nep-res New Economics Papers
on Resource Economics
Issue of 2023‒10‒30
three papers chosen by

  1. Ocean Salinity, Early-Life Health, and Adaptation By Guimbeau, Amanda; Ji, Xinde James; Long, Zi; Menon, Nidhiya
  2. Sustainable Investing in Imperfect Markets By Thorsten Hens; Ester Trutwin
  3. The Role of Sanctions and Spillovers in Forest Conservation By João Pedro Vieira; Ricardo Dahis; Juliano Assunção

  1. By: Guimbeau, Amanda (University of Sherbrooke); Ji, Xinde James (University of Florida); Long, Zi (Brandeis University); Menon, Nidhiya (Brandeis University)
    Abstract: We study the effects of in utero exposure to climate change induced high ocean salinity levels on children's anthropometric outcomes. Leveraging six geo-referenced waves of the Bangladesh Demographic and Health Surveys merged with gridded data on ocean salinity, ocean chemistry and weather indicators (temperature, rainfall and humidity) from 1993 to 2018, we find that a one standard deviation increase in in utero salinity exposure leads to a 0.11 standard deviation decline in height-for-age. Effects on weight-for-height and weight-for-age for a similar magnitude increase in salinity are 0.13 and 0.15 standard deviations, respectively. Analyses of parental investments and health-seeking behaviors demonstrate that compensating actions along these dimensions to attenuate the detrimental effects of salinity are few and restricted to poorer households. Using satellite-sourced datasets on agriculture and land-use, we find that increasing salinity constrains farmers' land use choices, leading to lower agricultural profitability. In particular, the effects of salinity on child health originate in areas with lower agricultural intensity caused by the progressive salinization of productive lands. These results highlight highlight the costs of environmental insults on early-life health outcomes in vulnerable populations.
    Keywords: ocean salinity, early-life health, climate change, height-for-age, weight-for-height, weight-for-age, children, adaptation, Bangladesh
    JEL: Q54 Q15 Q56 I15 O13 J13
    Date: 2023–09
  2. By: Thorsten Hens (University of Zurich; Norwegian School of Economics and Business Administration (NHH); Swiss Finance Institute); Ester Trutwin (University of Zurich; Swiss Finance Institute)
    Abstract: This paper analyses sustainable investing in terms of impact and ESG investing. Using a parsimonious general equilibrium model, we integrate the different effects of sustainable investing into welfare analysis. Given that the price for polluting the environment is too low, we show that impact investing can lead to a second-best solution. If at the margin the technology is ”clean” investment should be increased while a capital reduction is appropriate if at the margin the firm’s technology is ”dirty”. However, sustainable investing requires households to anticipate the firm’s pollution activity. Therefore we show how the same solution can be implemented with ESG investing in which the burden of knowledge lies on the rating agency. Finally, we indicate that the first-best solution can be achieved by sustainable consumption.
    Keywords: Impact Investing, ESG Investing, Sustainable Consumption, Environmental Kuznets Curve
    JEL: D10 D50 D53 G41 Q50
    Date: 2023–09
  3. By: João Pedro Vieira (Department of Economics, PUC-Rio); Ricardo Dahis (Department of Economics, Monash University); Juliano Assunção (Department of Economics, PUC-Rio)
    Abstract: We study how environmental sanctions and spillovers improve forest conservation in the Brazilian Amazon. Using a difference-in-differences framework and novel farm-level data, we show that sanctions curbed deforestation and promoted reforestation among punished farmers and their neighbors. Heterogeneity analysis reveals that even sanctions with limited incapacitation potential elicited relevant behavioral changes. In particular, farmers’ responsiveness to sanctions coincided with the government’s commitment to enforcement. We do not find substantial evidence of spatial displacement or monitoring evasion. Overall, sanctions prevented 1.6 billion tons of CO2 emissions between 2006 and 2019, equivalent to 31% of US emissions in 2021.
    Keywords: Law Enforcement, Spillovers, Deforestation
    JEL: K42 Q23 Q28 Q58
    Date: 2023–10

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