Domestic environmental policy and international cooperation for global commons

The paper analyzes the strategic behavior of several countries engaged in capital accumulation, pollution mitigation, and environmental adaptation in the context of an environmental common good. Both cooperative and non-cooperative strategies are discussed. The non-cooperative strategy is a dynamic game in which each country makes its own environmental decision following the open-loop Nash equilibrium. The cooperative social planner problem assumes an international environmental agreement in force. The non-cooperative and cooperative solutions are compared in the symmetric case of two countries and extended to several identical countries. It is shown that the non-cooperative strategy in multi-country world leads to over-production, over-consumption, over-pollution, and over-adaptation.     

生物碳汇类型的特性研究

温室气体增加被认为是全球变暖的主要原因,CO2是大气中最重要的温室气体,在对温室效应和全球气候变暖的贡献中,占70％。为应对全球变暖,各国采取多种措施致力于温室气体的减排增汇。减少二氧化碳温室效应,除人工减排增汇外,自然界生态系统的生物碳汇功能起着主导作用。生物碳汇主要类型有森林等陆生植物碳汇、水生高等植物和低等植物碳汇、水生高等动物碳汇等等,各种类型生物碳汇功效不尽相同,各具特性。     

Environmental performance,corruption and economic growth: global evidence using a new data set

This study investigates the relationship between environmental performance, corruption and economic growth using panel data of 87 countries covering the period from 2002 to 2012. The Environmental Performance Index is used for the first time to evaluate the environmental quality on economic growth. By employing both ‘static’ and ‘dynamic’ panel models, we find that environmental performance is positively related to economic growth and is more significant in non-Organization for Economic Cooperation Development (OECD) countries. Moreover, when corruption is incorporated, the empirical estimation results indicate that although lower corruption helps economic growth in non-OECD countries, the negative coefficients of the three interactive terms show that the positive effect of environment performance on economic growth will drop, while greater environmental performance combined with natural resource abundance inevitably leads to inefficient bureaucracies and hence disadvantageous economic growth. As a result, policymakers in non-OECD countries should carefully ensure better government quality when they exhibit strong environmental performance so as to avoid any disadvantageous impact upon economic growth.     

辽中县低碳农业现状分析和发展思路的探讨

全球气候变暖的趋势下,世界各国都在寻找与之相关解决方式,调整经济发展战略。农业生产与全球气候变化息息相关,农业是温室气体的第二大重要来源,如何减少农业温室气体排放量已成为当务之急。县域经济中农业占有相当大的比重,如何在县域农业中发展低碳农业,也已成为新农村建设研究的新课题。通过调查研究、现场走访的方式,总结了辽中县种植业、畜牧业、农副产品加工及农业旅游等的现状,发现县内在低碳农业方面的工作存在明显不足,根据这些实际情况提出了发展低碳农业的对策及具体措施,如发展新能源和设施农业等,旨在改善辽中县农村生态环境,为新农村建设提供科学决策,促进现代农业由高碳经济向低碳经济转型。     

Determinants of the sacrifice ratio: Evidence from OECD and non-OECD countries

This paper measures sacrifice ratios for all countries in the world over an approximately forty year time period, in addition to exploring the determinants of worldwide sacrifice ratios. We test the most commonly-cited determinants: the speed of disinflation, openness, inflation targeting, central bank independence, and political factors for both OECD and non-OECD countries. We find that the speed of disinflation is the most important determinant of OECD sacrifice ratios, but puzzlingly has no effect on non-OECD nations' disinflation costs. Instead we find evidence that greater central bank independence and more openness are associated with lower non-OECD sacrifice ratios. We also find that the ratio of government debt to GDP – a variable that is not important when it comes to OECD countries – is highly significant for non-OECD economies. Specifically, we find that higher indebtedness is associated with lower sacrifice ratios in non-OECD nations, suggesting that greater levels of debt do not lead to higher expectations of inflation. Furthermore we find evidence that the negative impact of debt on non-OECD sacrifice ratios is being driven by middle income economies.     

Structural transformation and the oil price

What part of the high oil price can be explained by structural transformation in the developing world? Will continued structural transformation in these countries result in a permanently higher oil price? To address these issues I identify an inverted-U shaped relationship in the data between aggregate oil intensity and the extent of structural transformation: countries in the middle stages of transition spend the highest fraction of their income on oil. I construct and calibrate a multi-sector, multi-country, general equilibrium growth model that accounts for this fact by generating an endogenously falling aggregate elasticity of substitution between oil and non-oil inputs. The model is used to measure and isolate the impact of changing sectoral composition in the developing world on global oil demand and the oil price in the OECD. I find that structural transformation in non-OECD countries accounts for up to 53% of the oil price increase in the OECD between 1970 and 2010. However, the impact of structural transformation is temporary. Continued structural transformation induces falling oil intensity and an easing of the upward pressure on the oil price. Since a standard one-sector growth model misses this non-linearity, to understand the impact of growth on the oil price, it is necessary to take a more disaggregated view than is standard in macroeconomics.     

Environmental Policy and the International Diffusion of Cleaner Energy Technologies

Technology transfer is an important channel of technological change and sustainable development for countries with less innovative ability than technological leaders. This paper studies whether domestic environmental policies affect the inward technology transfer of cleaner innovation from abroad. We focus specifically on the power sector, for its important role in the decarbonization process, by looking at zero-carbon (renewable) and carbon-saving (efficient fossil) technologies for energy production. Using data on cross-country patent applications, we provide evidence that environmental policy contributes to attracting foreign cleaner technology options to OECD markets but not to non-OECD markets. We show that this is due to the nature of the implemented policy instruments. Market-based approaches positively impact technology transfer to both OECD and non-OECD economies, while non-market based approaches have at best only a weak effect in OECD countries. Domestic environmental policies may provide too weak a signal for foreign innovators in countries off the technological frontier. This calls for a strengthening of policy incentives for technology transfer in light of pressing climate change objectives.     

Time-Series Wage Differential in Taiwan: The Role of International Trade

Rising relative wages between skilled and unskilled workers in developed countries has been a popular subject of recent studies. This paper analyzes Taiwan, a semi-developed economy, where the relative wage reveals a declining trend since the mid-1980s. The authors study the role of international trade. A major point of departure is to distinguish the effects of net exports to OECD countries from those to non-OECD countries. The paper also differentiates the effects of net exports to China from those to non-OECD countries except China. It is found that net exports to the OECD countries raise the relative wage of skilled workers, whereas net exports to non-OECD countries and China diminish the relative wage. Moreover, the impacts of net exports to China are much larger than those to OECD and other non-OECD countries. The documented wage effects of international trade in this work diverge from what existing works have argued based on Heckscher–Ohlin theory.     

A strategic analysis of global warming: Theory and some numbers

We model the global warming process as a dynamic commons game in which the players are countries, their actions at each date produce emissions of greenhouse gases, and the state variable is the current stock of greenhouse gases. The theoretical analysis is complemented by a calibration exercise. The first set of results establishes theoretically, and then with illustrative numbers, the over-emissions due to a “tragedy of the commons.” The power of simple sanctions to lower emissions and increase welfare is then examined as is the effect of cost asymmetry. Finally, a complete theoretical charactrization is provided for the best equilibrium, and it is shown that it has a very simple structure; it involves a constant emission rate through time.     

Global warming and economic externalities

Despite worldwide policy efforts such as the Kyoto Protocol, the emission of greenhouse gases (GHG) remains a negative externality. Economic equilibrium paths in the presence of such an uncorrected externality are inefficient; as a consequence, there is no real economic opportunity cost to correcting this externality by mitigating global warming. Mitigation investment using resources diverted from conventional investments can raise the economic well-being of both current and future generations. The economic literature on GHG emissions misleadingly focuses attention on the intergenerational equity aspects of mitigation by using a hybrid constrained optimal path as the “business-as-usual” benchmark. We calibrate a simple Keynes-Ramsey growth model to illustrate the significant potential Pareto improvement from mitigation investment and to explain the equilibrium concept appropriate to modeling an uncorrected negative externality.     

Cooperation and Competition in Climate Change Policies: Mitigation and Climate Engineering when Countries are Asymmetric

We study a dynamic game of climate policy design in terms of emissions and solar radiation management (SRM) involving two heterogeneous countries or group of countries. Countries emit greenhouse gasses (GHGs), and can block incoming radiation by unilateral SRM activities, thus reducing global temperature. Heterogeneity is modelled in terms of the social cost of SRM, the environmental damages due to global warming, the productivity of emissions in terms of generating private benefits, the rate of impatience, and the private cost of geoengineering. We determine the impact of asymmetry on mitigation and SRM activities, concentration of GHGs, and global temperature, and we examine whether a tradeoff actually emerges between mitigation and SRM. Our results could provide some insights into a currently emerging debate regarding mitigation and SRM methods to control climate change, especially since asymmetries seem to play an important role in affecting incentives for cooperation or unilateral actions.     

Economic growth and greenhouse gas emissions

Recent empirical research has examined the relationship between certain indicators of environmental degradation and income, concluding that in some cases an inverted U-shaped relationship, which has been called an environmental Kuznets curve (EKC), exists between these variables. Unfortunately, this inverted U-shaped relationship does not hold for greenhouse gas emissions. One explanation of the absence of EKC-like behavior in greenhouse gas emissions is that greenhouse gases are special pollutants that create global, not local, disutility. But the international nature of global warming is not the only reason that prevents de-linking greenhouse gas emissions from economic growth. The intergenerational nature of the negative impact of greenhouse gas emissions may have also been an important factor preventing the implementation of greenhouse gas abatement measures in the past. In this paper we explore the effect that the presence of intergenerational spillovers has on the emissions–income relationship. We use a numerically calibrated overlapping generations model of climate–economy interactions. We conclude that: (1) the intertemporal responsibility of the regulatory agency, (2) the institutional capacity to make intergenerational transfers and (3) the presence of intergenerationally lagged impact of emissions constitute important determinants of the relationship between economic growth and greenhouse gas emissions.     

Regulating an Externality-Generating Utility Environmental Taxes Under Limited Information

Global warming is currently an important item on most nationalenvironmental agendas. In many countries, coal-fired electricity generatingstations represent an important source of greenhouse gases. We examinehow regulations to curb emissions affect public utility pricing regulationwhen regulators act non-cooperatively. We show that, when there is limitedinformation on fixed abatement costs, an environmental regulator prefersan emission tax over an output tax or a lump sum environmental tax. Thepublic utility regulator prefers the lump sum tax regime.     

World steel production: A new monthly indicator of global real economic activity

This paper proposes world steel production as an indicator of global real economic activity. World steel production data is published with only a one-month delay, thereby providing timely information for world real GDP forecasters. We find that world steel production and Lutz Kilian's (2009) index of global real economic activity generate large gains in forecasting world real GDP, relative to an autoregressive benchmark. A forecast combination of world steel production, Kilian's (2009) index of global real economic activity and an index of the industrial production of OECD countries plus six non-OECD emerging economies produces significant gains in forecasting world real GDP, relative to an autoregressive benchmark     

Advertising,economic development,and global warming

Advertising is tied to global warming through an endogenous growth model. The model allows for the possibility that the environment can become a source rather than a sink for greenhouse gases. Optimal control analysis of the model shows that a feasible steady state is possible for which the environment remains a sink, and identifies a sufficient condition for such to be the case. Comparative-static analysis shows that, for sufficiently small values of steady-state anthropogenic greenhouse gas concentration, global surface temperature and advertising in steady state are negative functions of parameters that measure the damaging effects of global warming.     

How global is FDI? Evidence from the analysis of Theil indices

It is open to question whether the intensified worldwide competition for FDI has reduced its traditionally strong concentration in a few large and relatively advanced host countries. We calculate and decompose Theil indices to track changes in absolute and relative concentration of FDI during the period 1970–2013. We find that both absolute and relative concentration decreased when excluding offshore financial centers from the overall sample. In addition to the narrowing gap between OECD and non-OECD countries, the concentration across non-OECD countries declined for both the absolute and relative measures. This is also true for major subgroups of non-OECD countries. Finally, recent developments indicate that low-income countries are no longer at the losing end of the competition for FDI.     

Partial cross-ownership and strategic environmental policy

This paper analyzes the effect of passive investment in rival firms on the setting of cooperative and non-cooperative environmental taxes. We consider two firms located in different countries, with each firm owning the same percentage of the stock of its rival. We show that bilateral partial cross-ownership affects the taxes set by the countries in the cooperative and non-cooperative cases. When the stake that one firm has in its rival is great enough and environmental spillovers are low enough, cooperative taxes are lower than non-cooperative taxes. For the remaining values of parameters the opposite result is obtained.     

On the Efficiency of Green Trade Policy

The paper derives conditions for second best environmental policy when there are foreign countries which fail to implement appropriate environmental regulations. It is shown that in such cases, efficiency in the global economy will not be achieved unless domestic environmental regulations are supplemented by trade provisions. The result is independent of whether environmental problems are local or international. Furthermore, when trade provisions are implemented, efficiency requires that domestic environmental taxes are fixed at the Pigouvian tax rate. The results imply that there is an economic rationale for regulating the trade between signatories and non-signatories of international environmental agreements. Efficient trade regulations will either take the form of trade restrictions or trade promotions, depending on whether the environmental problem is created by production or consumption activities, and whether the net import of the relevant commodity is positive or negative. It is argued that an efficient climate agreement, signed by a group of fuel-importing countries (e.g., the OECD countries), should include a subsidy on the import of fossil fuels.     

Optimal climate policy under the possibility of a catastrophe

This paper concerns optimal emissions of greenhouse gases when catastrophic consequences are possible. A numerical model is presented, which takes into account both continuous climate-feedback damages as well as the possibility of a catastrophic outcome. The possibility of a climate catastrophe is a major argument for greenhouse gas abatement even in absence of continuous damage. Special attention is given to the subjective probability of a catastrophe and the pure rate of time preferences, and implicit values of these parameters are calculated if an emissions stabilisation target is assumed optimal. Finally, the expected value of perfect information about the probability of a catastrophe is estimated.     

International Environmental Agreements—The Role of Foresight

The present paper attempts to bridge the gap between the cooperative and the non-cooperative approach employed to examine the size of stable coalitions, formed to address global environmental problems. We do so by endowing countries with foresightedness, that is, by endogenizing the reaction of the coalition’s members to a deviation by one member. We assume that when a country contemplates withdrawing or joining an agreement, it takes into account the reactions of other countries ignited by its own actions. We identify conditions under which there always exists a unique set of farsighted stable IEAs. The new farsighted IEAs can be much larger than those some of the previous models supported but are not always Pareto efficient.