nep-res New Economics Papers
on Resource Economics
Issue of 2020‒07‒20
five papers chosen by
Maximo Rossi
Universidad de la República

  1. A carbon horse race: Abatement subsidies vs. permit trading in Switzerland By Hintermann, Beat; Zarkovic, Maja
  2. Environmental Taxation, Information Precision, and Information Sharing By Jihad C. Elnaboulsi; Wassim Daher; Yigit Saglam
  3. How Environmental Policies Spread ? A Network Approach to Diffusion in the U.S. By Côme Billard; Anna Creti; Antoine Mandel
  4. Environmental impacts and policy responses to Covid-19: A view from Latin America By Alejandro Lopez Feldman; Carlos Chavez, Maria Velez, Hernan Bejarano, Ariaster Chimeli, Jose Feres, Juan Robalino
  5. Emergent large traders in smallholder grain markets and their role in enhancing adoption of sustainable agricultural intensification practices in Kenya By Chalmers Mulwa; T.S Jayne; Milu Muyanga; Martine Visser

  1. By: Hintermann, Beat (University of Basel); Zarkovic, Maja (University of Basel)
    Abstract: Swiss climate policy consists of three regulatory instruments for greenhouse gas emissions reduction: A CO 2 levy, the Swiss Emissions Trading System (CH EHS), and an additional nonEHS" program for medium-sized plants that consists of command-and-control elements plus a sizeable abatement subsidy. Our paper informs about this tripartite climate policy, which is unique in the international context. Second, we estimate the dierential impact of the CH EHS and the nonEHS program on plants' emissions. Our empirical strategy exploits a policy change in 2013 that instituted a mandatory emissions trading system for a subset of previously regulated rms. We nd that the nonEHS outperforms the CH EHS for a minority of plants, but that on average, the two programs result in similar abatement eorts despite very dierent nancial incentives. Firms that previously engaged in abatement eorts continue to do so even after the nancial incentives were reduced by an order of magnitude. Our results suggest the presence of preferences for abatement per se, above and beyond nancial incentives. They further imply that expanding the nonEHS system at the expense of the CO 2 levy may be associated with signifcant costs but no additional emission reductions.
    Keywords: Climate policy, emissions tax, carbon tax, emissions trading, subsidies, command-and-control, Switzerland
    JEL: D22 D62 H23 H25 H32 Q52 Q54 Q58
    Date: 2020–05–19
  2. By: Jihad C. Elnaboulsi (CRESE, Univ. Bourgogne Franche-Comté); Wassim Daher (Gulf University for Science and Technology, Department of Mathematics and Natural Sciences); Yigit Saglam (Victoria University of Wellington, School of Economics and Finance)
    Abstract: We analyze how environmental taxes should be optimally levied when the regulators and firms face costs uncertainties in a Stackelberg-Cournot game. We allow linear-quadratic payoffs functions coupled with an affine information structure encompassing common and private information with noisy signals. In the first period, the regulator chooses the intensity of emissions taxes in order to reduce externalities. In the second period, facing industry-related and firm-specific shocks, firms compete in the market-place as Cournot rivals and choose outputs. We show that, given costs uncertainties with non-uniform quality of signals across firms, the regulator sets differentiated tax policy. We also examined the social value of information under ex-ante calibrated emissions taxes. We argue that the magnitude of the associated social benefits and costs of more precise private signals hinge largely and fundamentally on the value of the ratio of the slopes of the marginal damage and the marginal consumer surplus. The lack of accurate data clouds the regulatory process by preventing the necessary fine-tuning of the tax rules towards specific environmental circumstances. Finally, we investigate information sharing between polluters and its impacts on welfare. We stress that, when there are threats of severe environmental damages under deep uncertainties, collusion is welfare reducing and may jeopardize the regulatory process. Numerical simulations illustrate the results that the model delivers.
    Keywords: Differentiated Taxes, Costs Uncertainties, Signaling, Precision, Information Sharing, Collusion, Energy Markets.
    JEL: D43 D83 H23 L13 Q58
    Date: 2020–06
  3. By: Côme Billard (University of Paris-Dauphine / Climate Economics Chair); Anna Creti (University of Paris-Dauphine / Climate Economics Chair); Antoine Mandel (University of Paris-I Pantheon Sorbonne / Paris School of Economics)
    Abstract: In this paper, we reconstruct the network of environmental policies diffusion across American states from 1974 to 2018. Our results highlight an inefficient structure, suggesting lags in policy spreading. We identify Minnesota, California and Florida to be the main "facilitators" of the dynamics. Targeting them ensures the maximum likelihood of policy diffusion across the country. We then evaluate the determinants of the inferred network. Our results emphasize the role of contiguity and wealth in policy transmission. We also find sustainable economic systems as well as state’s expected economic losses due to climate change as critical factors of environmental policy flows.
    Keywords: Network, United States, Environmental Policy Diffusion, Cascades.
    Date: 2020–05
  4. By: Alejandro Lopez Feldman; Carlos Chavez, Maria Velez, Hernan Bejarano, Ariaster Chimeli, Jose Feres, Juan Robalino
    Abstract: COVID-19 is currently having major short run effects with possible serious long run consequences on economic and social aspects, including several potential implications for the environment and the management of natural resources in Latin America. In this paper, we discuss the possible effects of the pandemic on air pollution, deforestation and other relevant environmental dimensions across the region. With contributions from environmental economists from eight countries, we give an overview of the initial and expected environmental effects of this health crisis. We discuss potential effects on environmental regulations and possible policy interventions, as well as an agenda for future research for those interested in the design and evaluation of environmental policies relevant for the Latin American context.
    Keywords: Air pollution; COVID-19; coronavirus; deforestation; environmental impacts; environmental policy; Latin America; pandemic; SARS-Cov2-19
    JEL: H12 Q22 Q23 Q53 Q56
    Date: 2020–07–13
  5. By: Chalmers Mulwa; T.S Jayne; Milu Muyanga; Martine Visser
    Abstract: Pervasive threats of climate change and land degradation have compounded the low farm productivity problem inherent in sub-Saharan Africa. Though sustainable agricultural intensification practices have been shown to improve resilience of farm production in the face of these emerging threats, they suffer low adoption rates typical of technology adoption in these regions. Recent evidence shows the emergence of large grain traders in the smallholder farm output markets. Given established correlation between contractual farm arrangements and technology adoption, the hypothesis is that these traders can incentivize technology adoption at scale at the farm level, given their financial capacity. This study tests this hypothesis using a large panel dataset from Kenya spanning a decade. A dynamic random effects Probit model is used to evaluate how past adoption of sustainable inputs influence subsequent adoption behavior, while a control function approach is used evaluate how sales to large grain traders affect the adoption of sustainable inputs at the farm level. Results indicate that sales to large grain traders lead to higher adoption of inorganic fertilizer but not improved seed and manure, and that land ownership is a key success factor in explaining sales to these market actors. The adoption of improved seed and organic manure is persistent across time, indicating state dependence in the use of these inputs. These results suggest that strategies to foster engagements between large grain traders and farmers can enhance uptake of inorganic fertilizer; such strategies should also be accompanied by efforts to enable resource-poor farmers access to these markets
    Keywords: Large grain traders, Smallholder farm markets, Sustainable agricultural intensification, Kenya
    JEL: D13 Q12 Q13 Q16
    Date: 2020–03

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