nep-res New Economics Papers
on Resource Economics
Issue of 2018‒04‒02
five papers chosen by

  1. To Build or Not to Build? Capital Stocks and Climate Policy By Elizabeth Baldwin; Yongyang Cai; Karlygash Kuralbayeva
  2. Carbon Taxes from an Economic Perspective By Claudia Kettner-Marx; Daniela Kletzan-Slamanig
  3. Political Economy of Voluntary Approaches: A Lesson from Environmental Policies By Toshi H.Arimura; Shinji Kaneko; Shunsuke Managi; Takayoshi Shinkuma; Masashi Yamamoto; Yuichiro Yoshida
  4. Climate Change Around the World By Anthony Smith; Per Krusell
  5. Environmental policy on the fixed-fee licensing of eco-technology under foreign penetration By Kim, Seung-Leul; Lee, Sang-Ho

  1. By: Elizabeth Baldwin; Yongyang Cai; Karlygash Kuralbayeva
    Abstract: We investigate how irreversibility in “dirty” and “clean” capital stocks affects optimal climate policy, from both theoretical and numerical perspectives. An increasing carbon tax will reduce investments in assets that pollute, and so reduce emissions in the short term: our “irreversibility effect”. As such the “Green Paradox” has a converse if we focus on demand side capital stock effects. We also show that the optimal subsidy increases with the deployment rate: our “acceleration effect”. Considering second-best settings, we show that, although carbon taxes achieve stringent targets more efficiently, in fact renewable subsidies deliver higher welfare when policy is more mild.
    Keywords: infrastructure, clean and dirty energy inputs, renewable energy, stranded assets, carbon budget, climate change policies, Green Paradox
    JEL: O44 Q54 Q58
    Date: 2018
  2. By: Claudia Kettner-Marx (WIFO); Daniela Kletzan-Slamanig (WIFO)
    Abstract: Economic literature generally favours market-based instruments for regulating environmental externalities since they ensure compliance at the least cost to society. Emission taxes have been increasingly introduced internationally, with the focus shifting to CO2 after the adoption of the Kyoto Protocol in 1997. In this paper, the theoretical economic literature on energy and emission taxes is reviewed. The focus is on theoretical recommendations regarding the optimal design of environmental and especially carbon taxes, their performance relative to other instruments, the concept of a double dividend as well as potential competitiveness and distribution effects. Carbon taxation can play a key role in climate policy and for achieving long-term emission reductions. This overview of economic considerations may help in creating a sustainable, effective and efficient regulatory system for reducing emissions.
    Keywords: climate policy, carbon pricing, instrument choice, market-based instruments, environmental tax reform
    Date: 2018–02–23
  3. By: Toshi H.Arimura; Shinji Kaneko; Shunsuke Managi; Takayoshi Shinkuma; Masashi Yamamoto; Yuichiro Yoshida
    Abstract: In this paper, we attempt to identify the reasons behind the differences in environmental policy between Japan and other developed countries, particularly the US. Japan's environmental policy is unique in that voluntary approaches have been taken to reduce total emissions. This strategy is quite different from the traditional approach of heavy-handed regulation. In Japan, voluntary approaches are conducted through negotiations with polluters. The idea behind this type of voluntary approaches is that the government can induce polluters to abate emissions voluntarily by using light-handed regulations and the threat of heavy-handed regulations. The light-handed regulation is quite effective especially when it is costly to introduce heavy-handed regulations, although the negotiations are difficult to conduct when the number of stakeholders is large. To strengthen our analysis, we provide some examples of Japanese environmental policies which are successful and the ones that are not.
    Date: 2016–04
  4. By: Anthony Smith (Yale University); Per Krusell (Stockholm University)
    Abstract: This paper builds a highly disaggregated, dynamic, general equilibrium model of interactions between the climate and the economy. The model consists of approximately 19,000 1-degree by 1-degree regions containing land. Regional climates (or average annual temperatures) respond differently to increases in the Earth's temperature, and regional productivity varies with regional temperature. Each region makes optimal consumption-savings decisions in response to its changing productivity in one of two extreme market structures: autarky and free capital mobility. The relationship between regional temperature and productivity has an inverse U-shape, calibrated so that the many-region model replicates estimates of aggregate global damages from climate change; the implied optimal temperature is approximately twelve degrees. The central result is that climate change affects regions very differently, with many regions gaining while others lose. Although a tax on carbon increases average welfare, there is a large disparity of views across regions, with both winners and losers. These findings depend very little on the structure of capital markets.
    Date: 2017
  5. By: Kim, Seung-Leul; Lee, Sang-Ho
    Abstract: This study investigates environmental policy on the fixed-fee licensing strategy of clean eco-technology by an innovator having foreign ownership. We show that near-zero emission taxes accompanied by non-exclusive licensing regulation can improve social welfare when the cost gap is small or foreign penetration is high. However, when foreign ownership is not high, exclusive licensing regulations with an appropriate emission tax policy may improve social welfare.
    Keywords: Environmental policy; fixed-fee licensing; eco-technology; foreign penetration
    JEL: D45 L5
    Date: 2016–05–18

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