|
on Resource Economics |
|
Issue of 2017‒05‒28
three papers chosen by |
| By: | Jean-Marc Bourgeon (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech, Département d'Economie - Ecole Polytechnique - X); Margot Hovsepian (Département d'Economie - Ecole Polytechnique - X) |
| Abstract: | We analyze the adoption of green technology in a dynamic economy affected by random shocks where demand spillovers are the main driver of technological improvements. Firms' beliefs and consumers' anticipations drive the path of the economy. We derive the optimal policy of investment subsidy and the expected time and likelihood of reaching a targeted level of environmental quality under economic uncertainty. This allows us to estimate the value that should be given to the environment in order to avoid an environmental catastrophe as a function of the strength of spillover effects. |
| Keywords: | uncertainty,sustainability,Growth |
| Date: | 2017–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01508534&r=res |
| By: | Daniel Gros; Philip Lane; Sam Langfield; Sini Matikainen; Marco Pagano; Dirk Schoenmaker; Javier Suarez |
| Abstract: | Keeping global warming below 2°C will require substantial reductions in global greenhouse gas emissions over the next few decades. To reduce emissions, economies must reduce their carbon intensity; given current technology, this implies a decisive shift away from fossil-fuel energy and related physical capital. In an adverse scenario, the transition to a low-carbon economy occurs late and abruptly. Belated awareness about the importance of controlling emissions could result in an abrupt implementation of quantity constraints on the use of carbon-intensive energy sources. The costs of the transition will be correspondingly higher. This adverse scenario could affect systemic risk via three main channels. First, a sudden transition away from fossil-fuel energy could harm GDP, as alternative sources of energy would be restricted in supply and more expensive at the margin. Second, there could be a sudden repricing of carbon-intensive assets, which are financed in large part by debt. Third, there could be a concomitant rise in the incidence of natural catastrophes related to climate change, raising general insurers' and reinsurers' liabilities. To quantify the importance of these channels, policymakers could aim for enhanced disclosure of the carbon intensity of non-financial firms. The related exposures of financial firms could then be stress-tested under the adverse scenario of a late and sudden transition. In the short-term, joint research efforts of energy experts and macroeconomists could help to better quantify macroeconomic risks and inform the design of scenarios for stress testing. In the medium-term, the availability of granular data and dedicated low-frequency stress tests will provide information about the impact of the adverse scenario on the financial system. JEL Classification: G28 |
| Keywords: | climate change, global warming, sustainability |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:srk:srkasc:20166&r=res |
| By: | Andrew B. Ayres; Eric C. Edwards; Gary D. Libecap |
| Abstract: | Collective action to remedy the losses of open access to common-pool resources often is late and incomplete, extending rent dissipation. Examples include persistent over-exploitation of oil fields and ocean fisheries, despite general agreement that production constraints are needed. Transaction costs encountered in assigning property rights are an explanation, but analysis of their role is limited by a lack of systematic data. We examine governance institutions in California’s 445 groundwater basins using a new dataset to identify factors that influence the adoption of extraction controls. In 309 basins, institutions allow unconstrained pumping, while an additional 105 basins have weak management plans. Twenty of these basins are severely overdrafted. Meanwhile, users in 31 basins have defined groundwater property rights, the most complete solution. We document the critical role of transaction costs in explaining this variation in responses. This research adds to the literatures on open access, transaction costs, bargaining, and property rights |
| JEL: | K11 N52 P48 Q15 Q25 Q58 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23382&r=res |