nep-res New Economics Papers
on Resource Economics
Issue of 2020‒08‒24
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Getting the Costs of Environmental Protection Right By Lucas Bretschger
  2. Climate Change and Diet By Bose, Neha; Hills, Thomas; Sgroi, Daniel
  3. Valuing ecosystem services for agricultural TFP By Bostian, Moriha; Lundgren, Tommy

  1. By: Lucas Bretschger (Center of Economic Research (CER-ETH), ETH Zurich, Switzerland)
    Abstract: The belief that stringent climate policies are very costly is widespread among political decision-makers and the public. The Trump administration stressed the cost argument as the motivation for the US withdrawal from the Paris Climate Agreement. However, such judgements ignore the economic bene?ts of policy changes and implicitly build on a misguided decomposition of environmental impacts using the IPAT and Kaya identities. The paper shows that this method predicts policy-induced income losses that are systematically and signi?cantly biased. I extend the decomposition analysis by introducing input substitution, which leads to the IPAST identity. By additionally incorporating a production approach, causal relationships between drivers of resource use, and a Romer-Kremer framework for technology development in a Schumpeterian tradition, I develop the IAT rule, a structural equation to easily estimate climate policy e¤ects. For a given decarbonization path, I use the di¤erent rules to calculate the projected income development at the global and country level. The use of the IAT approach instead of agnostic decomposition suggests that the costs of a stringent climate policy are much lower than normally expected, which supports deep decarbonization..
    Keywords: Environmental protection; costs of climate policy; decarbonization; IPAT identity; IAT formula
    Date: 2020–08
  2. By: Bose, Neha (University of Warwick); Hills, Thomas (University of Warwick); Sgroi, Daniel (University of Warwick)
    Abstract: Though many in the general public are concerned about climate change, most are unaware that agriculture and food production accounts for about one quarter of aggregate green house emissions and therefore, diet change is one of the most effective ways that individuals can reduce their climate impact. To investigate how best to communicate this, we present the results of a pre-registered randomised control trial, involving 1220 subjects, exploring six different information interventions. Our findings indicate that the most influential interventions are based on scientific knowledge and efficacy salience. These effects are mediated by prior beliefs and individual characteristics. Providing information on the health impact of a plant-based diet was most effective for individuals with pre-existing health concerns. The greatest resistance to this information was associated with motivated reasoning around meat consumption: the more meat a participant consumed the less they reported knowing about the relationship between diet and climate before the study, the more resistant they were to new information demonstrating that relationship, the lower their efficacy beliefs around climate change, and the more likely they were to take moral offence at being informed. Our results suggest that while many people are open to dietary change and are responsive to scientific evidence, the largest potential for impact between diet and climate may be in overcoming pre-existing biases associated with sacred values around meat consumption.
    Keywords: self efficacy, decit model of science communication, nudge, interventions, environment, agriculture, vegan, vegetarian, diet, climate change, motivated reasoning, cognitive dissonance, strategic ignorance, social norms
    JEL: Q54 D91 I12 C90
    Date: 2020–06
  3. By: Bostian, Moriha (Department of Economics, Lewis & Clark College, USA); Lundgren, Tommy (CERE - the Center for Environmental and Resource Economics)
    Abstract: This paper provides a brief overview of methods to incorporate ecosystem service values into measures of agricultural total factor productivity, both in theory and in practice. This includes a review of the academic literature, summary of related economic index theory, and comparison of agency guidelines. We consider areas of consensus between the agencies and research literature, as well as open debates surrounding implementation of a standardized ecosystem accounting framework to integrate with existing TFP measures.
    Keywords: Ecosystem services; valuation; agricultural TFP
    JEL: D24 Q57
    Date: 2020–06–03

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