nep-res New Economics Papers
on Resource Economics
Issue of 2020‒04‒20
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Pro-environmental interventions and behavioral spillovers: Evidence from organic waste sorting in Sweden By Alacevich, Caterina; Bonev, Petyo; Söderberg, Magnus
  2. Environmental Preferences and Technological Choices: Is Market Competition Clean or Dirty? By Philippe Aghion; Roland Bénabou; Ralf Martin; Alexandra Roulet
  3. Real-time electricity pricing to balance green energy intermittency By Ambec, Stefan; Crampes, Claude
  4. Uncertain Penalties and Compliance By Marcelo Caffera; Carlos Chávez; Carol Luengo
  5. Applications of the Coase Theorem By Tatyana Deryugina; Frances C. Moore; Richard S.J. Tol

  1. By: Alacevich, Caterina; Bonev, Petyo; Söderberg, Magnus
    Abstract: This paper evaluates the spillover effect of a pro-environmental policy that introduced organicwaste sorting bins on a non-targeted behavior: total household waste. Using an administrativedataset on household waste from Sweden, we find large reductions in waste due to (i) information about the benefits of organic waste recycling and (ii) the provision of organicwaste bins. Our empirical strategy utilises spatial random variation in the administrative implementation of the reform. Our findings are compatible with attention spillovers in a framework with limited attention.
    Keywords: Behavioral spillovers, environmental policy, limited attention, household waste, staggered difference-in-difference
    JEL: D01 D04 D12 D83 D9 H41 O31 Q5
    Date: 2020–03
  2. By: Philippe Aghion; Roland Bénabou; Ralf Martin; Alexandra Roulet
    Abstract: This paper investigates the joint effect of consumers' environmental concerns and product-market competition on firms' decisions whether to innovate “clean” or “dirty”. We first develop a step-by-step innovation model to capture the basic intuition that socially responsible consumers induce firms to escape competition by pursuing greener innovations. To test and quantify the theory, we bring together patent data, survey data on environmental values, and competition measures. Using a panel of 8,562 firms from the automobile sector that patented in 42 countries between 1998 and 2012, we indeed find that greater exposure to environmental attitudes has a significant positive effect on the probability for a firm to innovate in the clean direction, and all the more so the higher the degree of product market competition. Results suggest that the combination of historically realistic increases in prosocial attitudes and product market competition can have the same effect on green innovation as major increase in fuel prices.
    JEL: D21 D22 D62 D64 H23 O3 O31
    Date: 2020–04
  3. By: Ambec, Stefan; Crampes, Claude
    Abstract: The presence of consumers able to respond to changes in wholesale electricity prices facilitates the penetration of renewable intermittent sources of energy such as wind or sun power. We investigate how adapting demand to intermittent electricity supply by making consumers price-responsive - thanks to smart meters and home automation appliances - impact the energy mix. We show that it always reduces carbon emissions. Furthermore, when consumers are not too risk-averse, demand response is socially beneficial because the loss from exposing consumers to volatile prices is more than offset by lower production and environmental costs. However, the gain is decreasing when the proportion of reactive consumers increases. Therefore, depending on the costs of the necessary smart hardware, it may be non-optimal to equip the whole population.
    Keywords: electricity; intermittency; renewable dynamic pricing; demand response; smart; meters.
    JEL: D24 D62 Q41 Q42 Q48
    Date: 2020–04
  4. By: Marcelo Caffera; Carlos Chávez; Carol Luengo
    Abstract: We present the results of a series of laboratory economic experiments designed to study compliance behavior of polluting firms when information on the penalty is uncertain. The experiments consist of a regulatory environment in which university students face emission standards and an enforcement mechanism composed of audit probabilities and penalties (conditional on detection of a violation). We examine how uncertainty on the penalty affects the compliance decision and the extent of violation under two enforcement levels: one in which the regulator induces perfect compliance and another one in which it does not. Our results suggest that in the first case, uncertain penalties increase the extent of the violations of those firms with higher marginal benefits. When enforcement is not sufficient to induce compliance, the uncertain penalties do not have any statistically significant effect on compliance behavior. Overall, the results suggest that a cost-effective design of emission standards should consider including public and complete information on the penalties for violations.
    Keywords: uncertainty, penalty, emission standard, economic experiment
    JEL: C91 L51 Q58 K42
    Date: 2019
  5. By: Tatyana Deryugina (Center for Business and Public Policy, College of Business, University of Illinois at Urbana-Champaign); Frances C. Moore (Environmental Science and Policy, University of California Davis); Richard S.J. Tol (Department of Economics, University of Sussex, Falmer, United Kingdom)
    Abstract: The Coase Theorem has a central place in the theory of environmental economics and regulation. But its applicability for solving real-world externality problems remains debated. In this paper, we first place this seminal contribution in its historical context. We then survey the experimental literature that has tested the importance of the many, often tacit assumptions in the Coase Theorem in the laboratory. We discuss a selection of applications of the Coase Theorem to actual environmental problems, distinguishing between situations in which the polluter or the pollutee pays. While limited in scope, Coasian bargaining over externalities offers a pragmatic solution to problems that are difficult to solve in any other way.
    Keywords: Coase Theorem, externalities, property rights, bargaining
    JEL: C78 H23 Q50
    Date: 2020–04

This nep-res issue is ©2020 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.