The Environmental and Natural Resource Economics Workshop is supported by the Centre interuniversitaire de recherche en analyse des organisations (CIRANO), the Centre interuniversitaire de recherche en économie quantitative (CIREQ), the Réseau de recherche en économie circulaire du Québec (RRECQ) and the Fonds de recherche du Québec (FRQ).
This workshop is intended for researchers and doctoral students in economics who are interested in resource and environmental economics.
The workshop will be led by a team of researchers composed of Geir B. Asheim (Oslo University), Hassan Benchekroun (McGill University), Sophie Bernard (Polytechnique Montréal), Etienne Billette de Villemeur (Université de Lille, UQAM), Robert Cairns (McGill University), Justin Leroux (HEC Montréal), and Charles Séguin (UQAM).
* Information on previous workshops can be found here.
Workshop Venue
1130, rue Sherbrooke Ouest, suite 1400
Montréal, QC H3A 2M8
Speakers
Stephen W. Salant (University of Michigan)
The Dynamics of Evasion: The Price Cap on Russian Oil Exports and the Amassing of the Shadow Fleet (with Diego S. Cardoso and Julien Daubanes)
Abstract: To reduce funds for Russia’s Ukraine invasion, Western governments imposed a price ceiling on Russian seaborne oil exports using Western services. To sell above that ceiling, Russia developed a “shadow fleet” which uses no such services. We use a calibrated model driven by this fleet’s expansion to assess various sanctions. While all sanctions reduce the present value of Russia’s profits, we find that the tighter the ceiling and the tighter the enforcement, the less harm sanctions impose, contradicting conventional wisdom based on Hotelling lemma. However, policies to reduce the shadow fleet’s size may increase the sanction’s effectiveness.
Gerard Van der Meijden (VU Amsterdam)
Mining Critical Minerals for the Energy Transition: Trade, Market Power and Policy (with Carolyn Fischer and Antonia Kurz)
Abstract: Green technologies—such as solar panels, wind turbines, and batteries—are heavily reliant on mineral inputs like cobalt, lithium, and nickel, for which supplies are geographically concentrated. This paper analyses how market power in critical minerals and strategic interactions between regions affect the energy transition. It develops and parameterizes a two-region analytical model of a resource-rich region (East) and a resource-scarce, energy-consuming region (West). Both regions mine and trade minerals, as well as the green capital required to replace fossil fuels in energy production. Results demonstrate how East’s market power over critical minerals slows down the energy transition, increases cumulative carbon emissions in West, and lowers West’s welfare. East’s market power significantly changes the speed and order of extraction of different mineral reserves. When West commits to a carbon budget, East benefits due to higher profits from mineral mining and green capital production. Following unilateral strategies, West gains from taxing imported green capital goods, and then East finds it optimal to tax mineral exports. West can also reap strategic benefits from a moderate subsidy on the recycling of minerals. Collective welfare would be highest without trade interventions, even under cartel-fringe competition.
