nep-res New Economics Papers
on Resource Economics
Issue of 2023‒08‒28
six papers chosen by
Maximo Rossi, Universidad de la República

  1. Air Pollution and Green Innovation By Guo, Liwen; Cheng, Zhiming; Tani, Massimiliano; Cook, Sarah
  2. Nighttime Light Pollution and Economic Activities: A Spatio-Temporal Model with Common Factors for US Counties By Bresson, Georges; Etienne, Jean-Michel; Lacroix, Guy
  3. Benefits and pitfalls of an EU emissions budget approach By Geden, Oliver; Knopf, Brigitte; Schenuit, Felix
  4. Economic Growth and Pollution in different Political Regimes By Andreas Kammerlander
  5. The pricing of climate transition risk in Europe’s equity market By Philippe Loyson; Rianne Luijendijk; Sweder van Wijnbergen
  6. Natural Gas Vehicles: Consequences to Fuel Markets and the Environment By Amaral-Santos, Roberto; Chimeli, Ariaster; Pessoa, João Paulo

  1. By: Guo, Liwen (University of New South Wales); Cheng, Zhiming (University of New South Wales); Tani, Massimiliano (University of New South Wales); Cook, Sarah (University of Nottingham)
    Abstract: With air pollution remaining a significant problem in many regions globally, an increasing number of environmentally conscious entrepreneurs have been taking initiatives to combat this issue, accompanied by a growing environmental awareness among the general public. To test the strength of this relationship, we use individual-level information from an enterprise survey in China in 2018 and conducted instrumental variable analyses to study the impact of air pollution on the green innovation behaviours of non-agricultural entrepreneurs. The results indicate that, on average, a one standard deviation increase in PM2.5 concentration is associated with a 4.3 percentage points increase in green innovation (or a 11.9 percentage points increase in green innovation intensity). Entrepreneurs' gambling preferences could potentially mediate the relationship between air pollution and green innovation, while expected firm income and actual firm income may act as suppressors. Specifically, entrepreneurs who launch their businesses following the implementation of environmental policies are more likely to adopt green innovation practices. This study provides insight into why there is a growing trend of environmentally-conscious entrepreneurs in regions with high levels of air pollution.
    Keywords: green innovation, air pollution, China
    JEL: J01 Q53 Q55
    Date: 2023–07
  2. By: Bresson, Georges (University of Paris 2); Etienne, Jean-Michel (Université Paris-Sud); Lacroix, Guy (Université Laval)
    Abstract: Excessive nighttime light is known to have detrimental effects on health and on the environment (fauna and flora). The paper investigates the link between nighttime light pollution and economic growth, air pollution, and urban density. We propose a county model of consumption which accounts for spatial interactions. The model naturally leads to a dynamic general nesting spatial model with unknown common factors. The model is estimated with data for 3071 continental US counties from 2012–2019 using a quasi-maximum likelihood estimator. Short run and long run county marginal effects emphasize the importance of spillover effects on radiance levels. Counties with high levels of radiance are less sensitive to additional growth than low-level counties. This has implications for policies that have been proposed to curtail nighttime light pollution.
    Keywords: nighttime light pollution, air pollution, GDP, satellite data, space-time panel data model
    JEL: C23 Q53
    Date: 2023–07
  3. By: Geden, Oliver; Knopf, Brigitte; Schenuit, Felix
    Abstract: Following the conclusion of the 'Fit for 55' package, European Union (EU) climate policy will enter its next phase. One of the most important decisions will be how to set the economy-wide emissions reduction target for 2040, which will form the starting point for the next round of revisions of all EU climate policy legislation. The European Climate Law stipulates that the European Commission shall propose a 2040 target that is based, among other things, on a "projected indicative Union greenhouse gas budget for the 2030-2050 period", informed by a report of the newly established European Scientific Advisory Board on Climate Change. While cumulating emissions resulting from different future trajectories can help to assess ambition levels, strictly deriving a 'science-based' EU emissions budget from the global carbon budget has several pitfalls. The debate on the design of EU climate policy after 2030 should not put too much focus on the 'appropriate' target for 2040 but on how to further develop the governance architecture, strengthen policy instruments, and bolster public support.
    Keywords: EU emissions budget approach, EU climate policy, "Fit for 55" package, European Scientific Advisory Board on Climate Change, Paris Agreement, United Nations Framework Convention on Climate Change (UNFCCC)
    Date: 2023
  4. By: Andreas Kammerlander (Department of International Economic Policy, University of Freiburg)
    Abstract: I examine the association between nighttime light luminosity and ten pollution measures (CO2, CO, NOx, SO2, NMVOC, NH3, BC, OC, PM10 and PM2.5) across dierent political regimes at a local level. Although the eects of the political system and economic growth on pollution have been widely analyzed at the country level, this is the rst study to do so at the grid level. The empirical analysis yields three major insights. First, economic growth is positively associated with a wide array of dierent pollution measures. Second, there are signicant dierences in the association between economic growth and air pollution across dierent political regimes. For example, the association between nighttime light luminosity and air pollution is strictly positive for autocracies. The association between nighttime luminosity and air pollution is substantially smaller but still positive for democracies. Furthermore, among democracies the relationship between nighttime light luminosity and air pollution is concave for nine out of ten pollutants; among autocracies, the relationship is either convex (ve out of ten pollutants) or the squared term is insignicant. Third, the dierences among political regimes is driven chiey by pollution emissions in the industry, energy, and transport sectors; there is no dierence between autocracies and democracies in terms of the eect of growth on emissions in the agricultural and residential sectors.
    Keywords: local economic growth, air pollution, nighttime lights, geo-data
    JEL: O18 Q53
    Date: 2022–10
  5. By: Philippe Loyson (VU Amsterdam); Rianne Luijendijk (DNB); Sweder van Wijnbergen (University of Amsterdam)
    Abstract: We assess whether climate transition risk is priced in Europe’s equity market by analysing relative equity returns of high versus low CO2-emitting firms. We use a panel data set covering firm-specific carbon emissions of 1, 555 European companies over the period 2005-2019. We add to the existing literature by addressing problems in carbon data and by using various econometric methods ranging from panel data analysis to the SCM. Fama-French style panel regressions at both the individual firm level as well as portfolio level suggest that carbon intensity is negatively related to stock returns. Treatment effect models, however, provide some evidence for increased pricing of climate transition risk after the Paris Agreement.
    Keywords: Climate Change, Carbon Emissions Intensity, Paris Agreement, Transition Risk Premia.
    JEL: G12 Q54
    Date: 2023–07–24
  6. By: Amaral-Santos, Roberto (University of California at Santa Barbara); Chimeli, Ariaster (Departamento de Economia, Universidade de São Paulo); Pessoa, João Paulo (FGV-Sao Paulo School of Economics and Centre for Economic Performance)
    Abstract: Policies to adopt cleaner fuels have become increasingly important, but their impacts on incumbent fuel prices and resulting greenhouse gas emissions are unclear. We use a panel dataset on weekly prices at the gas station level in a large Brazilian state to study how the growth of natural gas, a cheaper and less carbon-intensive alternative to traditional fuels, affected retail prices and profit margins of gasoline and ethanol. Applying an IV strategy, we estimate that prices and margins have fallen. The intensified competition in the fuel market boosted fuel demand, leading to higher emissions of GHGs and other pollutants.
    Keywords: Gasoline; Ethanol; Price Competition; Emissions; Brazil
    JEL: L11 L13 Q31 Q41 Q42 Q48 Q53 Q55 Q58
    Date: 2023–08–05

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