Use Of Domestic Resources Research Articles

Competitiveness analysis of fresh tomatoes in Indonesia: Turning comparative advantage into competitive advantage.

Tomato commodity ranks fifth regarding vegetable export volume and value in Indonesia. The main issues with tomato production in Indonesia are seemingly its lack of variations, quantity, quality, and supply continuity. This study aimed to analyze the comparative and the competitive advantages of tomato farming, evaluate the government policy on inputs, outputs, and input-output sectors, and formulate strategic for transforming the comparative advantage into a competitive advantage. Policy Analysis Matrix (PAM) and sensitivity analysis were employed as the method with the 75 farmers as the respondents and their Focus Group Discussion (FGD) involving farmer groups, agricultural extension workers, traders, and the Agricultural Service Offices in the respective regencies. The results showed that tomato farming has both its comparative and competitive advantages. Its comparative advantage was higher than its competitive advantage in both dry and wet seasons. In general, tomato farming's comparative and competitive advantages outside Java were higher than those in Java. Meanwhile, the divergence effects of tomato agribusiness were more beneficial to consumers than producers. It indicates that improving domestic tomato production was more profitable for Indonesia than importing this commodity in terms of domestic resource use. The sensitivity analysis shows that tomato farming was relatively stable regarding productivity and price changes. The suggested strategic policies to apply are transforming tomato farming's comparative advantage into competitive advantage through productivity enhancement, improvement of distribution efficiency, less market distortion, and government incentives.

Экономическое развитие Китая: основные тенденции и цели 14-й пятилетки

China is one of the leaders of the global economy, and its position is becoming stronger year by year. China ranks first worldwide in terms of GDP in purchasing power parity, industrial production, exports of goods and services, exports of foreign direct investment and others. In recent years, China has been increasingly focused on the use of domestic resources, stimulating expenditure on final consumption. The country is developing within the framework of five-year plans approved by the government. There have been identified the main trends in China’s economic development in 2010-2021 and explored the features of the current five-year plan. The changes in China’s GDP in local currency and US dollars have been analyzed and the factors influencing the economic growth including growth in the final consumption expenditures, investment and foreign trade have been defined. It is stated that the growth of GDP per capita led to the increasing standards of living and helped defeat poverty. There have been analyzed the indices of investment activity of the country, including dynamics and structure of investments in fixed capital, dynamics of gross fixed capital formation and direct foreign investments; the impact of the COVID-19 pandemic on the investment processes was determined. The main trends in the development of foreign trade of the country and formation of state budget expenditures were identified. The present state policy has been singled out in the light of the goals set by the Communist Party of China to maintain the speed of economic growth, increase the national welfare, activate the domestic market, eliminate the structural disproportions of the regional development, and deepen the current reforms. Special attention is payed to the innovation policies aimed at achieving national scientific and technological independence.

Türkiye’de Sanayi Müdahaleciliğinin Etkinliği: Madencilik Sektöründe Sabit Sermaye Yatırımlarının Kliometrik Analizi (1936-1950)

Madencilik eski çağlardan bu yana sanayileşmenin arkasında bir itici güç olarak önemi her geçen gün artan bir iktisadi faaliyet olmuştur. Sanayi Devrimi tarihsel açıdan yol açtığı göz alıcı değişmeleri büyük oranda madencilik alanındaki gelişmelere borçludur. Madencilik alanında yürütülen faaliyetler sanayileşme sürecine sağladıkları katkıların ötesinde yerli kaynakların etkin biçimde kullanılması ve enerjide dışa bağımlılığının azaltılması bakımından da büyük önem arz etmektedir. Türkiye iktisat tarihinde 1930’lu yıllarla birlikte başlayan devletçi politikaların temel amacı sanayileşmenin temin edilmesidir. Sanayileşme odağıyla cumhuriyetin kurulması süreciyle başlayan müdahaleci politikalar doğrultusunda madencilik faaliyetleri önemli bir yer tutmuştur. Çalışmayı kapsayan 1936-1950 dönemi boyunca madencilik sektöründe devleti temsil eden tek kurum Etibank olmuştur. Bu temsil yetkisinin ötesinde, kurum tarafından madencilik alanında yapılan üretim faaliyetleri Türkiye’de yapılan toplam maden üretiminin %100’ünü teşkil etmiştir. Bu bağlamda Etibank hem sanayi müdahaleciliği açısından kurumsal olarak hem de üstlendiği madencilik faaliyetleri ile sınai gelişime katkı sunmuştur. Çalışmada sanayi müdahaleciliğini temsilen Etibank’a ait sabit sermaye yatırımlarına ilişkin veriler kullanılarak, Etibank’ın ekonomik büyüme üzerindeki etkinliği test edilmeye çalışılmıştır. 1936-1950 yılları aralığını kapsayan Bitmemiş Tesisler ve Tesis Masrafları, Müessese ve Teşebbüs Sermayesi ile İştirakler sabit sermaye yatırımları olarak hesaplanmış; değişkenler arasındaki uzun vadeli ilişkiyi araştırmak için Otoregresif Dağılım Gecikmeli (ARDL) sınır testi modeli kullanılmıştır. Elde edilen ampirik bulgular sanayi müdahaleciliğinin ekonomik büyüme üzerinde olumlu bir etkisi olduğu sonucunu desteklemektedir.

The arithmetics and politics of domestic resource mobilization for poverty eradication

The Addis Ababa Action Agenda stresses the importance of effective resource mobilization and use of domestic resources to pursue sustainable development. The first Sustainable Development Goal is to eradicate extreme poverty for all people everywhere by 2030. This paper explores how feasible it would be for developing countries to achieve the goal of eradicating poverty using only domestic resources, given their current tax base and political equilibrium. To answer this question, we propose two new metrics: a Poverty Eradication Capacity Index and a Political Influence Concentration Index. The first metric looks at the “arithmetics” of the issue, and uses an accounting approach to assess whether the existing tax base is rich enough to end poverty through monetary redistribution. The second metric looks at the “politics” of the issue, and approximates the degree to which political power is concentrated among the rich—following the notion that a high concentration of power would likely hinder the effective implementation of fiscal policies (in terms of both revenue collection and social spending). We calculate these two metrics using data for over 120 developing countries, and find that: (i) a large proportion of countries simply do not have an affluent enough tax base to finance their own poverty eradication through redistribution; (ii) countries with the same arithmetic capacity to mobilize resources for poverty eradication differ widely in terms of the political feasibility of such policies; and (iii) a higher capacity for poverty eradication and a lower concentration of political influence is associated with a higher collection of tax revenue as a share of GDP. These results suggest that countries facing binding arithmetic and/or political constraints may need to complement domestic resources with foreign aid in the short-term. Such financial flows, however, should be designed to support the reduction of these constraints in the long-term.

Assessing the Effects of Logistics Performance on Energy Trade

Logistics has become one of the most important economic sectors. It significantly affects the transport infrastructure and many other sectors that are crucial for the country’s development. It is the factor that also influences trade efficiency. However, the question arises if logistics performance is significant for the trade of critical goods which are energy raw products. The aim of the paper is primarily to investigate the EU energy trade flows in general and to estimate the effect of logistics performance on the international trade of energy raw products. The energy raw products are grouped into solid, liquid, and gaseous products, and separate estimates are made for their export and import. The analysis also differentiates between the trade flows, that is export and import within the EU and trade flows between EU member states and third countries. The empirical model is based on the theory of gravity model extended to include the six subcomponents of the Logistics Performance Index (LPI). The results present that: (1) the standard gravity model variables, such as GDPs of reporter and partner countries and contiguity, are successful in explaining the trade flows of solid and liquid raw energy but in case of gas products, are insignificant; (2) the results indicate that all logistics’ performance subcomponents are highly significant and show positive effects on the export of liquid energy products, while for the solid and gas products, it seems to be insignificant when the energy commodities are more complex and costly to transport and store, and therefore, contiguity, i.e., when countries share a common border, positively affects energy trade; (3) the EU imports most liquid energy products, but is generally very dependent on energy imports. EU policymakers should strive to either make more use of domestic resources or switch more to renewable energy sources.

The competitiveness analysis of Nutmeg farming as spices in Ternate, North Moluccas

Today’s agricultural business is faced with various obstacles, and cannot be measured to what extent its competitiveness, while the conception of agricultural development that has competitiveness has not been described more operationally and implementable, so that there is a gap between the ideal conception and the actual field. This study activity aims to analyze the competitiveness of Nutmeg spice farming in terms of domestic resource use in Ternate City. Nutmeg farming in Ternate City has a competitive and comparative advantage, this is indicated by PCR and DRCR values that are smaller than 1 (one). The results of PAM analysis on nutmeg farming have no input transfers because they do not use foreign inputs. The NPCI value for all is below one (<1). The value of NPCI is smaller than one, meaning that domestic prices are lower than world prices, so there can be said to be a subsidy policy from the government. Whereas for nutmeg farming. The transfer value of factors for nutmeg is positive, this indicates that there is an implicit tax or transfer from the nutmeg farmer to domestic factor, so farmers have to pay more than the price of the shadow (social).

The competitiveness analysis of Nutmeg farming as spices in Ternate, North Moluccas

Today’s agricultural business is faced with various obstacles, and cannot be measured to what extent its competitiveness, while the conception of agricultural development that has competitiveness has not been described more operationally and implementable, so that there is a gap between the ideal conception and the actual field. This study activity aims to analyze the competitiveness of Nutmeg spice farming in terms of domestic resource use in Ternate City. Nutmeg farming in Ternate City has a competitive and comparative advantage, this is indicated by PCR and DRCR values that are smaller than 1 (one). The results of PAM analysis on nutmeg farming have no input transfers because they do not use foreign inputs. The NPCI value for all is below one (<1). The value of NPCI is smaller than one, meaning that domestic prices are lower than world prices, so there can be said to be a subsidy policy from the government. Whereas for nutmeg farming. The transfer value of factors for nutmeg is positive, this indicates that there is an implicit tax or transfer from the nutmeg farmer to domestic factor, so farmers have to pay more than the price of the shadow (social).

Modeling biomass-based biofuel production and developing a reference energy system for the agricultural sector in Turkey

Objective: In this study, a reference energy system was developed, and biomass-based biofuel production was modeled for the agricultural sector in Turkey. This was aimed at supplying the entire energy requirement of the agricultural sector using agricultural biomass.&#x0D; Material and Methods: In the generated model, domestically produced sugar beet, and canola plants were selected as the energy-producing resources. A market allocation model was generated by interfacing the ANSWER software with all of the relevant import and export components.&#x0D; Results: The reference energy system was developed in six columns, including energy resources and demands. As a result of the use of domestic resources, the dependence on energy to foreign countries will be reduced and a new source of employment will be generated in this sector. Furthermore, the production and consumption of biofuels are more appropriate both in terms of cost and in terms of greenhouse gas emissions than fossil fuels.&#x0D; Conclusion: The energy demand for the entire agricultural sector is met by the energy supplied from domestic bio-sources produced using part of the agricultural land.

The G20 and development assistance for health: historical trends and crucial questions to inform a new era

One of the most important gatherings of the world's economic leaders, the G20 Summit and ministerial meetings, takes place in June, 2019. The Summit presents a valuable opportunity to reflect on the provision and receipt of development assistance for health (DAH) and the role the G20 can have in shaping the future of health financing. The participants at the G20 Summit (ie, the world's largest providers of DAH, emerging donors, and DAH recipients) and this Summit's particular focus on global health and the Sustainable Development Goals offers a unique forum to consider the changing DAH context and its pressing questions. In this Health Policy perspective, we examined trends in DAH and its evolution over time, with a particular focus on G20 countries; pointed to persistent and emerging challenges for discussion at the G20 Summit; and highlighted key questions for G20 leaders to address to put the future of DAH on course to meet the expansive Sustainable Development Goals. Key questions include how to best focus DAH for equitable health gains, how to deliver DAH to strengthen health systems, and how to support domestic resource mobilisation and transformative partnerships for sustainable impact. These issues are discussed in the context of the growing effects of climate change, demographic and epidemiological transitions, and a global political shift towards increasing prioritisation of national interests. Although not all these questions are new, novel approaches to allocating DAH that prioritise equity, efficiency, and sustainability, particularly through domestic resource use and mobilisation are needed. Wrestling with difficult questions in a changing landscape is essential to develop a DAH financing system capable of supporting and sustaining crucial global health goals.

Regional development programming

Purpose: the purpose of the article is to study the features of regional development in terms of the need to take them into account in the formation of development strategies. The revealed features are the level of development, potential, geographical location, etc. These features are displayed in the strategy of formation of development projects in the region.Methods: the methodological basis for the formation of prospects for the development of the region is the methodology of program-target management to solve the problems of development of complex hierarchical systems. The main elements of this methodology are the basis for programming development processes in the space "forecast-strategy-program-project".Results: the results of the study are to determine the stages of programming the sequence of regional development, finding ways and conditions for the transition between the stages and intermediate goals of development, the formation and selection of development projects. To overcome the contradictions in the formation of the composition of the objectives of the development of projects in a hierarchical system: “macro level – the level of regions – the level of municipalities”, the top priority rule is used over the following. There is also the possibility of adding a lower level of own goals and projects, in accordance with the interests of a particular region and municipality. The task of project selection is one of the most important. Its importance lies not only in the required and available financial resources, but also in shaping the structure of the objective function of each region, adequate to the development goals. Fragments of the scheme of programming of development of the Astrakhan region are given.Conclusions and Relevance: the current external conditions for the development of the domestic economy dictate the need for the full use of domestic resources and the capabilities of the scientific and technological potential to ensure the competitiveness of Russia. This implies a critical attitude towards the development prospects, which are formed without taking into account the national interests of our country. The complexity of strategy formation is due to the hierarchical structure of the country's economy and the difference in interests in the system “macro level – meso level – micro level”. The basis of the proposed approach to development programming is the formation of strategic forecasts. The authors proposed a sequence of actions for programming the formation and selection of development projects at the regional level, as well as a possible list of promising development goals for the region. The analysis of the peculiarities of the development of the regions showed their considerable heterogeneity, which is important to take into account when forming promising strategies. The proposed scheme for the formation of regional development strategies and the mathematical model of project selection are illustrated by the example of one of the municipalities of the Astrakhan region.

Growth in Environmental Footprints and Environmental Impacts Embodied in Trade: Resource Efficiency Indicators from EXIOBASE3

SummaryMost countries show a relative decoupling of economic growth from domestic resource use, implying increased resource efficiency. However, international trade facilitates the exchange of products between regions with disparate resource productivity. Hence, for an understanding of resource efficiency from a consumption perspective that takes into account the impacts in the upstream supply chains, there is a need to assess the environmental pressures embodied in trade. We use EXIOBASE3, a new multiregional input‐output database, to examine the rate of increase in resource efficiency, and investigate the ways in which international trade contributes to the displacement of pressures on the environment from the consumption of a population. We look at the environmental pressures of energy use, greenhouse gas (GHG) emissions, material use, water use, and land use. Material use stands out as the only indicator growing in both absolute and relative terms to population and gross domestic product (GDP), while land use is the only indicator showing absolute decoupling from both references. Energy, GHG, and water use show relative decoupling. As a percentage of total global environmental pressure, we calculate the net impact displaced through trade rising from 23% to 32% for material use (1995–2011), 23% to 26% for water use, 20% to 29% for energy use, 20% to 26% for land use, and 19% to 24% for GHG emissions. The results show a substantial disparity between trade‐related impacts for Organization for Economic Cooperation and Development (OECD) and non‐OECD countries. At the product group level, we observe the most rapid growth in environmental footprints in clothing and footwear. The analysis points to implications for future policies aiming to achieve environmental targets, while fully considering potential displacement effects through international trade.

Economic dimension of Polish energy security

Research background: Stable and reliable access to a variety of energy carriers is undoubtedly a basis for the development of any economy. Therefore, the primary condition for the security of the state and its citizens is to ensure the essential minimum of energy on its territory. We can observe, however, an increasing dependence of the Polish energy sector on external sources.&#x0D; Purpose of the article: The aim of this paper is to examine and evaluate the economic aspects of the Polish energy security considering the fact of growing de-pendency on foreign supplies of energy carriers.&#x0D; Methods: In this paper we analyze the Polish energy security using several indicators: fuel/price efficiency ratio, energy intensity of the economy and Herfindahl-Hirschman rate of market concentration. For calculations we use statistical data provided by Energy Market Agency publications, including ?Energy Situation in Poland? covering the years of 2000? 2015.&#x0D; Findings &amp; value added: On the one hand, the Polish energy security depends on its internal conditions and resources - in this context, the available resources of coal and lignite play an extremely positive role because they provide access to a reliable source of energy. On the other hand, Poland is becoming dependent on external commitments that restrict the free use of domestic resources, thus lowering the energy security of the country, speaking in particular of oil and natural gas resources. The analysis carried out in this paper will allow to evaluate the effectiveness of using various energy carriers with respect to their price, market structure and geopolitical conditions.

Analysis on Route Choice of Russia Energy Innovation in Postcrisis Era

Due to drastic shock of international financial crisis, Russian energy strategies shift from resources-materials model to resources-innovation model in order to make best use of domestic resources and innovative potentials to realize transformation of energy industry and build up new economy based on innovation, this could be considered as inexorable road for Russia to become economic giant and even economic power. While in view of basis of Russian existing energy industry, it could be the inevitable choice for Russia to use high technologies so as to improve energy efficiency, including reducing energy losses, lowering product exportation related to energy resources, actively promoting application of natural gas in transportation sector and strengthening strategy and legislation for improvement of energy efficiency at the same time.

PRODUCTIVITY GAPS AND TAX POLICIES UNDER ASYMMETRIC TRADE

We build a two-country model of endogenous growth to study the welfare effects of taxes on tradable primary inputs when countries engage in asymmetric trade. We obtain explicit links between persistent gaps in productivity growth and the incentives of resource-exporting (importing) countries to subsidize (tax) domestic resource use. The exporters' incentive to subsidize hinges on slower productivity growth and is disconnected from the importers' incentive to tax resource inflows—i.e., rent extraction. Moreover, faster productivity growth exacerbates the importers' incentive to tax, beyond the rent-extraction motive. In a strategic tax game, the only equilibrium is of Stackelberg type and features, for a wide range of parameter values, positive exporters' subsidies and positive importers' taxes at the same time.

Not Just Any Old Place: How Place, People, and Technology Affect the Impact of Area Approaches to Domestic Resource Conservation

The rate of adoption and the impact of green technologies in the home vary considerably from location to location. The degree of change required in domestic resource use suggests that area-based approaches are needed to achieve the required level of technology and behaviour change. Using these observations as a starting point and drawing on theory from innovation diffusion, environmental psychology and social policy, a conceptual model of technology adoption and impact has been developed. Actors in five different area-based schemes across England were interviewed, and qualitative analysis of those interviews has helped identify the factors that affect the take up, use and impact in use of a range of micro-generation, energy efficiency and water conservation measures. Perspectives of adopters, non-adopters, installers, surveyors, and programme managers are compared. While results depend on the technology being deployed and its maturity, some critical success factors are identified, particularly in the competences and role of the technology surveyor and installer, and the self-perception of the user.

POLICY ANALYSIS OF HYBRID ACACIA PRODUCTION: CASE STUDY IN THUA THIEN HUE PROVINCE

Acacia species is the main tree species grown in forest plantation in Thua ThienHue province. This study has used Policy Analysis Matrix (PAM) as the main researchframework to analyze the profitability and the effects of intervention policies on theprofitability of acacia production in order to provide information, which can be used toassist in planting and expanding of acacia forest, to policy-makers and farmers. The resultsshowed that the acacia plantation is profitable but higher-profit model of intensivecultivation was almost twice as profitable as the extensive one. Results in PAM showed thatAcacia production offers both private and social efficiency. No indication of market failurewas found. The policies intervention was a tariff of 6.5% on imported fertilizer. Acaciaproduction generally has the protection of the government and efficient use of domesticresources. However, it also bore the tax burden with respect to the input (fertilizer). Acaciaproducts are comparative products in the market. Policy-makers and other forestrydevelopment programs should support farmers in cultivating the intensive model andlowering the interest rate for planting and expanding acacia forest.Keywords: PAM, Acacia production, profitability, Thua Thien Hue.

Foreign investment multinational companies and economic development

There is no universal answer on the question whether foreign investments stimulate economic development. The positive effect of foreign direct investments will follow when the investments is carried out under normal conditions of competition. That means, above all, low barriers for foreign trade and the low level of restrictions for foreign owned companies. In such circumstances, multinational corporations can assist the economies of penetration to make its businesses more efficient. Foreign investors bring with them brand new types of economic activities and in that way shifting the limits of business opportunities in the countries of penetration. But if the investments are implemented in markets protected with protectionist barriers of various kinds, then they could have negative effects. The negative effects are in particularly reflected in the inefficient use of domestic resources. Foreign investments depend on the macro and micro institutional reforms, low inflation, real exchange rate, and reasonably efficient legal system that protects the property rights and encourages savings and investment. The low level of corruption, together with the foregoing conditions is a prerequisite for the creation of a stimulating environment for foreign investments.

International Resource Tax Policies Beyond Rent Extraction

We study the incentives of selfish governments to tax tradable primary inputs under asymmetric trade. Using an empirically-consistent model of endogenous growth, we obtain explicit links between persistent gaps in productivity growth and the observed tendency of resource-exporting (importing) countries to subsidize (tax) domestic resource use. Assuming uncoordinated maximization of domestic welfare, national governments wish to deviate (i) from inefficient laissez-faire equilibria as well as (ii) from efficient equilibria in which domestic distortions are internalized. The incentive of resource-rich countries to subsidize hinges on slower productivity growth and is disconnected from the typical incentive of importers to tax resource inflows. i.e., rent extraction. The model predictions concerning the impact of resource taxes on relative income shares are supported by empirical evidence.

The current status of CCS development in South Africa

The IEA CCS Roadmap highlighted the significance that CCS will need to play in achieving an atmospheric CO2 concentration stabilization of 450 ppm. In the scenario it is based on, CCS will provide approximately 20% of the total CO2 emissions reductions out to 2050. Achieving this contribution of emissions reductions will require an ambitious CCS growth-path, with 100 projects needed globally by 2020 and over 3000 by 2050. In both 2020 and 2050 the major developing countries, including South Africa will need to contribute to CCS deployment. South Africa has a heavily coal-dependent economy with 94 % of electricity production coming from coal. In addition to this, South Africa also meets approximately 30% of its domestic fuel -oil demand through the conversion o f coal and gas to transportation fuels. The combination of these two factors means that South Africa is as dependant on coal as any country in the world, placing the country as the 13th largest CO2 emitter in the world. Currently South Africa is experiencing electricity shortages where the reserve margin is below desired levels on a daily basis. Consequently, deployment of electricity generation capacity is seen as a priority. With the slow development of renewable energy and the deployment of nuclear energy currently under review, the required short term increase in electricity production is likely to come from new, coal plant that will be expected to be in operation for 50–60 years, thus continuing the country’s dependence on coal for some time to come. At the climate change negotiations in Copenhagen, South Africa announced that it would take nationally appropriate mitigation actions to enable a reduction in national GHG emissions equating to a deviation of 34% below the “Business as Usual” emissions growth trajectory by 2020 and a 42% deviation below the below “Business as Usual” emissions growth trajectory by 2025, pended upon the provision of sufficient funding and technology support. Given all these factors, CCS could be a crucial technology for South Africa in the near future. This paper looks to discuss the current status of CCS in South Africa. This includes looking at the key outcomes of the recently released South African CCS Research and Development Roadmap and the milestones it outlines, such as the development of a geological storage atlas by 2010, a CO2 test injection by 2016, and a demonstration project operating by 2020. It also looks at how the South African government is positioned toward CCS, including how CCS fits with the countries priorities of poverty alleviation, economic growth, sustainable development, job creation and ensuring the most efficient use of domestic resources. In addition the paper looks at the manner in which the South African government could go about regulating the operation of CCS projects. The paper will discuss the options available to South Africa to fund CCS demonstration and deployment domestically including via the clean development mechanism (in the event that the question of using this mechanism in the CCS context is dealt with at the international level), development banks and other, appropriate, development finance institutions. Public awareness and engagement on CCS will also be covered, given the crucial role the public play in the smooth progress of projects. Finally the paper will look at international collaboration on CCS including the role South Africa can play internationally and what more the international CCS community can offer.

Endogenous Growth, Asymmetric Trade and Resource Taxation

Since 1980, the aggregate income of oil-exporting countries relative to that of oil- poor countries has been remarkably constant despite structural gaps in productivity growth rates. This stylized fact is analyzed in a two-country model where resource- poor (Home) and resource-rich (Foreign) economies display productivity differences but stable income shares due to terms-of-trade dynamics. We show that Home's income share is positively related to the national tax on domestic resource use, a prediction confirmed by dynamic panel estimations for sixteen oil-poor economies. National governments have incentives to deviate from both efficient and laissez-faire allocations. In Home, increasing the oil tax improves welfare through a rent-transfer mechanism. In Foreign, subsidies (taxes) on domestic oil use improve welfare if R&D productivity is lower (higher) than in Home.