feedback case, i.e., it is not the linear quadratic case of game and not a degenerated case, we calculate explicitly a stationary feedback equilibrium. In the proposed game the regulator has the ability to turn the optimal allocation of their efforts between abatement and taxation of the polluting firms. During the game, the regulator’s criterion is the minimization of the total discounted costs, while the criterion of the polluting firms is their utility maximization. Next, sensitivity analyses regarding the efficiency parameters of both players are provided. The conclusions are that a farsighted regulator should put much effort in abatement measures (instead of taxation measures) as well as in the improvement of abatement efficiency. |
| Keywords: | Differential games; Feedback equilibrium; Taxation; Pollution abatement. |
| JEL: | C61 C62 C7 H21 Q50 Q52 Q58 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:74467&r=res |
| By: | Mouez Fodha (PSE - Paris School of Economics, LEO - Laboratoire d'économie d'Orleans - CNRS - Centre National de la Recherche Scientifique - UO - Université d'Orléans) |
| Abstract: | This article analyzes the long-term consequences of nuclear waste storage within a general equilibrium framework. The objective is to determine the conditions for which the storage of waste, and thus the transfer of externalities towards the future, can be optimal. These conditions could explain the implementation of intergenerational externalities, justifying an intertemporal Not In My Back Yard behaviour. We first show that the choice of the policy instruments determines the feasibility of the storage policy. Indeed, economic stability imposes precise levels of the rate of storage or of the tax rate, making it possible to avoid chaotic economic dynamics. Under these specific conditions, and depending on the period at which an accident may occur and on the value of the social discount rate, we show that storing all the nuclear waste may be optimal. |
| Keywords: | Q58,Q53,Overlapping Generations Model,Nuclear Waste,Environmental Externalities JEL Classifications: O13 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:insu-01105358&r=res |