nep-res New Economics Papers
on Resource Economics
Issue of 2017‒02‒26
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Fertility, Mortality and Environmental Policy By Lehmijoki, Ulla; Palokangas, Tapio K.
  2. Moving on Towards a Workable Climate Regime By Jaime DE MELO
  3. Environmental pollution in a growing economy with endogenous structural change By Anton Bondarev; Alfred Greiner
  4. Vog: Using Volcanic Eruptions to Estimate the Health Costs of Particulates By Timothy Halliday; John Lynham; Ã ureo de Paula
  5. The Impact of Climate Change Skepticism on Adaptation in a Market Economy By Matthew E. Kahn; Daxuan Zhao
  6. Price and Network Dynamics in the European Carbon Market By Andreas Karpf; Antoine Mandel; Stefano Battiston

  1. By: Lehmijoki, Ulla (University of Helsinki); Palokangas, Tapio K. (University of Helsinki)
    Abstract: This article examines pollution and environmental mortality in an economy where fertility is endogenous and output is produced from labor and capital by two sectors, dirty and clean. An emission tax curbs dirty production, which decreases pollution-induced mortality but also shifts resources to the clean sector. If the dirty sector is more capital intensive, then this shift increases labor demand and wages. This, in turn, raises the opportunity cost of rearing a child, thereby decreasing fertility and the population size. Correspondingly, if the clean sector is more capital intensive, then the emission tax decreases the wage and increases fertility. Although the proportion of the dirty sector in production falls, the expansion of population boosts total pollution, aggravating mortality.
    Keywords: environmental mortality, pollution tax, population growth, two-sector models
    JEL: J13 Q56 Q58 O41
    Date: 2016–12
  2. By: Jaime DE MELO (Ferdi)
    Abstract: The Paris Agreement (PA) signed by 175 parties is now a Treaty since a quorum of signatories has been obtained. This Treaty is really the first important step taken to limit temperature increase, as pledges, if sustained and far more ambitious beyond 2030, would drastically limit the projected temperature increase from projections in the absence of measures to limit emissions of greenhouse gases. Contributions however fall short of the intentions to limit temperature increase to the +1.5° to +2° Celsius range since the onset of industrialization. Drawing on recent contributions, this paper reviews where we stand in tackling four challenges ahead: (i) taking fuller cognizance of the accumulating scientific evidence calling for urgent action; (ii) designing an architecture that will render effective the blend of ‘bottom-up’ and ‘top-down’ approaches; (iii) choosing policy options and tackling the slow transition to a low-carbon economy, and; (iv) raising finance and addressing burden sharing.
    JEL: O44 F18
    Date: 2016–11
  3. By: Anton Bondarev; Alfred Greiner (University of Basel)
    Abstract: In this paper we study the impact of environmental pollution in an endogenous growth model that allows for structural change. The model is based on doublydiff erentiated R&D where newer, less polluting technologies gradually replace older ones. The analysis shows that the presence of environmental externalities stimulates structural change but reduces the growth rate of the economy. Further, comparing the models with and without structural change demonstrates that the latter implies stronger environmental damages and, consequently, a lower growth rate than the rst one. Finally, levying a tax on the polluting output speeds up structural change, thus, reducing environmental pollution and spurring economic growth. This can give new support for the double dividend hypothesis.
    Keywords: Environmental Damages, Endogenous Growth, Creative Destruction, Endogenous Structural Change, Double Dividend Hypothesis
    JEL: Q55 O31 O44
    Date: 2017
  4. By: Timothy Halliday (UH-Manoa Department of Economics, University of Hawaii Economic Research Organization, and IZA); John Lynham (UH-Manoa Department of Economics and University of Hawaii Economic Research Organization); Ã ureo de Paula (UCL, São Paulo School of Economics, IFS, CeMMAP)
    Abstract: The negative consequences of long-term exposure to particulate pollution are well established but many studies find no effect of short-term exposure on health outcomes. The high correlation of industrial pollutant emissions complicates the estimation of the impact of individual pollutants on health. In this study, we use emissions from Kilauea volcano, which are uncorrelated with other pollution sources, to estimate the impact of pollutants on local emergency room (ER) admissions and a precise measure of costs. A one standard deviation increase in particulates leads to a 23-36% increase in expenditures on ER visits for pulmonary outcomes, mostly among the very young. Even in an area where air quality is well within the safety guidelines of the U.S. Environmental Protection Agency, this estimate is much larger than those in the existing literature on the short-term effects of particulates. No strong effects for cardiovascular outcomes are found.
    Keywords: Pollution, Health, Volcano, Particulates, SO2
    JEL: H51 I12 Q51 Q53
    Date: 2015–04
  5. By: Matthew E. Kahn; Daxuan Zhao
    Abstract: Climate change will increase the risk of temperature extremes. Induced innovation could offset some of this threat. This paper explores the demand and supply for climate adaptation innovation in a market economy. Climate change induces this innovation because the rising temperatures increase demand for self protection products and for profit firms respond to these incentives. We then augment the model to introduce climate skeptics. Such skeptics reject the claim that the world is warming and thus do not increasingly demand adaptation products. We study how the economy's rate of adaptation innovation, cross city migration, real estate pricing and the welfare of agents with rational expectations are all affected by the presence of such skeptics.
    JEL: Q54 R21
    Date: 2017–02
  6. By: Andreas Karpf (Centre d'Economie de la Sorbonne); Antoine Mandel (Paris School of Economics - Centre d'Economie de la Sorbonne); Stefano Battiston (Department of Banking and Finance - University of Zürich)
    Abstract: This paper presents an analysis of the European Emission Trading System as a transaction network. It is shown that, given the lack of a centralized market place, industrial actors had to resort to local connections and financial intermediaries to participate in the market. This gave rise to a hierarchical structure in the transaction network. To empirically relate networks statistics to market outcomes a PLS-PM modeling technique is introduced. It is shown that the asymmetries in the network induced market inefficiencies (e.g. increased bid-ask spread). Albeit the efficiency of the market has improved from the beginning of Phase II, the asymmetry persists, imposing unnecessary additional costs on agents and reducing the effectiveness of the market as a mitigation instrument
    Keywords: carbon market; network; climate economics
    JEL: L14 D85 Q56
    Date: 2017–02

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