nep-res New Economics Papers
on Resource Economics
Issue of 2023‒09‒18
four papers chosen by
Maximo Rossi, Universidad de la República

  1. The Effects of Climate Change in the Poorest Countries: Evidence from the Permanent Shrinking of Lake Chad By Jedwab, Remi; Haslop, Federico; Zarate, Roman; Rodriguez Castelan, Carlos
  2. Conditional Persistence? Historical Disease Exposure and Government Response to COVID-19 By Lindskog, Annika; Olsson, Ola
  3. Have climate policies been effective in Austria? A reverse causal analysis By Talis Tebecis
  4. Climate Policy and Trade in Polluting Technologies By Ferguson, Shon; Heijmans, Roweno J.R.K.

  1. By: Jedwab, Remi (New York University); Haslop, Federico (George Washington University); Zarate, Roman (World Bank); Rodriguez Castelan, Carlos (World Bank)
    Abstract: Empirical studies of the economic effects of climate change (CC) largely rely on climate anomalies for causal identification purposes. Slow and permanent changes in climate-driven geographical conditions, i.e. CC as defined by the IPCC (2013), have been studied relatively less, especially in Africa which remains the most vulnerable continent to CC. We focus on Lake Chad, which used to be the 11th-largest lake in the world. This African lake the size of El Salvador, Israel, or Massachusetts slowly shrunk by 90% for exogenous reasons between 1963 and 1990. While water supply decreased, land supply increased, generating a priori ambiguous effects. These effects make the increasing global disappearance of lakes a critical trend to study. For Cameroon, Chad, Nigeria, and Niger – 25% of sub-Saharan Africa's population –, we construct a novel data set tracking population patterns at a fine spatial level from the 1940s to the 2010s. Difference-in-differences show much slower growth in the proximity of the lake, but only after the lake started shrinking. These effects persist two decades after the lake stopped shrinking, implying limited adaptation. Additionally, the negative water supply effects on fishing, farming, and herding outweighed the growth in land supply and other positive effects. A quantitative spatial model used to rationalize these results and estimate aggregate welfare losses taking into account adaptation shows overall losses of about 6%. The model also allows us to study the aggregate and spatial effects of policies related to migration, land use, trade, roads, and cities.
    Keywords: climate change, aridification, shrinkage of lakes, natural disasters, environment, water supply, land supply, rural decline, agricultural sectors, adaptation, land use, Africa
    JEL: Q54 Q56 Q15 Q20 R11 R12 O13 O44
    Date: 2023–08
  2. By: Lindskog, Annika (Department of Economics, School of Business, Economics and Law, Göteborg University); Olsson, Ola (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: In this paper, we investigate differences in government responses to the COVID-19 pandemic. Drawing on the theory of the Behavioral Immune System and the Para-site Stress Theory, we hypothesize that a higher historical disease exposure leads to a stricter government response to the pandemic, in particular during the first year which was characterized by fundamental uncertainty. Our empirical analysis, using weekly panel data for almost every country in the world, show that a higher historical disease exposure is indeed related to a stronger response to disease dynamics, at least in the first year of the pandemic. The pattern is the same for state-level containment policies within the United States. Our results suggest that the persistence of historical legacies may not be deterministic, but rather time-varying and conditional on circumstances. Cultural norms may matter more in times of crisis and fundamental uncertainty.
    Keywords: COVID-19; cultural persistence; pathogen prevalence; containment policy; behavioral immune system
    JEL: H12 I18 Z18
    Date: 2023–08
  3. By: Talis Tebecis (Department of Economics, Vienna University of Economics and Business)
    Abstract: Around the world, countries are becoming more ambitious in their emission reduction pledges. Developing policies to actually meet these targets requires carefully evaluating which policies have been most effective at reducing emissions to date. We use reverse causal policy evaluation to answer this question, asking, “Which climate policies have reduced CO2 emissions the most in Austria since 1995?” This novel approach allows us to identify negative structural breaks, i.e. large reductions in emissions that are not accounted for by the main determinants of CO2 emissions (population and economic growth), and attribute these breaks to relevant policies. We find statistically significant breaks in only four out of 21 sectors, altogether representing a reduction of less than 2.5% of Austria’s total CO2 emissions beyond what would have been expected, given its socio-economic development, which is significantly shy of the country’s 48% emission reduction target.
    Keywords: CO2 emissions, climate policy, reverse causal analysis, Austria, structural breaks
    JEL: Q54 Q58
    Date: 2023–08
  4. By: Ferguson, Shon (Department of Economics, Swedish University of Agricultural Sciences (SLU)); Heijmans, Roweno J.R.K. (Department of Business and Management Science, NHH Norwegian School of Economics)
    Abstract: This study estimates the impact of carbon pricing on international trade in equipment used in the combustion of fossil fuels during the period 1995–2021. Using detailed data on bilateral trade combined with data on domestic carbon prices, we find that carbon pricing policies are associated with greater exports of this equipment. We provide a simple model of international trade in polluting technologies that can explain this outcome. Our results provide new evidence for this unexplored form of leakage due to more stringent climate policies.
    Keywords: Emissions pricing; Cap and trade; Carbon leakage; International trade in technologies
    JEL: F14 F18 Q37 Q54 Q58
    Date: 2023–08–14

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