nep-res New Economics Papers
on Resource Economics
Issue of 2020‒04‒27
four papers chosen by
Maximo Rossi
Universidad de la República

  1. Stated benefits from urban afforestation in an arid city: A contingent valuation in Mexicali, Baja California, Mexico By Muñoz-Pizza, Dalia M.; Villada-Canela, Mariana; Rivera-Castañeda, Patricia; Reyna-Carranza, Marco A.; Osornio-Vargas, Alvaro; Martínez-Cruz, Adan L.
  2. Recycling under environmental, climate and resource constraints By Gilles Lafforgue; Etienne Lorang
  3. Exiting the fossil world: The effects of fuel taxation in the UK By Lucas Bretschger; Elise Grieg
  4. Optimal Second-Best Taxation When Individuals Have Social Preferences By Aronsson, Thomas; Johansson-Stenman, Olof

  1. By: Muñoz-Pizza, Dalia M. (Oceanographic Research Institute. Universidad Autónoma de Baja California, Baja California, México); Villada-Canela, Mariana (Oceanographic Research Institute. Universidad Autónoma de Baja California, Baja California, México); Rivera-Castañeda, Patricia (Department of Urban and Environmental Studies, El Colegio de la Frontera Norte, Baja California, México); Reyna-Carranza, Marco A. (Oceanographic Research Institute. Universidad Autónoma de Baja California, Baja California, México); Osornio-Vargas, Alvaro (Department of Pediatrics, University of Alberta, Edmonton, Canada); Martínez-Cruz, Adan L. (CERE - the Center for Environmental and Resource Economics)
    Abstract: The pervasiveness of particulate matter in arid cities has yet to be discussed and tackled. Given that urban trees have been documented to provide air-filtering and dry deposition services, this study documents the stated benefits from an urban afforestation scenario in Mexicali –an arid city located northwest Mexico at the US-Mexico border. Our double-bounded dichotomous contingent valuation protocol yields an estimated average annual willingness to pay (WTP) of USD 88 per household. Variations in the WTP are associated with perception of air quality and presence of respiratory symptoms in the respondent’s household. The smallest WTP (USD 75) is reported by respondents perceiving poor air quality in their neighborhood and with no household members affected by respiratory symptoms. In contrast, respondents perceiving good air quality and with at least one household member facing respiratory symptoms reported a WTP of USD 99. The average stated benefits represent around 0.8% of the annual household income.
    Keywords: Air quality; PM10; urban afforestation; contingent valuation; arid cities; Mexicali.
    JEL: Q51 Q53 Q58 Q59
    Date: 2020–04–16
  2. By: Gilles Lafforgue (Toulouse Business School); Etienne Lorang (BETA-INRAE and Climate Economics Chair)
    Abstract: We study the recycling opportunity of an industrial sector constrained by climate, resource and waste capacities. A final good is produced from virgin and recycled materials, and its consumption releases both waste and GHG emissions. We identify the optimal trajectories of resources use, mainly depending on the emission rates of each resource and on the relative scarcity of their stocks. Recycling is sometimes an opportunity to reduce the impact of consumption on primary resources and waste but can still affect the environment. We characterize the optimal recycling strategy and we show that, in some cases, the time pace of the recycling rate is inverted U-shaped. Last, we discuss the policy implications of our model by identifying and analyzing the set of optimal tax-subsidy schemes.
    Keywords: Recycling, Resource extraction, Waste, GHG emissions
    JEL: Q32 Q53 Q54
    Date: 2020–04
  3. By: Lucas Bretschger (Center of Economic Research (CER-ETH), ETH Zurich, Switzerland); Elise Grieg (Center of Economic Research (CER-ETH), ETH Zurich, Switzerland)
    Abstract: Carbon taxes remain economists favoured policy tool to curb emissions, but are unpopular among segments of the populations. Theoretical and numerical work tends to show the effectiveness of carbon taxes, but ex-post empirical analyses are still rare. In this paper we attempt to bridge this gap. We construct a theoretical general equilibrium model with dirty and clean transportation to show the static and dynamic effects of a fuel tax on transportation and consumption by deriving closed-form solutions. We take the predictions of the model to data on the UK Fuel Tax Escalator, and estimate the impact of the tax on CO2 emissions, GDP, and transport behaviour. With a potential control pool of OECD countries, we use the synthetic control method to estimate the difference between the observed outcome in the UK and a synthetic counterfactual UK. We find that the tax has a large and significant impact on CO2 emissions from trafic, while there is no discernable impact on GDP or growth. We do not find large changes in driving behaviours, but the available evidence points to a possible switch to rail travel from road travel.
    Keywords: fuel tax, synthetic control method, climate policy, transport, level and growth effects
    JEL: Q43 O47 Q56 O41
    Date: 2020–04
  4. By: Aronsson, Thomas (Department of Economics, Umeå University); Johansson-Stenman, Olof (Department of Economics, School of Business, Economics and Law, University of Gothenburg)
    Abstract: Models where people derive well-being from motives other than material self-interest – including those rooted in status concerns – are surprisingly scarce in the study of optimal redistributive taxation. In fact, despite extensive evidence from experimental research, other-regarding behavior driven by prosocial preferences is more or less absent in this literature. The purpose of the present paper is to start filling this gap by analyzing the implications of prosocial preferences related to equality and efficiency for optimal income taxation. In doing so, we take a broad perspective by examining three well-known models of social preferences developed by Fehr and Schmidt (1999), Bolton and Ockenfels (2000), and Charness and Rabin (2002), respectively. Our contribution is to analyze the implications of these three social preference models for optimal redistributive income taxation based on a discrete version of the Mirrleesian (1971) framework of optimal nonlinear income taxation. We find that social preferences may have a considerable impact on the structure of marginal income taxation, and that interactions between externality correction and redistributive aspects of taxation are likely to play an important role for the optimal tax structure.
    Keywords: Optimal Taxation; Redistribution; Social Preferences; Inequality Aversion
    JEL: D62 D90 H21 H23
    Date: 2020–04–16

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