nep-res New Economics Papers
on Resource Economics
Issue of 2021‒06‒28
six papers chosen by

  1. The Social Power of Spillover Effects: Educating Against Environmental Externalities By Andri Brenner
  2. Relational Voluntary Environmental Agreements when Emissions Are Unverifiable By Berardino Cesi; Alessio D'Amato
  3. Charity, Status, and Optimal Taxation: Welfarist and Non-Welfarist Approaches By Aronsson, Thomas; Johansson-Stenman, Olof; Wendner, Ronald
  4. Growth, Endogenous Environmental Cycles, and Indeterminacy By Maxime MENUET; Alexandru MINEA; Patrick VILLIEU; Anastasios XEPAPADEAS
  5. No country is an island: international cooperation and climate change By Ferrari, Massimo; Pagliari, Maria Sole
  6. Do People Respond to the Climate Impact of their Behavior? The Effect of Carbon Footprint Information on Grocery Purchases By Toke R. Fosgaard; Alice Pizzo; Sally Sadoff

  1. By: Andri Brenner (University of Potsdam, MCC Berlin)
    Abstract: Economists are worried that the lack of property rights to natural capital goods jeopardizes the sustainability of the economic growth miracle that has existed since industrialization. This article questions their position. A vertical innovation model with a portfolio of technologies for abatement, adaptation, and general (Harrod-neutral) technology reveals that environmental damage spillovers have a comparable effect on research profits as technology spillovers so that the social costs of depleting public natural capital are internalized. As long as there is free access to information and technology, growth is sustainable and the allocation of research efforts among alternative technologies is socially optimal. While there still is a need to address externalities from monopolistic research markets, no environmental policy is necessary. These results suggest that environmental externalities may originate in restricted access to information and technology, demonstrating that (i) information has a similar effect as an environmental tax and (ii) knowledge and technology transfers have an impact comparable to that of subsidies for research in green technology.
    Keywords: endogenous growth, horizontal innovation, sustainability
    JEL: O30 O44 Q55 Q56
    Date: 2021–06
  2. By: Berardino Cesi (University of Rome Tor Vergata, Rome, Italy); Alessio D'Amato (University of Rome †Tor Vergata†, Italy)
    Abstract: Environmental regulation and pollution control may clash against the presence of unverifiable tasks, like source specific emissions. To tackle this issue we reshape a voluntary agreement instrument, already available in the received literature, in a dynamic perspective by means of a relational contracting approach. Setting up a Relational Voluntary Environmental Agreement (REA) helps the regulator to solve the unverifiability issue, and may provide polluting firms with the incentives to stick to environmental requirements. In an N firms symmetric context we show that even if emissions are not contractible across firms, so that enforcement cannot be delegated to a third party, if firms themselves are sufficiently patient, a self-enforcing equilibrium, under which the environmental objective is voluntarily met, exists. Finally, the policy analysis reveals that our REA may be welfare-improving with respect to a Voluntary Environmental Agreement on contractible emissions. This occurs when the enforcement cost savings under a relational agreement are larger than the additional social costs related to free riding.
    Keywords: Relational Contracts, Environmental Policy, UnveriÂ…ability, Voluntary Environmental Agreement
    JEL: D62 H23 Q58
    Date: 2021–06
  3. By: Aronsson, Thomas (Department of Economics, Umeå University); Johansson-Stenman, Olof (School of Business, Economics and Law, University of Gothenburg, Sweden); Wendner, Ronald (Department of Economics, University of Graz, Austria)
    Abstract: This paper analyzes optimal taxation of charitable giving to a public good in a Mirrleesian framework with social comparisons. Leisure separability together with zero transaction costs of giving imply that charitable giving should be subsidized to such an extent that governmental contributions are completely crowded out, regardless of whether the government acknowledges warm glows of giving. Stronger concerns for relative charitable giving and larger transaction costs support lower marginal subsidies, whereas relative consumption concerns work in the other direction. A dual screening approach, where charitable giving constitutes an indicator of wealth, is also presents. Numerical simulations supplement the theoretical results.
    Keywords: Conspicuous consumption; conspicuous charitable giving; optimal taxation; public good provision; warm glow; multiple screening
    JEL: D03 D62 H21 H23
    Date: 2021–06–18
  4. By: Maxime MENUET; Alexandru MINEA; Patrick VILLIEU; Anastasios XEPAPADEAS
    Keywords: , Growth, Environment, Pollution, Poverty Traps, Endogenous Cycles
    Date: 2021
  5. By: Ferrari, Massimo; Pagliari, Maria Sole
    Abstract: In this paper we explore the cross-country implications of climate-related mitigation policies. Specifically, we set up a two-country, two-sector (brown vs green) DSGE model with negative production externalities stemming from carbon-dioxide emissions. We estimate the model using US and euro area data and we characterize welfare-enhancing equilibria under alternative containment policies. Three main policy implications emerge: i) fiscal policy should focus on reducing emissions by levying taxes on polluting production activities; ii) monetary policy should look through environmental objectives while standing ready to support the economy when the costs of the environmental transition materialize; iii) international cooperation is crucial to obtain a Pareto improvement under the proposed policies. We finally find that the objective of reducing emissions by 50%, which is compatible with the Paris agreement's goal of limiting global warming to below 2 degrees Celsius with respect to pre-industrial levels, would not be attainable in absence of international cooperation even with the support of monetary policy. JEL Classification: F42, E50, E60, F30
    Keywords: climate modelling, DSGE model, open-economy macroeconomics, optimal policies
    Date: 2021–06
  6. By: Toke R. Fosgaard (Department of Food and Resource Economics, University of Copenhagen); Alice Pizzo (Department of Food and Resource Economics, University of Copenhagen); Sally Sadoff (Rady School of Management, University of California, San Diego)
    Abstract: Food production is a primary contributor to climate change with greenhouse gas (GHG) emissions varying widely across food groups. In a randomized experiment, we examine the impact of providing individualized information on the GHG emissions of grocery purchases via a smartphone app, compared to providing information on spending. Carbon footprint information decreases GHG emissions from groceries by an estimated 27% in the first month of treatment, with an estimated 45% reduction in emissions from beef, the highest emissions food group. Treatment effects fade in the longer-run along with app engagement. However, we find evidence of persistent effects among those who remain engaged with the app. Our results suggest that individualized carbon footprint information can reduce the climate impact of food consumption but requires sustained engagement.
    Keywords: Field Experiment, Pro-environmental Behavior, Carbon Footprint, Food Consumption, Consumer Behavior
    JEL: C93 D11 D91 Q5
    Date: 2021–06

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