Suchergebnisse

Economics; European Union - De serie 'Werkdocumenten' omvat stukken die in het kader van de werkzaamheden van de WRR tot stand zijn gekomen en die op aanvraag door de raad beschikbaar worden gesteld. De verantwoordelijkheid voor de inhoud en de ingenomen standpunten berust bij de auteurs.

The political economy of exhaustible resource extraction is analysed in three contexts. First, if an incumbent faces a threat of being removed once and for all by a rival faction, extraction becomes more voracious if the factions do not share rents equally. Second, perennial political conflict cycles are more inefficient if constitutional cohesiveness or the partisan in-office bias is large and political instability is high. Third, resource wars are more intense if constitutional cohesiveness is weak, the incumbent has a partisan in-office bias, reserves of resources are high, the wage is low, governments can be less frequently removed from office, and fighting technology has less decreasing returns to scale. Resource depletion in such wars is more rapacious if there is more government instability, the political system is less cohesive, and the partisan in-office bias is smaller.

The global financial crisis has potentially many adverse effects on the developing world: falls in exports of goods and services to the OECD, dramatic falls in commodity prices and resource exports, and falls in remittances. Many of the poorer countries are heavily specialized and dependent on natural resources, often landlocked, ethnically polarized, and financially underdeveloped. They therefore suffer especially from the notorious volatility of natural resource prices. Volatile oil prices harm not only producers and consumers in the developing world, but also harm environmental quality if they hold back irreversible investments in costly energy-saving technology and hydrocarbon substitutes. In the aftermath of the crisis, political leaders should seek for a global deal whereby resource-rich developing countries are helped to cope with managing very volatile streams of resource revenues while cutting back pollution of the energy industries. The global crisis facing the world today is thus not only a financial crises, but also a fuel and commodity crisis. In addition, the world also faces a food, water, and climate change crisis, all of which undermine the ability to sustain prosperity and eradicate poverty in the developing world. Hence, the contours of a Global Green New Deal will be sketched.

The global financial crisis has potentially many adverse effects on the developing world: falls in exports of goods and services to the OECD, dramatic falls in commodity prices and resource exports, and falls in remittances. Many of the poorer countries are heavily specialized and dependent on natural resources, often landlocked, ethnically polarized, and financially underdeveloped. They therefore suffer especially from the notorious volatility of natural resource prices. Volatile oil prices harm not only producers and consumers in the developing world, but also harm environmental quality if they hold back irreversible investments in costly energy-saving technology and hydrocarbon substitutes. In the aftermath of the crisis, political leaders should seek for a global deal whereby resource-rich developing countries are helped to cope with managing very volatile streams of resource revenues while cutting back pollution of the energy industries. The global crisis facing the world today is thus not only a financial crises, but also a fuel and commodity crisis. In addition, the world also faces a food, water, and climate change crisis, all of which undermine the ability to sustain prosperity and eradicate poverty in the developing world. Hence, the contours of a Global Green New Deal will be sketched.

The theory of tax smoothing and determination of public debt with uncertain future national income is extended for prudence. A prudent government deliberately underestimates future national income and the tax base, especially if the variance and persistence of shocks hitting the tax base are large and the tax rate and the unemployment benefit are large. As a precaution the tax rate is set higher and the level of public spending lower. As a result, as income and the tax base turn out to be bigger than budgeted, the minister of finance enjoys windfall revenues and is able to gradually reduce debt and debt service over time. This permits, depending on political preferences, either gradual cuts in the tax rate, gradual increases in government spending or a combination of both. It is easy to allow for government assets as well. Finally, political economy justifications are offered of why it is desirable to appoint a strong and pessimistic minister of finance. In particular, we show that prudence is able to offset the intertemporal spending, tax and debt biases resulting from the common-pool distortions. If the minister of finance and the prime minister are given as many voting rights as the spending ministers combined, the intratemporal common-pool distortions of an excessively large public sector are eliminated as well. A strong and pessimistic minister of finance can thus control the impatient profligacy of squabbling spending ministers. However, if voters care about outcomes on election eve, prudence may be abused for short-run electoral gains. Opportunistic manipulation of election results, however, also dampens the intertemporal common-pool distortions.

The general equilibrium model developed by Golosov et al. (2014), GHKT for short, is modified to allow for additional negative impacts of global warming on utility and productivity growth, mean reversion in the ratio of climate damages to production, labour-augmenting technical progress, and population growth. We also replace the GHKT assumption of full depreciation of capital each decade by annual logarithmic depreciation. Furthermore, we allow the government to use a lower discount rate than the private sector. We derive a tractable rule for the optimal carbon price for each of these extensions. We then simplify the GHKT model by making temperature a linear function of cumulative emissions and making the proportion of output lost due to global warming a linear function of temperature. Finally, we consider how the rule for the optimal carbon price must be modified to allow for a temperature cap, and what this implies for stranded oil and gas reserves. We illustrate our analytical results with a range of optimal policy simulations.

The general equilibrium model developed by Golosov et al. (2014), GHKT for short, is modified to allow for additional negative impacts of global warming on utility and productivity growth, mean reversion in the ratio of climate damages to production, labour-augmenting technical progress, and population growth. We also replace the GHKT assumption of full depreciation of capital each decade by annual logarithmic depreciation. Furthermore, we allow the government to use a lower discount rate than the private sector. We derive a tractable rule for the optimal carbon price for each of these extensions. We then simplify the GHKT model by making temperature a linear function of cumulative emissions and making the proportion of output lost due to global warming a linear function of temperature. Finally, we consider how the rule for the optimal carbon price must be modified to allow for a temperature cap, and what this implies for stranded oil and gas reserves. We illustrate our analytical results with a range of optimal policy simulations.

The general equilibrium model developed by Golosov et al. (2014), GHKT for short, is modified to allow for additional negative impacts of global warming on utility and productivity growth, mean reversion in the ratio of climate damages to production, labour-augmenting technical progress, and population growth. We also replace the GHKT assumption of full depreciation of capital each decade by annual logarithmic depreciation. Furthermore, we allow the government to use a lower discount rate than the private sector. We derive a tractable rule for the optimal carbon price for each of these extensions. We then simplify the GHKT model by modelling temperature as cumulative emissions and calibrating it to Burke et al. (2015) damages. Finally, we consider how the rule for the optimal carbon price must be modified to allow for a temperature cap, and what this implies for stranded oil and gas reserves. We illustrate our analytical results with a range of optimal policy simulations.

A simple integrated assessment framework that gives rules for the optimal carbon price, transition to the carbon-free era and stranded carbon assets is presented, which highlights the ethical, economic, geophysical and political drivers of optimal climate policy. For the ethics we discuss the role of intergenerational inequality aversion and the discount rate, where we show the importance of lower discount rates for appraisal of longer run benefit and of policy makers using lower discount rates than private agents. The economics depends on the costs and rates of technical progress in production of fossil fuel, its substitute renewable energies and sequestration. The geophysics depends on the permanent and transient components of atmospheric carbon and the relatively fast temperature response, and we allow for positive feedbacks. The politics stems from international free-rider problems in absence of a global climate deal. We show how results change if different assumptions are made about each of the drivers of climate policy. Our main objective is to offer an easy back-on-the-envelope analysis, which can be used for teaching and communication with policy makers.

A simple integrated assessment framework that gives rules for the optimal carbon price, transition to the carbon-free era and stranded carbon assets is presented, which highlights the ethical, economic, geophysical and political drivers of optimal climate policy. For the ethics we discuss the role of intergenerational inequality aversion and the discount rate, where we show the importance of lower discount rates for appraisal of longer run benefit and of policy makers using lower discount rates than private agents. The economics depends on the costs and rates of technical progress in production of fossil fuel, its substitute renewable energies and sequestration. The geophysics depends on the permanent and transient components of atmospheric carbon and the relatively fast temperature response, and we allow for positive feedbacks. The politics stems from international free-rider problems in absence of a global climate deal. We show how results change if different assumptions are made about each of the drivers of climate policy. Our main objective is to offer an easy back-on-the-envelope analysis, which can be used for teaching and communication with policy makers.