nep-res New Economics Papers
on Resource Economics
Issue of 2020‒09‒21
three papers chosen by

  1. Should environment be a concern for competition policy when firms face environmental liability ? By Eric Langlais; Maxime Charreire
  2. Colonial Origins, Property Rights, and the Organization of Agricultural Production: the US Midwest and Argentine Pampas Compared By Eric C. Edwards; Martin Fiszbein; Gary D. Libecap
  3. Is global deforestation under lockdown? By Saavedra, S

  1. By: Eric Langlais; Maxime Charreire
    Abstract: This paper considers an oligopoly where firms produce a joint and indivisible environmental harm as a by-product of their output. We first analyze the effects on the oligopoly equilibrium of alternative designs in environmental liability law, secondly, we discuss the rationale for "non-conventional" competition policies, i.e. more concerned with public interest such as the preservation of human health or environment. We study firms decisions of care and output under various liability regimes (strict liability vs negligence) associated with alternative damages apportionment rules (per capita vs market share rule), and with damages multipliers. We find that basing an environmental liability law on the combination of strict liability, the per capita rule, and an "optimal" damages multiplier, is consistent with a conservative competition policy, focused on consumers surplus, since, weakening firms' market power also increases aggregate expenditures in environment preservation and social welfare. In contrast, a shift to the market share rule, or to a negligence regime, may be consistent with a restriction of competition, since firms' entry may instead lead to a decrease in aggregate environmental expenditures and losses of social welfare. Nevertheless the fine tuning of the policy requires specific information from a Competition Authority, which we discuss as well.
    Keywords: Strict liability; negligence; damages apportionment rules; market share liability; environmental liability; Cournot oligopoly; competition policy.
    JEL: L41 L13 K13
    Date: 2020
  2. By: Eric C. Edwards; Martin Fiszbein; Gary D. Libecap
    Abstract: We examine the origins, persistence, and economic consequences of institutional structures of agricultural production. We compare farms in the Argentine Pampas and US Midwest, regions of similar potential input and output mixes. The focus is on 1910-1914, during the international grain trade boom and when census data are available. The Midwest was characterized by small farms and family labor. Land was a commercial asset and traded routinely. The Pampas was characterized by large landholdings and use of external labor. Land was a source of status and held across generations. Status attributes could not be easily monetized for trade, reducing market exchange, limiting entry, and hindering farm restructuring. Differing land property rights followed from English and Spanish colonial and post-independence policies. Geo-climatic factors cannot explain dissimilarities in farm sizes, tenancy, and output mixes, suggesting institutional constraints. Midwest farmers also were more responsive to exogenous signals. There is evidence of moral hazard on Pampas farms. Conjectures on long-term development are provided.
    JEL: K11 L1 L22 N2 N21 N22 N26 N5 N51 N52 N56 O13 Q12 Q15
    Date: 2020–08
  3. By: Saavedra, S
    Abstract: The COVID-19 pandemic and the associated responses by governments have halted economic activity abruptly across the world. The environment has benefited with reductions in pollution in urban areas, but what has happened in rural areas to deforestation has not been studied yet. A priori the effect is unclear: deforestation might decrease with the restrictions on economic activity. But it might have increased given the reductions in monitoring. I combine bi-weekly data from 70 countries covering the entire world’s tropical forest with the dates each country started lockdown restrictions. Using difference-in-differences I find that, although deforestation is higher in 2020 compared to 2019, it is not driven by the lockdowns but rather by higher deforestation that precedes them. There is heterogeneity by the level of government effectiveness of the country: countries with effective governance experience a reduction in deforestation, probably because they can enforce the lockdown restrictions
    Keywords: COVID-19, Deforestation
    JEL: Q23 Q58
    Date: 2020–08–06

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