IDEAS home Printed from https://ideas.repec.org/a/brc/brccej/v1y2016i4p133-147.html
   My bibliography  Save this article

Economic Aspects Of Fossil Fuel Social Costs. Why Do We Subsidize And Mediate The Cliamte Change Process?

Author

Listed:
  • Irina, NASALCIUC

    (National Institute for Economic Research of the Academy of Sciences of Moldova, Republic of Moldova)

Abstract

Nowadays, humanity is in a position to choose carefully every step it makes in order to ensure economic development without compromising the welfare of future generations who will need a social and ecological climate as favorable it could be. On the other hand, the conventional energy production is achieved taking the risks of the Earth overheating and its aggregate economic consequences, actually this climatic changes already appear in a more and more aggressive way, including on global economies. Over the past few years international organizations such as OECD, the IMF, the IEA, the World Bank are focusing their attention on the fossil fuel subsidies impacts over the energy production and consumption, quantifying the economic and social impacts of fossil fuel reform. The reason this study had to be done is the disadvantageous position of renewable energy industry compared with the fossil fuel’s industry situation which lies actually in the adopted subsidy strategy and the lack of measures for internalizing externalities on the sector, which are considered by IMF also a type of fossil fuel subsidy. So, this study presents an updated overlook on the fossil fuel externality problem, revises the identified literature linked to the”externality” notion, outlines the identified trends and polices of internalizing the fossil fuels externalities, and tries to review the estimations of the potential costs of the global warming as a consequence of too high social costs of the fossil fuel installed technologies. In this purpose there are on their way of implementation different systemic methods of research, including scientific abstraction, deduction, analysis and synthesis and quantitative analysis in order to outline the current situation of fossil fuel externality problem and its potential impact over the economic welfare.

Suggested Citation

  • Irina, NASALCIUC, 2016. "Economic Aspects Of Fossil Fuel Social Costs. Why Do We Subsidize And Mediate The Cliamte Change Process?," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 1(4), pages 133-147.
    • Handle: RePEc:brc:brccej:v:1:y:2016:i:4:p:133-147
    as

    Download full text from publisher

    File URL: http://www.revec.ro/papers/160409.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Krupnick, Alan J. & Burtraw, Dallas, 1996. "The social costs of electricity: Do the numbers add up?," Resource and Energy Economics, Elsevier, vol. 18(4), pages 423-466, December.
    2. repec:aen:journl:eeep3_2_05parry is not listed on IDEAS
    3. Frances C. Moore & Delavane B. Diaz, 2015. "Temperature impacts on economic growth warrant stringent mitigation policy," Nature Climate Change, Nature, vol. 5(2), pages 127-131, February.
    4. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    5. Ravi Bansal & Marcelo Ochoa, 2011. "Temperature, Aggregate Risk, and Expected Returns," NBER Working Papers 17575, National Bureau of Economic Research, Inc.
    6. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2012. "Temperature Shocks and Economic Growth: Evidence from the Last Half Century," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 66-95, July.
    7. Frances C. Moore & Delavane B. Diaz, 2015. "Erratum: Temperature impacts on economic growth warrant stringent mitigation policy," Nature Climate Change, Nature, vol. 5(3), pages 280-280, March.
    8. Stirling, Andrew, 1997. "Limits to the value of external costs," Energy Policy, Elsevier, vol. 25(5), pages 517-540, April.
    9. Fred S. McChesney, 2006. "Coase, Demsetz, and the Unending Externality Debate," Cato Journal, Cato Journal, Cato Institute, vol. 26(1), pages 179-200, Winter.
    10. Sundqvist, Thomas, 2004. "What causes the disparity of electricity externality estimates?," Energy Policy, Elsevier, vol. 32(15), pages 1753-1766, October.
    11. Freeman III, A. Myrick, 1996. "Estimating the environmental costs of electricity: an overview and review of the issues," Resource and Energy Economics, Elsevier, vol. 18(4), pages 347-362, December.
    12. Ian Parry, Dirk Heine, Shanjun Li, and Eliza Lis, 2014. "How Should Different Countries Tax Fuels to Correct Environmental Externalities?," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kent D. Daniel & Robert B. Litterman & Gernot Wagner, 2016. "Applying Asset Pricing Theory to Calibrate the Price of Climate Risk," NBER Working Papers 22795, National Bureau of Economic Research, Inc.
    2. Letta, Marco & Montalbano, Pierluigi & Tol, Richard S.J., 2018. "Temperature shocks, short-term growth and poverty thresholds: Evidence from rural Tanzania," World Development, Elsevier, vol. 112(C), pages 13-32.
    3. Armon Rezai & Frederick Van der Ploeg, 2016. "Intergenerational Inequality Aversion, Growth, and the Role of Damages: Occam's Rule for the Global Carbon Tax," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(2), pages 493-522.
    4. Marco Letta & Richard S. J. Tol, 2019. "Weather, Climate and Total Factor Productivity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 283-305, May.
    5. Howard, Peter H. & Derek, Sylvan, 2016. "The Wisdom of the Economic Crowd: Calibrating Integrated Assessment Models Using Consensus," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235639, Agricultural and Applied Economics Association.
    6. Hongbo Duan & Gupeng Zhang & Shouyang Wang & Ying Fan, 2018. "Balancing China’s climate damage risk against emission control costs," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 23(3), pages 387-403, March.
    7. Luca Gerotto & Paolo Pellizzari, 2021. "A replication of Pindyck’s willingness to pay: on the efforts required to obtain results," SN Business & Economics, Springer, vol. 1(5), pages 1-25, May.
    8. Kalkuhl, Matthias & Wenz, Leonie, 2020. "The impact of climate conditions on economic production. Evidence from a global panel of regions," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    9. Tobias Kranz & Hamza Bennani & Matthias Neuenkirch, 2024. "Monetary Policy and Climate Change: Challenges and the Role of Major Central Banks," Research Papers in Economics 2024-01, University of Trier, Department of Economics.
    10. Franziska Piontek & Matthias Kalkuhl & Elmar Kriegler & Anselm Schultes & Marian Leimbach & Ottmar Edenhofer & Nico Bauer, 2019. "Economic Growth Effects of Alternative Climate Change Impact Channels in Economic Modeling," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 1357-1385, August.
    11. Gregory Casey & Stephie Fried & Ethan Goode, 2023. "Projecting the Impact of Rising Temperatures: The Role of Macroeconomic Dynamics," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(3), pages 688-718, September.
    12. Baarsch, Florent & Granadillos, Jessie R. & Hare, William & Knaus, Maria & Krapp, Mario & Schaeffer, Michiel & Lotze-Campen, Hermann, 2020. "The impact of climate change on incomes and convergence in Africa," World Development, Elsevier, vol. 126(C).
    13. Matthew Agarwala & Josh Martin, 2022. "Environmentally-adjusted productivity measures for the UK," Working Papers 028, The Productivity Institute.
    14. Wu, Zhiyang & Zhou, Tao & Zhang, Ning & Choi, Yongrok & Kong, Fanbin, 2023. "A hidden risk in climate change: The effect of daily rainfall shocks on industrial activities," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 161-180.
    15. Yongyang Cai & William Brock & Anastasios Xepapadeas, 2023. "Climate Change Impact on Economic Growth: Regional Climate Policy under Cooperation and Noncooperation," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 10(3), pages 569-605.
    16. Krewitt, Wolfram, 2002. "External costs of energy--do the answers match the questions?: Looking back at 10 years of ExternE," Energy Policy, Elsevier, vol. 30(10), pages 839-848, August.
    17. Tol, Richard S.J., 2019. "A social cost of carbon for (almost) every country," Energy Economics, Elsevier, vol. 83(C), pages 555-566.
    18. Hiroaki Sakamoto & Masako Ikefuji & Jan R. Magnus, 2020. "Adaptation for Mitigation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(3), pages 457-484, March.
    19. Christopher W. Callahan & Justin S. Mankin, 2022. "National attribution of historical climate damages," Climatic Change, Springer, vol. 172(3), pages 1-19, June.
    20. Tsigaris, Panagiotis & Wood, Joel, 2019. "The potential impacts of climate change on capital in the 21st century," Ecological Economics, Elsevier, vol. 162(C), pages 74-86.

    More about this item

    Keywords

    fossil fuel energy industry; subsidies; externalities; social costs; climate change costs;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L7 - Industrial Organization - - Industry Studies: Primary Products and Construction

    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:brc:brccej:v:1:y:2016:i:4:p:133-147. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Cristina GANESCU (email available below). General contact details of provider: http://www.univcb.ro/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.