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on Resource Economics |
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Issue of 2022‒03‒21
three papers chosen by |
| By: | Gregory Casey (Williams College); Stephie Fried (Arizona State University); Matthew Gibson (Williams College) |
| Abstract: | Existing climate-economy models use aggregate damage functions to model the effects of climate change. This approach assumes climate change has equal impacts on the productivity of firms that produce consumption and investment goods or services. We show the split between damage to consumption and investment productivity matters for the dynamic consequences of climate change. Drawing on the structural transformation literature, we develop a framework that incorporates heterogeneous climate damages. When investment is more vulnerable to climate, we find short-run consumption losses will be smaller than leading models with aggregate damage functions suggest, but long-run consumption losses will be larger. We quantify these effects for the climate damage from heat stress and find that accounting for heterogeneous damages increases the welfare cost of climate change by approximately 4 to 24 percent, depending on the discount factor. |
| Keywords: | Climate Change, Structural Transformation, Growth |
| JEL: | O13 O44 Q56 |
| Date: | 2022–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:wil:wileco:2022-01&r= |
| By: | Philippe Aghion (Collège de France); Roland Bénabou (Princeton University); Ralf Martin (Imperial College London); Alexandra Roulet (INSEAD) |
| Abstract: | We investigate the effects of consumers' environmental concerns and market competition on firms' decisions to innovate in "clean" technologies. Agents care about their consumption and environmental footprint; firms pursue greener products to soften price competition. Acting as complements, these forces determine R&D, pollution, and welfare. We test the theory using panel data on patents by 8,562 automobile-sector firms in 41 countries, environmental willingness-to pay, and competition. As predicted, exposure to prosocial attitudes fosters clean innovation, all the more so where competition is strong. Plausible increases in both together can spur it as much as a large fuel-price increase. |
| Keywords: | climate change, Competition, Environment, Innovation, Patents, Social Responsibility |
| JEL: | D21 D22 D62 D64 H23 O30 O31 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2021-64&r= |
| By: | Stephanie von Hinke (School of Economics, University of Bristol, Erasmus School of Economics, Erasmus University Rotterdam, Institute for Fiscal Studies); Emil N. S{\o}rensen (School of Economics, University of Bristol) |
| Abstract: | This paper uses a large UK cohort to investigate the impact of early-life pollution exposure on individuals' human capital and health outcomes in older age. We compare individuals who were exposed to the London smog in December 1952 whilst in utero or in infancy to those born after the smog and those born at the same time but in unaffected areas. We find that those exposed to the smog have substantially lower fluid intelligence and worse respiratory health, with some evidence of a reduction in years of schooling. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2202.11785&r= |