nep-res New Economics Papers
on Resource Economics
Issue of 2019‒04‒29
four papers chosen by
Maximo Rossi
Universidad de la República

  1. Environmental Effects of Capital Income Taxation - A New Double Dividend? By Ritter, Hendrik; Runkel, Marco; Zimmermann, Karl
  2. Economic Growth and Environmental Degradation: Investigating the existence of the environmental Kuznets curve for local and global pollutants in South Africa By Timothy Köhler; Martin de Wit
  3. Subjects in the Lab, Activists in the Field: Public Goods and Punishment By Dave, Chetan; Hamre, Sjur; Kephart, Curtis; Reuben, Alicja
  4. Charity, Status, and Optimal Taxation: Welfarist and Paternalist Approaches By Aronsson, Thomas; Johansson-Stenman, Olof; Wendner, Ronald

  1. By: Ritter, Hendrik; Runkel, Marco; Zimmermann, Karl
    Abstract: We analyze a n-country, two-period Nash tax competition game to evaluate Sinn’s proposal to use capital income taxation as a means to decelerate fossil fuel ex- traction (Sinn, 2008). The interest and discount rate is determined on a perfectly competitive consumer loan market on which the resource extractor acts as the loan supplier. Our first result is that, with perfectly identical countries, tax rates are inefficiently low in the Nash equilibrium of the tax competition game since the tax distortion and the environmental externality are not taken into account. The sec- ond result is that, in an asymmetric setting with resource-exporting and -importing countries, the tax can turn into a subsidy in the exporting country. Moreover, we show that partial cooperation of the importers is always beneficial to them, but can be harmful to the exporter. Finally, we identify cases where full cooperation is self-enforcing.
    Keywords: Capital taxation,Green paradox,Non-renewable resources
    JEL: H21 H23 Q38 Q54
    Date: 2019
  2. By: Timothy Köhler (Department of Economics, University of Stellenbosch); Martin de Wit (School of Public Leadership, University of Stellenbosch)
    Abstract: Economic growth has been seen to be accompanied by surges in natural resource extraction rates or levels of pollution and waste. As such, many suggest that the pursuit thereof may lead to environmental degradation through increased waste generation and pollution, given a country’s technological constraints and environmental assimilative capacity. In the field of economics, the ‘Environmental Kuznets Curve’ (EKC) has served as arguably the most dominant approach to assess this relationship between economic growth and environmental degradation since its popularisation in the early 1990s (Stern, 2017:8). The EKC implies that economic activity is environmentally beneficial in the long-run, despite adversely affecting it in the short-run. International findings remain mixed at best, and only a limited amount of other studies which attempt to assess the existence of an EKC in South Africa’s context exist, all of which use the same global air pollutant for environmental quality. The aim of this paper is to contribute to the existing literature by investigating the presence of the EKC for a set of relatively diverse – three local and three global – air pollutants in South Africa for the period 1970 to 2010. This study serves as the first to estimate the relationship for any local pollutant, as well as two global pollutants, in South Africa through the EKC framework. Using OLS and ARDL regression techniques, the results of the 24 estimated models do not provide evidence of an EKC for any of the select pollutants. However, when using levels instead of logarithms, an EKC is found in one specification for one local pollutant (NH3). Otherwise, no distinction between local and global air pollutants is found. In contrast to the EKC’s inverted-U shape, the ARDL models for two global (CO2 and N2O) and two local (SO2 and PM10) pollutants indicate statistically significant U-shaped relationships at conventional significance levels. Unfortunately, the reduced-form approach utilised in this paper does not indicate any underlying causal relationship and as such, conclusive policy suggestions cannot be made.
    Keywords: environmental Kuznets curve, economic growth, economic development, environmental degradation, environmental quality, air pollution, South Africa
    JEL: O13 Q53 Q56
    Date: 2019
  3. By: Dave, Chetan (University of Alberta, Department of Economics); Hamre, Sjur (Duke University); Kephart, Curtis (R-Studio); Reuben, Alicja (New York University Abu Dhabi)
    Abstract: We compare standard (laboratory) and non-standard (field) subject pool behavior in an extensive form public goods game with random punishment. Our experimental investigation is motivated by real-world ‘Activists’ encouraging public goods provision by firms; an activity known as corporate social responsibility. We find that relative to laboratory subjects, activists in Mumbai are more willing to settle at the Nash equilibrium of the game (which entails increased provision of public goods) and are more willing to punish non-cooperative firm behavior even if such punishments hurt their own payoffs.
    Keywords: Public goods; punishment; non-standard subject pool
    JEL: C92 C93 D64
    Date: 2019–04–23
  4. By: Aronsson, Thomas (Department of Economics, Umeå University); Johansson-Stenman, Olof (Department of Economics, School of Business, Economics and Law, University of Gothenburg); Wendner, Ronald (Institute of Economics, University of Graz)
    Abstract: This paper deals with tax policy responses to charitable giving, defined in terms of voluntary contributions to a public good, to which the government also contributes through public revenue; the set of tax instruments contains general, nonlinear taxes on income and charitable giving. In addition to consumption, leisure and a public good, individuals obtain utility from the warm glow of giving and social status generated by their relative contributions to charity as well as their relative consumption compared with others. We analyze the conditions under which it is optimal to tax or subsidize charitable giving and derive corresponding optimal policy rules. Another aim of the paper is to compare the optimal tax policy and public good provision by a conventional welfarist government with those by two kinds of paternalist governments: The first kind does not respect the consumer preferences for status in terms of relative giving and relative consumption, while the second kind in addition does not respect preferences for warm glow of giving. The optimal policy rules for marginal taxation and public good provision are similar across governments, except for the stronger incentive to tax charitable giving at the margin under the more extensive kind of paternalism. Numerical simulations supplement the theoretical results.
    Keywords: Conspicuous consumption; conspicuous charitable giving; optimal taxation; warm glow
    JEL: D03 D62 H21 H23
    Date: 2019–04–16

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