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on Resource Economics |
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Issue of 2018‒05‒21
five papers chosen by |
| By: | Mehling, Michael A. (Massachusetts Institute of Technology); Metcalf, Gilbert E. (Tufts University); Stavins, Robert N. (Harvard University) |
| Abstract: | The Paris Agreement has achieved one of two key necessary conditions for ultimate success – a broad base of participation among the countries of the world. But another key necessary condition has yet to be achieved – adequate collective ambition of the individual nationally determined contributions. How can the climate negotiators provide a structure that will include incentives to increase ambition over time? An important part of the answer can be international linkage of regional, national, and sub-national policies, that is, formal recognition of emission reductions undertaken in another jurisdiction for the purpose of meeting a Party’s own mitigation objectives. A central challenge is how to facilitate such linkage in the context of the very great heterogeneity that characterizes climate policies along five dimensions – type of policy instrument; level of government jurisdiction; status of that jurisdiction under the Paris Agreement; nature of the policy instrument’s target; and the nature along several dimensions of each Party’s Nationally Determined Contribution. We consider such heterogeneity among policies, and identify which linkages of various combinations of characteristics are feasible; of these, which are most promising; and what accounting mechanisms would make the operation of respective linkages consistent with the Paris Agreement. |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp17-042&r=res |
| By: | Moreno-Cruz, Juan B. (Georgia Institute of Technology); Wagner, Gernot (Harvard University); Keith, David w. (Harvard University) |
| Abstract: | This paper introduces geoengineering into an optimal control model of climate change economics. Together with mitigation and adaptation, carbon and solar geoengineering span the universe of possible climate policies. We show in the context of our model that: (i) a carbon tax is the optimal response to the unpriced carbon externality only if it equals the marginal cost of carbon geoengineering; (ii) the introduction of solar geoengineering leads to higher emissions yet lower tempera- tures, and, thus, increased welfare; and (iii) solar geoengineering,in effect, is a public goods version of adaptation that also lowers temperatures. |
| JEL: | D90 O44 Q48 Q54 Q58 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp17-028&r=res |
| By: | Andrea Fracasso (Department of Economics [Università di Trento]); Massimo Riccabonii (School for advanced studies Lucca); Martina Sartori; Stefano Schiavo (Observatoire français des conjonctures économiques) |
| Abstract: | The paper investigates how the topological features of the virtual water (VW) network and the size of the associated VW flows are likely to change over time, under different socio-economic and climate scenarios. We combine two alternative models of network formation –a stochastic and a fitness model, used to describe the structure of VW flows- with a gravity model of trade to predict the intensity of each bilateral flow. This combined approach is superior to existing methodologies in its ability to replicate the observed features of VW trade. The insights from the models are used to forecast future VW flows in 2020 and 2050, under different climatic scenarios, and compare them with future water availability. Results suggest that the current trend of VW exports is not sustainable for all countries. Moreover, our approach highlights that some VW importers might be exposed to “imported water stress” as they rely heavily on imports from countries whose water use is unsustainable. |
| Keywords: | Virtual water trade; Complex networks; Fitness model; Agricultural production; Preferential attachment; Gravity model; Water stress |
| JEL: | F14 F18 Q25 Q56 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/4krkv5tkmp871q08f5rv2n43tn&r=res |
| By: | Christian Elleby (Department of Food and Resource Economics, University of Copenhagen); Frank Jensen (Department of Food and Resource Economics, University of Copenhagen) |
| Abstract: | Part of the existing economic literature on fisheries regulation focuses on addressing several objectives with one instrument. In an extension of this literature we investigate the following three objectives of fisheries regulation: A) Correcting a stock externality; B) Raising public funds, and; C) Solving problems with uncertainty. We analyze the implications of combining a non-linear tax on harvest and individual transferable quotas to address these three objectives and argue that a tax alone can fulfill all three objectives simultaneously. This result can be related to the theory on a first-best and a second-best optimum which state that the number of objectives must be identical to the number of instruments if a first-best optimum shall be reached. We show that one instrument (a tax based on the size of the harvest in this case) is enough to achieve a first-best optimum. |
| Keywords: | Stock externalities, double-dividend, uncertainty, taxes, quotas |
| JEL: | Q22 D80 H20 H23 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:foi:wpaper:2018_05&r=res |
| By: | Aldy, Joseph (Harvard University); Gerarden, Todd (Harvard University); Sweeney, Richard (Boston College) |
| Abstract: | This paper examines the choice between subsidizing investment or output to promote socially desirable production. We exploit a natural experiment in which wind farm developers could choose an investment or output subsidy to estimate the impact of these instruments on productivity. Using regression discontinuity and matching estimators, we find that wind farms claiming the investment subsidy produced 10 to 11 percent less power than wind farms claiming the output subsidy, and that this effect reflects subsidy incentives rather than selection. The introduction of investment subsidies caused the Federal government to spend 12 percent more per unit of output from wind farms. |
| JEL: | H23 Q42 Q48 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp18-012&r=res |