The capital intensive network industries such as electricity and gas delivery infrastructures exhibit natural monopoly characteristics because of their high economy of scale relative to the size of the market. Due to the absence of direct competition in these regulated industries, infrastructure providers hardly undertake the appropriate level of innovation activities to optimise the operation and continuity of their services; a review is provided to show how different countries support innovation in the network industries. As innovation activities are costly and risky undertakings, a relevant query is how to incentivise innovation through economic regulations. This paper models three generic schemes of innovation promotion: individual incentive contracts, competitive innovation fund and cooperative innovation program. We show how each of these schemes affects the firms' incentives for innovation activities. The results confirm the effectiveness of all three schemes. However, implementing an individual incentive contract is information-intensive, while competitive or cooperative schemes do not require an informed regulator. A comparison is provided between the schemes.
{"title":"The Promotion of Innovation in Regulated Network Industries","authors":"Seyed Reza Mirnezami","doi":"10.1561/101.00000139","DOIUrl":"https://doi.org/10.1561/101.00000139","url":null,"abstract":"The capital intensive network industries such as electricity and gas delivery infrastructures exhibit natural monopoly characteristics because of their high economy of scale relative to the size of the market. Due to the absence of direct competition in these regulated industries, infrastructure providers hardly undertake the appropriate level of innovation activities to optimise the operation and continuity of their services; a review is provided to show how different countries support innovation in the network industries. As innovation activities are costly and risky undertakings, a relevant query is how to incentivise innovation through economic regulations. This paper models three generic schemes of innovation promotion: individual incentive contracts, competitive innovation fund and cooperative innovation program. We show how each of these schemes affects the firms' incentives for innovation activities. The results confirm the effectiveness of all three schemes. However, implementing an individual incentive contract is information-intensive, while competitive or cooperative schemes do not require an informed regulator. A comparison is provided between the schemes.","PeriodicalId":45355,"journal":{"name":"International Review of Environmental and Resource Economics","volume":null,"pages":null},"PeriodicalIF":1.8,"publicationDate":"2021-07-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48752409","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}
This paper analyses the most recent literature available on the green bond, a financial instrument that raises funds for environmentally friendly projects. The aim of this research is to build a comprehensive review based on green bond roles, functions, features, typologies, general uses and effects. Ultimately, we try to address its potential contribution to the objectives of environmental policy. Our research reveals several roles that the instrument is taking. The regulation, the ecosystem and the best practices being developed around it may further boost the advance of sustainable activities in the market. Since 2013, when the issuances started to grow considerably, green bond market behaviour has been relatively similar to that of the conventional bond market. There have, however, been cases in which it attracted greater attention from investors and others in which it appeared to perform better than regular bond instruments. The green bond is also increasingly being considered as a strong potential support mechanism for the post-pandemic crisis recovery. Last, the paper highlights opportunities for future research on the subject.
{"title":"Green Bonds: The Evolution of a Sustainable Financial Instrument on the Cutting Edge","authors":"Antonio Malorgio, E. Teti, M. Dallocchio","doi":"10.1561/101.00000134","DOIUrl":"https://doi.org/10.1561/101.00000134","url":null,"abstract":"This paper analyses the most recent literature available on the green bond, a financial instrument that raises funds for environmentally friendly projects. The aim of this research is to build a comprehensive review based on green bond roles, functions, features, typologies, general uses and effects. Ultimately, we try to address its potential contribution to the objectives of environmental policy. Our research reveals several roles that the instrument is taking. The regulation, the ecosystem and the best practices being developed around it may further boost the advance of sustainable activities in the market. Since 2013, when the issuances started to grow considerably, green bond market behaviour has been relatively similar to that of the conventional bond market. There have, however, been cases in which it attracted greater attention from investors and others in which it appeared to perform better than regular bond instruments. The green bond is also increasingly being considered as a strong potential support mechanism for the post-pandemic crisis recovery. Last, the paper highlights opportunities for future research on the subject.","PeriodicalId":45355,"journal":{"name":"International Review of Environmental and Resource Economics","volume":null,"pages":null},"PeriodicalIF":1.8,"publicationDate":"2021-07-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48203852","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":"Cities and the Environment: The Case of Air Pollution","authors":"E. Kyriakopoulou","doi":"10.1561/101.00000130","DOIUrl":"https://doi.org/10.1561/101.00000130","url":null,"abstract":"","PeriodicalId":45355,"journal":{"name":"International Review of Environmental and Resource Economics","volume":null,"pages":null},"PeriodicalIF":1.8,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67075187","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}
Jimena Gonzalez-Ramirez, Jill L. Caviglia-Harris, J. Whitehead
{"title":"Teaching Environmental and Natural Resource Economics: A Review of the Economic Education Literature","authors":"Jimena Gonzalez-Ramirez, Jill L. Caviglia-Harris, J. Whitehead","doi":"10.1561/101.00000143","DOIUrl":"https://doi.org/10.1561/101.00000143","url":null,"abstract":"","PeriodicalId":45355,"journal":{"name":"International Review of Environmental and Resource Economics","volume":null,"pages":null},"PeriodicalIF":1.8,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67075321","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":"What Should We Be Teaching Students about the Economics of Climate Change: Is There a Consensus?","authors":"Lynne Y. Lewis, Casey J. Wichman","doi":"10.1561/101.00000142","DOIUrl":"https://doi.org/10.1561/101.00000142","url":null,"abstract":"","PeriodicalId":45355,"journal":{"name":"International Review of Environmental and Resource Economics","volume":null,"pages":null},"PeriodicalIF":1.8,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67075310","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}
This paper argues for incorporating distributional impacts into research and classroom discussions that focus on potential solutions to market failures. Many economists were taught to focus on the efficiency associated with such solutions and to assume that other means would be used to achieve the appropriate distribution of wealth within an economy. The paper briefly enumerates both theoretical and practical reasons why emphasizing distributional impacts is important. The paper offers a number of methods that can be used to identify distributional impacts in applied research such as Kaldor–Hick Tableaus, Lorenz Curves, Gini Coefficients, and weighted benefit–cost analysis and provides sample assignments that can be used in a wide range of classes.
{"title":"Emphasizing Distributional Impacts in Teaching Solutions to Market Failures","authors":"Sarah Stafford","doi":"10.1561/101.00000141","DOIUrl":"https://doi.org/10.1561/101.00000141","url":null,"abstract":"This paper argues for incorporating distributional impacts into research and classroom discussions that focus on potential solutions to market failures. Many economists were taught to focus on the efficiency associated with such solutions and to assume that other means would be used to achieve the appropriate distribution of wealth within an economy. The paper briefly enumerates both theoretical and practical reasons why emphasizing distributional impacts is important. The paper offers a number of methods that can be used to identify distributional impacts in applied research such as Kaldor–Hick Tableaus, Lorenz Curves, Gini Coefficients, and weighted benefit–cost analysis and provides sample assignments that can be used in a wide range of classes.","PeriodicalId":45355,"journal":{"name":"International Review of Environmental and Resource Economics","volume":null,"pages":null},"PeriodicalIF":1.8,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67075298","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}
Resource efficiency and circular economy policies aim at reducing resource intensity and use throughout the economy, thereby decreasing environmental impacts. Besides the environmental benefits expected from these policies, potential employment benefits are often emphasised, which would follow the anticipated structural changes in the economy from material-intensive to more labour-intensive activities. However, the size of the employment effect is still unclear and difficult to quantify. To date, the quantitative literature on the employment impacts of the circular economy is still scarce. This study is the first of its kind to review the available studies on this increasingly important policy issue.
{"title":"Labour Market Consequences of a Transition to a Circular Economy: A Review Paper","authors":"Frithjof Laubinger, E. Lanzi, Jean Château","doi":"10.1561/101.00000120","DOIUrl":"https://doi.org/10.1561/101.00000120","url":null,"abstract":"Resource efficiency and circular economy policies aim at reducing resource intensity and use throughout the economy, thereby decreasing environmental impacts. Besides the environmental benefits expected from these policies, potential employment benefits are often emphasised, which would follow the anticipated structural changes in the economy from material-intensive to more labour-intensive activities. However, the size of the employment effect is still unclear and difficult to quantify. To date, the quantitative literature on the employment impacts of the circular economy is still scarce. This study is the first of its kind to review the available studies on this increasingly important policy issue.","PeriodicalId":45355,"journal":{"name":"International Review of Environmental and Resource Economics","volume":null,"pages":null},"PeriodicalIF":1.8,"publicationDate":"2020-12-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48656115","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}
This paper provides an overview of the role of oil spill liability in policy at the state, national, and international levels. The primary focus is on damages to publicly owned natural resources from oil spills and associated legislation, policy, and economics. Both US and International Law have evolved over time to provide strict liability for an ever more inclusive set of oil spill damages, including what is termed "pure environmental" damages. This represents arguably the most expansive implementation of the "Polluter Pays Principle", which makes those who pollute financially responsible for the damages. Under both US and International Law, the primary form of compensation is a set of cost-effective actions to restore environmental damages, which has been termed resource-based compensation, as opposed providing to monetary compensation to injured parties. The framework under US law for liability for publicly owned natural resource damages requires quantification of causal linkages from a spill event, to injury to natural resources, to damages to the public, to natural recovery to baseline conditions, and accelerated recovery under alternative sets of restoration programs. In principle, this is a logical framework to ensure that the public is compensated for spill-related environmental damages. However, carrying out such a program may strain the state-of-the-science at each stage, given the many limitations of our scientific understanding of complex environmental systems. Thus, assessing liability for oil spill damages is a highly challenging endeavor and enormous uncertainties exist at nearly every stage in the process. Furthermore, litigation for oil spill damages is often a high stakes game, where the parties that are principally involved in assessing damages also receive benefits from, or pay the costs of, the damage awards. Thus, the process of assessing damages cannot be viewed as an objective analysis by impartial third parties. Furthermore, this damage assessment process is costly and time consuming, and neither assessment costs nor litigation costs contribute to compensating victims or restoring environmental damages. This raises the question of whether we as a society should rethink the framework for compensation for natural resource damages in future oil spill legislation. Standardized alternatives to traditional tort law exist which may reduce the time and financial costs of litigation and may thereby expedite restoration actions. Furthermore, standardized approaches may not necessarily reduce the accuracy of damage assessments, given the great scientific uncertainties and the financial interests of the parties involved in the damage assessment process.
{"title":"Liability for Natural Resource Damages from Oil Spills: A Survey","authors":"J. Opaluch","doi":"10.1561/101.00000114","DOIUrl":"https://doi.org/10.1561/101.00000114","url":null,"abstract":"This paper provides an overview of the role of oil spill liability in policy at the state, national, and international levels. The primary focus is on damages to publicly owned natural resources from oil spills and associated legislation, policy, and economics. Both US and International Law have evolved over time to provide strict liability for an ever more inclusive set of oil spill damages, including what is termed \"pure environmental\" damages. This represents arguably the most expansive implementation of the \"Polluter Pays Principle\", which makes those who pollute financially responsible for the damages. Under both US and International Law, the primary form of compensation is a set of cost-effective actions to restore environmental damages, which has been termed resource-based compensation, as opposed providing to monetary compensation to injured parties. The framework under US law for liability for publicly owned natural resource damages requires quantification of causal linkages from a spill event, to injury to natural resources, to damages to the public, to natural recovery to baseline conditions, and accelerated recovery under alternative sets of restoration programs. In principle, this is a logical framework to ensure that the public is compensated for spill-related environmental damages. However, carrying out such a program may strain the state-of-the-science at each stage, given the many limitations of our scientific understanding of complex environmental systems. Thus, assessing liability for oil spill damages is a highly challenging endeavor and enormous uncertainties exist at nearly every stage in the process. Furthermore, litigation for oil spill damages is often a high stakes game, where the parties that are principally involved in assessing damages also receive benefits from, or pay the costs of, the damage awards. Thus, the process of assessing damages cannot be viewed as an objective analysis by impartial third parties. Furthermore, this damage assessment process is costly and time consuming, and neither assessment costs nor litigation costs contribute to compensating victims or restoring environmental damages. This raises the question of whether we as a society should rethink the framework for compensation for natural resource damages in future oil spill legislation. Standardized alternatives to traditional tort law exist which may reduce the time and financial costs of litigation and may thereby expedite restoration actions. Furthermore, standardized approaches may not necessarily reduce the accuracy of damage assessments, given the great scientific uncertainties and the financial interests of the parties involved in the damage assessment process.","PeriodicalId":45355,"journal":{"name":"International Review of Environmental and Resource Economics","volume":null,"pages":null},"PeriodicalIF":1.8,"publicationDate":"2020-04-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1561/101.00000114","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49624707","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}
Environment is a public good whose preservation requires some type of intervention. Use of natural resources for economic activities should be regulated by the local communities; however, this can have in turn external effects on other communities. Environment then takes the double nature of local and global public good, requiring intervention of different levels of governments, whose interplay may raise further conflicts. The aim of this paper is twofold. First, we survey the literature on conflicts arising from the alternative uses of land and natural resources and discuss the effects and policy implications of the interplay between different governments. Second, we focus on the role of strategic interactions in the environmental governance and the implied policy trade-offs and present a formal policy game with potential conflicts between central and local authorities. The model aims to describe the circumstances according to which the lack of coordination between local and central authorities leads to under- or over- provision of natural resources and environment preservation.
{"title":"Natural Resources and Environment Preservation: Strategic Substitutability vs. Complementarity in \u0000Global and Local Public Good Provision","authors":"N. Acocella, G. Bartolomeo","doi":"10.1561/101.00000109","DOIUrl":"https://doi.org/10.1561/101.00000109","url":null,"abstract":"Environment is a public good whose preservation requires some type of intervention. Use of natural resources for economic activities should be regulated by the local communities; however, this can have in turn external effects on other communities. Environment then takes the double nature of local and global public good, requiring intervention of different levels of governments, whose interplay may raise further conflicts. The aim of this paper is twofold. First, we survey the literature on conflicts arising from the alternative uses of land and natural resources and discuss the effects and policy implications of the interplay between different governments. Second, we focus on the role of strategic interactions in the environmental governance and the implied policy trade-offs and present a formal policy game with potential conflicts between central and local authorities. The model aims to describe the circumstances according to which the lack of coordination between local and central authorities leads to under- or over- provision of natural resources and environment preservation.","PeriodicalId":45355,"journal":{"name":"International Review of Environmental and Resource Economics","volume":null,"pages":null},"PeriodicalIF":1.8,"publicationDate":"2019-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1561/101.00000109","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47702622","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}
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