nep-res New Economics Papers
on Resource Economics
Issue of 2018‒08‒20
three papers chosen by

  1. The Short and Long-Run Effects of International Environmental Agreements on Trade By Josh Ederington; Mihai Paraschiv; Maurizio Zanardi
  2. Escalation of Scrutiny: The Gains from Dynamic Enforcement of Environmental Regulations By Wesley Blundell; Gautam Gowrisankaran; Ashley Langer
  3. Overcoming public resistance to carbon taxes By Carattini, Stefano; Carvalho, Maria; Fankhauser, Samuel

  1. By: Josh Ederington; Mihai Paraschiv; Maurizio Zanardi
    Abstract: Does the ratification of an international environmental agreement (IEA) reduce a country’s competitiveness on world markets? In this paper, we take a gravity regression approach to answering this question by using industry-level bilateral trade data and employing time-varying country fixed effects to control for the endogeneity of treaty participation. We find that ratifying an IEA has significant (albeit small) negative effects on the exports of a country’s median manufacturing industry as well as a compositional shift towards exporting cleaner goods. However, we also show that this negative competitive effect on the median manufacturing industry disappears in the long-run. In fact, the positive compositional shift becomes stronger in the long-run as a ratifying country sees a further decline in exports of dirtier industries which is more than compensated for by an increase in exports of cleaner industries, with an overall positive but negligible effect on employment.
    Keywords: international environmental agreements, trade flows, gravity equation
    JEL: F14 F18 F53 Q56
    Date: 2018
  2. By: Wesley Blundell; Gautam Gowrisankaran; Ashley Langer
    Abstract: The U.S. Environmental Protection Agency uses a dynamic approach to environmental enforcement for air pollution, with repeat offenders subject to high fines and designation as high priority violators (HPV). We estimate the benefits of dynamic monitoring and enforcement by developing and estimating a dynamic model of a plant and regulator, where plants decide when to invest in pollution abatement technologies. We use a fixed grid approach to estimate random coefficient specifications. Investment, fines, and HPV designation are very costly to most plants. Eliminating dynamic enforcement would have large adverse impacts on the number of high priority violators and pollutants emitted.
    JEL: Q53 Q58
    Date: 2018–07
  3. By: Carattini, Stefano; Carvalho, Maria; Fankhauser, Samuel
    Abstract: Carbon taxes represent a cost-effective way to steer the economy towards a greener future. In the real world, their application has however been limited. In this paper, we address one of the main obstacles to carbon taxes: public opposition. We identify drivers of and barriers to public support, and, under the form of stylized facts, provide general lessons on the acceptability of carbon taxes. We derive our lessons from a growing literature, as well as from a combination of policy “failures” and “successes”. Based on our stylized facts, we formulate a set of suggestions concerning the design of carbon taxes. We consider the use of trial periods, tax escalators, environmental earmarking, lump-sum transfers, tax rebates, and advanced communication strategies, among others. This paper aims to contribute to the policy debate, ideally leading to more success stories, and less policy failures.
    Keywords: carbon taxes; carbon pricing; acceptability; public support; revenue recycling
    JEL: J1
    Date: 2018–06–06

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