nep-res 2023-10-23 papers

on Resource Economics

Issue of 2023‒10‒23
two papers chosen by

The Effect of Offshoring on Firm Emissions

By:	Yen Nhi Nguyen (Johannes Gutenberg University Mainz)
Abstract:	This paper analyses the effect of unilateral environmental policies on global emissions under trade in intermediate inputs. I develop a model of heterogeneous firms with two countries (North-South) in which North firms can invest in abatement activities but also offshore the pollution-intensive part of the production in South. The model suggests that a unilateral increase in North emission tax promotes more abatement activities of the least productive firms while the most productive firms stop investing in abatement and offshore polluting production steps. Marginal increases in North emission tax decrease global emissions when the relative emission tax is low but increase global emissions when it is high. Tests using German firm-level data support the central prediction of the model: offshoring activities reduce firms’ domestic emission intensity, particularly when firms offshore in countries with lax environmental regulations.
JEL:	F10 F14 F18 F23 Q52 Q54 Q56
Date:	2023–10–04
URL:	http://d.repec.org/n?u=RePEc:jgu:wpaper:2315&r=res

Does environment pay for politicians?

By:	Mohamed Boly (World Bank Group); Jean-Louis Combes (LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - UCA - Université Clermont Auvergne, UCA - Université Clermont Auvergne); Pascale Combes Motel (LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - UCA - Université Clermont Auvergne, UCA - Université Clermont Auvergne)
Abstract:	We econometrically assess how elections affect environmental performance, namely climate policy, using a sample of 76 democratic countries from 1990 to 2014. Three key results emerge from our system-GMM estimations. First, CO2 emissions increase in election years, suggesting that incumbents engage in fiscal manipulation through the composition of public spending rather than its level. Second, the effect has weakened over recent years and is present only in established democracies. Third, higher freedom of the press and high income that can proxy high environmental preferences from citizens reduce the size of this trade-off between pork-barrel spending and the public good, namely environmental quality. Deteriorating environmental quality can bring electoral benefits to politicians.
Keywords:	CO2 emissions, Electoral cycles, Environmental policy, Panel data, 2 emissions Electoral cycles Environmental policy Panel data JEL Codes D72 E62 O13 Q54, 2 emissions, Panel data JEL Codes D72, E62, O13, Q54
Date:	2023–09
URL:	http://d.repec.org/n?u=RePEc:hal:journl:hal-04209496&r=res

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