Conference Agenda

The livestock industry is a major source of global greenhouse gas (GHG) emissions and harmful air pollutants, while also degrading permanent grasslands that serve as important carbon stocks in the effort to mitigate climate change. Despite this, no previous empirical studies have actually measured the effects of livestock reduction in pastural areas on GHG emissions, air pollutants, or grassland carbon sequestration. In this study, we examine this question using a cross–boundary quasi–natural experimental analysis of China’s Inner Mongolia region, where one of the world’s largest payment–for–ecosystem services programs, the Grassland Ecological Compensation Policy (GECP), has been implemented since 2011. Empirical findings based on the synthetic difference–in–differences (SDID) approach show that the GECP significantly reduced GHG (CH4) concentrations and air pollutant (PM2.5, PM10, and O3) concentrations and increased grassland carbon sequestration. Our mechanism analysis proves that these effects of the GECP resulted from a significant reduction in animal number and an improvement in grassland quality. The decrease in atmospheric CH4 concentrations is directly explained by the decrease in CH4 emissions from animals under the livestock reduction with the implementation of GECP, and the decreases in PM2.5 and PM10 concentrations are explained by the decrease in NH3 emissions from animals under the GECP, as NH3 is a precursor for forming particulate matter. Grassland restoration under the GECP both increased grassland carbon sequestration and decreased concentrations of PM2.5 and PM10. Finally, the reduction in livestock decreased O3 concentrations, which further promotes vegetation growth. These findings provide empirical evidence of the effects of livestock reduction on mitigating GHG effects and air pollution, and can guide future approaches to climate change mitigation in pastural areas.

This paper investigates the impact of mining on sustainable development in Mexico. In particular, it tests whether the mining sector has an effect on consumption, inequalities, education, and environmental quality. Using household data on 2,403 municipalities over a period of 30 years considering four waves of census data (1990, 2000, 2010, 2020), we find that the mining sector has mixed effects on sustainable development. It has a limited positive effect on the income of neighboring households but it also generates negative environmental spillovers. We do not find significant effects on inequalities or education. Overall, our study provides a more nuanced understanding of the impact of mining on various aspects of sustainable development, contributing to ongoing debates on the relationship between natural resource extraction and sustainable development in emerging economies.

As directed technical change has the potential to delink economic activity from environmental degradation, understanding the drivers of environment-related innovation is valuable to policy makers. This paper investigates two drivers of clean innovation, energy prices and market competition, grounded in the induced innovation and inverted-U literature, respectively. Using a self-constructed dataset, combining data on patents, energy prices, competitiveness, firm financials and firm ownership structures, I empirically estimate the role energy input prices play in the firm's environment-related innovation decision under different intensities of market competition. I allow for strategic behavior by studying the patenting decisions of firm groups. I find little evidence of energy prices inducing clean, dirty or overall innovation. I find some evidence of competition and innovation to follow an inverted-U relationship.

This paper analyses the role of climate and environmental policy for the relationship between firms' environmental externalities and their credit risk and cost of debt using data on firm credit risk ratings and European corporate bonds. For direct environmental costs as well as for carbon emissions, we find that policy determines how environmental externalities translate into firm’s credit risks and ultimately in the pricing of debt on the capital market. The size as well as direction of the effect of externalities on credit risk and bond spreads depends on the stringency of policy and a firm’s externalities, such as pollution and carbon emissions. Ambitious policy reduces the credit risk and costs of debt for clean firms and increases both for dirty firms. Lenient regulation can have the opposite effect: dirty firms are assessed to be less risky as vis-à-vis clean firms. The results are consistent across overall policy stringency and specific policies, such as CO2 taxation or air pollution regulation. The findings stress the importance of developing and introducing regulations addressing externalities that are not fully covered yet or where regulation is still rather lenient.