Essays in Environmental and Resource Economics

This thesis explores topics in environmental and resource economics and is composed of two single-authored papers (Papers 1 and 3) and one co-authored paper (paper 2). The following paragraphs highlight the main research question of each paper, methodology and results and the main contributions made...

Full description

Saved in:
Bibliographic Details
Main Author: Fadly, Dalia
Contributors: Farzanegan, Mohamed (Prof. Dr.) (Thesis advisor)
Format: Dissertation
Published: Philipps-Universität Marburg 2019
Online Access:PDF Full Text
Tags: Add Tag
No Tags, Be the first to tag this record!
Summary:This thesis explores topics in environmental and resource economics and is composed of two single-authored papers (Papers 1 and 3) and one co-authored paper (paper 2). The following paragraphs highlight the main research question of each paper, methodology and results and the main contributions made. Paper 1: Low-Carbon Transition: Private Sector Investment in Renewable Energy Projects in Developing Countries A transition to clean energy sources is unlikely to occur without the participation of the private sector. To date, however, most of the literature investigating determinants of renewable energy investments has focused on developed countries. In addition to this, the link fossil fuel dependence and private sector investment in renewable energies has not been investigated. This paper applies discrete time, multiple spell survival model to a dataset of private participation in renewable energy projects in a sample of 134 developing and middle-income countries for the 1990-2012 period. The paper examines the duration leading to private sector investment in renewable energy projects and how this is affected by the high dependence on fossil fuels. This paper contributes to the literature in a number of ways. First, it focuses on the factors affecting the time at which private sector investments in renewable energy projects occur. Second, the paper tests the “carbon lock-in” hypothesis in which fossil fuel dependence in its different forms deters private sector investment in the renewable energy. Third, I solely focus on developing and middle-income countries which remain understudied in the literature. The results suggest that higher dependence on fossil fuels, in the form of fuel rents and higher fossil fuel consumption, lead to a lower probability of investments in renewables. However, the negative effect becomes less pronounced with having investments in previous period. Consistent with previous literature, the results support the belief that a number of macroeconomic variables, such as higher oil prices, higher income per capita, and the implementation of domestic renewable energy policies, play an important role in increasing the likelihood of private sector investment. The results are relevant in light of recent trends in international oil prices as they suggest two potential competing effects, with lower oil prices potentially delaying investments directly through higher fossil fuel consumption but positively affecting investment through lower fuel rents. Paper 2: Geographical Proximity and Renewable Energy Diffusion: An Empirical Approach The reform of the energy landscape is central to achieving the sustainable development goals (SDGs) and it depends substantially on the successful adoption and diffusion of renewable energies across countries. To date, the literature on the diffusion of renewable energies has highlighted a number of important determinants such as income level, domestic energy consumption and availability of finance. However, the importance of geographical proximity in explaining the observed diffusion patterns of renewable energies remains unexplored, despite the potential implications of spatial interrelationships in terms of capital accumulation and knowledge spill-over and therefore on long run economic growth. This co-authored paper examines three fundamental questions. First, it explores the importance of geographic proximity to adopters in explaining diffusion patterns of renewable energies. Second, we test whether this effect becomes more important given a large share of trade with adopters. Third, we investigate whether the importance of geographic proximity to diffusion patterns changes over time. Our results highlight the fact that the scope of diffusion of renewable energy technologies across countries like other types of technology has a spatial aspect. In addition, stronger spillover effects occur when intensive adopters of renewable energies are also important trading partners, highlighting the relevance of trade links with technology adopters as a potential catalyst of the diffusion of renewable energies across countries. The paper contributes to the larger literature on knowledge transfer and is a step in establishing the proposed links between geography, international trade and technology transfer. Given the importance of technology transfer in the economic growth process, technological interdependence between countries generated by spatial externalities is important in explaining convergence process between countries. Paper 3: Greening Industry in Vietnam: Environmental Standards and Resource Efficiency in SMEs The debate of whether mandatory or voluntary environmental management standards contribute to a win-win situation environmentally and economically has been an issue of interest recently. For large-scale enterprises in industrialised countries, such win-win has been documented; but little is known about the effectiveness of this instrument in achieving resource efficiency in small and medium enterprises (SMEs), especially in emerging countries. In Vietnam, high industrial growth rates and the inefficient technologies used by most SMEs raised concerns about the waste of materials and fuels in resource intensive industries. As a consequence, the law of Environmental Protection of 2005 required firms engaged in polluting activities to undergo an environmental impact assessment and upon compliance, obtain a certificate acknowledging satisfaction of environmental management standards (EMS). This paper fills a research gap by empirically testing whether the adoption of environmental standards certificates by small and medium enterprises in the manufacturing sector in Vietnam contributes to resource efficiency for the (2011-2013) period, where resource efficiency is measured by the aggregate consumption of water, fuel, and electricity per unit of output. In this paper, to examine the impact of adopting environmental standards certificate on resource efficiency, I use a balanced panel dataset for the years 2011 and 2013 of the Small and Medium Scale Manufacturing Enterprise (SME) survey, which comprise 1,333 firms distributed across 17 manufacturing sectors and 10 provinces. I estimate an instrumental variable model to control for the possible sources of endogeneity arising for the reverse causality between certificate adoption and resource efficiency. The paper finds a number of determinants for ESC adoption, where firm size, investment in new technology and engaging in selling products via e-trade are likely to be key variables in the decision to adopt certification. The result indicates that adopting environmental standards certificates among manufacturing SMEs in Vietnam contributed to higher aggregate resource efficiency during the 2011-2013 period, reflected by a lower use of electricity, fuel and water for each unit of output. The largest savings relate to electricity (3.25%) followed by fuel (2.68%) and water (2.2%). Additionally, certification was found to have a heterogeneous effect on the extent of resource saving depending on the sector of operation. Less polluting manufacturing activities (for example such as wood, paper, printing, food and beverages, jewellery) achieved about 3.5% resource savings at 5% significance level compared to only 1.82% in more polluting sectors such as rubber, refined petroleum and chemical products. With regards to the control variables, receiving government assistance, as well as investing in new machinery and using a higher share of raw material from households, contributed to efficiency in resource use.
Physical Description:145 Pages