nep-res New Economics Papers
on Resource Economics
Issue of 2018‒04‒30
four papers chosen by
Maximo Rossi
Universidad de la República

  1. A New Resource Curse: How Externalities and Governance Shape Social Conflict By Renard Sexton
  2. Public Opinion, Elections, and Environmental Fiscal Policy By Chortareas, Georgios; Logothetis, Vassilis; Papandreou, Andreas
  3. Climate Finance for Canadian Cities: Is Debt Financing a Viable Alternative? By Gustavo Carvalho
  4. Fossil Fuel Subsidy Reform in the Developing World: Who Wins, Who Loses, and Why? By Coxhead, Ian; Grainger, Corbett

  1. By: Renard Sexton (Princeton University)
    Abstract: Natural resource extraction is increasingly important in many developing countries, but harmful externalities threaten the viability of the sector. This paper articulates and finds evidence for a new ‘resource curse,’ whereby negative side effects from resource extraction increase social conflict in nearby communities. Using micro-level data on extractive commodities, water pollution, children’s and livestock health, local government quality and mining-related social conflict in Peru, this study shows that rising international prices increase conflict, pollution and negative health effects, but not public spending in mining areas. These effects disappear when local government is high quality, indicating that good governance can temper the effects of this new resource curse.
    Keywords: Peru, Conflict, Natural resources, Externalities, Governance
    JEL: D74 Q34 O13 L72
    Date: 2018–04
  2. By: Chortareas, Georgios (King's College London and National and Kapodistrian University of Athens); Logothetis, Vassilis (Cardiff Business School); Papandreou, Andreas (National and Kapodistrian University of Athens)
    Abstract: We investigate how public opinion along with the electoral process affect the strength of environmental fiscal policies in the European Union (EU). Our analysis accounts for a set of economic, institutional, and political factors that can affect environmental taxes and expenditures. We pursue a dynamic panel data analysis covering 27 EU countries using public opinion data. We produce evidence showing that public concern for the environment, as gauged by opinion surveys, positively affects environmental protection expenditures, while elections negatively affect environmental tax revenues and environmental protection expenditures shrink in the aftermath of elections. We do not find evidence of partisan effects. The effect of public opinion and elections on environment-related fiscal decisions depends on the degree of integration with the global economy as well as several institutional factors including the level of corruption and the soundness of the rule of law. We also document that the results are impervious to a wide set of robustness tests.
    Keywords: Environmental Protection, Taxes and Expenditures, Public Opinion, European Union, Panel Data
    JEL: D72 Q58 C23
    Date: 2018–04
  3. By: Gustavo Carvalho (University of Toronto)
    Abstract: Municipalities are crucial stakeholders in the response to climate change. Cities are major sources of greenhouse gas emissions and, due to their higher building and population densities, will bear the brunt of the economic and social costs imposed by extreme weather and the impact of climate change. Ontario municipalities have traditionally funded their investments from property taxes, user fees, and transfers from higher levels of government, but these sources will not be sufficient to fund both current expenditures and future capital needs. This paper explores an alternative: climate finance, the provision of financing by private actors for projects intended to decrease carbon emissions or make cities more resilient to the impacts of climate change. It analyzes four climate financing tools used in other jurisdictions – green bonds, environmental impact bonds, catastrophe bonds, and green banks – and their feasibility under current Ontario regulations. Not all instruments would be equally suitable to Ontario municipalities; each offers trade-offs that must be weighed before implementation. Still, the potential for climate financing is huge and it has a role to play in long-term climate infrastructure projects requiring large upfront investments.
    Keywords: climate finance, debt finance, green bonds, environmental impact bonds, catastrophe bonds, green banks
    JEL: H23 H71 H74 Q54
    Date: 2018–03
  4. By: Coxhead, Ian (University of Wisconsin); Grainger, Corbett (University of Wisconsin)
    Abstract: Fossil fuel subsidies are widespread in developing countries, and reform efforts are often derailed by disputes over the likely distribution of gains and losses. Subsidy reform is transmitted to households through changes in energy prices and prices of other goods and services, but also factor earnings. Most empirical studies focus on consumer expenditures alone, and computable general equilibrium analyses typically report only total effects without decomposing them by source. Meanwhile, analytical models neglect important open-economy characteristics relevant to developing countries. In this paper we develop an analytical model of a small open economy with a pre-existing fossil fuel subsidy and identify direct and indirect impacts of subsidy reform on real household incomes. Our results, illustrated with data from Viet Nam, highlight two important drivers of distributional change: the mix of tradable and nontradable goods, reflecting the structure of a trade-dependent economy, and household heterogeneity in sources of factor income.
    JEL: F18 O25 Q43
    Date: 2018–03

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