Conference Agenda

Overview and details of the sessions of this online conference.

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Session Overview
H06: Policies and the Environment
Friday, 20/Aug/2021:
9:00am - 10:30am

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9:00am - 9:22am

Contracting with Countries in a Walrasian World to Curb Coal

Lennart Stern


Existing international environmental institutions curb fossil fuels by rewarding countries for reducing demand and expanding substitutes. This paper argues that it would be beneficial to create new institutions that would reward countries for reducing their fossil fuel supply. Assuming complete information, I prove a Price Preservation Lemma: For any given budget, the optimal way to split the budget between the three approaches (rewarding supply reduction, demand reduction, and substitute expansion) leaves the world market price of the fossil fuel unchanged. In a dynamic setting, this result holds under full commitment for any given intertemporal budget. Using this Lemma, I show that the optimum cannot be implemented by relying on the supply side entirely on a deposit purchase fund. The results suggest that it would be valuable to also create funds rewarding countries for taxing fossil fuel extraction in addition to creating a deposit purchase fund.

Stern-Contracting with Countries in a Walrasian World to Curb Coal-499.pdf

9:22am - 9:45am

Green Protection for Sale: The Impact of Industrial Lobbying on International Cooperation in the Presence of Border Carbon Adjustment

Achim Hagen, Mark Schopf

University of Hagen, Germany

We study the influence of producer firm lobby groups on the choice of national emission reduction policies and the formation of a climate coalition if members of the coalition use border carbon adjustments (BCA). Coalition countries regulate emissions from commodity production with a carbon tax. The commodity is traded on an international market. We find that lobbying leads to a reduction of the price difference between coalition countries and outsiders and can thereby help to stabilize larger coalitions. We contribute to the literature by providing novel insights how, in the presence of BCA, industry lobbies can improve the prospects for climate cooperation. In this case, "green protection for sale" turns into environmental protection.

Hagen-Green Protection for Sale-514.pdf

9:45am - 10:07am

Environmental tax,Regulation intensity and Labor demand:evidence from China

Jinke liu, yueyun Wang

central university of finance and economics, China, People's Republic of

Environmental tax is an important market-based environmental protection instrument in many countries, but little research assesses the impact of the environmental tax on industrial labor demand in developing countries. Employing the pollutant discharge fees standard reform of SO2 in China as a quasi-natural experiment, the paper estimates the effects of the environmental tax on labor demand of manufacturing sector with a difference-in-differences design. Analyzing the most comprehensive firm-level dataset of China, we find the pollutant discharge fees standard reform had no significant negative impact on overall labor demand. However, it had heterogeneous impacts on different types of firms. The available evidence indicates that the negative effects were significant for firms in more heavily polluting industries, those of smaller size, and those firms in regions with poor fiscal capacity, respectively. The reform also decreased SO2 emissions significantly and had a positive effect on public health.

liu-Environmental tax,Regulation intensity and Labor demand-525.pdf

10:07am - 10:30am

Stimulating the Car Market at an Environmental Cost: Evidence from Fiscal Stimulus in China

Xuan Wang

University of Michigan, United States of America

Stimulating durable goods purchases is especially crucial during recessions and many stimulus policies target environmental-friendly products. However, there is little evidence on the consequences of these policies, both in terms of stimulus and environmental impact. We seek such evidence by evaluating important recent fiscal stimulus programs in the Chinese passenger car market: tax holidays and cash subsidies for the purchase of new small engine cars. This paper shows the impact of tax incentives using national administrative car registration data from the years 2005-2018. The results show that a one percentage point sales tax decrease increases the total sales of targeted small cars by about 3.2% and decreases sales of their substitutes, cars with slightly larger sized engines, by 3.9%. Overall, the stimulus effect dominates the substitution effect.

Wang-Stimulating the Car Market at an Environmental Cost-478.pdf

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