nep-res New Economics Papers
on Resource Economics
Issue of 2017‒01‒29
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Prices versus Standards and Firm Behavior: Evidence from an Artefactual Field Experiment By Hennlock, Magnus; Löfgren, Åsa; Wollbrant, Conny
  2. The Behavioral Effect of Pigovian Regulation: Evidence from a Field Experiment By Bruno Lanz; Jules-Daniel Wurlod; Luca Panzone; Timothy Swanson
  3. Environmental Art and Environmental Beliefs: the Case of Plastic Bag Pollution in Oceans By Turner, Robert
  4. Technology adoption in emission trading programs with market power By André, Francisco J.; Arguedas, Carmen.
  5. Does Climate Aid Affect Emissions? Evidence from a Global Dataset By Sambit Bhattacharyya; Maurizio Intartaglia; Andy Mckay

  1. By: Hennlock, Magnus (Policy and Economy, IVL Swedish Environmental Research Institute,); Löfgren, Åsa (Department of Economics, School of Business, Economics and Law, Göteborg University); Wollbrant, Conny (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: We conduct an artefactual field experiment in which 164 managers and senior advisors recruited from Swedish industry were presented with a task of maximizing net revenue from abatement investments under three different but equally stringent environmental policy regimes. We find that investment decisions are strongly influenced by type of policy instrument. Economic instruments and performance standards cause different attentional and judgment biases that are inconsistent with standard economic theory. Inconsistencies are larger with economic policy instruments (tax and subsidy) than with performance standards even though subjects’ attention to cost minimization was greater with economic instruments than under performance standards.
    Keywords: artefactual field experiment; bounded rationality; attentional bias; investment inefficiencies; firm; regulation; policy
    JEL: C93 H32 L20
    Date: 2017–01
  2. By: Bruno Lanz (University of Neuchâtel, Department of Economics and Business; ETH Zurich, Chair for Integrative Risk Management and Economics; Massachusetts Institute of Technology, Joint Program on the Science and Policy of Global Change.); Jules-Daniel Wurlod (Boston Consulting Group, Geneva, Switzerland.); Luca Panzone (Newcastle University, School of Agriculture, Food and Rural Development, UK.); Timothy Swanson (Graduate Institute of International and Development Studies, Centre for International Environmental Studies, Switzerland.)
    Abstract: Pigovian regulation provides monetary penalties/rewards to incentivize prosocial behavior, and may thereby trigger behavioral effects beyond a more standard response associated with a change in relative prices. This paper quantifies the magnitude of these behavioral effects using data from an experiment on real product choices together with a structural model of consumer behavior. First, we show that information about external effects (products’ embodied carbon emissions) triggers voluntary substitution towards cleaner alternatives, and we estimate that this effect is equivalent to a change in relative prices of GBP30.69-165.15/tCO2. Second, comparing a Pigovian intervention (GBP19/tCO2) with a neutrally-framed price change of the same magnitude, we find a negative behavioral effect associated with regulation. Compensating this bias would require increasing the Pigovian price signal by up to 48.06/tCO2. Finally, based on a cross-product comparison, we show that the magnitude of behavioral effects declines with substitutability between clean and dirty product alternatives, a measure of effort to reduce emissions.
    Keywords: Externalities; Pigovian regulation; Consumer behavior; Information; Field experiments; Environmental policy.
    JEL: C93 D03 D12 H23 Q58
    Date: 2017–01
  3. By: Turner, Robert (Department of Economics, Colgate University)
    Abstract: This paper reports the results of two experiments exploring the impact of exposure to environmental art on environmental beliefs, using images of plastic bag pollution in oceans. Even though the experimental design investigates only the immediate impact of a brief exposure to artistic images, the design controls well for other factors that might influence changes in environmental beliefs. This study is one of the few to directly estimate the effect of environmental art and it is the first to use elements of the New Ecological Paradigm in that context. Beyond the main research question of whether environmental art has effects on beliefs, the study also investigates whether expected behavior is affected, whether it is art or the information conveyed along with the art that matters, whether other factors influence the effect of exposure to the artwork, and what personal characteristics are associated with pro-environmental behaviors with respect to plastic bags as well as pro-environmental beliefs.
    Keywords: environmental art, environmental beliefs, plastic pollution, New Ecological Paradigm
    Date: 2017–01–19
  4. By: André, Francisco J. (Departamento de Análisis Económico. Universidad Complutense de Madrid.); Arguedas, Carmen. (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.)
    Abstract: In this paper we study the relationship between market power in emission permit markets and endogenous technology adoption. The presence of market power results in a di- vergence of both abatement and technology adoption levels with respect to the benchmark scenario of perfect competition, as long as technology adoption becomes more e¤ective in reducing abatement costs. Also, the initial distribution of permits, in particular, the amount of permits initially given to the dominant rm, is crucial in determining over- or under-investment in relation to the benchmark model. Speci cally, if the dominant rm is initially endowed with more permits than the corresponding cost e¤ective allocation, this results in under- investment by the dominant rm and over- investment by the competitive fringe, regardless of the speci c amount of permits given to the latter rms. The results are reversed if the dominant rm is initially endowed with relatively few permits. Our ndings seem consistent with some empirical evidence about the performance of the power sector in the initial phases of the European Union Emission Trading System.
    Keywords: environmental policy, emission permits, market power, environmentally-friendly technologies
    JEL: C72 D43 D62 L51 Q55 Q58
    Date: 2017–01
  5. By: Sambit Bhattacharyya (Department of Economics, University of Sussex); Maurizio Intartaglia (Department of Economics, University of Sussex); Andy Mckay (Department of Economics, University of Sussex)
    Keywords: Climate Aid; Emissions; Energy
    JEL: D72 O11
    Date: 2016–05

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