nep-res New Economics Papers
on Resource Economics
Issue of 2023‒04‒03
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Adapting to Climate Risk? Local Population Dynamics in the United States By Agustín Indaco; Francesc Ortega
  2. Climate change and growth By Stern, Nicholas; Stiglitz, Joseph E.
  3. Emissions and Global Development: Evidence from the Environmental Kuznets Curve By Walter Cont; Fernando Antonio Ignacio González; Eliana Mariel Uesu
  4. The Relevance of Life-Cycle CO2 Emissions for Vehicle Purchase Decisions: A Stated Choice Experiment for Germany By Michaela V. Gerhardt; Elke D. Kanberger; Andreas Ziegler
  5. Carbon Tax in the Shipping Sector: Assessing Economic and Environmental Impacts By Paula Pereda; Andrea Lucchesi, Thais Diniz, Rayan Wolf
  6. Willingness to Pay for Carbon Mitigation: Field Evidence from the Market for Carbon Offsets By Rodemeier, Matthias

  1. By: Agustín Indaco (Carnegie Mellon University in Qatar); Francesc Ortega (CUNY, Queens College)
    Abstract: Using a new composite climate-risk index, we show that population in high-risk counties has grown disproportionately over the last few decades, even relative to the corresponding commuting zone. We also find that the agglomeration is largely driven by increases in the (white) working-age population. In addition, we show that high-risk tracts have typically grown more than low-risk tracts within the same county, suggesting the presence of highly localized amenities in high-risk areas. We also document heterogeneous population dynamics along a number of dimensions. Specifically, population has been retreating from high-risk, lowurbanization locations, but continues to grow in high-risk areas with high residential capital. The findings above hold for most climate hazards. However, we document that tracts with high risk of coastal flooding have grown significantly less than other tracts in the same county
    Keywords: Climate risk; Agglomeration; Migration
    JEL: J3 J7
    Date: 2023–03
  2. By: Stern, Nicholas; Stiglitz, Joseph E.
    Abstract: Contrary to much of the conventional wisdom, taking stronger actions on climate change may enhance economic growth, even as conventionally measured, but even more so, in terms of societal well-being. We identify the flaws in the models and analyses which contend that there must be a trade-off and explain the mechanisms and dynamic forces which have the potential to enhance growth. Critically, there are numerous market failures that result in suboptimal economic performance. We explain how addressing climate change reduces the bite of these failures and enhances the incentives and political will to address them. We identify packages of policies that alleviate market failures, enhance growth, and reduce carbon emissions. Finally, we argue that the green transition is coming at a time when, both because of persistent deficiencies of aggregate demand and advances in technology, including artificial intelligence and robotization, the macroeconomic opportunity costs of strong climate actions may be especially low and the benefits particularly high.
    JEL: O40 O49 Q58
    Date: 2023–02–17
  3. By: Walter Cont; Fernando Antonio Ignacio González; Eliana Mariel Uesu
    Abstract: The global sustainable development agenda indicates that countries must achieve a rapid reduction in greenhouse gases emissions (decarbonization) while sustaining economic growth to continue improving living standards -especially in developing countries-. The relationship between emissions and economic growth is complex. One of the most widely used tools to model this relationship is the so-called Environmental Kuznets curve (EKC). The EKC suggests the existence of an inverted-U relationship between greenhouse gases (GHG) emissions and economic growth. In this work, we estimate the EKC for a broad panel of countries spanning the last three decades (1990-2019), using a panel regression with fixed effects. We find a positive relationship between GHG emissions and growth. Emissions eventually turn with income when we narrow down the analysis to carbon dioxide excluding land use, land use change and forestry, supporting the EKC hypothesis. These results are robust when decomposing by emitting activities (energy and industrial processes) and sub-activities (electricity, transportation and buildings), but they are not robust to decomposition by regions. In the 1990-2019 sample, we find no relationship between emissions and growth in the Latin American and the Caribbean, as well as some other regions. We use the results to assess the level of income at which emissions eventually decouple from growth. Even though we show some disperse results, which are common in the literature, we recommend cautiousness and deeper research in fostering growth hoping emissions will eventually turn. Therefore, decarbonization efforts should not be diminished.
    JEL: Q56 O13
    Date: 2022–11
  4. By: Michaela V. Gerhardt (University of Kassel); Elke D. Kanberger (University of Kassel); Andreas Ziegler (University of Kassel)
    Abstract: This paper examines the individual preferences for a reduction of life-cycle CO2 emissions in vehicle purchase decisions. The empirical analysis is based on data from a stated choice experiment with more than 1, 100 citizens in Germany that refers to decisions between three types of electric vehicles and a conventional (i.e. gasoline or diesel) vehicle that are characterized by several attributes like purchase price or fuel costs. With respect to CO2 emissions, we specifically examine emissions in vehicle production besides the commonly considered emissions in vehicle use. Our econometric analysis with flexible mixed logit models reveals a strong stated preference for the reduction of CO2 emissions in both vehicle use and production, whereby the estimated willingness to pay for CO2 emission reductions is higher for vehicle production. Furthermore, we find that conventional vehicles are significantly preferred over plug-in hybrid electric vehicles and particularly strongly significantly preferred over extended-range and pure electric vehicles. Surprisingly, environmental attitudes, i.e. environmental awareness and ecological policy identification, have no significant effects on the reduction of CO2 emissions in both vehicle use and production. These results suggest that citizens in Germany with strong environmental identity do not consider reductions of CO2 emissions in vehicle purchase decisions as an important direction for climate protection. Instead, this group rather tends to avoid the purchase of conventional vehicles since environmental attitudes have a significantly positive effect on the stated choice of electric vehicles, whereby this estimated effect is dominated by an ecological policy orientation instead of general environmental awareness. The latter result suggests the strong relevance of the controversial political discussion about the transition to electromobility in Germany. By considering economic preferences, the econometric analysis additionally reveals that individual trust is relevant for the purchase of plug-in hybrid electric vehicles.
    Keywords: Vehicle purchase decisions, CO2 emissions in vehicle use and production, climate protection, electric vehicles, stated choice experiment, mixed logit models
    Date: 2023
  5. By: Paula Pereda; Andrea Lucchesi, Thais Diniz, Rayan Wolf
    Abstract: We discuss the impact of a carbon tax on the maritime transport sector, which is responsible for approximately 3% of global emissions. The International Maritime Organization (IMO) has set long-term targets to reduce carbon intensity and achieve carbon neutrality, but the impact of the policies to achieve those targets on the global and local economies must be assessed. We use a global and multi-region Computable General Equilibrium (CGE) model - Global Trade Analysis Project Energy-Environmental augmented version (GTAP-E) – to evaluate the environmental and economic effectiveness of a carbon tax of $50/tCO2e on international shipping. GTAP-E does not provide emissions data by transport mode and accurately estimating emissions is crucial to proposing a carbon pricing measure. Therefore, we have applied machine-learning techniques to predict the share of international trade transported by sea by sector, origin and destination countries and calculate ship emissions for each bilateral flow by sector. The findings indicate that while the tax considerably reduced emissions from ships, it also had a negative impact on exports and resulted in mixed impacts on GDP, exacerbating existing inequalities across regions. Our analysis highlights the importance of considering various economic and social variables in impact assessments to identify potential trade-offs and synergies between policy objectives.
    Keywords: Carbon Pricing; Carbon Tax; Shipping; Computable General Equilibrium
    JEL: Q52 R48 F17 Q56
    Date: 2023–03–16
  6. By: Rodemeier, Matthias (Bocconi University)
    Abstract: What do markets for voluntary climate protection imply about people's valuations of en- vironmental protection? I study this question in a large-scale field experiment (N=255, 000) with a delivery service, where customers are offered carbon offsets that compensate for emissions. To estimate demand for carbon mitigation, I randomize whether the delivery service subsidizes the price of the offset or matches the offset's impact on carbon mitigation. I find that consumers are price-elastic but fully impact-inelastic. This would imply that consumers buy offsets but their willingness to pay (WTP) for the carbon it mitigates is zero. However, I show that consumers can be made sensitive to impact through a simple information treatment that increases the salience of subsidies and matches. Salient information increases average WTP for carbon mitigation from zero to 16 EUR/tCO2. Two complementary surveys reveal that consumers have a limited comprehension of the carbon-mitigating attribute of offsets and, as a result, appear indifferent to impact variations in the absence of information. Finally, I show that the widely-used contingent valuation approach poorly captures revealed preferences: Average hypothetical WTP in a survey is 200 EUR/tCO2, i.e., 1, 150% above the revealed preference estimate.
    Keywords: climate change, carbon mitigation, willingness to pay, carbon offsets, contingent valuation, nudging
    JEL: D61 D82 H21 Q51 Q58
    Date: 2023–02

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