nep-res New Economics Papers
on Resource Economics
Issue of 2022‒10‒31
four papers chosen by

  1. Understanding Climate Damages: Consumption versus Investment By Gregory Casey; Stephie Fried; Matthew Gibson
  2. Carbon Pricing and Firm-Level CO2 Abatement: Evidence from a Quarter of a Century-Long Panel By Martinsson, Gustav; Sajtos, László; Strömberg, Per; Thomann, Christian
  3. Climate Change Salience, Economic Insecurity, and Support for Mitigation Policies By Johnston, David W.; Knott, Rachel; Mendolia, Silvia
  4. Air pollution and child development in India By A. Balietti; S. Datta; S. Veljanoska

  1. By: Gregory Casey; Stephie Fried; Matthew Gibson
    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; productivity; consumption; investments; structural changes; growth
    JEL: Q56
    Date: 2022–10–04
  2. By: Martinsson, Gustav (Royal Institute of Technology, Swedish House of Finance (SHoF)); Sajtos, László (Tillväxtanalys, Swedish House of Finance (SHoF), Misum); Strömberg, Per (Stockholm School of Economics, Swedish House of Finance (SHoF), CEPR, ECGI); Thomann, Christian (Royal Institute of Technology, Swedish House of Finance (SHoF), Misum)
    Abstract: Sweden was one of the first countries to introduce a carbon tax in 1991. We assemble a unique dataset tracking all CO2 emissions from the Swedish manufacturing sector to estimate the impact of carbon pricing on firm-level emission intensities. In panel regressions, spanning 26 years and around 4,000 firms, we find a statistically robust and economically meaningful negative relationship between emissions and marginal carbon pricing. We estimate an emission-to-pricing elasticity of around two, albeit with substantial heterogeneity across manufacturing subsectors. A simple calibration implies that 2015 CO2 emissions from Swedish manufacturing would have been roughly 30% higher without carbon pricing.
    Keywords: Carbon taxation; Emissions trading; Climate Policy; Climate change; Green growth; Tax policy
    JEL: H23 H23 Q54 Q58
    Date: 2022–10–06
  3. By: Johnston, David W. (Monash University); Knott, Rachel (Monash University); Mendolia, Silvia (University of Wollongong)
    Abstract: Many people remain opposed to climate change mitigation policies. This opposition is an obstacle to policy action and, therefore, important to understand. We explore how unusually high temperatures (heat waves), which observably increase the salience of climate change-related issues, affect people's support for policies to reduce emissions. We additionally test whether this relationship is moderated by economic status and employment conditions. By linking local temperature observations to attitudes collected in large U.K. surveys, we find that unusually hot weather caused significant reductions in support in 2012-2013, a high-unemployment period, but not in 2018-2019, a low-unemployment period. The negative effects in 2012-2013 were driven by people working in carbon-intensive industries and people who felt economically insecure. Overall, these findings suggest that economically vulnerable groups can respond negatively to the promotion of climate change mitigation policies, but that this negativity is mutable.
    Keywords: climate change, attitudes, economic insecurity, employment
    JEL: D83 H23 Q54 Q58
    Date: 2022–09
  4. By: A. Balietti (Heidelberg University); S. Datta (ETH Zürich - Eidgenössische Technische Hochschule - Swiss Federal Institute of Technology [Zürich]); S. Veljanoska (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In this paper, we study the impact of air pollution on child growth in India. We rely on wind direction to capture quasi-random variation in three main criteria air pollutants. We show that an increase in the average concentration of fine particulate matter by one standard deviation is accountable for almost 5 and 2.4 percentage points of stunting and severe stunting rates, respectively. We also find that ozone and carbon monoxide impact weight-related outcomes. Stunting has critical long-term health and economic consequences; through its impact on stunting, pollution exacerbates the height premium in earnings, with girls being more adversely affected than boys in India. © 2022 Elsevier Inc.
    Keywords: Ambient air pollution,Anthropometry,Child health,Height premium,Wind direction
    Date: 2022

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