nep-res New Economics Papers
on Resource Economics
Issue of 2022‒04‒18
four papers chosen by
Maximo Rossi
Universidad de la República

  1. Towards net zero emissions in Denmark By Andrew Barker; Hélène Blake; Filippo Maria D’Arcangelo; Patrick Lenain
  2. Economic geography and the efficiency of environmental regulation By Hollingsworth, Alex; Jaworski, Taylor; Kitchens, Carl; Rudik, Ivan
  3. Do PTAs with environmental provisions reduce GHG emissions? Distinguishing the effectiveness of climate-related provisions By Sorgho, Zakaria; Tharakan, Joe
  4. Exposure to Climate Shocks, Poverty and Happiness: The ”Three Little Pigs” Effect By Leonardo Becchetti; Sara Mancini; Sara Savastano

  1. By: Andrew Barker; Hélène Blake; Filippo Maria D’Arcangelo; Patrick Lenain
    Abstract: Denmark has been a frontrunner in policies that reduce greenhouse gas emissions and now plans to cut emissions by 70% by 2030 from 1990 levels and to achieve carbon neutrality by 2050. Such ambition induces halving emissions from 2019 levels and making the same emission abatement effort in ten years than the past thirty years. Cutting emissions at such fast pace will be challenging with substantial disruptions and macroeconomic consequences. A balanced mix of pricing policies, public investment, regulation and enabling policies should allow smoothing the potential economic and social shocks and accompanying the reallocation of resources.This paper investigates further sectoral climate strategies in Denmark. In the energy sector (electricity and district heating), past progress made to ramp up clean technologies provides a good blueprint to achieve further decarbonisation, but the focus will need to be put soon on lowering reliance on woody biomass. In the transport sector, emissions have continued to increase despite the shift to more fuel-efficient vehicles, highlighting the need for more transformative policies to expand alternatives to individual car uses. In agriculture, little has been done so far to cut emissions, especially from livestock. The sector is subject to leakage risks, but nonetheless should be encouraged to transform its practices. Helping farmers to monitor their GHG emissions should be combined with more stringent regulation.
    Keywords: Agriculture, Climate change adaptation, Climate change mitigation, Climate strategy, Denmark, Energy, Environmental taxation, Public policy, Transport
    JEL: H21 H23 H50 H54 Q52 Q53 Q54 Q55 Q56 Q15 Q42 Q43 Q48 R48
    Date: 2022–04–04
  2. By: Hollingsworth, Alex; Jaworski, Taylor; Kitchens, Carl; Rudik, Ivan (Cornell University)
    Abstract: We develop a spatial equilibrium model to evaluate the efficiency and distributional impacts of the leading air quality regulation in the United States: the National Ambient Air Quality Standards (NAAQS). We link our economic model to an integrated assessment model for air pollutants which allows us to capture endogenous changes in emissions, amenities, labor, and production. Our results show that the NAAQS generate over $23 billion of annual welfare gains. This is roughly 80 percent of welfare gains of the second-best NAAQS design, but only 25 percent of the first-best emission pricing policy. The NAAQS benefits are concentrated in a small set of cities, impose substantial costs on manufacturing workers, improve amenities in counties in compliance with the NAAQS, and reduce emissions in compliance counties through general equilibrium channels. These findings highlight the importance of accounting for geographic reallocation and equilibrium responses when quantifying the effects of environmental regulation.
    Date: 2022–03–11
  3. By: Sorgho, Zakaria; Tharakan, Joe (Université catholique de Louvain, LIDAM/CORE, Belgium)
    Abstract: This paper assesses the effectiveness on climate change mitigation of the environmental-related commitments contained in preferential trade agreements (PTAs). The starting question is does any PTA with environmental provisions reduce emissions? Because of a lack of detailed data on PTAs, the academic literature on the role of PTAs with environmental provisions (PTAwEP) in global climate governance remains limited. A novel and detailed database identifying nearly 300 different types of environmental provisions from more than 680 PTAs since 1947 allows us to distinguish the PTAs with climate-related provisions (PTAwCP) from those with provisions related to other environmental issues. Using panel data covering 165 countries over the period 1995 to 2012, controlling for endogeneity issues, our main result shows that PTAwCP statistically reduce the emissions while the effect of PTAs with provisions related to other environmental issues remains a negative but not significant on emissions. Our results suggest that it is rather the specific climaterelated provisions in PTAwEP that positively affect the environmental quality. Thus, to be effective in terms of mitigating climate change, PTAwEP should contain climate-related commitments.
    Keywords: Preferential trade agreements ; Climate-related provisions ; Environmental policy ; Greenhouse gases ; Global warming ; Climate change
    JEL: F13 F18 Q51 Q54
    Date: 2022–01–01
  4. By: Leonardo Becchetti (CEIS & DEF, University of Rome "Tor Vergata"); Sara Mancini (University of Rome "Tor Vergata"); Sara Savastano (CEIS & DEF, University of Rome "Tor Vergata" and IFAD)
    Abstract: We evaluate the impact of climate shocks on household subjective wellbeing on a sample of farmers in a Small Island Developing State (SIDS) of the Pacific (the Solomon Islands). We find that both subjective (self-assessed exposure to climate shocks) and objective (past cumulative extended dry spells) environmental stress indicators significantly reduce respondent’s subjective wellbeing. Using the compensating surplus approach we calculate that this loss requires several years of crop income to be compensated. Subjective wellbeing is more severely impacted for farmers with poor dwellings (ie. with thatch walls, consistently with the well known Disney tale), below median income or durable asset and for farmers living more isolated and not being members of formal agricultural associations. Farmers hit by climate shocks experienced in significantly higher proportion nutrition problems in their households. These findings support the hypothesis of the strong interdependence between environmental and social shocks.
    Keywords: climate shock, subjective wellbeing, compensating surplus, small scale Pacific islands.
    JEL: I31 Q01 Q20
    Date: 2022–04–02

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