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on Resource Economics |
| By: | Dzemski, Andreas (Department of Economics, School of Business, Economics and Law, Göteborg University); Farago, Adam (Department of Economics, School of Business, Economics and Law, Göteborg University); Hjalmarsson, Erik (Department of Economics, School of Business, Economics and Law, Göteborg University); Kiss, Tamas (The School of Business, Örebro University, Sweden) |
| Abstract: | We analyze empirical estimation of the distribution of total payoffs for stock investments over very long horizons, such as 30 years. Formal results for recently proposed bootstrap estimators are derived and alternative parametric methods are proposed. All estimators should be viewed as inconsistent for longer investment horizons. Valid confidence bands are derived and should be the focus when performing inference. Empirically, confidence bands around long-run distributions are very wide and point estimates must be interpreted with great caution. Consequently, it is difficult to distinguish long-run aggregate return distributions across countries; long-run U.S. returns are not significantly different from global returns. |
| Keywords: | Estimation uncertainty; Long-run stock returns; Quantile estimation |
| JEL: | C58 G10 |
| Date: | 2025–04–28 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:gunwpe:0853 |
| By: | Burtraw, Dallas (Resources for the Future, Washington, DC, USA); Holt, Charles (University of Virginia, Charlottesville, VA, USA); Löfgren, Åsa (Department of Economics, School of Business, Economics and Law, Göteborg University); Shobe, William (University of Virginia, Charlottesville, VA, USA) |
| Abstract: | Many climate solutions including carbon dioxide removal (CDR) technologies require investments in capital intensive technologies that require large capacity investments and exhibit modest unit costs. Governments seeking to achieve net zero goals may invest directly in CDR to procure negative emissions credits to offset emissions in hard-to-abate sectors such as agriculture. In a procurement auction for a declining cost industry, the optimal allocation will generally require all winning bidders operating at full capacity. Because of the lumpy nature of investments, this may not fit within the government’s budget, leaving one or more winning bidders at the margin, operating at less than full capacity, and consequently with higher average costs. Protection can be provided to the marginal bidder by letting bids specify a range of acceptable quantities up to full capacity. The auction can be executed with sealed bids (specifying prices with associated minimum quantities) or by having the proposed bid price be lowered sequentially in a “clock auction” with quantity intervals specified by bidders at the current clock price. We consider the performance of sealed bid and clock auctions, in the presence of 1) a fixed government procurement budget, 2) “common value” uncertainty about the true per-unit production cost, and 3) the presence of a large, fixed cost. Laboratory experiment simulations with financially motivated human subjects are valuable for testing and developing auction designs that have never been used before, without relying on theoretical properties that depend on strong assumptions of perfect cost information and “truthful bidding.” Preliminary experiment results indicate that winner’s curse effects (bidder losses) are infrequent in both auction formats (clock and sealed bid), but the clock tends to restrict bidder profits in a manner that reduces the average cost for the buyer of the “units” representing CDR. Our experiments are informed by the projected use of auctions by the government of Sweden to procure carbon capture and sequestration from its domestic wood products and energy industry. |
| Keywords: | Carbon dioxide removal (CDR); Procurement auctions; Common value uncertainty; Capital-intensive technologies |
| JEL: | C92 D44 H57 Q54 Q55 Q58 |
| Date: | 2025–04–28 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:gunwpe:0854 |
| By: | Björn Bos; Moritz A. Drupp; Lutz Sager |
| Abstract: | Low emission zones (LEZ) represent a key environmental policy instrument to address air pollution in cities. LEZs have reduced air pollution and associated health damages in regulated areas, but it remains unclear who has benefited from cleaner air. To examine the distributional effects of LEZs, we combine gridded data on resident characteristics, including income and a proxy for ethnicity, with high-resolution estimates of fine particle (PM2.5) concentrations in Germany, the country with the highest number of LEZs. We estimate heterogeneous treatment effects with a difference-in-differences approach and show that PM2.5 pollution reductions are distributed unequally across society. While residents with German name origins experience larger improvements within LEZs, residents with foreign names disproportionately live in LEZs and thus benefit more when assessed at a nationwide scale. Monetizing air quality benefits following governmental guidance, we find that they are distributed pro-poor within LEZs, disproportionately benefiting lower-income residents. From a nationwide perspective, benefits are distributed almost proportionally although the sign is sensitive to how benefits from cleaner air scale with income. Overall, our results suggest that LEZs have nuanced distributional implications that differ sharply between a national perspective and local assessments that focus on effects within LEZs. |
| Keywords: | air pollution, distributional effects, low emission zones, traffic regulation |
| JEL: | J15 Q52 Q53 Q58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11739 |
| By: | Clara Brandi (German Institute of Development and Sustainability); Federico Carri-Caccia (Department of International and Spanish Economics, University of Granada) |
| Abstract: | The present paper re-visits the link between cross-border mergers and acquisitions (M&As) and bilateral trade liberalization. It presents new evidence on the extent to which investment related environmental provisions (IEP) embedded in Preferential Trade Agreements (PTAs) moderate the impact of PTAs on cross-border M&As. To this end, we estimate a gravity model. Our findings suggest that IEPs diminish the positive effect of PTAs on bilateral M&As. We show that IEP undermines the positive effect of PTAs on investments flows between countries with high environmental stringency. |
| Keywords: | Gravity; M&As; Pollution haven; PTA |
| JEL: | F13 F21 F23 Q58 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:drx:wpaper:202513 |
| By: | Immervoll, Herwig (OECD, Paris); Linden, Jules (LISER (CEPS/INSTEAD)); O'Donoghue, Cathal (National University of Ireland, Galway); Sologon, Denisa Maria (LISER (CEPS/INSTEAD)) |
| Abstract: | We assess household burdens from a carbon tax with revenue recycling, comparing them to burdens from price changes during the recent cost-of-living crisis. We focus on Lithuania, an OECD country that attained high-income status a decade ago, and that recently enacted a €60/ton CO2 carbon tax despite a challenging policy context, with high poverty rates and concerns about the affordability of energy. Households spend large parts of their budget on energy, but the impact of the carbon tax on overall cost of living is modest (3% on average), substantially smaller than the impact of inflation between 2021-24 (36%). Direct carbon-tax burdens, from higher fuel prices, fall disproportionately on lower-income households. But indirect effects, from higher prices of goods other than fuel, are sizeable and broadly “flat” across the income distribution, which dampens regressivity. We simulate seven different options for compensating households by recycling carbon-tax revenues back to them through transfers or by lowering other taxes. When carefully designed, revenue recycling allows considerable scope for cushioning burdens, and for addressing concerns about disproportionate costs for some groups of households and voters. |
| Keywords: | carbon pricing, revenue recycling, inflation, inequality |
| JEL: | C8 D12 D31 H23 Q52 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17826 |
| By: | Xipeng Gao (School of Economics and Finance, XiÕan Jiaotong University, XiÕan, Shaanxi, PR China); Xiangju Li (School of Economics and Finance, XiÕan Jiaotong University, XiÕan, Shaanxi, PR China); Jorge Martinez-Vazquez (International Center for Public Policy, Georgia State University, Atlanta, Georgia, United States) |
| Abstract: | A central tenet in the fiscal federalism literature posits that inter-jurisdictional tax competition can engender economic efficiency losses. However, diverse firms exhibit heterogeneous sensitivities to varying tax burdens. When firms strategically evaluate differential tax pressures across tax categories, tax competition evolves into competition over tax structure. This dynamic is particularly pronounced in the case of green taxes and fees, which aim to internalize negative externalities compared to conventional tax instruments. We identify a Òrace to the bottomÓ phenomenon in corporate green taxes and fees driven by structural distortions within the tax system in China. Based on the constructed theoretical model of energy factor allocation that includes a distortionary coefficient of green taxes and fees, we predict that the efficiency growth of firms will decrease as the intensity of their Òrace to the bottomÓ competition increases in response to the relative pressure of green taxes and fees. Using data from listed companies in China, we find a robust negative relation between the Òrace to the bottomÓ competitive intensity of green taxes and fees pressure and total factor productivity growth. Our findings indicate that increasing the intensity of fiscal and environmental decentralization exacerbates the problem of the intensity of competition in the corporate tax structure, generating significant efficiency losses. These findings provide new evidence on the economic disadvantages of unchecked tax competition in decentralized systems. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:ays:ispwps:paper2507 |
| By: | Robert Metcalfe; Sefi Roth |
| Abstract: | Exposure to ambient air pollution has been shown to be detrimental to human health and productivity, and has motivated many policies to reduce such pollution. However, given that humans spend 90% of their time indoors, it is important to understand the degree of exposure to Indoor Air Pollution (IAP), and, if high, ways to reduce it. We design and implement a field experiment in London that monitors households' IAP and then randomly reveals their IAP in real-time. At baseline, we find that IAP is worse than ambient air pollution when residents are at home and that for 38% of the time, IAP is above World Health Organization standards. Additionally, we observe a large household income-IAP gradient, larger than the income-ambient pollution gradient, highlighting large income disparities in IAP exposure. During our field experiment, we find that the randomized revelation reduces IAP by 17% (1.9 ug/m3) overall and 34% (5 ug/m3) during occupancy time. We show that the mechanism is households using more natural ventilation as a result of the feedback (i.e., opening up doors and windows). Finally, in terms of welfare, we find that: (i) households have a willingness to pay of 4.8 pounds (6 dollars) for every 1 ug/m3 reduction in indoor PM2.5; (ii) households have a higher willingness to pay for mitigation than for full information; (iii) households have a price elasticity of IAP monitor demand around -0.75; and (iv) a 1 pound subsidy for an IAP monitor or an air purifier has an infinite marginal value of public funds, i.e., a Pareto improvement. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:feb:framed:00819 |
| By: | Innocenti, Stefania; Bharadwaj, Preethika (School of Geography and the Environment, University of Oxford) |
| Abstract: | Fossil fuel subsidies pose a significant barrier to achieving decarbonisation goals, yet their removal remains challenging due to concerns about public opposition and the potential impact on vulnerable groups. In Malaysia, where a petrol subsidy reform is underway, we conducted a mixed-methods study to explore strategies to increase public support for the reform. The study combined an incentivised experimental online survey (N=1, 208) and interviews with policymakers (N=12). The survey tested redistributive and environmental framing interventions, while the interviews examined policymakers' perceptions of public support and its interplay with other reform considerations. Results show that emphasising the redistributive benefits of the reform can increase public support by at least 8 percentage points from a baseline of 25%, while the environmental framing increases support by at least 5 percentage points from a 39% baseline among prior opposers. Policymakers acknowledged the challenges posed by the unpopularity of subsidy reforms, but underscored the critical role of strategic communication in addressing public concerns. By crafting transparent and resonant narratives, policymakers can garner greater support for implementing the reform. |
| Keywords: | climate policy, fuel subsidy reform, public support, communication, survey-based experiment, Malaysia |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2025-03 |
| By: | Gilberto Miller Devós Ganga (UFSCar - Federal University of São Carlos); Roberta Dell Avanzi (UFSCar - Federal University of São Carlos); Guilherme Ramos (UFSCar - Federal University of São Carlos); Mario Henrique Callefi (Chemnitz University of Technology / Technische Universität Chemnitz); Moacir Godinho Filho (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School); Fabiane Letícia Lizarelli (UFSCar - Federal University of São Carlos); Glauco Henrique de Souza Mendes (UFSCar - Federal University of São Carlos) |
| Abstract: | Electric autonomous vehicles, including Autonomous Electric Buses (AEBs), offer significant societal benefits such as fewer accidents, reduced pollution, and enhanced driving efficiency, presenting a promising alternative to public transportation. While research on this subject exists in developed countries like Europe, China, and Germany, there remains a significant gap in our understanding of the acceptance of AEBs in emerging economies. Our study investigated the adoption factors of AEBs in a medium-sized Brazilian city by surveying 554 respondents. In our structural model, we adopted a hybrid approach that integrates elements from the modified Technology Acceptance Model (TAM), Theory of Planned Behavior (TPB), and Unified Theory of Acceptance and Use of Technology (UTAUT). The study's findings indicate that a positive attitude, perceived usefulness, initial trust, and subjective norm significantly influence Brazilian consumers' intention to use AEBs. The theoretical implications of this study involve the creation of a model that intricately merges elements from multiple existing frameworks (TAM, TPB, and UTAUT). This proposed model synthesizes key factors influencing the acceptance of AEBs in emerging economies, providing a foundation for developing effective public policies for urban logistics automation. |
| Keywords: | Autonomous electric buses, Technology acceptance, Autonomous public transport, Emerging economy |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04992013 |
| By: | Ohyun Kwon (LeBow College of Business, Drexel University); Hao Zhao (School of Ecology and Environment, Renmin University of China); Min Qiang Zhao (MOE Key Laboratory of Econometrics, Xiamen University) |
| Abstract: | This paper investigates the reallocation effects of emissions cap-and-trade policy, leveraging China’s phased implementation of chemical oxygen demand (COD) regulations as a quasi-experiment. Our theoretical model posits that a pro rata emissions cap is more stringent for more productive firms, resulting in negative reallocation, whereas emissions trading restores efficiency through positive reallocation by reallocating emissions towards more productive firms. Utilizing the spatial and temporal variation in policy implementation, our empirical findings demonstrate that emission intensities of more productive firms, relative to less productive counterparts, declined after adopting the cap policy but subsequently increased with the introduction of cap-and-trade, aligning with our theoretical predictions. We also find that firms operating under a cap-and-trade regime, on average, experienced faster output growth compared to those operating under a cap-only regime, highlighting the role of emissions trading in enhancing production efficiency, even within imperfect markets. |
| Keywords: | emissions cap-and-trade; heterogeneous firms; imperfect competition; reallocative efficiency |
| JEL: | L51 Q53 Q58 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:drx:wpaper:202514 |