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on Resource Economics |
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Issue of 2021‒05‒24
five papers chosen by |
| By: | Ángel Estrada (Banco de España); Daniel Santabárbara (Banco de España) |
| Abstract: | The design of the key elements of a public budget-neutral environmental fiscal reform could have very different implications in terms of its environmental and macroeconomic impact. Our proposals rely on a carbon tax on fossil fuels covering all economic sectors. It would be a powerful and efficient instrument for reducing emissions, as it gives economic agents an incentive to find ways to save energy and switch to greener energy sources while generating significant tax revenues whose judicious use may have positive macroeconomic effects. In addition, a carbon tax is easy to administer since it can be integrated into existing fuel excise duties. We build a novel model to assess the environmental and economic impact of a set of environmental fiscal reforms in Spain which are defined by different levels of the carbon tax, the possibility of a border carbon adjustment and alternative uses of the tax revenues generated. In this framework, we incorporate technological innovation, which will allow firms to produce with non-polluting inputs and, specifically, the electricity sector, to increase the role of renewables in its generation mix. The results indicate that carbon tax designs with border carbon adjustment tend to be more effective in lowering emissions in Spain. They also suggest that an appropriately designed environmental fiscal reform may even boost economic activity in the medium term if the revenues are used to reduce other, more distorting taxes. |
| Keywords: | carbon tax, environmental policy, modelling, green tax reform |
| JEL: | C6 H2 Q5 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:2119&r= |
| By: | Bisin, Alberto; Gottardi, Piero |
| Abstract: | In the context of an epidemic, a society is forced to face a complex system of externalities in consumption and in production. Command economy interventions can support Efficient allocations at the cost of severe information requirements. Competitive markets for infection rights (alternatively, Pigouvian taxes) can guarantee instead efficiency without requiring direct policy interventions on the activity of agents and firms. We demonstrate that this is the case also when the infections cannot be associated to the activities which originated them; and moral hazard then ensues. Finally, we extend the analysis to situations where governments have only incomplete information regarding the values of the parameters of the infection process or of firms' production processes. |
| Keywords: | Epidemic; Externalities; infection rights; Pigouvian Taxes |
| JEL: | D62 D82 H23 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15386&r= |
| By: | Alan Finkelstein Shapiro; Gilbert E. Metcalf |
| Abstract: | We analyze the quantitative labor market and aggregate effects of a carbon tax in a framework with pollution externalities and equilibrium unemployment. Our model incorporates endogenous labor force participation and two margins of adjustment influenced by carbon taxes: (1) firm creation and (2) green production-technology adoption. A carbon-tax policy that reduces carbon emissions by 35 percent – roughly the emissions reductions that will be required under the Biden Administration's new commitment under the Paris Agreement – and transfers the tax revenue to households generates mild positive long-run effects on consumption and output; a marginal increase in the unemployment and labor force participation rates; and an expansion in the number and fraction of firms that use green technologies. In the short term, the adjustment to higher carbon taxes is accompanied by gradual gains in output and consumption and a negligible expansion in unemployment. Critically, abstracting from endogenous firm entry and green-technology adoption implies that the same policy has substantial adverse short- and long-term effects on labor income, consumption, and output. Our findings highlight the importance of these margins for a comprehensive assessment of the labor market and aggregate effects of carbon taxes. |
| JEL: | E20 E24 E62 H23 O33 Q52 Q54 Q55 Q58 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28795&r= |
| By: | Brian R. Copeland; Joseph S. Shapiro; M. Scott Taylor |
| Abstract: | How should international economic policy address climate change? Does trade cause deforestation and endangered species depletion? How does globalization affect air and water pollution? Do trade and investment create a race to the bottom in environmental policy? How important are environmental impacts of transporting goods? We review theory and empirical work linking international trade and the environment with a focus on recent work and methods. We discuss the literature linking trade to local and global pollutants, the impact of emissions from transportation, the effect of trade on the sustainability of renewable resources, and the interaction between trade and climate policy. To shape our review, we present nine new stylized facts that, together with our review of past work, highlight questions for future research. |
| JEL: | F18 H23 Q27 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28797&r= |
| By: | Rob Dellink (OECD); Christine Arriola (OECD); Ruben Bibas (OECD); Elisa Lanzi (OECD); Frank van Tongeren (OECD) |
| Abstract: | This paper analyses the long-term effects of the COVID-19 pandemic and associated government responses on the environment. It uses large-scale modelling to investigate the impact of sectoral and regional shocks to the economy until 2040. These detailed economic impacts are linked to a range of environmental pressures, including greenhouse gas emissions, emissions of air pollutants, the use of raw materials and land use change. The short-term reductions in environmental pressures are significant: in 2020, energy-related greenhouse gas and air pollutant emissions dropped by around 7%. Environmental pressures related to agriculture observed a smaller drop in 2020. The reduction in the use of non-metallic minerals, including construction materials, reached double digits. From 2021, emissions are projected to increase again, gradually getting closer to the pre-COVID baseline projection levels as growth rates recover fully. But there is a long-term – potentially permanent – downward impact on the levels of environmental pressures of 1‑3%. |
| Keywords: | air pollution, climate change, COVID-19, general equilibrium, land use change, materials use |
| JEL: | D58 O44 Q53 Q54 |
| Date: | 2021–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:176-en&r= |