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on Resource Economics |
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Issue of 2022‒03‒07
seven papers chosen by |
| By: | Stephen J. DeCanio; Charles F. Manski; Alan H. Sanstad |
| Abstract: | Integrated assessment models have become the primary tools for comparing climate policies that seek to reduce greenhouse gas emissions. Policy comparisons have often been performed by considering a planner who seeks to make optimal trade-offs between the costs of carbon abatement and the economic damages from climate change. The planning problem has been formalized as one of optimal control, the objective being to minimize the total costs of abatement and damages over a time horizon. Studying climate policy as a control problem presumes that a planner knows enough to make optimization feasible, but physical and economic uncertainties abound. Earlier, Manski, Sanstad, and DeCanio proposed and studied use of the minimax-regret (MMR) decision criterion to account for deep uncertainty in climate modeling. Here we study choice of climate policy that minimizes maximum regret with deep uncertainty regarding both the correct climate model and the appropriate time discount rate to use in intergenerational assessment of policy consequences. The analysis specifies a range of discount rates to express both empirical and normative uncertainty about the appropriate rate. The findings regarding climate policy are novel and informative. The MMR analysis points to use of a relatively low discount rate of 0.02 for climate policy. The MMR decision rule keeps the maximum future temperature increase below 2C above the 1900-10 level for most of the parameter values used to weight costs and damages. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2201.08826&r= |
| By: | Julien Daubanes (UNIGE - Université de Genève); Fanny Henriet (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); Katheline Schubert (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) |
| Abstract: | We examine an open economy's strategy to reduce its carbon emissions by replacing its consumption of coal—very carbon intensive—with gas—less so. Unlike the standard theoretical approach to carbon leakage, we show that unilateral CO2 reduction policies generate a higher leakage rate in the presence of more than one carbon energy source and may turn counterproductive, ultimately increasing world emissions. We establish testable conditions as to whether a unilateral tax on domestic CO2 emissions increases the domestic exploitation of gas and whether such a strategy increases global emissions. We also characterize this strategy's implications for climate policy in the rest of the world. Finally, we present an illustrative application of our results to the United States. |
| Keywords: | unilateral climate policy,carbon emission reduction,shale gas,gas-coal substitution,coal exports,carbon leakage,US policy,counter-productive policy |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03093955&r= |
| By: | Victor Ajayi (EPRG, CJBS, University of Cambridge); Karim Anaya (EPRG, CJBS, University of Cambridge); Michael Pollitt (EPRG, CJBS, University of Cambridge) |
| Keywords: | Total factor productivity, incentive regulation, electricity networks, emissions |
| JEL: | D24 H23 L43 L94 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2126&r= |
| By: | Ramit Debnath (Department of Architecture, University of Cambridge); Ronita Bardhan (Department of Architecture, University of Cambridge); Kamiar Mohaddes (EPRG, CJBS, University of Cambridge); Darshil U Shah (Department of Architecture, University of Cambridge); Michael H. Ramage (Department of Architecture, University of Cambridge) |
| Keywords: | Emission, climate change, building, computational social science, people-centric transition, Twitter |
| JEL: | C63 Q54 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2203&r= |
| By: | Persico, Claudia L (American University); Marcotte, Dave E. (American University) |
| Abstract: | Though there is clinical evidence linking pollution induced inflammatory factors and major depression and suicide, no definitive study of risk in the community exists. In this study, we provide the first population-based estimates of the relationship between air pollution and suicide in the United States. Using detailed cause of death data from all death certificates in the U.S. between 2003 and 2010, we estimate the relationship between daily variation in air quality measured using NASA satellite data, and suicide rates. Using wind direction as an instrument for reducing potentially endogeneity and measurement error in daily pollution exposure, we find that a 1 μg/m3 increase in daily PM2.5 is associated with a 0.49 percent increase in daily suicides (a 19.3 percent increase). We also estimate the impact of days with high air pollution on contemporaneous suicide rates compared to other days in the same state-month, month-year, day of the week and county with lower air pollution, conditional on the same weather and total population. Estimates using 2SLS are larger and more robust, suggesting a bias towards zero arising from measurement error. Event study estimates further illustrate that contemporaneous pollution exposure matters more than exposure to pollution in previous weeks. |
| Keywords: | air pollution, suicide, health |
| JEL: | I10 Q52 Q53 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15087&r= |
| By: | Zeynep Clulow (EPRG, CJBS, University of Cambridge); David Reiner (EPRG, CJBS, University of Cambridge) |
| Keywords: | climate scepticism, anti-vaccine, public perceptions, trust, COVID-19 |
| JEL: | I12 I18 Q54 Q58 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2205&r= |
| By: | Dietz, Simon; van der Ploeg, Frederick; Rezai, Armon; Venmans, Frank |
| Abstract: | We show that economic models of climate change produce climate dynamics inconsistent with current climate science models: (i) the delay between CO2 emissions and warming is much too long and (ii) positive carbon cycle feedbacks are mostly absent. These inconsistencies lead to biased economic policy advice. Controlling for how the economy is represented, different climate models result in significantly different optimal CO2 emissions. A long delay between emissions and warming leads to optimal carbon prices that are too low and attaches too much importance to the discount rate. Similarly we find that omitting positive carbon cycle feedbacks leads to optimal carbon prices that are too low. We conclude it is important for policy purposes to bring economic models in line with the state of the art in climate science and we make practical suggestions for how to do so. |
| Keywords: | carbon cycle; carbon price; climate change; integrated assessment modelling; positive feedbacks; social cost of carbon |
| JEL: | Q54 |
| Date: | 2021–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:108887&r= |