nep-res New Economics Papers
on Resource Economics
Issue of 2021‒07‒19
five papers chosen by

  1. When externalities collide: influenza and pollution By Zivin, Joshua Graff; Neidell, Matthew; Sanders, Nicholas; Singer, Gregor
  2. Ethics of the Environment By Julia M. Puaschunder
  3. Carbon Pricing and Power Sector Decarbonisation: Evidence from the UK By Marion Leroutier
  4. Emission tax and strategic environmental corporate social responsibility in a Cournot–Bertrand comparison By Xu, Lili; Chen, Yuyan; Lee, Sang-Ho
  5. The Reallocation Effect of Emissions Cap-and-Trade: Evidence from China By Kwon, Ohyun; Zhao, Hao; Zhao, Min Qiang

  1. By: Zivin, Joshua Graff; Neidell, Matthew; Sanders, Nicholas; Singer, Gregor
    Abstract: Influenza and air pollution each pose significant public health risks with large global economic consequences. The common pathways through which each harms health presents an interesting case of compounding risk via interacting externalities. Using instrumental variables based on changing wind directions, we show increased levels of contemporaneous pollution significantly increase influenza hospitalizations. We exploit random variations in the effectiveness of the influenza vaccine as an additional instrument to show vaccine protection neutralizes this relationship. This suggests seemingly disparate policy actions of pollution control and vaccination campaigns jointly provide greater returns than those implied by addressing either in isolation.
    Keywords: air pollution; influenza; hospitalizations; vaccines; externalities; ES/R009708/1
    JEL: Q53 I12 I11
    Date: 2021–06–28
  2. By: Julia M. Puaschunder (The New School, New York, USA)
    Abstract: Globalization leveraged pressure on contemporary society. Today's most pressing social dilemmas regarding climate change demand for inclusive solutions that marry the idea of sustainable growth with environmental economics. Understanding the bounds of environmental limits to avoid ethical downfalls beyond the control of singular nation states infringing on intergenerational equity – the fairness to provide an at least as favorable standard of living to future generations as enjoyed today – has become a blatant demand. In a history of turning to natural law as a human-imbued moral compass for solving societal downfalls on a global scale in times of crises; the paper covers the ethical justification for environmental economics. Climate change demands for intergenerational equity in the 21st century and climate justice attention around the globe, while the gains and losses of a warming globe are distributed unequally. Only ethical foundations and imperatives will help to provide the groundwork on climate justice within a society, around the world and over time. Ethics of the environment derived from a human natural drive towards intergenerational fairness back climate justice based governance and private sector solutions.
    Keywords: Climate Bonds, Climate Change, Climate Justice, Climatorial Imperative, Economics of the Environment, Ethics, Environmental Justice, Environmental Governance, Heidegger, Kant, Public Policy, Rawls, Sustainability, Teaching
    Date: 2021–03
  3. By: Marion Leroutier (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Decreasing greenhouse gas emissions from electricity generation is crucial to tackle climate change. Yet, empirically little is known on the effectiveness of economic instruments in the power sector. This paper examines the impact of the UK Carbon Price Support (CPS), a carbon tax implemented in the UK power sector in 2013. Compared to a synthetic control unit built from other European countries, emissions from the UK power sector declined by 26 percent on an average year between 2013 and 2017. Bounds on the effects of potential UK confounding policies and several placebo tests suggest that the carbon tax caused at least 80% of this decrease. Three mechanisms are highlighted: a decrease in emissions at the intensive margin; the closure of some high-emission plants at the extensive margin; and a higher probability of closure than in the synthetic UK for plants at risk of closure due to European air quality regulations. This paper shows that a carbon tax on electricity generation can lead to successful decarbonisation.
    Keywords: Synthetic control method,Synthetic control method carbon tax,Electricity generation,Carbon tax
    Date: 2021–06
  4. By: Xu, Lili; Chen, Yuyan; Lee, Sang-Ho
    Abstract: This study considers strategic relations between emission tax and environmental corporate social responsibility (ECSR) in a Cournot–Bertrand comparison, and analyzes two different timings of the games between a tax-then-ECSR (T game) and an ECSR-then-tax (E game). We show that the T game always yields higher emission tax than the E game irrespective of competition modes, but lower ECSR under Cournot while higher ECSR when the marginal damage is high under Bertrand. Additionally, compared with Bertrand, Cournot yields lower (higher) ECSR in the T (E) game, but lower emission tax in the E game while higher emission tax when the product substitutability is low in the T game. We finally show that firms always prefer Cournot competition with the commitment of E game irrespective of the product substitutability and marginal damage.
    Keywords: Emission tax; environmental corporate social responsibility; Cournot–Bertrand comparison; tax-then-ECSR; ECSR-then-tax
    JEL: H23 L13 M14
    Date: 2021–06
  5. By: Kwon, Ohyun (Drexel University); Zhao, Hao (Chapman University); Zhao, Min Qiang (Xiamen University)
    Abstract: Under a heterogeneous firm framework, this paper demonstrates a novel channel through which emissions cap-and-trade mitigates production-side distortion vis-à-vis an emissions cap. Specifically, a pro rata emissions cap across firms is excessively stringent for more productive firms, leading to negative reallocation in favor of less productive firms. Allowing firms to trade emission permits restores the efficiency loss via positive reallocation without increasing total emissions. Our empirical investigation that exploits the regional and temporal variation in the implementation of cap and cap-and-trade policies in China shows that the emission intensities of more productive firms declined and then increased relative to those of their less productive counterparts following the sequential implementation of emissions cap and cap-and-trade, confirming our key theoretical prediction. Provinces that implemented emissions cap-and-trade achieved greater output growth while being equally effective in curbing total emissions.
    Keywords: emissions cap-and-trade; heterogeneous firms; reallocative efficiency
    JEL: L51 Q53 Q58
    Date: 2021–06–21

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