Pub Date : 2025-02-13DOI: 10.1016/j.reseneeco.2025.101491
Libo Wu , Yang Zhou
This paper investigates how social norms influence energy conservation behaviors in China. Through a field experiment, we demonstrate that simply providing social comparison information can lead to significant energy reductions, even when the potential consumption and monetary gains from energy savings are limited. Specifically, energy consumption was reduced by 0.42 kWh, sufficient to meet a household’s daily energy needs for lighting. Our findings further indicate that this conservation effect is only significant for households using convenient payment schemes (quick-pay) via other digital platforms, which only offer monetary costs without other information. Hence, attention and information on energy consumption are relatively lacking for these households. This result reveals the potential mechanism of social norms as a reminder, drawing users’ attention to their energy consumption behaviors. This study offers valuable insights into the application and mechanism of social norms, emphasizing the importance of providing additional reminder information as auto- and quick-pay schemes become more prevalent.
{"title":"Social norms and energy conservation in China","authors":"Libo Wu , Yang Zhou","doi":"10.1016/j.reseneeco.2025.101491","DOIUrl":"10.1016/j.reseneeco.2025.101491","url":null,"abstract":"<div><div>This paper investigates how social norms influence energy conservation behaviors in China. Through a field experiment, we demonstrate that simply providing social comparison information can lead to significant energy reductions, even when the potential consumption and monetary gains from energy savings are limited. Specifically, energy consumption was reduced by 0.42 kWh, sufficient to meet a household’s daily energy needs for lighting. Our findings further indicate that this conservation effect is only significant for households using convenient payment schemes (quick-pay) via other digital platforms, which only offer monetary costs without other information. Hence, attention and information on energy consumption are relatively lacking for these households. This result reveals the potential mechanism of social norms as a reminder, drawing users’ attention to their energy consumption behaviors. This study offers valuable insights into the application and mechanism of social norms, emphasizing the importance of providing additional reminder information as auto- and quick-pay schemes become more prevalent.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"82 ","pages":"Article 101491"},"PeriodicalIF":2.6,"publicationDate":"2025-02-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143430230","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}
Pub Date : 2025-02-13DOI: 10.1016/j.reseneeco.2025.101488
Puja Singhal , Stephan Sommer , Kathrin Kaestner , Michael Pahle
Rental housing, where tenants are responsible for their own energy bills but landlords are responsible for the dwelling’s energy performance, may pose a particular challenge for investments in energy efficiency. In this paper, we describe the severity of this split-incentive problem by comparing homes purchased for own use with those rented out on the German housing market, where the share of renters is particularly high and the majority of rented apartments is owned by private individuals. Using data on energy performance scores from Germany’s largest online housing market platform between 2019 and 2021, we find on average economically small differences in the energy efficiency levels between apartments that differ by tenure type. Even though there are heterogeneous effects, also across broker types, by and large, our findings suggest that there may not be a critical energy efficiency deficit in the German multi apartment building sector.
{"title":"Split-incentives in energy efficiency investments? Evidence from rental housing","authors":"Puja Singhal , Stephan Sommer , Kathrin Kaestner , Michael Pahle","doi":"10.1016/j.reseneeco.2025.101488","DOIUrl":"10.1016/j.reseneeco.2025.101488","url":null,"abstract":"<div><div>Rental housing, where tenants are responsible for their own energy bills but landlords are responsible for the dwelling’s energy performance, may pose a particular challenge for investments in energy efficiency. In this paper, we describe the severity of this split-incentive problem by comparing homes purchased for own use with those rented out on the German housing market, where the share of renters is particularly high and the majority of rented apartments is owned by private individuals. Using data on energy performance scores from Germany’s largest online housing market platform between 2019 and 2021, we find on average economically small differences in the energy efficiency levels between apartments that differ by tenure type. Even though there are heterogeneous effects, also across broker types, by and large, our findings suggest that there may not be a critical energy efficiency deficit in the German multi apartment building sector.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"82 ","pages":"Article 101488"},"PeriodicalIF":2.6,"publicationDate":"2025-02-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143422007","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}
Pub Date : 2025-02-10DOI: 10.1016/j.reseneeco.2025.101492
Maria Börjesson , Stef Proost
The EU aims to achieve climate neutrality for trucks. This paper compares the user cost of diesel trucks, battery electric trucks, and trucks that rely on overhead lines in a decision context where the developments of battery costs and overhead line investment and maintenance costs are uncertain. The user costs contain the truck capital cost and the energy costs, the possible vehicle-to-grid benefits, driver costs, and other distance costs. User costs are compared for different distance profiles and optimized battery sizes. The possible user cost developments serve as input to an analysis of investment decisions in electric motorways (e-roads). The economics of e-roads is analyzed for two representations of the EU TEN-T network. In the first analysis, average EU truck flow (veh/h) and truck trip characteristics are used. In the second representation, we consider domestic and international truck transport between two neighbouring countries with strongly diverging average traffic flows and shares of international truck trips on their TEN-T network. This allows for the analysis of the non-cooperative and cooperative solutions of the two countries. The installation of e-roads appears to be a robust investment decision for the motorways of large countries that have dense truck traffic but not for less dense countries. Cooperation between countries may increase total benefits due to economies of scale.
{"title":"Costs and benefits of e-roads versus battery trucks: Uncertainty and coordination","authors":"Maria Börjesson , Stef Proost","doi":"10.1016/j.reseneeco.2025.101492","DOIUrl":"10.1016/j.reseneeco.2025.101492","url":null,"abstract":"<div><div>The EU aims to achieve climate neutrality for trucks. This paper compares the user cost of diesel trucks, battery electric trucks, and trucks that rely on overhead lines in a decision context where the developments of battery costs and overhead line investment and maintenance costs are uncertain. The user costs contain the truck capital cost and the energy costs, the possible vehicle-to-grid benefits, driver costs, and other distance costs. User costs are compared for different distance profiles and optimized battery sizes. The possible user cost developments serve as input to an analysis of investment decisions in electric motorways (e-roads). The economics of e-roads is analyzed for two representations of the EU TEN-T network. In the first analysis, average EU truck flow (veh/h) and truck trip characteristics are used. In the second representation, we consider domestic and international truck transport between two neighbouring countries with strongly diverging average traffic flows and shares of international truck trips on their TEN-T network. This allows for the analysis of the non-cooperative and cooperative solutions of the two countries. The installation of e-roads appears to be a robust investment decision for the motorways of large countries that have dense truck traffic but not for less dense countries. Cooperation between countries may increase total benefits due to economies of scale.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"82 ","pages":"Article 101492"},"PeriodicalIF":2.6,"publicationDate":"2025-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143422004","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}
Pub Date : 2025-02-06DOI: 10.1016/j.reseneeco.2025.101479
Gregory Galay , Jennifer Winter
The development of oil and gas resources while maximizing production has been the primary objective of policymakers and regulators in Alberta, Canada for many decades. When oil prices were sufficiently high, environmental risks and other concerns received little attention. When oil prices collapsed in 2014, Alberta’s inventory of inactive, decommissioned, and orphaned wells grew dramatically. It is now a complex problem for operators, regulators, and policymakers and the return of high oil prices has not resolved the issue. This article uses a real options model to evaluate firms’ end-of-life decisions for oil wells in Alberta subject to mean-reverting oil prices, to understand the factors that affect a firm’s decision to reclaim an oil well at the end of its useful life versus leaving it unreclaimed. We focus on a firm’s optimal management of a representative oil well in response to different policy decisions, rather than a socially optimal outcome that internalizes the negative externalities of oil and gas development. Results under our baseline parameters show that firms operating a representative oil well will extract over 95 per cent of the reserves in place and reclaim the well. When the cost to decommission or cost to reclaim a well is larger than the cost of maintaining an inactive well, the firm will still extract over 95 per cent of reserves but will leave the well in an inactive state (not able to produce) and never reclaim the well. This suggests that some of the unreclaimed oil and gas wells have high decommissioning or reclamation costs. If those cleanup are correlated with environmental risks (groundwater contamination, gas migration, etc.) then the inventory of inactive oil and gas wells could be populated with the riskiest wells, adding an additional level of complexity to the issue of unreclaimed oil and gas wells in Alberta. We examine the effect of a time limit on inactivity or a bond has on end-of-life decisions. Our results suggest that neither policy on its own ensure wells with high decommissioning or reclamation costs are reclaimed at the end of useful life. However, a combination of a time limit on inactivity and a bond could be useful policy instruments to help ensure high-cost oil and gas wells are reclaimed at the end of their life.
{"title":"No end in sight: End-of-life management of oil wells in Alberta","authors":"Gregory Galay , Jennifer Winter","doi":"10.1016/j.reseneeco.2025.101479","DOIUrl":"10.1016/j.reseneeco.2025.101479","url":null,"abstract":"<div><div>The development of oil and gas resources while maximizing production has been the primary objective of policymakers and regulators in Alberta, Canada for many decades. When oil prices were sufficiently high, environmental risks and other concerns received little attention. When oil prices collapsed in 2014, Alberta’s inventory of inactive, decommissioned, and orphaned wells grew dramatically. It is now a complex problem for operators, regulators, and policymakers and the return of high oil prices has not resolved the issue. This article uses a real options model to evaluate firms’ end-of-life decisions for oil wells in Alberta subject to mean-reverting oil prices, to understand the factors that affect a firm’s decision to reclaim an oil well at the end of its useful life versus leaving it unreclaimed. We focus on a firm’s optimal management of a representative oil well in response to different policy decisions, rather than a socially optimal outcome that internalizes the negative externalities of oil and gas development. Results under our baseline parameters show that firms operating a representative oil well will extract over 95 per cent of the reserves in place and reclaim the well. When the cost to decommission or cost to reclaim a well is larger than the cost of maintaining an inactive well, the firm will still extract over 95 per cent of reserves but will leave the well in an inactive state (not able to produce) and never reclaim the well. This suggests that some of the unreclaimed oil and gas wells have high decommissioning or reclamation costs. If those cleanup are correlated with environmental risks (groundwater contamination, gas migration, etc.) then the inventory of inactive oil and gas wells could be populated with the riskiest wells, adding an additional level of complexity to the issue of unreclaimed oil and gas wells in Alberta. We examine the effect of a time limit on inactivity or a bond has on end-of-life decisions. Our results suggest that neither policy on its own ensure wells with high decommissioning or reclamation costs are reclaimed at the end of useful life. However, a combination of a time limit on inactivity and a bond could be useful policy instruments to help ensure high-cost oil and gas wells are reclaimed at the end of their life.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"82 ","pages":"Article 101479"},"PeriodicalIF":2.6,"publicationDate":"2025-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143422006","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}
Pub Date : 2025-02-01DOI: 10.1016/j.reseneeco.2025.101477
Zhenyang Pi , Ke Wang
Cost-reduction investments by leading electric vehicle (EV) automakers like Tesla are essential in lowering EV prices and accelerating market adoption. However, the impact of these investments on the electrification strategies of traditional gasoline vehicle (GV) automakers remains unclear, particularly when spillovers to GV automakers producing perfectly substitutable EVs are possible. This study examines the interaction between these factors within a Cournot competition model involving one EV automaker and one GV automaker, revealing three key insights. First, the EV automaker’s cost-reduction investments do not necessarily encourage the GV automaker to pursue electrification, even with significant spillovers; the outcome also depends on product substitutability between GVs and EVs. Second, the EV automaker tends to increase investments under low spillovers and decrease them under high spillovers in response to GV automaker electrification. Nevertheless, these investments cannot fully offset the profit erosion caused by GV automaker electrification. Third, these findings remain qualitatively robust across several extended scenarios, including asymmetric consumer reservation prices, imperfect EV substitution, a shift from quantity to price competition, and a Stackelberg game framework. The model is also extended to evaluate the effects of three government interventions—purchase subsidies, carbon taxes, and emission standards—alongside the impact of oligopolistic competition.
{"title":"Does lower electric vehicle production cost spur traditional automaker electrification? Spillovers of cost-reduction investments","authors":"Zhenyang Pi , Ke Wang","doi":"10.1016/j.reseneeco.2025.101477","DOIUrl":"10.1016/j.reseneeco.2025.101477","url":null,"abstract":"<div><div>Cost-reduction investments by leading electric vehicle (EV) automakers like Tesla are essential in lowering EV prices and accelerating market adoption. However, the impact of these investments on the electrification strategies of traditional gasoline vehicle (GV) automakers remains unclear, particularly when spillovers to GV automakers producing perfectly substitutable EVs are possible. This study examines the interaction between these factors within a Cournot competition model involving one EV automaker and one GV automaker, revealing three key insights. First, the EV automaker’s cost-reduction investments do not necessarily encourage the GV automaker to pursue electrification, even with significant spillovers; the outcome also depends on product substitutability between GVs and EVs. Second, the EV automaker tends to increase investments under low spillovers and decrease them under high spillovers in response to GV automaker electrification. Nevertheless, these investments cannot fully offset the profit erosion caused by GV automaker electrification. Third, these findings remain qualitatively robust across several extended scenarios, including asymmetric consumer reservation prices, imperfect EV substitution, a shift from quantity to price competition, and a Stackelberg game framework. The model is also extended to evaluate the effects of three government interventions—purchase subsidies, carbon taxes, and emission standards—alongside the impact of oligopolistic competition.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"81 ","pages":"Article 101477"},"PeriodicalIF":2.6,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143096255","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}
The value of environmental goods to individuals often depends on spatial features such as distance. The most common approach of accounting for distance decay is to model utility as some function of distance. It has been suggested to instead model the value as a function of the quantity of an environmental good within a certain distance. We develop three novel quantity-within-distance models that may be more suited for evaluating quantity changes in an environmental good. We argue that these models could capture spatial patterns better than distance-based models when i) secondary benefits are a relevant source of welfare, ii) the environmental change is spatially scattered, iii) the distribution of the endowment, i.e. the present availability of the environmental good, matters. Using data from choice experiments on the extension of green space and trees in two urban areas, we compare required assumptions, model fit, and size and precision of aggregated welfare estimates. Our results indicate limited differences in model fit. However, the quantity-within-distance models consistently produce aggregate welfare estimates roughly half of common distance decay models and have narrower confidence intervals. While it is not possible to infer which is more accurate, the large differences can have considerable policy implications.
{"title":"Does quantity matter for distance decay? Evidence from two choice experiments on urban green","authors":"Malte Welling , Jette Bredahl Jacobsen , Søren Bøye Olsen , Thomas Lundhede","doi":"10.1016/j.reseneeco.2024.101472","DOIUrl":"10.1016/j.reseneeco.2024.101472","url":null,"abstract":"<div><div>The value of environmental goods to individuals often depends on spatial features such as distance. The most common approach of accounting for distance decay is to model utility as some function of distance. It has been suggested to instead model the value as a function of the quantity of an environmental good within a certain distance. We develop three novel quantity-within-distance models that may be more suited for evaluating quantity changes in an environmental good. We argue that these models could capture spatial patterns better than distance-based models when i) secondary benefits are a relevant source of welfare, ii) the environmental change is spatially scattered, iii) the distribution of the endowment, i.e. the present availability of the environmental good, matters. Using data from choice experiments on the extension of green space and trees in two urban areas, we compare required assumptions, model fit, and size and precision of aggregated welfare estimates. Our results indicate limited differences in model fit. However, the quantity-within-distance models consistently produce aggregate welfare estimates roughly half of common distance decay models and have narrower confidence intervals. While it is not possible to infer which is more accurate, the large differences can have considerable policy implications.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"81 ","pages":"Article 101472"},"PeriodicalIF":2.6,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143096251","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}
Pub Date : 2025-02-01DOI: 10.1016/j.reseneeco.2024.101474
Haowei Yu , Guanglai Zhang , Ning Zhang
The Key Cities for Air Pollution Control (KCAPC) program is one of China’s earliest and most important target-based environmental policies, launched in 2002 to address the country’s severe air pollution issue. However, the effectiveness of the program is still largely unknown. This paper examines the impact of the KCAPC program on sulfur dioxide (SO) emissions, with an emphasis on the role of bureaucratic incentives. We find that the program reduced SO emissions by 12.19%–13.84% at the city level and by 11.22%–13.50% at the firm level. We also find that local governments shut down highly polluting firms, promoted greener production and enhanced environmental regulation in order to meet environmental targets set by the program. However, we find that the KCAPC program was only effective in cities where the mayor has a promotion incentive and is not incentivized to collude with polluting firms. Our findings point to the importance of bureaucratic incentives in governing the effectiveness of environmental regulations in localities.
{"title":"The role of bureaucratic incentives in the effectiveness of environmental regulations: Evidence from China","authors":"Haowei Yu , Guanglai Zhang , Ning Zhang","doi":"10.1016/j.reseneeco.2024.101474","DOIUrl":"10.1016/j.reseneeco.2024.101474","url":null,"abstract":"<div><div>The Key Cities for Air Pollution Control (KCAPC) program is one of China’s earliest and most important target-based environmental policies, launched in 2002 to address the country’s severe air pollution issue. However, the effectiveness of the program is still largely unknown. This paper examines the impact of the KCAPC program on sulfur dioxide (SO<span><math><msub><mrow></mrow><mrow><mn>2</mn></mrow></msub></math></span>) emissions, with an emphasis on the role of bureaucratic incentives. We find that the program reduced SO<span><math><msub><mrow></mrow><mrow><mn>2</mn></mrow></msub></math></span> emissions by 12.19%–13.84% at the city level and by 11.22%–13.50% at the firm level. We also find that local governments shut down highly polluting firms, promoted greener production and enhanced environmental regulation in order to meet environmental targets set by the program. However, we find that the KCAPC program was only effective in cities where the mayor has a promotion incentive and is not incentivized to collude with polluting firms. Our findings point to the importance of bureaucratic incentives in governing the effectiveness of environmental regulations in localities.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"81 ","pages":"Article 101474"},"PeriodicalIF":2.6,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143135967","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}
Pub Date : 2025-02-01DOI: 10.1016/j.reseneeco.2024.101473
Marvin Gleue, Theresa Luigs, Andreas Ziegler
Previous studies on leading by example have shown how an actor contributing to a public good first can increase the contribution of following actors in social dilemma situations. This paper empirically examines how leading by example of non-state actors, which are key to the transition to a low-carbon society, affects individual climate protection. Specifically, we consider the causal effect of providing information about the past climate protection activities of two non-state actors on donations for climate protection through an incentivized donation scheme. Based on data from a survey of 671 students, we conducted a framed field experiment using different information treatments about climate protection activities of the university and city of residence of the participants. Although our treatments successfully influence beliefs about the climate protection activities of both non-state actors, these beliefs do not significantly increase the individual contributions to climate protection in either treatment group. The analysis of heterogeneity in treatment effects reveals that informing students about climate protection activities of the city significantly increases climate protection activities among individuals with low prior beliefs about the role of cities in climate protection. In contrast, no such heterogeneity is observed for the university. Finally, individual identification with a non-state actor and environmental attitudes do not significantly moderate the treatment effects. These results contrast somewhat with previous studies on the effectiveness of leading by example measures and suggest that a broader understanding of the leader-follower relationship is needed for non-state actors to effectively promote individual climate protection.
{"title":"The relevance of non-state climate protection activities as motivation for individual climate protection: Results from a framed field experiment","authors":"Marvin Gleue, Theresa Luigs, Andreas Ziegler","doi":"10.1016/j.reseneeco.2024.101473","DOIUrl":"10.1016/j.reseneeco.2024.101473","url":null,"abstract":"<div><div>Previous studies on leading by example have shown how an actor contributing to a public good first can increase the contribution of following actors in social dilemma situations. This paper empirically examines how leading by example of non-state actors, which are key to the transition to a low-carbon society, affects individual climate protection. Specifically, we consider the causal effect of providing information about the past climate protection activities of two non-state actors on donations for climate protection through an incentivized donation scheme. Based on data from a survey of 671 students, we conducted a framed field experiment using different information treatments about climate protection activities of the university and city of residence of the participants. Although our treatments successfully influence beliefs about the climate protection activities of both non-state actors, these beliefs do not significantly increase the individual contributions to climate protection in either treatment group. The analysis of heterogeneity in treatment effects reveals that informing students about climate protection activities of the city significantly increases climate protection activities among individuals with low prior beliefs about the role of cities in climate protection. In contrast, no such heterogeneity is observed for the university. Finally, individual identification with a non-state actor and environmental attitudes do not significantly moderate the treatment effects. These results contrast somewhat with previous studies on the effectiveness of leading by example measures and suggest that a broader understanding of the leader-follower relationship is needed for non-state actors to effectively promote individual climate protection.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"81 ","pages":"Article 101473"},"PeriodicalIF":2.6,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143096252","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}
Pub Date : 2025-02-01DOI: 10.1016/j.reseneeco.2024.101475
Francisco Cabo, Guiomar Martín-Herrán, Laís Ramos
This paper analyzes the dynamic interaction between an environmental regulator and a polluting firm in a stock pollution Stackelberg game, where the regulator acts as the leader and the firm as the follower. The firm must determine the emissions required for production and pay a tax based on its reported emissions. The regulator chooses this tax on emissions to induce more environmentally respectful behavior of the firm. Evasion, defined as the gap between real and reported emissions can be discouraged using a fine. A central assumption in our analysis is that the regulator has incomplete information regarding the firm’s objective function. The regulator does not know, but conjectures, how afraid the firm is of the fine for fraud. Based on this conjecture, the regulator estimates the firm’s best-response functions and determines the tax. We compare the results when the regulator is accurate or misguided. Interestingly we find that when the regulator overestimates the firm’s fear of the fine for fraud, social welfare can be greater than when he accurately estimates it.
{"title":"Environmental regulation and tax evasion when the regulator has incomplete information","authors":"Francisco Cabo, Guiomar Martín-Herrán, Laís Ramos","doi":"10.1016/j.reseneeco.2024.101475","DOIUrl":"10.1016/j.reseneeco.2024.101475","url":null,"abstract":"<div><div>This paper analyzes the dynamic interaction between an environmental regulator and a polluting firm in a stock pollution Stackelberg game, where the regulator acts as the leader and the firm as the follower. The firm must determine the emissions required for production and pay a tax based on its reported emissions. The regulator chooses this tax on emissions to induce more environmentally respectful behavior of the firm. Evasion, defined as the gap between real and reported emissions can be discouraged using a fine. A central assumption in our analysis is that the regulator has incomplete information regarding the firm’s objective function. The regulator does not know, but conjectures, how afraid the firm is of the fine for fraud. Based on this conjecture, the regulator estimates the firm’s best-response functions and determines the tax. We compare the results when the regulator is accurate or misguided. Interestingly we find that when the regulator overestimates the firm’s fear of the fine for fraud, social welfare can be greater than when he accurately estimates it.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"81 ","pages":"Article 101475"},"PeriodicalIF":2.6,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143096253","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}
Pub Date : 2025-02-01DOI: 10.1016/j.reseneeco.2024.101476
Michael Pahle , Simon Quemin , Sebastian Osorio , Claudia Günther , Robert Pietzcker
The 2023 reform of the EU emissions trading system (ETS) has brought to the forefront the issue of allowance market functioning in the long run. With the emissions cap set to go down to zero by around 2040, the next decade can be said to mark the ‘ETS endgame’. That is, when allowance supply approaches zero, the market is bound to undergo fundamental changes. Yet the understanding and modeling of terminal market dynamics with ever-increasing allowance scarcity is limited. We analyze possible changes in market conditions and behaviors, and discuss associated challenges in two steps. First, we use the numerical model LIMES-EU to illuminate the market dynamics instigated by the reform, i.e. key changes in allowance price formation, supply adjustment and abatement by sector. Second, we use our numerical results as a backdrop to identify potential frictions (financial, informational, distributional) that may arise or become exacerbated as the endgame unfolds. Besides shedding light on whether the ETS is fit for climate neutrality, these frictions further delineate avenues for future research to improve the understanding and modeling of emissions trading in the long run.
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