nep-res New Economics Papers
on Resource Economics
Issue of 2023‒12‒04
four papers chosen by
Maximo Rossi, Universidad de la República

  1. Encouraging adoption of fuel-efficient vehicles – A policy reform evaluation from Ethiopia By Tesemma, Tewodros
  2. Is urban wastewater treatment effective in India? Evidence from water quality and infant mortality By Claire Lepault
  3. The nexus between e-commence and environmental pollution: The roles of resource consumption and energy efficiency By Wentao Yu; Yanrui Wu; Xiaolan Tan; Xiumei Guo
  4. Sustainable Investing and Public Goods Provision By Ilaria Piatti; Joel Shapiro; Xuan Wang

  1. By: Tesemma, Tewodros (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: The extent of vehicle ownership is increasing in many <p> developing countries. Most of the increase takes place <p> through import of second-hand vehicles that are usually <p> fuel-inefficient and have poor emissions standards. This is <p> creating enormous environmental pressures, since most <p> developing countries also lack the necessary policies to <p> regulate the sector. This study investigates the effect of <p> a recent policy reform in Ethiopia that aimed at <p> encouraging adoption of cleaner vehicles. In March 2020, <p> Ethiopia introduced a new vehicle excise tax that linked the <p> excise tax rate to engine size and age of vehicles, <p> imposing lower rates on ‘fuel-efficient’ vehicles and higher <p> rates on ‘fuel-inefficient’ ones. Exploiting the <p> quasiexperimental nature of the reform and employing a <p> difference-in-differences design, the study investigates the <p> reform’s effect on vehicle ownership and composition of the <p> vehicles, and in reducing CO2 emissions. The results show <p> that while the reform has no significant effect on total <p> vehicle ownership, it has a significant effect in increasing <p> the adoption of newer vehicles. We also find no significant <p> increase in the adoption of smaller-engine vehicles. The <p> reformled to no significant reduction on CO2 emissions <p> intensity of the vehicles. The reform, however, <p> significantly increased adoption of small-engine but new <p> vehicles - relatively the most ‘fuel-efficient’ <p> alternatives. The results are robust to various robustness <p> checks. The study discusses the policy implications of the <p> results, especially for developing countries.
    Keywords: transportation; environment; policy instruments; developing countries
    JEL: H23 Q40 Q58
    Date: 2023–11
  2. By: Claire Lepault (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: In developing countries, untreated sewage exposes people to alarming water pollution levels, yet there is limited knowledge about the effectiveness of wastewater treatment investments. I leverage the national inventory of sewage treatment plants in India and various granular datasets on river water quality measures, as well as geo-localized information on child births and deaths, to identify robust effects of wastewater treatment installations. To do so, I use estimators robust to staggered adoption within a difference-indifferences design and compare urban areas that started wastewater treatment from 2010 onwards and urban areas where such treatment was planned or under construction in 2020. I show that after starting wastewater treatment, levels of fecal coliforms decreased by 50%, and downstream mortality under the age of six months declined by 20%. A back-of the-envelope calculation suggests that starting wastewater treatment earlier-from 2010 onwards-in urban areas later selected into treatment-after 2020-would have prevented over 40, 000 child deaths in downstream sub-basins.
    Keywords: infrastructure, wastewater treatment, water quality, infant mortality, India
    Date: 2023–10–06
  3. By: Wentao Yu (School of Economics and Management, Fuzhou University and Business School, University of Western Australia); Yanrui Wu (Business School, The University of Western Australia); Xiaolan Tan (School of Public Administration, Hohai University and School of Marxism, Fuzhou University); Xiumei Guo (School of Economics and Management, Fuzhou University)
    Abstract: The platform economy is growing fast in the world. Its expansion, exemplified by industry giants like Amazon, Airbnb, and Uber, is reshaping societal lifestyles and commercial business. However, its environmental impacts are uncertain. Currently, the relationship between e-commerce activities and environmental pollution has attracted a lot of attention. This paper attempts to construct a comprehensive theoretical model to investigate the nexus between e-commerce and regional environmental pollution, with a particular focus on the effects of air pollution and waste pollution. Fixed effect models and China’s provincial data during the period from 2008 to 2018 are employed to examine the roles of resource consumption and energy efficiency in such a nexus. The findings suggest that the development of e-commerce is linked to a reduction in regional air pollution through the channel of improving transportation energy efficiency. The results also show that e-commerce is associated with an increase in regional waste pollution due to the mechanism of resource consumption in the express packaging industry. As a result, the relationship between e-commerce and environmental pollution is quite complex at the regional level, transcending a binary distinction of solely positive or negative impacts. This paper contributes to a better understanding of the complex environmental impacts of e-commerce and helps governments design more efficient and targeted policies to reduce regional pollution.
    Keywords: e-commerce strategy; environmental pollution; energy efficiency; China
    Date: 2023
  4. By: Ilaria Piatti (Queen Mary University of London); Joel Shapiro (Said Business School, University of Oxford); Xuan Wang (SBE Vrije Universiteit Amsterdam and Tinbergen Institute)
    Abstract: We model investors that take into account the amount of public good that firms produce (e.g., by reducing carbon emissions) when making their portfolio allocation. In an equilibrium asset pricing model with production and public goods provision, we find that environmentally conscious investors invest more than others, invest more in clean firms, and may invest more in dirty firms. Whether clean firms exhibit CAPM alphas depends on the amount of systematic risk of the firm and its relative contribution to the public good. There is underprovision of the public good in equilibrium. Lower government provision may lead to a surge in investment and government provision may be dominated by green subsidies. Finally, we extend the model to analyze negative externalities, donations, and uncertainty regarding public good provision.
    Keywords: Sustainable finance, ESG investing, public good pro-vision, asset pricing
    JEL: G11 G12 H41
    Date: 2023–11–17

This nep-res issue is ©2023 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.