nep-res New Economics Papers
on Resource Economics
Issue of 2018‒09‒10
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. Optimal Recycling Under Heterogeneous Waste Sources and the Environmental Kuznets Curve By El Ouardighi, Fouad; Kogan, Konstantin; Boucekkine, Raouf
  2. Climate Policy and Stranded Carbon Assets: a Financial Perspective By Rick van der Ploeg; Armon Rezai
  3. Dynamic corrective taxes with time-varying salience By Ben Gilbert; Joshua S. Graff Zivin
  4. Energy and Climate By Richard S.J. Tol
  5. Per Capita Income, Consumption Patterns, and CO2 Emissions By Justin Caron; Thibault Fally
  6. Adaptation to climate change in the tropical mountains? Effects of intraseasonal climate variability on crop diversification strategies in the Peruvian Andes By Ponce, Carmen
  7. The Environmental Kuznets Curve in Small Geographies By Anita Schiller; Dakshina De Silva; Robert McComb; Aurelie Slechten

  1. By: El Ouardighi, Fouad (ESSEC Research Center, ESSEC Business School); Kogan, Konstantin (Bar-Ilan University); Boucekkine, Raouf (Aix-Marseille University)
    Abstract: We investigate how the relationship between economic growth and pollution is affected by the source of pollution: production or consumption. We are interested in polluting waste that cannot be naturally absorbed, but for which recycling efforts aim to avoid massive pollution accumulation with harmful consequences in the long run. We distinguish the cases where recycling efforts are capital-improving or capital-neutral. Based on both environmental and social welfare perspectives, we determine how the interaction between growth and polluting waste accumulation is affected by the source of pollution, i.e., either consumption or production, and by the fact that recycling may or may not act as an income generator, i.e., either capital-improving or capital-neutral recycling efforts. Several new results are extracted regarding optimal recycling policy and the Environmental Kuznets Curve. Beside the latter concern, we show both analytically and numerically that the optimal control of waste through recycling allows to reaching larger (resp., lower) consumption and capital stock levels under consumption-based waste compared to production-based waste while the latter permits to reach lower stocks of waste through lower recycling efforts.
    Keywords: Economic growth; Capital; Consumption; Polluting waste; recycling efforts
    JEL: C61 Q57
    Date: 2017–11
  2. By: Rick van der Ploeg; Armon Rezai
    Abstract: Unanticipated climate policy curbs the value of physical capital that is costly to adjust. We illustrate this by showing that climate policy to keep peak global warming below 2°C depresses the share prices of oil and gas majors and their market capitalisation, curbs exploration investment and oil and gas discoveries, boosts proven reserves left abandoned in the crust of the earth, cuts exploitation investment, and induces an earlier onset of the carbon-free era. For a given carbon budget, an immediate carbon tax is the first-best response but delaying the carbon tax or a renewable energy subsidy to meet the same temperature target are preferred by shareholders because they introduce Green Paradox effects and protect the profitability of existing capital.
    Keywords: Infrastructure; climate policy, fossil fuel, exploration investment, discoveries, exploitation investment, stranded carbon assets, stock prices, irreversible capital, adjustment costs
    JEL: D20 D53 D92 G11 H32 Q02 Q38 Q54
    Date: 2018
  3. By: Ben Gilbert (Division of Economics and Business, Colorado School of Mines); Joshua S. Graff Zivin (Department of Economics, University of California, San Diego and NBER)
    Abstract: The intermittency of payment for many goods creates a disconnect between paying and consuming such that the marginal price is not always salient when consumption decisions are made. This paper derives optimal dynamic corrective taxes when there are externalities as well as internalities from inattention and persistence in consumption across periods. Our optimal taxes address dynamic inefficiencies that are not captured in static models of inattention. We also characterize a second-best constant tax and the excess burden associated with time-invariant tax rates. We then calibrate the model to U.S. residential electricity consumption.
    Keywords: Salience, Inattention, Optimal Taxes, Energy Demand, Consumption Persistence
    JEL: D03 D11 D62 D91 H21 H23 L97 Q40 Q41 Q50
    Date: 2018–08
  4. By: Richard S.J. Tol (Department of Economics, University of Sussex, Brighton, UK; Department of Spatial Economics, Vrije Universiteit, Amsterdam; Institute for Environmental Studies, Vrije Universiteit, Amsterdam; Tinbergen Institute, Amsterdam; CESifo, Munich; Payne Institute for Earth Resources, Colorado School of Mines, Golden, Colorado)
    Abstract: Carbon dioxide emissions have grown less fast than the economy because of improvements in energy efficiency. Switching to less carbon-intensive fuels and climate policy have played a minor role. Scenarios of future emissions are optimistic about economic growth and energy efficiency, and the higher scenarios assume resurgent coal use at odds with current trends. Climate policy is cheap for moderate targets and smart implementation. Costs are much higher for more realistic policies and for more stringent targets. The negative emission required by the Paris Agreement would need large subsidies. Greenhouse gas emission reduction is a global public good that is hard to provide. Key players in the climate debate benefit from the rents created by inefficient policies, from causing confusion, and from mixing climate with other matters.
    Keywords: climate change, energy, climate policy
    JEL: Q42 Q48 Q54
    Date: 2018–08
  5. By: Justin Caron; Thibault Fally
    Abstract: This paper investigates the role of income-driven differences in consumption patterns in explaining and projecting energy demand and CO 2 emissions. We develop and estimate a general-equilibrium model with non-homothetic preferences across a large set of countries and sectors, and trace embodied energy consumption through intermediate use and trade linkages. Consumption of energy goods is less than proportional to income in rich countries, and more income-elastic in low-income countries. While income effects are weaker for embodied energy, we find a significant negative relationship between income elasticity and CO 2 intensity across all goods. These income-driven differences in consumption choices can partially explain the observed inverted-U relationship between income and emissions across countries, the so-called environmental Kuznet curve. Relative to standard models with homothetic preferences, simulations suggest that income growth leads to lower emissions in high-income countries and higher emissions in some low-income countries, with only modest reductions in world emissions on aggregate.
    JEL: F18 O10 Q47 Q56
    Date: 2018–08
  6. By: Ponce, Carmen (Grupo de Análisis para el Desarrollo (GRADE))
    Abstract: La diversificación de cultivos, la selección de cultivos tolerantes y el cultivo intercalado son algunas de las estrategias que los agricultores andinos, al igual que los agricultores de otras regiones montañosas, han utilizado históricamente para enfrentar los riesgos relacionados con el clima y para aprovechar las tierras agrícolas heterogéneas (con parcelas ubicadas en distintas altitudes, enfrentando diferentes condiciones ambientales). Este estudio analiza el papel de la variabilidad climática —durante el período de crecimiento— en el uso de estas estrategias, en un contexto de cambio climático en la región andina. Utilizando datos censales agrarios de 1994 y 2012 (panel distrital), la autora encuentra que —controlando por otras condiciones climáticas y factores socioeconómicos—, un aumento en la variabilidad climática intraestacional lleva a los agricultores de las áreas más frías (
    Keywords: Diversificación de cultivos, Crop diversi?cation, Cambio climático, Climate change, Andes, Perú, Peru
    JEL: Q15 Q54
    Date: 2018
  7. By: Anita Schiller (University Of Dundee); Dakshina De Silva (Lancaster University); Robert McComb (Texas Tech University); Aurelie Slechten (Lancaster University)
    Abstract: Finding a theoretical explanation of the Environmental Kuznets Curve (EKC) has been difficult. Given that environmental quality improves as income and consumption increase, ceteris paribus, there must be an increase in remediation/abatement activity. In this paper, we provide theoretical conditions for an existence of a locality-based EKC when both output and abatement expenditures are increasing in income. We validate these predictions empirically using a detailed firm-level dataset in which environmental policies are uniform across locations. We also show that firms engaging in abatement activity tend to locate near polluting firms while income also plays a significant role in location choice.
    Keywords: EKC, Environmental Economics, Agglomeration, Entry and Exit.
    JEL: Q50 R00 L00
    Date: 2018–07

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