{"title":"The economics of climate change with endogenous preferences","authors":"Linus Mattauch , Cameron Hepburn , Fiona Spuler , Nicholas Stern","doi":"10.1016/j.reseneeco.2022.101312","DOIUrl":"10.1016/j.reseneeco.2022.101312","url":null,"abstract":"<div><p>Avoiding unmanageable climate change implies that global greenhouse gas emissions<span> must be reduced rapidly. Carbon prices and technological development are essential to deliver such reductions. Changes in preferences, however, are rarely considered, even though other major socioeconomic transitions – such as those from reducing smoking and drink-driving – have succeeded partly because preferences have changed. This article examines the impact of climate policy-induced changes in consumers’ preferences. We show that low-carbon policies could be better designed if it is recognised that preferences can be endogenous to such policies. For instance, carbon taxes must be adjusted, if they crowd-in or -out social preferences, to achieve a given target. Further, when the urban built environment changes mobility preferences, the value of low-carbon infrastructure investments can be underestimated if such effects are ignored. Third, policy-induced changes in preferences for active travel and plant-based diets could increase the net benefits of the transition to zero emissions.</span></p></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"69 ","pages":"Article 101312"},"PeriodicalIF":2.9,"publicationDate":"2022-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43013254","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Lesly Cassin , Paolo Melindi-Ghidi , Fabien Prieur
{"title":"Confronting climate change: Adaptation vs. migration in Small Island Developing States","authors":"Lesly Cassin , Paolo Melindi-Ghidi , Fabien Prieur","doi":"10.1016/j.reseneeco.2022.101301","DOIUrl":"10.1016/j.reseneeco.2022.101301","url":null,"abstract":"<div><p>This paper examines the adaptation policy of Small Island Developing States (SIDS) facing climate change. We consider a dynamic economy with the following ingredients: <em>(i)</em> natural capital is an input in local production that is degraded as a result of climate change; <em>(ii)</em> the government has two instruments to cope with climate-related damages: it can adjust the population size thanks to migration policies and/or it can undertake adaptation measures in order to slow the degradation of natural assets; <em>(iii)</em><span><span><span> expatriates send remittances back home. We identify two critical conditions on the fundamentals of the economy that helps understand the features of the </span>optimal policy. We especially show that in most situations, the migration policy is a valuable instrument. Calibrating the model for Caribbean SIDS, we find that the optimal policy of the Caribbean region displays heterogeneity, that is explained by the different </span>degradation rate, population size, and endowment in natural capital. We also highlight that the higher the climate damages, the higher the incentives to conduct an active adaptation policy, combining conventional adaptation actions and migration.</span></p></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"69 ","pages":"Article 101301"},"PeriodicalIF":2.9,"publicationDate":"2022-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49320566","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"One or two non-fossil technologies in the decarbonized transport sector?","authors":"Gøril L. Andreassen , Knut Einar Rosendahl","doi":"10.1016/j.reseneeco.2022.101314","DOIUrl":"10.1016/j.reseneeco.2022.101314","url":null,"abstract":"<div><p>What factors determine whether policymakers should promote one or more technologies in a decarbonized road transport sector, and what policies should governments choose? We investigate these questions theoretically and numerically through a static, partial equilibrium model for the road transport market. We find that one important factor is how close substitutes the two vehicle technologies are. Further, the number of vehicles of one technology depends on the number of vehicles of the other technology, both in the market and in the first-best solution. The first-best policy involves a subsidy of the markup on charging and filling, where the markup is higher the more utility increases with the number of stations. However, as there are several possible market equilibria, additional policies may be needed to avoid an unwanted lock-in.</p></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"69 ","pages":"Article 101314"},"PeriodicalIF":2.9,"publicationDate":"2022-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0928765522000318/pdfft?md5=cb96cc30fd852dcd36f87c08c0287d07&pid=1-s2.0-S0928765522000318-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45126280","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
S. Schwartz , J. Choumert-Nkolo , J.-L. Combes , P. Combes-Motel , E. Kere
{"title":"Optimal protected area implementation under spillover effects","authors":"S. Schwartz , J. Choumert-Nkolo , J.-L. Combes , P. Combes-Motel , E. Kere","doi":"10.1016/j.reseneeco.2022.101284","DOIUrl":"10.1016/j.reseneeco.2022.101284","url":null,"abstract":"<div><p>This paper determines the best political implementation level of protected areas in the presence of two spillover effects, the infrastructure and scarcity effects. We show that decentralized regulation always leads to an overall decrease in deforestation under the infrastructure effect but not under the scarcity effect. Centralized regulation always leads to a larger protected area than decentralized regulation under the scarcity effect, which is not always true under the infrastructure effect. Finally, we conduct a case study of the Brazilian Legal Amazônia and find that spillover effects matter in the size of protected area design.</p></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"68 ","pages":"Article 101284"},"PeriodicalIF":2.9,"publicationDate":"2022-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47150988","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
David Wolf , H. Allen Klaiber , Sathya Gopalakrishnan
{"title":"Beyond marginal: Estimating the demand for water quality","authors":"David Wolf , H. Allen Klaiber , Sathya Gopalakrishnan","doi":"10.1016/j.reseneeco.2022.101299","DOIUrl":"10.1016/j.reseneeco.2022.101299","url":null,"abstract":"<div><p>Using micro-level data across Wisconsin covering over 100 inland lakes, we recover first- and second-stage hedonic welfare estimates for non-marginal changes in water quality. We overcome longstanding endogeneity concerns with Rosen (1974)’s second stage hedonic framework and recover slope estimates for water quality demand using instruments based on sorting behavior. For near lake Wisconsin households, we find the slope of their water quality demand function is bounded by − 2087 when imperfect instruments are employed, which is significantly more price inelastic than the naïve OLS estimate of − 895. Applying these estimates to a hypothetical policy scenario where water quality reduces by 24.2% due to a 30-year continuation of current trends, we find welfare losses of at least $7554 per household. These losses are 22% ($1658) more than what is predicted from marginal willingness to pay estimates recovered from the first-stage hedonic. For policymakers, our results highlight the importance of recovering underlying demand functions when evaluating non-marginal water quality improvements.</p></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"68 ","pages":"Article 101299"},"PeriodicalIF":2.9,"publicationDate":"2022-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47245731","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Estimating welfare impacts of climate change using a discrete-choice model of land management: An application to western U.S. forestry","authors":"Yukiko Hashida , David J. Lewis","doi":"10.1016/j.reseneeco.2022.101295","DOIUrl":"10.1016/j.reseneeco.2022.101295","url":null,"abstract":"<div><p>This study develops a method to estimate the welfare impacts of climate change on landowners using a discrete-choice econometric model of land management. We apply the method to forest management in the Pacific states of the U.S. and estimate welfare effects on the region that holds the largest current commercial value – western Oregon and Washington. We find evidence that a warmer and drier climate will induce an approximate 39 % loss in the economic value of timberland by 2050, though there is heterogeneity across space. The discrete-choice approach allows us to determine that the welfare losses are primarily driven by estimated losses to Douglas-fir, the most commercially valuable species. An alternative approach to welfare analysis from climate change is the Ricardian method, which gives conceptually similar estimates to the discrete-choice method. While we find similar empirical findings between the discrete-choice and Ricardian approaches, the discrete-choice approach provides more heterogeneity and somewhat larger negative welfare impacts. Our analysis is notable for providing the first empirical evidence that climate change can induce welfare losses to timberland owners, even while accounting for optimal adaptation.</p></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"68 ","pages":"Article 101295"},"PeriodicalIF":2.9,"publicationDate":"2022-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0928765522000124/pdfft?md5=dbe069ee0fdc2abb3ddbb6a009930e98&pid=1-s2.0-S0928765522000124-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49297661","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Drive less, drive better, or both? Behavioral adjustments to fuel price changes in Germany","authors":"Anna Alberini , Marco Horvath , Colin Vance","doi":"10.1016/j.reseneeco.2022.101292","DOIUrl":"https://doi.org/10.1016/j.reseneeco.2022.101292","url":null,"abstract":"<div><p>The demand for motor fuel should decline when its price rises, but how exactly does that happen? Do people drive less, do they drive more carefully to conserve fuel, or do they do both? To answer these questions, we use data from the German Mobility Panel from 2004 to 2019, taking advantage of the fluctuations in motor fuel prices over time and across locales to see how they affect Vehicle Kilometers Traveled (VKT) and on-road fuel economy (expressed in kilometers per liter) for gasoline and diesel cars. Our reduced-form regressions show that while the VKTs driven by gasoline cars decrease when the price of gasoline rises, there is virtually no response among diesel cars. Likewise, the on-road fuel economy is largely unresponsive to fuel price changes, irrespective of the fuel type. Since the price elasticity of fuel consumption is the difference between the price elasticity of VKT and the price elasticity of the fuel economy, our results suggest that the fuel economy might be the “weakest link” of price-based policies that seek to address environmental externalities.</p></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"68 ","pages":"Article 101292"},"PeriodicalIF":2.9,"publicationDate":"2022-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72290572","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Discriminatory subsidies for energy-efficient technologies and the role of envy","authors":"Valeria Fanghella , Corinne Faure , Marie-Charlotte Guetlein , Joachim Schleich","doi":"10.1016/j.reseneeco.2022.101298","DOIUrl":"10.1016/j.reseneeco.2022.101298","url":null,"abstract":"<div><p>Discriminatory subsidies, that is, subsidies for which only a subset of the population is eligible, are widespread. However, research on social preferences suggests that non-eligible households may negatively respond to these subsidies. We investigate both eligible and non-eligible households’ response to discriminatory subsidies for smart thermostats using a discrete choice experiment with 3071 owner-occupiers from France and Romania. Households are randomly exposed to discriminatory subsidies through a between-subject design that manipulates two factors: type of discrimination (positive or negative) and eligibility criteria (based on geographical location or on household characteristics). A control condition (uniform subsidy) is also included. In addition, we elicit envy via an incentivized game in the sample from France. Our results show that eligible households are more likely to adopt a smart thermostat, regardless of whether the subsidy is uniform or discriminatory. By contrast, non-eligible households are less likely to adopt it, especially when eligibility criteria are based on household characteristics. We find no evidence for a moderating effect of envy.</p></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"68 ","pages":"Article 101298"},"PeriodicalIF":2.9,"publicationDate":"2022-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46003793","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Cross-country spillovers of renewable energy promotion—The case of Germany","authors":"Jan Abrell , Mirjam Kosch","doi":"10.1016/j.reseneeco.2022.101293","DOIUrl":"https://doi.org/10.1016/j.reseneeco.2022.101293","url":null,"abstract":"<div><p>Electricity generation based on renewable energy (RE) sources such as wind and solar replace the most expensive generators that often rely on fossil fuels. In response to RE promotion, wholesale electricity prices and carbon emissions are therefore expected to decrease. In interconnected electricity systems, this so-called merit-order effect stimulates a change in electricity trade flows. Therefore, conventional generation and prices in neighboring countries are also likely to decrease. The impact of these trade reactions on carbon offsets is ambiguous and depends on installed generation and interconnector capacities. Moreover, the cross-border merit-order effect causes opposing effects on consumers and producers: generators’ profits decline, while consumers benefit from lower electricity costs and an increase in the consumer surplus. Using a rich data set of hourly technology-specific generation and wholesale market price data for ten central European countries, we estimate the domestic and cross-border impacts of German RE for the years 2015–2020. We find that German RE generation offset 79–113 MtCO<span><math><msub><mrow></mrow><mn>2</mn></msub></math></span> per year. The major emission effect took place in Germany (64–99 MtCO<span><math><msub><mrow></mrow><mn>2</mn></msub></math></span>). The average cost of emission offset of 212–321<span><math><mo>€</mo></math></span>/t were almost entirely borne by German market participants. Neighboring countries do not bear costs, but a significant shift from producer to consumer rents is observed.</p></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"68 ","pages":"Article 101293"},"PeriodicalIF":2.9,"publicationDate":"2022-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72290573","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Paul Picciano , Francisco X. Aguilar , Dallas Burtraw , Ashkan Mirzaee
{"title":"Environmental and socio-economic implications of woody biomass co-firing at coal-fired power plants","authors":"Paul Picciano , Francisco X. Aguilar , Dallas Burtraw , Ashkan Mirzaee","doi":"10.1016/j.reseneeco.2022.101296","DOIUrl":"https://doi.org/10.1016/j.reseneeco.2022.101296","url":null,"abstract":"<div><p>We apply a detailed power sector model to explore the near-term role of woody biomass co-firing at existing coal facilities in the Eastern US in the decarbonization of US electricity generation. We evaluate five public policy interventions: a biomass co-firing subsidy, two carbon emissions fees, and two clean energy standards. Treating woody biomass as a carbon neutral feedstock, we find co-firing weakly supports decarbonization. However, policies subsidizing co-firing can delay retirement of coal facilities and reduce generation from nuclear, natural gas, wind and solar. Consequently, corresponding sector-wide emissions of CO<sub>2</sub> and SO<sub>2</sub> may increase (slightly) due to greater utilization of coal plants including relatively inefficient facilities. We assume NO<sub>X</sub> emissions increase due to generation efficiency losses, but this remains uncertain. Due to higher emissions, a biomass subsidy for co-firing yields small (near zero) economic welfare losses, while in contrast other policies advance decarbonization and yield significant welfare gains. We find justification for biomass use from a local perspective based on first-order impacts on employment and economy activity, but less so air quality.</p></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"68 ","pages":"Article 101296"},"PeriodicalIF":2.9,"publicationDate":"2022-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72290575","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}