nep-res New Economics Papers
on Resource Economics
Issue of 2022‒09‒19
four papers chosen by

  1. Environmental Policies Benefit Economic Development: Implications of Economic Geography By Seth Morgan; Alexander Pfaff; Julien Wolfersberger
  2. The Effectiveness of Policy Measures to Reduce CO2 Emissions from Passenger Cars in Austria By Tobias Eibinger; Hans Manner
  3. Ask a local: Improving the public pricing of land titles in urban Tanzania By Tanner Regan; Martina Manara
  4. How carbon tariffs and climate clubs can slow global warming By Shantayanan Devarajan; Delfin S. Go; Sherman Robinson; Karen Thierfelder

  1. By: Seth Morgan; Alexander Pfaff; Julien Wolfersberger (UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: For over a century, starting with the work of Alfred Marshall (and including in resource economics), economic geography has emphasized the productivity of dense urban agglomerations. Yet little attention goes to one key policy implication of economic geography's core mechanisms: Environmental policies can aid economic development, per se—not hurting the economy to help the environment but advancing both objectives. We review mechanisms from economic geography which imply that environmental policies can deliver such win-wins: influences upon agglomeration of long-standing natural conditions, like usable bays, which long were perceived as fixed yet now are being shifted by global environmental quality; agglomeration's effects on other influential conditions, like urban environmental quality; and the effects of rural nvironmental quality on the flows to cities of people and environmental quality. Finally, we consider a geographic policy typology in asking why society leaves money on the table by failing to promote environmental policies despite the potential win-wins that we highlight.
    Keywords: economic geography,development,environment,natural resources
    Date: 2022–10
  2. By: Tobias Eibinger (University of Graz, Austria); Hans Manner (University of Graz, Austria)
    Abstract: Passenger transport plays a crucial role in achieving climate-neutrality. While a switch to zero-emission vehicles is a crucial part in this process, policy makers likely have to resort to a differentiated mix of complementary policy measures to achieve global targets on climate-neutrality. To help policy makers design effective measures, we analyse the effect of environmental policies on CO2 emissions from passenger cars in Austria from 1965-2019. In a first step, we propose an environmental policy stringency index for the Austrian transport sector for the period 1950-2019. In a second step, we analyse the effect of different policies on transport-related CO2 emissions in a structural vector autoregressive model. This allows us to control for possible interdependencies between the variables. We find that taxes on vehicle-related emissions and policies that influence the usage of cars (through, e.g., speed limits, car-free days, road pricing) can significantly reduce CO2 emissions and contribute to an accelerated transition towards a carbon-neutral society. Among tax-based policies, we find emission-based taxes on new vehicles to be most effective. Finally, our results indicate that more efficient fuels can reduce emissions from existing vehicles at a limited magnitude.
    Keywords: Climate change; CO2 emissions; passenger transport; mitigation; policy stringency; vector autoregression.
    JEL: C32 C54 Q54 Q58 R48
    Date: 2022–08
  3. By: Tanner Regan (George Washington University); Martina Manara (London School of Economics)
    Abstract: Information on willingness-to-pay is key for public pricing and allocation of services but not easily collected. Studying land titles in Dar-es-Salaam, we ask whether local leaders know and will reveal plot owners' willingness-to-pay. We randomly assign leaders to predict under different settings then elicit owners' actual willingness-to-pay. Demand is substantial, but below exorbitant fees. Leaders can predict the aggregate demand curve and distinguish variation across owners. Predictions worsen when used to target subsidies, but adding cash incentives mitigates this. We demonstrate that leader-elicited information can improve the public pricing of title deeds, raising uptake while maintaining public funds.
    Keywords: property rights; willingness-to-pay; public pricing; local publicly provided goods
    JEL: O17 H40 R21 D80
    Date: 2022–07
  4. By: Shantayanan Devarajan (Georgetown University); Delfin S. Go; Sherman Robinson (Peterson Institute for International Economics); Karen Thierfelder (US Naval Academy)
    Abstract: Slowing global warming requires countries to reduce carbon emissions, which imposes costs on their economies. To be effective, most countries must agree collectively to participate (e.g., the Paris Agreement, COP26). However, every country has an incentive not to comply and still reap the benefits of other countries' actions--a classic free-rider problem. This paper evaluates recent recommendations to use trade policy to solve the free-rider problem associated with climate mitigation strategies. It shows that the European Union's carbon border adjustment mechanism (CBAM tariffs) are effective at offsetting the unfair competitive advantage of noncompliant countries in the markets of compliant countries but have little effect on the trade of noncompliant countries, who can divert trade to other noncompliers. CBAM tariffs alone have little impact on global CO2 emissions. The paper also examines "climate clubs" (coalitions of countries that agree to impose carbon taxes or other equivalent policies and impose punitive tariffs on non-club members to induce them to join the club). It finds that punitive climate club tariffs can be effective in inflicting significant damage on the economies of nonmembers, providing a strong incentive for them to join the club. The paper identifies trade dependence between club and non-club members as an important consideration for the success of a climate club. Club members that are strongly linked to non-club members suffer losses when the club punishes non-club members, which would make them hesitant to impose punitive tariffs on a major nonmember trading partner.
    Keywords: carbon taxes, greenhouse gas (GHG) emissions, climate clubs, carbon tariffs, carbon border adjustment mechanism (CBAM), computable general equilibrium (CGE) models, trade dependence
    JEL: F18 C68 Q54 Q43
    Date: 2022–09

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.