Fossilizing
How Much Will Climate Change Reduce Productivity in a High-Technology Supply Chain? Evidence from Silicon Wafer Manufacturing
Jingnan Chen et al.
Environmental and Resource Economics, November 2023, Pages 533–563
Abstract:
The frequency of hot days in much of the world is increasing. What is the impact of high temperatures on productivity? Can technology-based adaptation mitigate such effects of climate change? We provide some answers to these questions by examining how high outdoor temperatures affect a high-technology, precision manufacturing setting. Exploiting individual-level data on the quantity and quality of work done across 35,190 worker-shifts in a leading NYSE-listed silicon wafer maker in China, we evidence a negative effect of outdoor heat on productivity. The effects are large: in our preferred linear specification, an increase in wet bulb temperature of 10C causes a reduction in output of 8.3%. Temperature effects exist even though the manufacturer’s work-spaces are indoors and protected by high-quality climate control systems. Results are not driven by extreme weather events and are robust to alternative modelling approaches. They illustrate the potential future adverse economic effects of climate change in most of the industrialised world.
Rising U.S. Income Inequality and Declining Residential Electricity Consumption: Is There a Link?
Joshua Linn, Jing Liang & Yueming (Lucy) Qiu
Review of Economics and Statistics, forthcoming
Abstract:
After growing steadily for decades, in the mid-2000s, average US household energy consumption began declining. Using household-level data from the Residential Energy Consumption Survey and Current Population Survey between 1990 and 2020, we decompose overall changes in per-household consumption into three components: a) average income; b) cross-household income distribution; and c) consumption habits, which include energy efficiency. Growth of average income caused consumption to increase by 11 percent, and rising income inequality reduced consumption by 8 percent, nearly entirely offsetting the effect of income growth. Changes in habits also reduced consumption. Back-of-the-envelope calculations indicate an unexpected effect of rising income inequality: climate and air quality improvements valued at $9 billion in 2020 due to lower electricity consumption. The results indicate the importance of coordinating policies that address inequality and pollution.
The Ethics of Volcano Geoengineering
Michael Cassidy, Anders Sandberg & Lara Mani
Earth's Future, October 2023
Abstract:
Volcano geoengineering is the practice of altering the state of volcanic systems and/or volcanic eruptions to exploit them or mitigate their risk. Although many in the field insist there is little that can be done to mitigate the hazard, past examples of both intentional and inadvertent volcano interventions demonstrate that it is technically feasible to reach volcano plumbing systems or alter atmospheric processes following eruptions. Furthermore, we suggest that economical, political, and environmental pressures may make such interventions more common in the future. If volcano geoengineering ever becomes a discipline, it will need to overcome many safety and ethical concerns, including dealing with uncertainty, deciding on philosophical approaches such as a consequentialism or precautionary principle, justice and inequality, military uses, cultural values, and communication. We highlight that while volcano geoengineering has significant potential benefits, the risks and uncertainties are too great to justify its use in the short term. Despite this, because of the potential large benefits to society, we believe there is a strong ethical case to support research into the efficacy and safety of volcano geoengineering for its potential future use. We propose that rigorous governance and regulation of any volcano geoengineering is required to protect against potential risks, to enable potentially valuable and publicly available research (e.g., quantification of efficacy and safety), to ensure that any future policy must be co-created through community engagement, and that volcano geoengineering should only be considered as part of larger mitigation practices.
Climate Change Concerns and Mortgage Lending
Tinghua Duan & Frank Weikai Li
Journal of Empirical Finance, January 2024
Abstract:
We examine whether beliefs about climate change affect loan officers’ mortgage lending decisions. We show that abnormally high local temperature leads to elevated attention to and belief in climate change in a region. Loan officers approve fewer mortgage applications and originate lower amounts of loans in abnormally warm weather. This effect is stronger among counties heavily exposed to the risk of sea-level rise, during periods of heightened public attention to climate change, and for loans originated by small lenders. Additional tests suggest that the negative relation between temperature and approval rate is not fully explained by changes in local economic conditions and demand for mortgage credit, or deteriorating quality of loan applicants. By contrast, Fintech lenders partially fill the gap in demand left by traditional lenders when local temperature is abnormally high.
Climate Risk and Capital Structure
Edith Ginglinger & Quentin Moreau
Management Science, forthcoming
Abstract:
We use firm-level data that measure forward-looking physical climate risk to examine the impact of climate risk on capital structure. We find that greater physical climate risk leads to lower leverage in the post-2015 period (i.e., after the Paris Agreement and the first step of standardization of disclosure of climate risk information). Our results hold after controlling for firm characteristics known to determine leverage, including credit ratings. Our evidence shows that the reduction in leverage related to climate risk is shared between a demand effect (the firm’s optimal leverage decreases) and a supply effect (bankers and bondholders increase spreads when lending to firms with the greatest risk). Our results are consistent with the hypothesis that physical climate risk affects leverage via larger expected distress costs and higher operating costs.
The spread and cost of saltwater intrusion in the US Mid-Atlantic
Pinki Mondal et al.
Nature Sustainability, November 2023, Pages 1352–1362
Abstract:
Saltwater intrusion on coastal farmlands can render productive land unsuitable for agricultural activities. While the visible extent of salt-impacted land provides a useful saltwater intrusion proxy, it is challenging to identify in early stages. Moreover, associated ecological and economic impacts are often underestimated as reduced crop yields in farmlands surrounding salt patches are difficult to quantify. Here we develop a high-resolution (1 m) dataset showing salt patches on farm fringes and quantify the extent of salt-impacted lands across the Delmarva Peninsula, United States. Our method is transferable to other regions across and beyond the mid-Atlantic with similar saltwater intrusion issues, such as Georgia and the Carolinas. Our results show that between 2011 and 2017, visible salt patches almost doubled and 8,096 ha of farmlands converted to marsh—another saltwater intrusion consequence. Field-based electrical conductivity measurements show elevated salinity values hundreds of metres from visible salt patches, indicating the broader extent of at-risk farmlands. More farmland areas were within 200 m of a visible salt patch in 2017 compared to 2011, a rise ranging between 68% in Delaware and 93% in Maryland. On the basis of assumed 100% profit loss in at-risk farmlands within a 200 m buffer around salt patches in 2016–2017, the range of economic losses was estimated between US$39.4 million and US$107.5 million annually, under 100% soy or corn counterfactuals, respectively.
Free riding in climate protests
Johannes Jarke-Neuert, Grischa Perino & Henrike Schwickert
Nature Climate Change, November 2023, Pages 1197–1202
Abstract:
Climate protests are an important driver for ambitious climate policies. However, it is still unknown how individual protest participation decisions depend on each other. Exploiting the unique opportunity of the Third Global Climate Strike, we conducted multi-wave population surveys with 1,510 people in the four largest German cities. With a randomized information intervention, we changed turnout expectations of a subgroup of respondents and measured the impact on the probability to join the local protest event. Our findings provide causal evidence for strategic interdependence in protest participation decisions among members of the general public rather than among a movement’s core group of supporters. These decisions are found to be strategic substitutes: individuals who expect many other people to participate are less likely to participate themselves. This dynamic has important implications for the movement’s future communication and growth perspective.
Survival improvements of marine mammals in zoological institutions mirror historical advances in human longevity
Morgane Tidière et al.
Proceedings of the Royal Society: Biological Sciences, 25 October 2023
Abstract:
An intense public debate has fuelled governmental bans on marine mammals held in zoological institutions. The debate rests on the assumption that survival in zoological institutions has been and remains lower than in the wild, albeit the scientific evidence in support of this notion is equivocal. Here, we used statistical methods previously applied to assess historical improvements in human lifespan and data on 8864 individuals of four marine mammal species (harbour seal, Phoca vitulina; California sea lion, Zalophus californianus; polar bear, Ursus maritimus; common bottlenose dolphin, Tursiops truncatus) held in zoos from 1829 to 2020. We found that life expectancy increased up to 3.40 times, and first-year mortality declined up to 31%, during the last century in zoos. Moreover, the life expectancy of animals in zoos is currently 1.65–3.55 times longer than their wild counterparts. Like humans, these improvements have occurred concurrently with advances in management practices, crucial for population welfare. Science-based decisions will help effective legislative changes and ensure better implementation of animal care.
Greenland-wide accelerated retreat of peripheral glaciers in the twenty-first century
Laura Larocca et al.
Nature Climate Change, forthcoming
Abstract:
The long-term response of Greenland’s peripheral glaciers to climate change is widely undocumented. Here we use historical aerial photographs and satellite imagery to document length fluctuations of >1,000 land-terminating peripheral glaciers in Greenland over more than a century. We find that their rate of retreat over the last two decades is double that of the twentieth century, indicating a ubiquitous transition into a new, accelerated state of downwasting.
Rapid disintegration and weakening of ice shelves in North Greenland
Romain Millan et al.
Nature Communications, November 2023
Abstract:
The glaciers of North Greenland are hosting enough ice to raise sea level by 2.1 m, and have long considered to be stable. This part of Greenland is buttressed by the last remaining ice shelves of the ice sheet. Here, we show that since 1978, ice shelves in North Greenland have lost more than 35% of their total volume, three of them collapsing completely. For the floating ice shelves that remain we observe a widespread increase in ice shelf mass losses, that are dominated by enhanced basal melting rates. Between 2000 and 2020, there was a widespread increase in basal melt rates that closely follows a rise in the ocean temperature. These glaciers are showing a direct dynamical response to ice shelf changes with retreating grounding lines and increased ice discharge. These results suggest that, under future projections of ocean thermal forcing, basal melting rates will continue to rise or remain at high level, which may have dramatic consequences for the stability of Greenlandic glaciers.