Academic journal article NBER Reporter

Environmental Economics. (Bureau News)

Academic journal article NBER Reporter

Environmental Economics. (Bureau News)

Article excerpt

The NBER's Working Group on Environmental Economics met in Cambridge on April 12. Don Fullerton, NBER and University of Texas, Austin, organized the meeting. These papers were discussed:

David F. Bradford, NBER and Princeton University, "Improving on Kyoto: Greenhouse Gas Control as the Purchase of a Global Public Good"

Discussant: Peter Wilcoxen, Syracuse University

Scott Barrett, Johns Hopkins University, "Global Disease Eradication"

Discussant: Joshua Graff Zivin, Columbia University

Brian R. Copeland, University of British Columbia, and M. Scott Taylor, NBER and University of Wisconsin, "Trade, Tragedy, and the Commons"

Discussant: Istvan Konya, Boston College

Mustafa H. Babiker and John Reilly, MIT; and Gilbert B. Metcalf, NBER and Tufts University, "Tax Distortions and Global Climate Policy" (NBER Working Paper No. 9136)

Discussant: Lawrence H. Goulder, NBER and Stanford University

W. Michael Hanemann, University of California, Berkeley; Sheila M. Olmstead, Yale University; and Robert N. Stavins, Harvard University; "Does Price Structure Matter? Household Water Demand Under Increasing-Block and Uniform Prices"

Discussant: Li Gan, University of Texas at Austin

John A. List, University of Maryland; Michael Margolis, Resources for the Future; and Daniel E. Osgood, University of Arizona, "Measuring the Preemption of Regulatory Takings in the U.S. Endangered Species Act: Evidence from a Natural Experiment"

Discussant: Steve Polasky, University of Minnesota

One way to obtain a global public good is to set up an institution to buy it, with the nations of the world contributing to the cost according to whatever sharing arrangements make political sense. Bradford suggests a way to exploit this approach in order to limit the accumulations of greenhouse gases in the atmosphere. The "service" that produces the control is the reduction in the levels of emissions over time from what the nations otherwise would choose, also known as the "business as usual" emissions path. In the scheme as envisioned, which could be used in a successor agreement to the Kyoto Protocol, the fact that all nations are sellers of reductions ameliorates the enforcement problems typical of commitments to particular emission paths. Another difference from the Kyotostyle system: in the scheme sketched here, the distribution of burdens is explicit, rather than implicit, in the allowable emission amounts. An infectious disease only can be eradicated globally if it is eliminated in every country. But does this simply require international coordination, or does it also require cooperation? Using a model that blends epidemiology, economics, and game theory, Barrett shows that coordination will not always suffice, even when the global benefits of eradication exceed the costs. In general, eradication will require strong international institutions.

Copeland and Taylor develop a theory of resource management whereby the degree to which countries escape "the tragedy of the commons" is determined endogenously and linked explicitly to changes in world prices and other possible effects of market integration. The authors show how changes in world prices can move some countries from de facto open access situations to ones in which management replicates an unconstrained social planner. Not all countries can follow this path of institutional reform and the authors identify key country characteristics (mortality rates, resource growth rates, technology) that divide the world's set of resource rich countries into three categories. …

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