nep-res New Economics Papers
on Resource Economics
Issue of 2019‒06‒10
three papers chosen by
Maximo Rossi
Universidad de la República

  1. The Future of U.S. Carbon-Pricing Policy: Normative Assessment and Positive Prognosis By Stavins, Robert N.
  2. The Consequences of Uncertainty: Climate Sensitivity and Economic Sensitivity to the Climate By Hassler, John; Krusell, Per; Olovsson, Conny
  3. Hurricanes, Climate Change Policies and Electoral Accountability By Gagliarducci, Stefano; Paserman, M. Daniele; Patacchini, Eleonora

  1. By: Stavins, Robert N. (John F. Kennedy School of Government, Harvard University)
    Abstract: There is widespread agreement among economists--and a diverse set of other policy analysts--that at least in the long run, an economy-wide carbon pricing system will be an essential element of any national policy that can achieve meaningful reductions of CO2 emissions cost-effectively in the United States. There is less agreement, however, among economists and others in the policy community regarding the choice of specific carbon-pricing policy instrument, with some supporting carbon taxes and others favoring cap-and-trade mechanisms. This prompts two important questions. How do the two major approaches to carbon pricing compare on relevant dimensions, including but not limited to efficiency, cost-effectiveness, and distributional equity? And which of the two approaches is more likely to be adopted in the future in the United States? This paper addresses these questions by drawing on both normative and positive theories of policy instrument choice as they apply to U.S. climate change policy, and draws extensively on relevant empirical evidence. The paper concludes with a look at the path ahead, including an assessment of how the two carbon-pricing instruments can be made more politically acceptable.
    JEL: Q40 Q48 Q54 Q58
    Date: 2019–05
  2. By: Hassler, John (IIES, Stockholm University, University of Gothenburgh, CEPR and SEM); Krusell, Per (IIES, Stockholm University, University of Gothenburg, CEPR and NBER); Olovsson, Conny (Research Department, Central Bank of Sweden)
    Abstract: We construct an integrated assessment model with multiple energy sources-two fossil fuels and “green energy" - and use it to evaluate ranges of plausible estimates for the climate sensitivity as well as for the sensitivity of the economy to climate change. Rather than focusing on uncertainty explicitly, we look at extreme scenarios defined by the upper and lower limits given in available studies in the literature. We compare optimal policy with laissez faire and we point to the possible policy errors that could arise. By far the largest policy error arises when the climate policy is “overly passive"; “overly zealous" climate policy (i.e., a high carbon tax applied when climate change and its negative on the economy are very limited) does not hurt the economy much as there is considerable substitutability between fossil and non-fossil energy sources.
    Keywords: Climate change; integrated assessment model; uncertainty
    JEL: E60 H23 O44 Q43 Q54
    Date: 2019–03–01
  3. By: Gagliarducci, Stefano (University of Rome Tor Vergata); Paserman, M. Daniele (Boston University); Patacchini, Eleonora (Cornell University)
    Abstract: This paper studies how politicians and voters respond to new information on the threats of climate change. Using data on the universe of federal disaster declarations between 1989 and 2014, we document that congress members from districts hit by a hurricane are more likely to support bills promoting more environmental regulation and control in the year after the disaster. The response to hurricanes does not seem to be driven by logrolling behavior or lobbysts' pressure. The change in legislative agenda is persistent over time, and it is associated with an electoral penalty in the following elections. The response is mainly promoted by representatives in safe districts, those with more experience, and those with strong pro-environment records. Our evidence thus reveals that natural disasters may trigger a permanent change in politicians' beliefs, but only those with a sufficient electoral strength or with strong ideologies are willing to engage in promoting policies with short-run costs and long-run benefits.
    Keywords: U.S. Congress, hurricanes, legislative activity
    JEL: D70 D72 H50 Q54
    Date: 2019–05

This nep-res issue is ©2019 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.