Next Seminars
Tuesday, January 21th 2025
11h00 - E2.508
Veronica Salazar-Retrespo
"Cattle Supply Chains and Deforestation in Brazil”
Tropical forests are crucial to the global environment, serving as biodiversity hubs, storing and sequestering carbon, yet they face severe threats from agricultural expansion. Recognizing their role in deforestation, countries like the UK, US, and EU have implemented trade policies to curb deforestation by requiring proof that the production of a set of agricultural commodities is deforestation-free. A key question is whether these policies will encourage farmers to adopt sustainable practices or instead push them toward less regulated buyers. In this paper, we ask that question in the context of Brazil’s cattle sector. First, we leverage a unique dataset on animal transport, matched with property boundaries, to document key empirical patterns of deforestation and the supply network of cattle at the farm level in the state of Pará, Brazil. Second, we build a structural model of farm-level land use decisions with an endogenous supply network. Third, guided by model-derived gravity equations, we estimate the role of existing domestic supply-chain anti-deforestation policies in shaping the trade of cattle and deforestation decisions. In the future, we aim to simulate counterfactual scenarios to quantify the potential outcomes of trade policies such as the EU’s upcoming Regulation on Deforestation-free products (EUDR).
Calendar
- January, 21 th 2025 : Veronica Salazar-Retrespo (Uni.Geneva) - “Cattle Supply Chains and Deforestation in Brazil”, avec Matthieu Stigler (U. Genève)
- February, 4th 2025 : Karine Nyborg (University of Oslo)
- March, 4th 2025 : Benoit Schmutz-Bloch (Ecole Polytechnique)
- March, 11th 2025 : Florian Oswald (University of Turin)
Organization
Organized on Tuesdays from 11:00 am to 12:15 pm.
Location : Room E2.508
Organiszer : Can Askan Mavi - INRAE - can-askan.mavi@inrae.fr
Latest Archives
- January, 16th 2025 : Maxime Tranchard - "The UK Soft Drinks Levy Tax”
This paper investigates the implementation of the Soft Drinks Industry Levy (SDIL) in the United Kingdom, leveraging panel data from 2015 to 2018 to assess the policy's impacts. Introduced in April 2018, the SDIL is a targeted fiscal intervention designed to reduce sugar consumption through a price-based mechanism. Under the policy, beverages with sugar content exceeding 5g per 100ml are subject to an 18p per liter levy, with an additional 8p for products exceeding 8g, leaving part of the supply chain untouched by regulation.
While prior research has examined the immediate effects of the SDIL on consumption patterns, pricing strategies, and product reformulation—highlighting significant reformulation efforts in the pre-implementation phase—this study advances the literature by adopting a structural approach. By integrating consumer panel data across pre- and post-implementation phases, this analysis disentangles the causal effects of the levy from broader market trends. Furthermore, the structural framework enables counterfactual simulations, allowing us to assess the policy’s potential impacts in a pre-policy environment and to explore optimal taxation designs.
- January, 14th 2025 : Martin Quaas (University of Leipzig) - “Fisheries Management from a Fisherman’s perspective: An Economic Theory”
The economics of overfishing has been largely understood since long, and proposals for economically more efficient management have been made. In particular, strong user rights in fisheries have been identified as a way towards greatly increasing efficiency and biological sustainability of fisheries. Yet, the uptake of catch shares as the primary form of rights-based fishery management has been limited and slowing down in recent years and, strikingly, the problem of overfishing has not been going down in the past decades. In this paper we develop a theory to analyze fisheries management from a fisherman’s perspective. With strong user rights, and efficiently managed stocks, fishermen receive resource rent and producer surplus. Without strong user rights, they only receive producer surplus. We study the preferred quota management from the fisherman’s perspective and find that it is strictly higher than the more efficient, rent-maximizing management. We further compare the welfare that a fisherman derives from (i) an efficiently managed fishery and (ii) a fishery under (regulated) open access. As overall efficiency is higher in the fishery with strong user rights, in principle it could Pareto-dominate the open-access fishery. In practice, however, the fisherman may be better off in the fishery under (regulated) open access. We find that even full grandfathering of resource-use rights does not guarantee a strict Pareto improvement, as some resource users will leave the sector.
- January, 11 th 2025 : Romain Fillon (PSAE) - "The Biophysical Channels of Climate Impacts"
How does regional economic activity shape regional climate impacts? Land use and land cover (LULC) change with economic activity, affecting regional climate through biophysical channels like albedo. These regional feedbacks are often overlooked in quantitative spatial models, which focus on global carbon effects. By incorporating this biophysical feedback, I find notable welfare implications for adaptation and mitigation, as it alters temperature impacts and interacts with regional adaptation. Using a dynamic-spatial model at a global 1° grid along ‘middle-of-the-road’ scenario SSP2-4.5, I estimate the welfare consequences of climate change, with agents that adapt through migration, structural change and trade. I interact intra-annual climate projections with model-consistent non-linear damage patterns on amenities and sectoral productivities. Without biophysical impacts, almost all locations experience negative welfare changes: there are no benefits to be expected from climate change in the Northern Hemisphere. Biophysical channels account for 2.4% of total welfare impacts, intensifying regressive effects of climate change on lower-income regions.
- January, 9th 2025 : Inès Mourelon (U Paris Dauphine - PSL) - "Macroeconomic and Environmental Effects of Climate Policy Uncertainty: A Sectoral Reallocation Perspective”
This paper investigates sectoral reallocations in an economy where climate policy is uncertain. To this end, it develops a Dynamic General Equilibrium model with two sectors - a polluting one and a non-polluting one, along with climate externality and endogenous firm entry. Climate policy uncertainty stems from the possibility that the government may introduce a carbon tax in the next period. I show that, compared to a scenario without climate policy uncertainty, the probability of implementing carbon taxation prompts entrepreneurs to curtail investment in polluting firms’ entry while promoting entry into the non-polluting sector. Through general equilibrium effects, these sectoral reallocations deteriorate welfare, generate a drop in economic activity, and increase CO2 emissions. I provide additional empirical evidence through a VAR model that supports these results. Overall, this paper points out the economic and environmental costs of climate policy uncertainty.
- December, 19th 2024 : Martin O'Connell (Wisconsin - Madison) - “ The Welfare Effects of Price Shocks and Household Relief Packages: Evidence from the European Energy Crisis ”
How should governments respond to rapid increases in the cost of living driven by shocks to the prices of staple goods? We study this question in the context of the 2022–2023 European Energy Crisis. Vulnerability to price shocks depends both on energy spending patterns – which we show vary widely and only weakly correlate with income – and substitution responses. Households responded to price rises with an average elasticity of energy consumption of 0.31, but with the top fifth of energy users having an elasticity over 50% larger than the bottom fifth. The UK government's policy response – a combination of an energy price subsidy and a universal transfer – reduced the average welfare loss from the crisis from 6% to 1% of income. However, the intervention entailed efficiency costs of £3.7bn over six months. We show that an alternative policy that bases transfers on income and past energy use, alongside a subsidy, closes 60% of the gap in social welfare between the UK’s policy and the first-best.
- December, 17th 2024 : Claire Rimbaud (U. Paris Dauphine) - “Playing Dumb to Look Green? The Impact of Information Complexity on Attitudes Toward Information”, with Alice Soldà (EM Lyon)
This paper investigates whether individuals use information complexity as an excuse to remain ignorant so as to behave more selfishly. We study this question in a context where individuals face a trade-off between their monetary payoff and their pro-environmental preferences. We propose that individuals use information complexity as an excuse to make self-serving mistakes, which allow them to behave more selfishly without compromising their pro-environmental image. To test this idea, we conducted an online experiment in which we varied (i) the complexity of the information regarding the environmental impact of a donation and (ii) whether there is a trade-off between participants' selfish motives and pro-environmental preferences. In line with our hypothesis, we found that participants make more mistakes when information is complex, but even more so when there is a trade-off between their monetary payoff and their pro-environmental preferences. Our findings suggest that pro-environmental individuals do 'play dumb' when doing so gives them an excuse to behave more selfishly without compromising their image.
