{"title":"Escaping Damocles’ Sword: Endogenous Climate Shocks in a Growing Economy","authors":"Alexandra Brausmann, Lucas Bretschger","doi":"10.1007/s10640-023-00835-w","DOIUrl":"https://doi.org/10.1007/s10640-023-00835-w","url":null,"abstract":"<p>We consider a growing economy which is subject to recurring, random, uninsurable, and potentially large and long-lasting climate shocks leading to destruction of infrastructure, land degradation, collapse of ecosystems or similar loss of productive capacity. The associated damages and the hazard rate are endogenously driven by the stock of greenhouse gases. We highlight the important role of the relative risk aversion and provide analytical solutions for the optimal climate policy, the growth rate and the saving propensity of the economy. We stress the importance of jointly determining these variables, especially if the objective is to formulate meaningful policy prescriptions. If, for example, the growth rate or the saving rate are assumed to be exogenous, and thus independent of the characteristics of climate shocks and economic fundamentals, then future economic developments in the face of climate change and, consequently, the future mitigation efforts will deviate from the optimal paths. In a quantitative assessment we show that with log-utility and under favorable technological and climatic conditions the abatement expenditure represents only 0.5% of output, equivalent to $37 per ton carbon. Under less favorable conditions, coupled with a relative risk aversion which exceeds unity, the abatement propensity increases to 2.9%, equivalent to $212 per ton carbon, and it jumps to a striking 16% in the pessimistic scenario involving severe shocks and low efficiency of abatement technology.</p>","PeriodicalId":501498,"journal":{"name":"Environmental and Resource Economics","volume":"86 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139678742","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Jan-Niklas Meier, Paul Lehmann, Bernd Süssmuth, Stephan Wedekind
{"title":"Correction to: Wind Power Deployment and the Impact of Spatial Planning Policies","authors":"Jan-Niklas Meier, Paul Lehmann, Bernd Süssmuth, Stephan Wedekind","doi":"10.1007/s10640-024-00839-0","DOIUrl":"https://doi.org/10.1007/s10640-024-00839-0","url":null,"abstract":"","PeriodicalId":501498,"journal":{"name":"Environmental and Resource Economics","volume":"63 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139678836","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Regulatory Stringency and Emission Leakage Mitigation","authors":"Fabio Antoniou, Panos Hatzipanayotou, Nikos Tsakiris","doi":"10.1007/s10640-023-00837-8","DOIUrl":"https://doi.org/10.1007/s10640-023-00837-8","url":null,"abstract":"<p>We construct a two-country trade model where emissions are an input in production and generate cross-border pollution. We examine the strategic incentives of an active regulator who sets a binding level of emissions in production. We show that, in the presence of terms of trade and emission leakage strategic motives, tighter regulation can mitigate emission leakage, reduce global pollution, and improve a country’s welfare. This result and the corresponding policy implications depend on the relative magnitude of emissions intensities of goods between sectors and on their relationship in production and consumption.</p>","PeriodicalId":501498,"journal":{"name":"Environmental and Resource Economics","volume":"65 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139585992","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Discounting the Future: On Climate Change, Ambiguity Aversion and Epstein–Zin Preferences","authors":"","doi":"10.1007/s10640-023-00832-z","DOIUrl":"https://doi.org/10.1007/s10640-023-00832-z","url":null,"abstract":"<h3>Abstract</h3> <p>We show that ambiguity aversion and deviations from standard expected time separable utility have a major impact on estimates of the willingness to pay to avoid future climate change risk. We propose a relatively standard integrated climate/economy model but add stochastic climate disasters. The model yields closed form solutions up to solving an integral, and therefore does not suffer from the curse of dimensionality of most numerical climate/economy models. We analyze the impact of substitution preferences, risk aversion (known probabilities), and ambiguity aversion (unknown probabilities) on the social cost of carbon. Introducing ambiguity aversion leads to two offsetting effects on the social cost of carbon: a positive direct effect and a negative effect through discounting. Our numerical results show that for reasonable calibrations, the direct effect dominates the discount rate impact, so ambiguity aversion gives substantially higher estimates of the social cost of carbon.</p>","PeriodicalId":501498,"journal":{"name":"Environmental and Resource Economics","volume":"181 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-01-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139586002","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Macroeconomic Impact of Global and Country-Specific Climate Risk","authors":"Joseph P. Byrne, Prince Asare Vitenu-Sackey","doi":"10.1007/s10640-023-00831-0","DOIUrl":"https://doi.org/10.1007/s10640-023-00831-0","url":null,"abstract":"<p>This paper examines the impact of climate risk on macroeconomic activity for thirty countries using over a century of panel time series data. The key innovation of our paper is to use a factor stochastic volatility approach to decompose climate change into global and country-specific climate risk and to consider their distinct impact upon macroeconomic activity. To allow for country heterogeneity, we also differentiate the impact of climate risk upon advanced and emerging economies. While the existing literature has focused on country based climate risk shocks, our results suggest idiosyncratic or country-specific climate risk shocks are relatively unimportant. Global climate risk, on the other hand, has a negative and relatively more important impact on macroeconomic activity. In particular, we find that both advanced and emerging countries are adversely impacted by global climate risk shocks.</p>","PeriodicalId":501498,"journal":{"name":"Environmental and Resource Economics","volume":"6 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-01-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139586054","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"If You Build It, Will They Compost? The Effects of Municipal Composting Services on Household Waste Disposal and Landfill Emissions","authors":"Lihini De Silva, Rebecca L. C. Taylor","doi":"10.1007/s10640-023-00834-x","DOIUrl":"https://doi.org/10.1007/s10640-023-00834-x","url":null,"abstract":"<p>Composting food and garden waste generates less methane emissions than landfills, yet most organic waste is landfilled. This paper examines how local government provision of composting services affects the amount of household waste going to landfills. Using quasi-random adoption of curbside organics collection by local councils in Australia, we find that curbside organics collection diverted one-fourth of household waste from landfill to composting. We find no evidence that organics collection altered total household waste and weak evidence of a small negative spillover effect on dry-recycling waste. Our results suggest curbside organics collection could reduce emissions from landfills by 6–26%.</p>","PeriodicalId":501498,"journal":{"name":"Environmental and Resource Economics","volume":"280 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-01-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139585937","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Climate Actions and Policies Measurement Framework: A Database to Monitor and Assess Countries’ Mitigation Action","authors":"","doi":"10.1007/s10640-023-00821-2","DOIUrl":"https://doi.org/10.1007/s10640-023-00821-2","url":null,"abstract":"<h3>Abstract</h3> <p>There are major gaps in the measurement of the adoption and stringency of countries’ climate actions and policies, notably in a manner coherent across countries, time, sectors, and instrument types. The Climate Actions and Policies Measurement Framework (CAPMF) aims to fill this gap. It is the most extensive structured and internationally harmonised climate mitigation policy database available to date. Currently, it comprises 130 policy variables, grouped into 56 policy instruments and other climate actions, covering 50 countries and the EU-27 as a block for the period 1990–2022. Results indicate that countries strengthened their climate action between 1990 and 2022 in terms of policy adoption and policy stringency, although at different paces. Policy adoption, policy stringency and policy mixes changed over time and differ substantially across countries and country groups. Importantly, regression analysis suggests a significant relationship between stronger climate action and greater emission reductions. Mitigation policies helped reduce emissions by about 12% in the last 5 years; most of this effect is attributable to a reduction in the energy intensity of the economy, and only residually to other factors such as a reduction of GHG intensity.</p>","PeriodicalId":501498,"journal":{"name":"Environmental and Resource Economics","volume":"55 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-01-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139410432","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Tree Cover Perforation and Malaria: Evidence from Colombia","authors":"","doi":"10.1007/s10640-023-00830-1","DOIUrl":"https://doi.org/10.1007/s10640-023-00830-1","url":null,"abstract":"<h3>Abstract</h3> <p>A growing literature seeks to econometrically identify the link between tree cover change and malaria, two of the most pressing problems facing the Global South. However, we know little about the effect of tree cover fragmentation on malaria transmission, even though correlational evidence suggests that this effect may be important. We use municipality-level panel data from Colombia along with two-way fixed effects models to identify the effect on malaria incidence of changes in two measures of tree cover fragmentation—perforation and edge—as well as of a conventional measure of aggregate tree cover loss. We find that perforation in core areas of tree cover spurs malaria transmission. Evidence for the effects of changes in edge and aggregate loss is weaker. On average, a one-percentage-point increase in contemporaneous perforation leads to a 12.7% increase in malaria cases. This effect is stronger in municipalities with gold production and in those with coca production. These findings provide further evidence that forest conservation has significant benefits for local communities. They can also help stakeholders improve the efficacy of policies to stem malaria transmission.</p>","PeriodicalId":501498,"journal":{"name":"Environmental and Resource Economics","volume":"22 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-12-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139052914","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Jan-Niklas Meier, Paul Lehmann, Bernd Süssmuth, Stephan Wedekind
{"title":"Wind power deployment and the impact of spatial planning policies","authors":"Jan-Niklas Meier, Paul Lehmann, Bernd Süssmuth, Stephan Wedekind","doi":"10.1007/s10640-023-00820-3","DOIUrl":"https://doi.org/10.1007/s10640-023-00820-3","url":null,"abstract":"<p>Spatio-environmental externalities of renewable energy deployment are mainly managed through spatial planning policies, like regional expansion goals, zoning designated areas, or setback distances. We provide a quantitative analysis of how effectively spatial planning policies can steer RES deployment, using the example of onshore wind power expansion in Germany. Based on a novel georeferenced dataset of wind turbines and spatial planning policies, we use a dynamic panel data model to explain yearly additions in wind power capacities. Most importantly, we find a strong positive impact of zoning specific land areas for wind power deployment. An additional square kilometer of designated area leads to an increase of 4.6% of yearly capacity additions per county. Not only the amount of designated area matters, but also the size and shape of each individual designated area. Small and elongated areas are, on average, associated with more wind power expansion than large and compact areas. Moreover, we find that in states with an expansion goal, capacity additions are 2.6% higher. In contrast, increasing the setback distance between turbine sites and settlements by 100 m is associated with reductions of yearly capacity additions by about 3.1%. Our findings show that policymakers can resort to spatial planning instruments in order to effectively arrange wind power deployment with other land uses.</p>","PeriodicalId":501498,"journal":{"name":"Environmental and Resource Economics","volume":"5 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-12-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139031144","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Dutch disease revisited: consistency of theory and evidence","authors":"Arsham Reisinezhad","doi":"10.1007/s10640-023-00827-w","DOIUrl":"https://doi.org/10.1007/s10640-023-00827-w","url":null,"abstract":"<p>The Dutch disease literature reveals several gaps between empirical evidence and theoretical predictions. To bridge such gaps, I develop a model that accounts for uneven spillovers of technological progress from the resource sector to other domestic sectors. I then employ a dynamic panel approach to align the theory with the data. I find that the real exchange rate appreciation resulting from a resource boom (i.e., the spending channel) is more pronounced in resource-poor countries than in resource-rich countries. Additionally, the resource movement channel exhibits differences between resource-rich and resource-poor countries. In resource-rich countries, a resource boom reduces the growth rate in the manufacturing sector more than in the service sector, leading to a decrease in relative sectoral output and a slowdown in economic growth. On the other hand, in resource-poor countries, a resource boom accelerates the growth of the manufacturing sector and decelerates the growth of the service sector, resulting in an increase in relative sectoral output and economic growth.</p>","PeriodicalId":501498,"journal":{"name":"Environmental and Resource Economics","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138686384","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}