We consider a firm’s incentive for foreign direct investment (FDI) and international technology licensing in a polluting industry. We explain the rationale and the welfare implications of complementarity between FDI and licensing, i.e., the firm’s strategy of “FDI and licensing” (FL), which is empirically relevant but ignored in the literature. When the environmental tax cannot...
Renewable energy projects are subject to risk due to the uncertainty of future electricity prices and the amount of energy produced. Public support usually consists of some form of guarantee, either on the price received per MWh supplied or the return on investment per MW installed. This support reduces the investor’s risk, which is then assumed by the regulator. However, most of...
This paper uses time-varying smooth transition autoregressive model to investigate the asymmetric nature of El Niño Southern Oscillation (ENSO) —an exogenous climatic factor—with respect to the nonlinear dynamics of food prices in sub-Saharan Africa. Curating food price series from more than 1100 markets from 36 SSA countries, the study finds that ENSO (linearly or nonlinearly...
Recent studies demonstrated that green innovation and environment-related technologies reduce energy intensity and improve energy efficiency, contributing to the reduction of carbon emissions. However, the existing studies employ linear estimation methods to examine the relationship between green innovation and energy intensity and do not consider the indirect implications of...
Combining detailed county-to-county migration data with Toxics Release Inventory data, and fine-scale $$\hbox{PM}_{2.5}$$ concentration levels, we investigate the relationship between internal migration, income of migrant and non-migrant households and county-level differences in environmental quality. We show that households moving to “cleaner” counties are relatively “richer”—a...
Faced with a global emissions problem such as climate change, we know that if countries’ emissions decisions are made in an independent and self-interested fashion the outcome can be very far from optimal. One proposed solution is to have countries enter international environmental agreements (IEAs) whereby individual countries’ emissions decisions are taken in the interests of...
The paper addresses the often-neglected economic impacts associated with the supply of hydraulic infrastructure in rural and under-serviced communities in developing countries. We rely on a rich panel dataset including 1319 Senegalese rural households collected in 2016 and 2020, during the deployment of the first phase of the Emergency Program for Community Development (PUDC). By...
Emissions of local pollutants from industry have declined across many developed countries over the last decades. For carbon emissions such reductions have yet to materialize. Using German administrative micro-data at the product level, we apply the workhorse model for decomposing emission changes into scale, composition (changes in the mix of goods produced) and technology...
This study focuses on green parties in government and analyzes the political economy of public spending for biodiversity and landscape protection, comparing it with other environmental and non-environmental spending categories. Using panel data covering 26 OECD economies during the sample period from 1995 to 2021, we employ an error-correction approach that effectively accounts...
This paper investigates whether informative feedback on consumption can nudge water saving. We launched a five-month online information campaign which involved around 1,000 households located in the province of Milan (Italy) with a smart meter. A group of households received monthly reports via email on their per capita daily average water consumption, including a social...
This paper analyses the effects of altruism on the formation of climate coalitions in the standard two-stage game of self-enforcing international environmental agreements with identical countries. Altruism implies that each country values, to some extent, every other country’s welfare when deciding on its coalition membership and emissions policy. In the Nash [Stackelberg] game...
This study investigates the effect of flash floods on local economic activity in Central America and the Caribbean. I measure these rarely analyzed floods by constructing a high-resolution, physically based index of flash flood occurrence from satellite data and connect these to changes in local night light emissions. After accounting for tropical cyclone activity, flash floods...
With rising average temperatures and extreme heat events becoming more frequent, understanding the ramifications for cognitive performance is essential. I estimate the effect of outside air temperature on performance in mental arithmetic training games. Using data from 31,000 individuals and 1.15 million games played, I analyze frequent engagement in a cognitively challenging...
This paper estimates the causal effect of air pollution on firm innovation based on a nationwide sample of Chinese manufacturing firms. Using thermal inversion as instrument variable (IV), we demonstrate that air pollution significantly hurts firm innovation performance: a 1% increase in air pollution (PM2.5) in the past year, from its mean value, amounts to a 1.5% decrease in...
Adoption of low-carbon technology is key to mitigating climate change. A possible unwanted consequence of fast technological progress is that products get outdated before their technical lifetime is over. We investigate whether the market value of electric vehicles, characterized by rapid technological progress, declines faster over their lifetime than gasoline vehicles, which...
We analyse a model of environmental regulation where two firms can optimally decide to invest in an emission abatement technology and the regulator taxes firms’ emissions in a time-consistent manner. Depending on the values of the parameters measuring the extent of emission abatement that firms may achieve and the degree of product differentiation, we characterize the subgame...
We analyze, in a game-theoretic model, the strategic interaction between competing firms that source their inputs from either primary or recycled material. Because the manufacturers’ primary production today serves as input for the recyclers’ production tomorrow, manufacturers can limit the recyclers’ scale of operation by reducing their output. Improving the recycling process...
In this paper, we investigate the economic impact of the COVID-19 pandemic on European and Chinese unsustainable and non-recyclable plastic markets, specifically those used for the production of Personal Protective Equipment (PPE). We explore exogenous economic and commodity price impacts on polypropylene, acrylonitrile and polyvinyl-chloride, via VECM and Granger causality...
A growing body of empirical evidence suggests that land use change, and the resulting decline in both the area and quality of natural habitats, contributes to an increased incidence of disease in humans. Despite calls to leverage conservation policy to address the burden of disease linked to ecosystem change, the potential benefits are unknown. Efficiently reducing the burden of...
Food production is a primary contributor to climate change, and one way to mitigate its effect is through consumption choices. Finding the most effective way to achieve emissions reduction via consumers behavioral change has recently raised policy-makers
In October 2003 four contiguous prefectures in Greater Tokyo introduced Low Emission Zones (LEZs) from which diesel trucks and buses without particulate filters have been banned from entering. This paper analyzes the effects of this large-scale intervention on air quality, new vehicle registrations, and birthweights. We use a matching approach to construct a control group...
Fresh surface water is increasingly becoming scarcer worldwide, leading to significant groundwater over-extraction. However, groundwater over-extraction could result in many environmental externalities including various land subsidence (LS) effects. LS causes the gradual reduction of the voids and the subsequent ground surface sinking. The loss of aquifer system storage capacity...