nep-res New Economics Papers
on Resource Economics
Issue of 2019‒07‒29
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Emission Taxes, Feed-in Subsidies and the Investment in a Clean Technology by a Polluting Monopoly By Ángela García-Alamino; Santiago J. Rubio
  2. Revisiting water and economic growth from a long-term perspective By Rosa Duarte; Vicente Pinilla; Ana Serrano
  3. Adoption Gaps of Environmental Adaptation Technologies with Public Effects By Angelo Antoci; Simone Borghesi; Giulio Galdi; Sergio Vergalli

  1. By: Ángela García-Alamino (University of Castilla-La Mancha); Santiago J. Rubio (University of Valencia)
    Abstract: The paper studies the use of emission taxes and feed-in subsidies for the regulation of a monopoly that can produce the same good with a technology that employs a polluting input and a clean technology. The second-best tax and subsidy are calculated solving a two-stage policy game between the regulator and the monopoly with the regulator acting as the leader of the game. We find that the second-best tax rate is the Pigouvian tax. The tax implements the efficient level of the dirty output but does not affect the total output. On the other hand, the subsidy leads to the monopoly to reduce the dirty output but also to increase the total output. This increase in total output may yield a larger net social welfare when the subsidy is used provided that the marginal cost of clean output is not very high, as a linear-quadratic specification of the model confirms. Finally, it is showed that the combination of an emission tax with a feed-in subsidy induces the firm to choose the efficient outputs, but in this case the first-best tax must be lower than the Pigouvian tax. Thus, the findings of this paper support the idea that feed-in subsidies open the possibility for improving the regulation of a polluting firm with market power.
    Keywords: Monopoly, Polluting Inputs, Clean Technology, Production-mix, Emission Tax, Feed-in Subsidy
    JEL: D42 H23 L12 Q58
    Date: 2019–07
  2. By: Rosa Duarte; Vicente Pinilla; Ana Serrano
    Abstract: Water use has increased notably throughout the world over the last 250 years. The industrial revolution and the long-term economic growth processes, first experienced by Western countries, and then by many other regions, put growing pressure on water resources. If we focus on economic growth, structural change and the rise in per capita income have been key factors in explaining water use trajectories. In addition, population growth has also boosted water needs worldwide. On the contrary, the increase in water use efficiency, mostly driven by technological developments, but also by improved institutions and environmental awareness, has slowed down water requirements. In this general context, our study aims to analyse the drivers of water use from a long-term perspective. More specifically, we analyse world and regional trends in water use over the last century and their relationships with population, economic growth and technological change. We pay particular attention to the second half of the last century and the twenty-first century, given the rising demands linked to trade, the emergence of new economies with increasing per capita income and demands and the smooth technological change observed in developed countries.
    Keywords: water history, water use drivers, water long-term trends
    JEL: N50 Q15 Q25 Q56
    Date: 2019–07
  3. By: Angelo Antoci (University of Sassari); Simone Borghesi (University of Siena and European University Institute); Giulio Galdi (University of Siena); Sergio Vergalli (Fondazione Eni Enrico Mattei and University of Brescia)
    Abstract: The global nature of the climatic challenge requires a high level of cooperation among agents, especially since most of the related coping strategies produce some kind of externalities toward others. Whether they are positive or negative, the presence of externalities may lead the system towards Pareto-dominated states. In this work, we study under and over-adoption of environmental adaptation technologies which enhance environmental quality for the individual while transferring externalities to other agents. We distinguish adaptation technologies between maladaptation and mitigation ones, depending on the sign of the externalities. In particular, we show that over adoption may occur for maladaptive technologies, whereas under-adoption may occur in case of mitigation. We study a model with two regions at different stages of development, which allows us to draw considerations on well-being consequences of environmental dumping.
    Keywords: Adaptation, Negative Externalities, Evolutionary Dynamics, Public Good Game, Environmental Dumping
    JEL: C70 D62 O13 O40 Q20
    Date: 2019–07

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