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on Resource Economics |
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Issue of 2024‒08‒12
five papers chosen by |
| By: | Elisa Belfiori; Daniel R. Carroll; Sewon Hur |
| Abstract: | We study climate policy in an economy with heterogeneous households, two types of goods (clean and dirty), and a climate externality from the dirty good. Using household expenditure and emissions data, we document that low-income households have higher emissions per dollar spent than high-income households, making a carbon tax regressive. We build a model that captures this fact and study climate policies that are neutral with respect to the income distribution. A central feature of these policies is that resource transfers across consumers are ruled out. We show that the constrained optimal carbon tax in a heterogeneous economy is heterogeneous: Higher-income households face a higher rate. Our main result shows that when the planner is limited to a uniform carbon tax, the tax follows the Pigouvian rule but is lower than the unconstrained carbon tax. Finally, we embed this model into a standard incomplete markets framework to quantify the policy effects on the economy, climate and welfare, and we find a Pareto-improving result. The climate policy is welfare-improving for every consumer. |
| Keywords: | carbon tax; inequality; consumption; welfare; climate change |
| JEL: | D62 H23 Q54 |
| Date: | 2024–07–16 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddgw:98565 |
| By: | Olivier Chanel (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Irène Cucchi (Service de l'air, du bruit et des rayonnements non-ionisants, Departement du Territoire, Republique et Canton de Geneve, Geneve) |
| Abstract: | Objectives: We propose a general framework for estimating long-term health and economic effects that takes into account four time-related aspects.We apply it to a reduction in exposure to air pollution in the Canton of Geneva. Study design: Methodological developments on the evaluation of long-term economic and health benefits, with an empirical illustration. Methods: We propose a unified frameworkdthe comprehensive impact assessment (CIA)dto assess the long-term effects of morbidity and mortality in health and economic terms. This framework takes full account of four time-related issues: cessation lag, policy/technical implementation timeframe, discounting and time horizon. We compare its results with those obtained from standard quantitative health impact assessment (QHIA) in an empirical illustration involving air pollution reduction in the canton of Geneva. Results: We find that by neglecting time issues, the QHIA estimates greater health and economic benefits than the CIA. The overestimation is about 50% under reasonable assumptions and increases ceteris paribus with the magnitude of the cessation lag and the discount factor. It decreases both with the time horizon and with the implementation timeframe. Conclusion: A proper evaluation of long-term health and economic effects is an important issue when they are to be used in cost-benefit analyses, particularly for mortality, which often represents the largest fraction. We recommend using the CIA to calculate more accurate values. |
| Keywords: | Quantitative health impact assessment, Comprehensive impact assessment, Air pollution, Long-term health effects, Economic assessment, Switzerland |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04616123 |
| By: | Raisa Sherif; Sven A. Simon |
| Abstract: | Today’s environmental challenges prompt individuals to take personal actions, though motivations vary. This paper presents causal evidence of a trade-off between two motivations behind pro-environmental behaviors (PEBs): maximizing environmental impact or being seen as green. In an experiment on voluntary carbon offsetting, we first isolate each motivation and quantify their impact. We then investigate whether individuals deliberately trade-off impact for the visibility of their actions, and why they do so. Our results show that while individuals respond to salient differences in efficiency and visibility, visible PEBs crowd out efficient alternatives, indicating a preference for being seen as green over actual environmental impact. We disentangle two motivations driving this preference for visible actions: social image concerns and role model aspirations. Role model aspirations exert a stronger influence, leading individuals to choose visible PEBs over efficient ones more frequently. |
| Keywords: | Pro-environmental behavior, Efficient behavior, Visible behavior, Role-model aspirations, Social image, Green preferences |
| JEL: | C90 D90 Q50 |
| Date: | 2023–06–01 |
| URL: | https://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2023-27 |
| By: | Sanjit Dhami (University of Leicester); Paolo Zeppini (Université Côte d'Azur, CNRS, GREDEG, France) |
| Abstract: | We consider firms' choices between a clean technology that benefits, and a dirty technology, that harms, the environment. Green firms are more suited to the clean, and brown firms are more suited to the dirty technology. We use a model derived from complexity theory that takes account of true uncertainty and increasing returns to technology adoption. We examine theoretically, the properties of the long-run equilibrium, and provide simulated time paths of technology adoption, using plausible dynamics. The long-run outcome is an 'emergent property' of the system, and is unpredictable despite there being no external technological or preference shocks. We describe the role of taxes and subsidies in facilitating adoption of the clean technology; the conflict between optimal Pigouvian taxes and adoption of clean technologies; the optimal temporal profile of subsidies; and the desirability of an international fund to provide technology assistance to poorer countries. |
| Keywords: | Technology choice, climate change, complexity, lock-in e ects, increasing returns, green subsidies, public policy, Pigouvian taxes, stochastic dynamics |
| JEL: | B2 B21 B4 D9 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2024-20 |
| By: | Sen, Anupama (Smith School of Enterprise and the Environment, University of Oxford); Jamasb, Tooraj (Department of Economics, Copenhagen Business School); Brandstätt, Christine (Department of Economics, Copenhagen Business School) |
| Abstract: | EU electricity infrastructure will need to undergo significant expansion to meet future demand for green energy, as member countries seek to meet their 2050 net zero targets. Meeting these targets requires the development of cross-border transmission networks, as high shares of offshore renewables need to be integrated in energy “hubs” and into mainland markets. However, the current liberalised national, but integrated, energy markets present challenges to the efficient development of the hubs. In the emerging offshore multi-vector renewable system, a simple allocation of the investment costs of a “hub” among its beneficiaries is not necessarily proportionately aligned with the benefits drawn from it. This challenge is exacerbated by the allocation of property rights to operate regulated natural monopolies of national Transmissions System Operators (TSOs), creating a fragmented ownership structure. We propose a solution based on the logic of collective action – namely, that a subset of EU member states have the shared incentive to cooperate on the joint development of assets. We then outline a Joint Venture framework that decouples the decision to invest from the decision on the allocation of costs and benefits across beneficiaries, enabling essential investments to proceed. This model also exhibits favourable dynamic properties for gradual development of hubs. |
| Keywords: | Cost allocation; decarbonisation; electricity; networks; climate; energy; security |
| JEL: | L50 L51 L94 Q40 Q48 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2024_010 |