Environmental and Resource Economics最新文献

Abstract

An extensive climate policy literature provides various recommendations for mitigating climate change, but these recommendations are not supported democratically, since the models employed consider either infinitely-lived individuals or normative social objectives (or both). In contrast, the present paper provides policy recommendations capable of incorporating democratic processes. I develop an overlapping generation model with political process micro-foundations and show how democratic climate policies are interconnected with other democratic policies. Time inconsistent social objectives combined with commitment issues lead to an inefficient tax on capital accumulation and a climate policy below the efficient level; while suppressing the tax on capital accumulation generates a climate policy even further below the efficient level. I derive a novel politico-economic Keynes–Ramsey rule for the market interest rate, which is useful for calculating the climate policy level. I show that individual pure time preference, individual altruism toward descendants, and young generation political power are key determinants of democratic climate policy ambition.

Trying to reach carbon neutrality is by no means plain sailing in times of energy crisis, price volatility, and war. The European Green Deal (EGD) prioritizes green pathways, but it is not enough when it copes with greenhouse gases (GHGs). The present research utilizes the Malmquist–Luenberger productivity index (MLPI) to estimate advancements in total factor productivity (TFP) in the European Union (EU). The study uses panel data from 1995 to 2019, in addition, there is comparison between two periods: 1995 – 1996 and 2018 – 2019, would provide important information about TFP progress or recession during a turbulent European era. Two MLPI models are applied, one that utilizes only non-renewable energy sources (NRES), while the other adopts renewable energy sources (RES). Encompassing inputs such as: electricity generation, labour force, and gross fixed capital formation (GFCF); desirable output: gross domestic product; and undesirable outputs: carbon dioxide (CO₂) and methane (CH₄). There is average productivity progress, more specifically the MLPI average productivity for NRES and RES is 2.14% and 7.34% respectively, meaning that the RES adoption leads to greater productivity performance by almost three times. This novel analysis might offer useful and practical information to policymakers through the measuring of TFP in order to effectively attain and accomplish carbon neutrality objectives.

As the international community continues to fall short on reducing emissions to avoid disastrous impacts of climate change, some scientists have called for more research into solar geoengineering (SGE) as a potential temporary fix. Others, however, have adamantly rejected the notion of considering SGE in climate policy discussions. One prominent concern with considering SGE technologies to help manage climate change is the so-called “free driver” conjecture. The prediction is that among countries with different preferences for the level of SGE, the country that prefers the most will deploy levels higher than the global optimum. This paper tests the free-driver hypothesis experimentally under different conditions and institutions. We find that aggregate deployment of SGE is inefficiently high in all settings, but slightly less so when players are heterogeneous in endowments or when aggregate deployment is determined by a best-shot technology. Despite persistent inefficiencies in SGE deployment, free-driver behavior, on average, is less extreme than the theoretical predictions.

Abstract

The methodology of differential games is a combination of optimal control theory and game theory. It is the natural framework for economic analysis with strategic interaction and dynamical optimization. The theory gained traction by seminal papers in the early seventies, and it gradually found its way into economics. The purpose of this paper is to make theory and applications of differential games easily accessible by explaining the basics and by developing some characteristic applications. The core of the theory focuses on the open-loop and the multiple Markov-perfect Nash equilibria that use the maximum principle and dynamic programming as the techniques to solve the optimal control problems. The applications are the game of international pollution control and the game of managing a lake, which is an example of an ecological system with tipping points. Finally, it is interesting to note that the discovery of time-inconsistency in the open-loop Stackelberg equilibrium had a huge impact on macroeconomics, since policy making under rational expectations is a Stackelberg differential game.

While economists in the past tended to assume that individual preferences, including risk preferences, are stable over time, a recent literature has developed and indicates that risk preferences respond to shocks, with mixed evidence on the direction of the responses. This paper utilizes a natural experiment with covariate (drought) and idiosyncratic shocks in combination with an independent field risk experiment. The risk experiment uses a Certainty Equivalent-Multiple Choice List approach and is played 1–2 years after the subjects were (to a varying degree) exposed to a covariate drought shock or idiosyncratic shocks for a sample of resource-poor young adults living in a risky semi-arid rural environment in Sub-Saharan Africa. The experimental approach facilitates a comprehensive assessment of shock effects on experimental risk premiums for risky prospects with varying probabilities of good and bad outcomes. The experiment also facilitates the estimation of the utility curvature in an Expected Utility (EU) model and, alternatively, separate estimation of probability weighting and utility curvature in three different Rank Dependent Utility models with a two-parameter Prelec probability weighting function. Our study is the first to comprehensively test the theoretical predictions of Gollier and Pratt (Econom J Econom Soc 64:1109–1123, 1996) versus Quiggin (Econ Theor 22(3):607–611, 2003). Gollier and Pratt (1996) build on EU theory and state that an increase in background risk will make subjects more risk averse while Quiggin (2003) states that an increase in background risk can enhance risk-taking in certain types of non-EU models. We find strong evidence that such non-EU preferences dominate in our sample.

This paper argues that the joint relation between long-term orientation, environmental quality and innovation plays a key role in explaining the economic and the environmental dimension of sustainability. In our model multiple equilibria of economic development and environmental quality can arise due to a trade-off between the demand for innovation that promotes sustainability, and the ephemeral pleasure from polluting manufacturing that impedes it. Additional to traditional policies such as aid and technology transfers, policies that target behavioral changes through environmental protection may provide a double-dividend of economic and environmental sustainability through an environment-patience-innovation channel.

Abstract

Animal-mediated pollination is important for agricultural seed and crop production, and critical to overall ecosystem health. However, the scientific literature focused on the economic valuation of pollination services has thus far neglected the role of pollination services in seed production. The marketed food output of many crops is not dependent on pollination services, but these crops indirectly depend on pollination services with respect to their seed production. This study proposes a partial equilibrium framework for identifying the value of pollination services. Using Germany as a case study, we find the value of pollination services is about 33% higher when seed production is considered. This increased valuation is driven by two effects: higher seed costs due to high dependence on pollination services, and a higher demand for seeds due to the land expansion needed to mitigate a potential pollinator collapse. This study demonstrates that more sophisticated approaches are needed to estimate the economic value of pollination services more accurately.