nep-res New Economics Papers
on Resource Economics
Issue of 2021‒09‒13
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Optimal Mix of Policy Instruments and Green Technology Transitions By Dato, Prudence; Krysiak, Frank C.
  2. North-South Displacement Effects of Environmental Regulation: The Case of Battery Recycling By Tanaka, Shinsuke; Teshima, Kensuke; Verhoogen, Eric
  3. Water Conservation and the Common Pool Problem: Can Pricing Address Free-Riding in Residential Hot Water Consumption? By Elinder, Mikael; Hu, Xiao; Liang, Che-Yuan

  1. By: Dato, Prudence (University of Basel); Krysiak, Frank C.
    Abstract: Green innovation is a key element in fighting climate change. But there are several challenges that need to be addressed in managing a green technology transition, both in terms of interacting market failures (environmental externality, public good nature of innovation, strategic behaviour of incumbents protecting an emission-intensive technology) and as the structure of the technology market (whether the new technology is offered by a monopolistic incumbent or whether there is some competition induced by market entrants) will evolve throughout the transition. In this paper, we investigate the question what constitutes the optimal policy at different stages of the technology transition and for different market structures. We first analyse a policy mix that can implement a first-best outcome. We show that this mix will differ between different market settings and for different stages of the technology transition. Second, we investigate the choice between a push policy (subsidy for the new technology) and a pull strategy (tax on the old technology) and show that throughout the transition, the policy should be switched, often even more than once. Overall, our results indicate that managing a green technology transition requires a sequence of different policies attuned to the state of the transition and that this sequence differs substantially for different cases, for example, different levels of environmental damage or different cost advantages of the incumbent over entrants.
    Keywords: Policy, Tax, Subsidy, Green Technology, Imperfect Competition, Technology Transition, Innovation, Endogenous Market Structure, Emissions, Climate Change, Environmental Economics.
    JEL: C60 L10 O31 Q54 Q55
    Date: 2021–08–24
  2. By: Tanaka, Shinsuke (Tufts University); Teshima, Kensuke (ITAM, Mexico); Verhoogen, Eric (Columbia University)
    Abstract: This study examines the effect of a tightening of the U.S. air-quality standard for lead in 2009 on the relocation of battery recycling to Mexico and on infant health in Mexico. In the U.S., airborne lead dropped sharply near affected plants, most of which were battery-recycling plants. Exports of used batteries to Mexico rose markedly. In Mexico, production increased at battery-recycling plants, relative to comparable industries, and birth outcomes deteriorated within two miles of those plants, relative to areas slightly farther away. The case provides a salient example of a pollution-haven effect between a developed and a developing country.
    Keywords: pollution-haven hypothesis, environmental regulation, infant health
    JEL: F18 Q56 O15
    Date: 2021–08
  3. By: Elinder, Mikael (Department of Economics, Uppsala University); Hu, Xiao (Department of Forest Economics and Center for Environmental and Resource Economics (CERE)); Liang, Che-Yuan (Institute for Housing and Urban Research (IBF) and Department of Economics)
    Abstract: Water is an increasingly scarce resource. It is often distributed such that consumers do not face any marginal cost of consumption, creating a common pool problem. For instance, tenants in multi-family buildings can often consume both hot and cold water at zero marginal cost. Using high-frequency data over many years, we analyze how the introduction of apartment-level metering and billing (IMB) affects hot water consumption. We find that introducing a marginal cost, reflecting the market price, decreases consumption drastically by 26%. Hence, price interventions can curb free-riding behavior and help the conservation of cheap but precious resources. Our results also show that heavy water users in the top consumption quartile account for 72% of the reduction. Moreover, cost-benefit calculations indicate that IMB for hot water is a cost-effective policy tool for reducing water and energy consumption.
    Keywords: esidential water consumption; Water conservation; Common pool problem; Free-riding; Individual metering and billing
    JEL: D12 Q21 Q25 Q28
    Date: 2021–09–06

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