IDEAS home Printed from https://ideas.repec.org/p/isu/genstf/201001010800002824.html
   My bibliography  Save this paper

Essays on Environment, Natural Resource, Growth and Development

Author

Listed:
  • Wang, Min

Abstract

1. Abstract for the theis paper "Climate Change Impacts of Renewable Energy Policies: the Roles of Capacity Constraints and Market Power". A recent literature of Green Paradox shows that green policy intended to alleviate the problem of climate change may turn to speed it up (Sinn, 2008). The goal of this paper is to examine the climate change impacts of renewable energy policies by focusing on capacity constraints of some renewable energies and market power in the fossil fuel sector, both of which turn out to play important roles in determining policy impacts on the time profile of fossil fuel supply as well as the time pattern of greenhouse gas (GHG) emissions. By recognizing the capacity constraints of renewable energies, in this paper, we distinguish renewable energies between capacity constrained renewable energies and abundant renewable energies, and study their price policies and quantity policies in competitive market and non-competitive market. We show that the Green Paradox can only be confirmed in the benchmark case. Moreover, after considering the two factors mentioned, Green Paradox may not exist: the capacity constraints help renewable energy to delay the fossil fuel use to the distant future and the existence of market power changes the optimization rule of fossil fuel owners as well as their response to renewable energy policies.3. Abstract fo the thesis paper "Health and Precautionary Savings in the Pollution-Growth". We study the pollution-economic growth nexus from the perspective of health and precautionary savings. We first establish empirical support from Chinese data that higher pollution levels are associated with high savings rates. We then construct an overlapping-generations model in which agents save more in response to the higher pollution-induced health risk and the increased saving in turn leads to more investment, and thus more pollution. Such a path may appear to be sustainable in terms of economic growth, but the increased pollution makes the welfare level unsustainable. We study three kinds of policy interventions: private insurance achieves full risk sharing but does not reduce pollution; Pay-as-you-go health insurance reduces pollution but can only achieve partial risk sharing; pollution tax reduces pollution, but introduces an additional distortion in the rate of return to capital. A tax on pollution is most effective when the tax revenue is distributed to the old and sick. Even when double dividends do not exist in a static setting, they may still arise in a dynamic setting via its effects on savings behavior.3. Abstract for the thesis paper "Optimal Education Policies under Endogenous Borrowing Constraints". When young students face exogenous borrowing constraints (incomplete markets) on education loans, the simultaneous establishment of a education subsidy and an old-age pension has been shown to restore the complete market allocation (Boldrin and Montes, 2005). If the borrowing constraint is endogenous, owing to limited commitment of repayment and inalienability of future human capital (as in Kehoe and Levine, 1993), Andolfatto and Gervais (2006) by means of an example, argue that the education-subsidy-cum-pension scheme distorts the credit market, and hence, fails to restore the complete market allocation. In this paper, I show that the complete market allocation can be achieved even with endogenous borrowing constraints. The result broadens the rationale for a two-armed (education and pension) welfare state to a much wider class of economies.

Suggested Citation

  • Wang, Min, 2010. "Essays on Environment, Natural Resource, Growth and Development," ISU General Staff Papers 201001010800002824, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genstf:201001010800002824
    as

    Download full text from publisher

    File URL: http://lib.dr.iastate.edu/cgi/viewcontent.cgi?article=2824&context=etd
    Download Restriction: no

    References listed on IDEAS

    as
    1. McCleary, Rachel & Barro, Robert, 2003. "Religion and Economic Growth across Countries," Scholarly Articles 3708464, Harvard University Department of Economics.
    2. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    3. Bovenberg, A Lans & Smulders, Sjak A, 1996. "Transitional Impacts of Environmental Policy in an Endogenous Growth Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 861-893, November.
    4. Franco Modigliani & Shi Larry Cao, 2004. "The Chinese Saving Puzzle and the Life-Cycle Hypothesis," Journal of Economic Literature, American Economic Association, pages 145-170.
    5. David Andolfatto & Martin Gervais, 2006. "Human Capital Investment and Debt Constraints," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(1), pages 52-67, January.
    6. Michele Boldrin & Ana Montes, 2005. "The Intergenerational State Education and Pensions," Review of Economic Studies, Oxford University Press, vol. 72(3), pages 651-664.
    7. Alberto Martin & Jaume Ventura, 2012. "Economic Growth with Bubbles," American Economic Review, American Economic Association, pages 3033-3058.
    8. De Gregorio, Jose, 1996. "Borrowing constraints, human capital accumulation, and growth," Journal of Monetary Economics, Elsevier, vol. 37(1), pages 49-71, February.
    9. John, A & Pecchenino, R, 1994. "An Overlapping Generations Model of Growth and the Environment," Economic Journal, Royal Economic Society, vol. 104(427), pages 1393-1410, November.
    10. X. Pautrel, 2008. "Reconsidering the Impact of the Environment on Long-run Growth when Pollution Influences Health and Agents have a Finite-lifetime," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 37-52.
    11. Hoel, Michael, 1983. "Monopoly resource extractions under the presence of predetermined substitute production," Journal of Economic Theory, Elsevier, vol. 30(1), pages 201-212, June.
    12. Marcos D. Chamon & Eswar S. Prasad, 2010. "Why Are Saving Rates of Urban Households in China Rising?," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 93-130, January.
    13. John, A. & Pecchenino, R. & Schimmelpfennig, D. & Schreft, S., 1995. "Short-lived agents and the long-lived environment," Journal of Public Economics, Elsevier, pages 127-141.
    14. David Croix & Philippe Michel, 2007. "Education and growth with endogenous debt constraints," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 509-530.
    15. Flug, Karnit & Spilimbergo, Antonio & Wachtenheim, Erik, 1998. "Investment in education: do economic volatility and credit constraints matter?," Journal of Development Economics, Elsevier, pages 465-481.
    16. Lans Bovenberg, A. & Smulders, Sjak, 1995. "Environmental quality and pollution-augmenting technological change in a two-sector endogenous growth model," Journal of Public Economics, Elsevier, pages 369-391.
    17. Gene M. Grossman & Alan B. Krueger, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, Oxford University Press, vol. 110(2), pages 353-377.
    18. Robert J. Barro & Xavier Sala-i-Martin, 2003. "Economic Growth, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262025531, January.
    19. Ujjayant Chakravorty & Michel Moreaux & Mabel Tidball, 2008. "Ordering the Extraction of Polluting Nonrenewable Resources," American Economic Review, American Economic Association, pages 1128-1144.
    20. Lance Lochner & Alexander Monge-Naranjo, 2002. "Human Capital Formation with Endogenous Credit Constraints," NBER Working Papers 8815, National Bureau of Economic Research, Inc.
    21. Raymond Gradus & Sjak Smulders, 1993. "The trade-off between environmental care and long-term growth—Pollution in three prototype growth models," Journal of Economics, Springer, pages 25-51.
    22. Jones, Larry E. & Manuelli, Rodolfo E., 1992. "Finite lifetimes and growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 171-197, December.
    23. Partha Dasgupta & Richard J. Gilbert & Joseph E. Stiglitz, 1982. "Invention and Innovation Under Alternative Market Structures: The Case of Natural Resources," Review of Economic Studies, Oxford University Press, vol. 49(4), pages 567-582.
    24. Costas Azariadis & Luisa Lambertini, 2003. "Endogenous Debt Constraints in Lifecycle Economies," Review of Economic Studies, Oxford University Press, vol. 70(3), pages 461-487.
    25. Pierre-André Jouvet & Pierre Pestieau & Gregory Ponthiere, 2010. "Longevity and environmental quality in an OLG model," Journal of Economics, Springer, pages 191-216.
    26. Timothy J. Kehoe & David K. Levine, 1993. "Debt-Constrained Asset Markets," Review of Economic Studies, Oxford University Press, vol. 60(4), pages 865-888.
    27. Hans-Werner Sinn, 2008. "Public policies against global warming: a supply side approach," International Tax and Public Finance, Springer;International Institute of Public Finance, pages 360-394.
    28. Darko JUS & Marc GRONWALD & Markus ZIMMER, "undated". "The Green Paradox and the Choice of Capacity," EcoMod2010 259600085, EcoMod.
    29. Marcus Scheiblecker & et al., 2003. "Austria's Economy in 2002: Another Year of Slow Growth," WIFO Monatsberichte (monthly reports), WIFO, vol. 76(4), pages 257-323, April.
    30. van der Ploeg, Frederick & Withagen, Cees, 2012. "Is there really a green paradox?," Journal of Environmental Economics and Management, Elsevier, vol. 64(3), pages 342-363.
    31. Robert J. Barro & Rachel McCleary, 2003. "Religion and Economic Growth," NBER Working Papers 9682, National Bureau of Economic Research, Inc.
    32. Costas Azariadis & Allan Drazen, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 501-526.
    33. Ujjayant Chakravorty & Michel Moreaux & Mabel Tidball, 2008. "Ordering the Extraction of Polluting Nonrenewable Resources," American Economic Review, American Economic Association, pages 1128-1144.
    34. Dasgupta, Partha & Gilbert, Richard & Stiglitz, Joseph, 1983. "Strategic Considerations in Invention and Innovation: The Case of Natural Resources," Econometrica, Econometric Society, vol. 51(5), pages 1439-1448, September.
    35. Chakravorty, Ujjayant & Magne, Bertrand & Moreaux, Michel, 2006. "A Hotelling model with a ceiling on the stock of pollution," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2875-2904, December.
    36. Amigues, Jean-Pierre & Favard, Pascal & Gaudet, Gerard & Moreaux, Michel, 1998. "On the Optimal Order of Natural Resource Use When the Capacity of the Inexhaustible Substitute Is Limited," Journal of Economic Theory, Elsevier, vol. 80(1), pages 153-170, May.
    37. Holland, Stephen P., 2003. "Extraction capacity and the optimal order of extraction," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 569-588, May.
    38. Cartiglia, Filippo, 1997. "Credit constraints and human capital accumulation in the open economy," Journal of International Economics, Elsevier, pages 221-236.
    39. Robert J. Barro, 2003. "Determinants of Economic Growth in a Panel of Countries," Annals of Economics and Finance, Society for AEF, vol. 4(2), pages 231-274, November.
    40. Ono, Tetsuo, 1996. "Optimal tax schemes and the environmental externality," Economics Letters, Elsevier, vol. 53(3), pages 283-289, December.
    41. Flug, Karnit & Spilimbergo, Antonio & Wachtenheim, Erik, 1998. "Investment in education: do economic volatility and credit constraints matter?," Journal of Development Economics, Elsevier, pages 465-481.
    42. Stokey, Nancy L, 1998. "Are There Limits to Growth?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 1-31, February.
    43. Lans Bovenberg, A. & Smulders, Sjak, 1995. "Environmental quality and pollution-augmenting technological change in a two-sector endogenous growth model," Journal of Public Economics, Elsevier, pages 369-391.
    44. Li, Quan & Reuveny, Rafael, 2003. "Economic Globalization and Democracy: An Empirical Analysis," British Journal of Political Science, Cambridge University Press, vol. 33(01), pages 29-54, January.
    45. Jacoby, Hanan G, 1994. "Borrowing Constraints and Progress through School: Evidence from Peru," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 151-160, February.
    46. Xavier Sala-i-Martín & Elsa V. Artadi, 2003. "Economic growth and investment in the Arab world," Economics Working Papers 683, Department of Economics and Business, Universitat Pompeu Fabra.
    47. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:isu:genstf:201001010800002824. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Curtis Balmer). General contact details of provider: http://edirc.repec.org/data/deiasus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.