nep-res New Economics Papers
on Resource Economics
Issue of 2021‒02‒15
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Climate economics support for the UN climate targets By Hansel, Martin C.; Drupp, Moritz A.; Johansson, Daniel A. J.; Nesje, Frikk; Azar, Christian; Freeman, Mark. C.; Groom, Ben; Sterner, Thomas
  2. Environmental preferences and technological choices: is market competition clean or dirty? By Aghion, Philippe; Bénabou, Roland; Martin, Ralf; Roulet, Alexandra
  3. Where is Pollution Moving? Environmental Markets and Environmental Justice By Joseph S. Shapiro; Reed Walker

  1. By: Hansel, Martin C.; Drupp, Moritz A.; Johansson, Daniel A. J.; Nesje, Frikk; Azar, Christian; Freeman, Mark. C.; Groom, Ben; Sterner, Thomas
    Abstract: Under the UN Paris Agreement, countries committed to limiting global warming to well below 2 °C and to actively pursue a 1.5 °C limit. Yet, according to the 2018 Economics Nobel laureate William Nordhaus, these targets are economically suboptimal or unattainable and the world community should aim for 3.5 °C in 2100 instead. Here, we show that the UN climate targets may be optimal even in the Dynamic Integrated Climate–Economy (DICE) integrated assessment model, when appropriately updated. Changes to DICE include more accurate calibration of the carbon cycle and energy balance model, and updated climate damage estimates. To determine economically ‘optimal’ climate policy paths, we use the range of expert views on the ethics of intergenerational welfare. When updates from climate science and economics are considered jointly, we find that around three-quarters (or one-third) of expert views on intergenerational welfare translate into economically optimal climate policy paths that are consistent with the 2 °C (or 1.5 °C) target.
    Keywords: climate science; economics; intergenerational welfare; policy
    JEL: N0
    Date: 2020–07–13
  2. By: Aghion, Philippe; Bénabou, Roland; Martin, Ralf; Roulet, Alexandra
    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-bystep 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.
    Keywords: environment; product market competition; innovation
    JEL: R14 J01
    Date: 2020–03
  3. By: Joseph S. Shapiro; Reed Walker
    Abstract: Do US air pollution offset markets disproportionately relocate pollution to or from low-income or minority communities? Concerns about an equal distribution of environmental quality across communities—environmental justice—have growing policy influence. We relate prices and quantities of offset transactions to demographics of the communities surrounding polluting plants. We find little association of offset prices or offset-induced movements in pollution with the share of a community that is Black, Hispanic, or with mean household income. This analysis of twelve prominent offset markets suggests that they do not substantially increase or decrease the equity of environmental outcomes.
    JEL: H22 Q50 Q52 Q53
    Date: 2021–01

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