nep-res New Economics Papers
on Resource Economics
Issue of 2021‒09‒27
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Prices vs. Quantities in International Pollution Regulation By Jared C. Carbone
  2. Green technologies, complementarities, and policy By Nicolò Barbieri; Alberto Marzucchi; Ugo Rizzo
  3. The effects of extractive industries rent on deforestation in developing countries By Harouna Kinda; Noel Thiombiano

  1. By: Jared C. Carbone (Colorado School of Mines)
    Abstract: In simple models of pollution regulation, both emission taxes and systems of tradable emission permits are minimum-cost methods of achieving a target level of pollution reduction. In this paper, I identify a source of asymmetry between permits and taxes based on the expectation a nation holds for the effect of its policy on interntational prices and pollution levels. Taxes allow for flexibility in the quantity of pollution produced and permits do not. In the context of international pollution policy, this means that a country may reasonably anticipate no foreign emission response to domestic abatement changes when the world’s abatement programs are denominated in terms of permits because permits cap aggregate pollution levels. The same is not true in tax-based regimes. Thus, tax or permit-based plans with the same regulatory goals will result in different equilibrium emission reductions, a different cost-benefit balance, and a different regional distribution of welfare impacts. The analysis provides an analytical description of the incentives faced by countries in each of these regimes and a numerical characterization of equilibrium outcomes for greenhouse gas emissions in a calibrated, general equilibrium model.
    Keywords: climate change, general equilibrium, tradable permits, carbon tax
    JEL: D58 F18 F42 Q52 Q54
    Date: 2021–09
  2. By: Nicolò Barbieri (Department of Economics and Management, University of Ferrara, Ferrara, Italy); Alberto Marzucchi (Gran Sasso Science Institute, Social Sciences, L’Aquila, Italy); Ugo Rizzo (Department of Mathematics and Computer Science, University of Ferrara, Ferrara, Italy)
    Abstract: The present study explores the technological complementarities between green and non-green inventions. First, we look at whether inventive activities in climate-friendly domains depend on patenting in related technological domains that are not green. Based on patent data filed over the 1978–2014 period, we estimate a spatial autoregressive model using co-occurrence matrices to capture technological interdependencies. Our first finding highlights that the development of green technologies strongly relies on advances in other green and in particular non-green technological domains, whose relevance for the green economy is usually neglected. Building on this insight, we detect the non-green complementary technologies that co-occur with green ones and assess whether environmental policies affect this particular instantiation of technologies at the country level. The results of the instrumental variable approach confirm that while environmental policies spur green patenting, they do not displace the development of the non-green technological pillars upon which green inventions develop.
    Keywords: Green technology, patent data, environmental policy, network-dependent innovation
    JEL: H23 O31 Q58 Q55
    Date: 2021–09
  3. By: Harouna Kinda (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Noel Thiombiano
    Abstract: The extractive industries (oil, gas, and mining) play a dominant economic, social, and political role in the lives of approximately 3.5 billion people living in 81 countries across the world. However, the benefits come at a cost that is no longer limited to the problems of the ‘curse of natural resources', but also includes the damage of greenhouse gas emissions, pollution, and biodiversity that extraction wreaks on the environment. This paper revisits the links between man-made and natural capital in developing countries, focusing on the case of forest cover loss . Considering a theoretical model of income maximization, we assess through empirical observation the impact of extractive industries on forest cover loss. Based on a panel of 52 resource-rich developing countries, over the period 2001-2017, we adopt a dynamic specification with the two-step Generalized Method of Moments (GMM) system to address the inherent bias. Our main results show that the total rent from the extractive industries is detrimental to the forest. More specifically, mineral and gas rents accelerate forest cover loss. In contrast, oil rents contribute to reducing forest cover loss. In addition, we find that natural resource tax revenues contribute to reducing forest cover loss. Our results suggest substitutability between oil rents (natural resource tax revenues and forest natural capital), and complementarity between mineral rents (gas rents and forest natural capital). To promote corporate environmental management, stakeholders must overcome regulatory inefficiencies in exploration and exploitation contracts so that environmental compensation is at least equal to the marginal damage caused by the extractive industries.
    Date: 2021–07–04

This nep-res issue is ©2021 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.