Research

Projects and papers from the Centre for Macroeconomics and Natural Resources.

oil and the economy

Extraction of natural resources is the backbone of the Norwegian economy with consequences for value added creation, macroeconomic management and public finances.

Natural resource management and climate change research have furthermore become mainstream topics in economics research and teaching.

The centre gruoup undertakes research and provide teaching within several fields connected to these subjects.

Tropical Deforestation

The Tropical Deforestation research projects contributes to the understanding of the effects of structural change and urbanisation on tropical deforestation.

It also aims to strengthen the Norwegian research environment on development economics and spatial economics by creating international links and build competence on the use of GIS-data.

WHEN MACRO MEETS MICRO: GLOBAL CHALLENGES AND HETEROGENEOUS RESPONSES IN NORWAY

Macro-micro will contribute to a better understanding of how the transition away from a petroleum-based economy may affect the efficiency of resource allocations. The project will study the drivers, spillovers and challenges resource rich economies face and discuss Norway’s challenges in connection with technological change, robotisation and digitalization. Macro-micro will analyse inequalities arising from business cycles and challenges to the sustainability of the welfare state and study the heterogeneous effects of macroeconomic policy in Norway, addressing business cycle conditions, the shift to a greener economy, and the management of the Government Pension Fund.

Other projects and research papers

Mining Booms: Impacts on Local Environments and Local Economic Development

Mining Booms: Impacts on Local Environments and Local Economic Development

By T. Harding, H. Krings and J. Cust
The Effects of Land Use Regulation on Deforestation: Evidence from the Brazilian Amazon

The Effects of Land Use Regulation on Deforestation: Evidence from the Brazilian Amazon

Liana Anderson, Samantha De Martino, Torfinn Harding, Karlygash Kuralbayeva, Andre Lima

Abstract:

To reduce deforestation rates in the Amazon, Brazil established in the period 2004-2010 conservation zones covering an area 1.5 times the size of Germany. In the same period, Brazil experienced a large reduction in deforestation rates. By combining satellite data on deforestation with data on the location and timing of the conservation zones, we provide spatial regression discontinuity estimates and difference-in-difference estimates indicating that the policy cannot explain the large reduction in deforestation rates. The reason is that the zones are located in areas where agricultural production is likely to be unprofitable. We also provide evidence that zones reduce deforestation if the incentives for municipalities to reduce deforestation are high. We rationalize these finding with a spatial economics model of land use, with endogenous location of conservation zones and imperfect enforcement. Our findings point to the need for other explanations than the conservation zones to explain the sharp decline in deforestation rates in the Brazilian Amazon since 2004.

Full text
Evaluation the Bolsa Verde Program

Evaluation the Bolsa Verde Program

Po Yin Wong, Torfinn Harding, Karlygash Kuralbayeva, Samantha De Martino, Liana O. Anderson, Andre Lima and Ana Pessoa

Abstract:

We evaluate the impact of Brazil's Bolsa Verde (BV) - a cash transfer program conditional on forest conservation - on deforestation and household outcomes in eligible areas with and without beneficiaries. We link spatial data on deforestation and remaining forest from satellite imagery with data on the socio-economic characteristics of eligible zones. The unique set up of BV allows the identification of the effect of committing to the program's conditionality through a contract separately from the effect of an increase in income through the cash transfer. We find less deforestation in eligible areas with beneficiaries and we find a larger effect of the program among eligible areas with more BV beneficiaries.
Forest Loss from Oil Activities

Forest Loss from Oil Activities

Hanna Krings, Torfinn Harding, James Cust
Economic Growth and Deforestation

Economic Growth and Deforestation

Julika Herzberg, Torfinn Harding, Karlygash Kuralbayeva

ABSTRACT

Tropical deforestation needs to be reduced as the forests sink carbon efficiently and embody invaluable biological diversity. We take advantage of the boom in commodity prices over the last 15 years to study this question. Growth driven by expansion of the agricultural sector will have different effects than growth driven by expansion of other tradable sectors, such as mining. In the theory we analyze the expected change in deforestation in a model of structural change with endogenous land endowment. Empirically we show that a boom in the agricultural prices will increase deforestation and a higher price in other tradable, e.g. minerals, will reduce deforestation, as higher labour demand leads to a higher wage rate and less expansion of agriculture, as predicted by the theoretical model. In our sample of more than 700 municipalities in Brazil, in the period 2002-2013, we find that a 1% increase in agricultural prices increases deforestation by 0.7%; while 1% higher mineral prices decrease deforestation by 0.3%. Furthermore, the paper will set light on the mechanisms of reduction of deforestation during a mineral price shock, which is supposed to be less profitable in forestry, pulling facts such as higher salaries in the mining sector, introduction of better control and security systems.
The role of Protected Areas on active fires occurrence in Brazilian Amazon

The role of Protected Areas on active fires occurrence in Brazilian Amazon

Ana C. M. Pessôa, Sacha M. O. Siani, Torfinn Harding, Liana O. Anderson

Abstract

Conservation scientists consider the designation of Protected Areas an important strategy to mitigate socio-environmental damages, biodiversity loss and climate change. Significant environmental impacts are caused every year by fires in Amazonia. In this study, we explore the hypothesis that Protected Areas have an inhibitory role on fire occurrence in Acre state. Then we evaluate the patterns of fires occurrence in different management categories and jurisdiction. For this, it was considered buffers of different sizes inside and around the protected areas perimeter. Fire density was calculated for each buffer, and comparisons between inside versus outside were carried out. It is observed that outside Protected Areas fire density is always higher than inside, indicating the presence of inhibitory process by the protected area borders. The results also showed that such inhibitory process does not occur equally among management categories and jurisdiction. Moreover, this study highlights the importance of establishment of buffer zones based on technical studies and considering the importance on protect not only the protected area itself, but also its surroundings.
Spatial analysis of enforcement for reducing deforestation in Brazilian Amazon

Spatial analysis of enforcement for reducing deforestation in Brazilian Amazon

Sacha M. O. Siani, Ana C. M. Pessôa, Torfinn Harding, Liana O. Anderson

Abstract

Deforestation rates in Brazilian Amazon declined dramatically since 2004. The expansion of protected areas (PA), law enforcement and a set of policy interventions have contributed to this decrease. This paper aims to develop an exploratory analysis of the space-time patterns of seizures related to illegal logging in the period between 2004 and 2015 for the state of Pará. We used the IBAMA’s seizures and DETER database to produce kernel density maps for four periods between 2004 and 2015. The results showed that the location of seizures operations was more influenced by proximity to cities and mobility axes than by the location of deforestation itself. In addition, places with high rates of deforestation without law enforcement showed declines in rates as well as those that had more enforcement. We also analyzed spatial patterns of law enforcement with the presence of PAs considering different institutional arrangements by comparing the ratio between the number of IBAMA’s seizure operations and the deforested area and the distance to the nearest border of active PAs. We found that enforcement was higher inside strictly protected (SP) areas than sustainable use (SU), but SU areas have higher influence on the enforcement in the outside, close to its borders, probably due to the proximity to the cities and consequent greater accessibility, leading to lower costs for their execution.
Spillovers from US monetary policy: evidence from a time varying parameter global vector auto-regressive model

Spillovers from US monetary policy: evidence from a time varying parameter global vector auto-regressive model

Jesus Crespo Cuaresma, Gernot Doppelhofer, Martin Feldkircher & Florian Huber

Abstract:

The paper develops a global vector auto‐regressive model with time varying parameters and stochastic volatility to analyse whether international spillovers of US monetary policy have changed over time. The model proposed enables us to assess whether coefficients evolve gradually over time or are better characterized by infrequent, but large, breaks. Our findings point towards pronounced changes in the international transmission of US monetary policy throughout the sample period, especially so for the reaction of international output, equity prices and exchange rates against the US dollar. In general, the strength of spillovers has weakened in the aftermath of the global financial crisis. Using simple panel regressions, we link the variation in international responses to measures of trade and financial globalization. We find that a broad trade base and a high degree of financial integration with the world economy tend to cushion risks stemming from a foreign shock such as US tightening of monetary policy, whereas a reduction in trade barriers and/or a liberalization of the capital account increase these risks.