Keeping it clean
Has Surface Water Quality Improved Since the Clean Water Act?
Kerry Smith & Carlos Valcarcel Wolloh
NBER Working Paper, June 2012
Abstract:
On the fortieth anniversary of the Clean Water Act this paper reports the first quantitative assessment of the aggregate trends in water quality in the U.S. using a single standard over the years 1975 to 2011. The analysis suggests that fresh water lakes for the nation as a whole are about at the same quality levels as they were in 1975. In short, viewed in the aggregate, nothing has changed. An assessment of the factors influencing the aggregates also suggests that water quality appears to be affected by the business cycle. This result calls into question the simple descriptions of the change in environmental quality with economic growth that are associated with the Environmental Kuznets Curve.
----------------------
Zachary Liscow
Journal of Environmental Economics and Management, forthcoming
Abstract:
Many policymakers argue that property rights decrease deforestation. Some theoretical papers also make this prediction, arguing that property rights decrease discount rates applied to a long-term investment in forestry. However, the effect is theoretically ambiguous. The paper takes a novel instrumental variables approach based on Nicaragua's agrarian reform to test for the effect, using a new dataset - Nicaragua's 2001 agricultural census. It finds that property rights significantly increase deforestation. The model, supported by the data, suggests a likely mechanism for this relationship: property rights increase investment, increasing agricultural productivity and therefore the returns to deforestation.
----------------------
Worldwide health effects of the Fukushima Daiichi nuclear accident
John Ten Hoeve & Mark Jacobson
Energy & Environmental Science, forthcoming
Abstract:
This study quantifies worldwide health effects of the Fukushima Daiichi nuclear accident on 11 March 2011. Effects are quantified with a 3-D global atmospheric model driven by emission estimates and evaluated against daily worldwide Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO) measurements and observed deposition rates. Inhalation exposure, ground-level external exposure, and atmospheric external exposure pathways of radioactive iodine-131, cesium-137, and cesium-134 released from Fukushima are accounted for using a linear no-threshold (LNT) model of human exposure. Exposure due to ingestion of contaminated food and water is estimated by extrapolation. We estimate an additional 130 (15-1100) cancer-related mortalities and 180 (24-1800) cancer-related morbidities incorporating uncertainties associated with the exposure-dose and dose-response models used in the study. We also discuss the LNT model's uncertainty at low doses. Sensitivities to emission rates, gas to particulate I-131 partitioning, and the mandatory evacuation radius around the plant are also explored, and may increase upper bound mortalities and morbidities in the ranges above to 1300 and 2500, respectively. Radiation exposure to workers at the plant is projected to result in 2 to 12 morbidities. An additional 600 mortalities have been reported due to non-radiological causes such as mandatory evacuations. Lastly, a hypothetical accident at the Diablo Canyon Power Plant in California, USA with identical emissions to Fukushima was studied to analyze the influence of location and seasonality on the impact of a nuclear accident. This hypothetical accident may cause 25% more mortalities than Fukushima despite California having one fourth the local population density due to differing meteorological conditions.
----------------------
Organic farmers or conventional farmers: Where's the money?
Hiroki Uematsu & Ashok Mishra
Ecological Economics, June 2012, Pages 55-62
Abstract:
There is growing evidence that organic farming is a rapidly expanding economic sector in the U.S. However, an unanswered question is whether organic farmers are better off than conventional farmers when it comes to farm household income. Using large farm-level data and a matching estimator, this study explores the relationship between organic certification and farm household income with its various components. Contrary to expectations, certified organic farmers do not earn significantly higher household income than conventional farmers. Though certified organic crop producers earn higher revenue, they incur higher production expenses as well. In particular, certified organic producers spend significantly more on labor, insurance, and marketing charges than conventional farmers. The results suggest that the lack of economic incentives can be an important barrier to conversion to organic farming.
----------------------
The Influence of Financial Status on the Effectiveness of Environmental Enforcement
Dietrich Earnhart & Kathleen Segerson
Journal of Public Economics, October 2012, Pages 670-684
Abstract:
This paper analyzes the influence of financial status on the effectiveness of environmental enforcement. It considers multiple dimensions of both enforcement and financial status. Regarding enforcement, the paper considers both the likelihood of enforcement, as captured by the likelihood of inspections conducted at regulated facilities, and the severity of enforcement, as captured by the size of sanctions imposed on polluting facilities found violating their effluent limits. As indicators of corporate financial status, the paper considers measures of liquidity, solvency, and profitability [a proxy for corporate managerial skill], all of which can influence the likelihood that a firm faces liquidity and/or bankruptcy constraints. The paper first develops a theoretical model of optimal abatement in the presence of liquidity and bankruptcy constraints and uses the model to investigate the impact of financial status on optimal abatement and the effectiveness of enforcement. Then the paper empirically examines the interactions between enforcement and financial status using data on wastewater discharges from US chemical manufacturing facilities for the years 1995 to 2001. Empirical results suggest that the financial status dimensions considered here in general play an important role in determining the incentives created by enforcement. As the most striking result, we show theoretically and empirically that, when financial dimensions are included in the analysis, the conventional wisdom regarding the effect of enforcement likelihood on abatement no longer holds, i.e., increased enforcement can actually lead to worse environmental performance.
----------------------
Renan Silvério & Alexandre Szklo
Energy Economics, forthcoming
Abstract:
The aim of this article is to empirically measure the contribution of the futures market to the price discovery process in the spot market for benchmark crude oils, specifically that for West Texas Intermediate (WTI). For this purpose, we test the hypothesis that the recent evolution of the financial markets has affected the future oil market so as to increase its contribution to the price discovery process of the spot market. We modeled the relation between WTI spot and future prices as a cointegration relation. By using the Kalman filter technique, it was possible to obtain a time-varying measure of the contribution of future market's to the price discovery mechanism. The results show that in the case of WTI, the contribution of the futures market has been increasing, especially between 2003 and 2008 and then again after the start of 2009, evidencing the growing importance of factors particular to the financial markets in determining oil prices in recent years. During 2009, the spot prices adjusted to agents' future expectations rather than to the current supply and demand conditions.
----------------------
Back to the Future of Green Powered Economies
Juan Moreno Cruz & Scott Taylor
NBER Working Paper, July 2012
Abstract:
The purpose of this paper is to introduce the concept of power density [Watts/m²] into economics. By introducing an explicit spatial structure into a simple general equilibrium model we are able to show how the power density of available energy resources determines the extent of energy exploitation, the density of urban agglomerations, and the peak level of income per capita. Using a simple Malthusian model to sort population across geographic space we demonstrate how the density of available energy supplies creates density in energy demands by agglomerating economic activity. We label this result the density-creates-density hypothesis and evaluate it using data from pre and post fossil-fuel England from 1086 to 1801.
----------------------
Ambient Air Pollution and the Risk of Stillbirth
Ambarina Faiz et al.
American Journal of Epidemiology, forthcoming
Abstract:
The purpose of the present study was to examine the risk of stillbirth associated with ambient air pollution during pregnancy. Using live birth and fetal death data from New Jersey from 1998 to 2004, the authors assigned daily concentrations of air pollution to each birth or fetal death. Generalized estimating equation models were used to estimate the relative odds of stillbirth associated with interquartile range increases in mean air pollutant concentrations in the first, second, and third trimesters and throughout the entire pregnancy. The relative odds of stillbirth were significantly increased with each 10-ppb increase in mean nitrogen dioxide concentration in the first trimester (odds ratio (OR) = 1.16, 95% confidence interval (CI): 1.03, 1.31), each 3-ppb increase in mean sulfur dioxide concentration in the first (OR = 1.13, 95% CI: 1.01, 1.28) and third (OR = 1.26, 95% CI: 1.03, 1.37) trimesters, and each 0.4-ppm increase in mean carbon monoxide concentration in the second (OR = 1.14, 95% CI: 1.01, 1.28) and third (OR = 1.14, 95% CI: 1.06, 1.24) trimesters. Although ambient air pollution during pregnancy appeared to increase the relative odds of stillbirth, further studies are needed to confirm these findings and examine mechanistic explanations.
----------------------
What Doesn't Kill You Makes You Weaker: Prenatal Pollution Exposure and Educational Outcomes
Nicholas Sanders
Journal of Human Resources, Summer 2012, Pages 826-850
Abstract:
I examine the impact of prenatal total suspended particulate (TSP) exposure on educational outcomes using county-level variation in the timing and severity of the industrial recession of the early 1980s as a shock to ambient TSPs (similar to Chay and Greenstone 2003b). I then instrument for pollution levels using county-level changes in relative manufacturing employment. A standard deviation decrease in TSPs in a student's year of birth is associated with 2 percent of a standard deviation increase in high school test scores for OLS and 6 percent for IV. I also consider how migration and selection into motherhood relate to my results.
----------------------
Kishore Gawande, Hank Jenkins-Smith & May Yuan
Journal of Environmental Economics and Management, forthcoming
Abstract:
We use evidence from a quasi-experiment - the shipping of radioactive spent nuclear fuel by train through South Carolina - to assess whether many years of incident-free transport of nuclear waste no longer negatively affects market valuation of properties along the route. Using Charleston County (SC) property sales data over thirteen years we find, to the contrary, that the negative impact of the nuclear waste shipments on property values continues to be felt over the long run. The perception of risk from nuclear waste transport appears to be resilient. We contribute methodologically by comparing well-defined treatment and control groups of properties to estimate the average treatment effect of the nuclear waste shipment program. The results are affirmed in both a pooled cross-section sample, as well as a panel data sample of repeated property sales.
----------------------
Ex Post Analysis of Economic Impacts from Wind Power Development in U.S. Counties
Jason Brown et al.
Energy Economics, forthcoming
Abstract:
Wind power development has surged in recent years in the United States. Policymakers and economic development practitioners to date have typically relied upon project-level case studies or modeled input-output estimates to assess the economic development impacts from wind power, often focusing on potential local, state-wide, or national employment or earnings impacts. Building on this literature, we conduct an ex post econometric analysis of the county-level economic development impacts of wind power installations from 2000 through 2008 in a large, wind-rich region in the country. Taking into account factors influencing wind turbine location, we find an aggregate increase in county-level personal income and employment of approximately $11,000 and 0.5 jobs per megawatt of wind power capacity installed over the sample period of 2000 to 2008. These estimates appear broadly consistent with modeled input-output results, and translate to a median increase in total county personal income and employment of 0.2% and 0.4% for counties with installed wind power over the same period.
----------------------
Harland Prechel & Lu Zheng
Social Forces, March 2012, Pages 947-970
Abstract:
Organizational and environmental sociology contain surprisingly few studies of the corporation as one of the sources of environmental pollution. To fill this gap, we focus on the parent company as the unit of analysis and elaborate environmental theories that focus on the organizational and political-legal causes of pollution. Using a compiled longitudinal dataset of corporations in Standard & Poor's 500 from 1994 through 2001, we test hypotheses derived from an organizational political economy framework. We find that corporations with more complex structures, greater capital dependence and those headquartered in a state with lower environmental standards have higher pollution rates. In addition, the dollar amount of penalties did not curb pollution rates during this period of weakened federal environmental protection.
----------------------
The Diffusion of Market-Based Instruments: The Case of Air Pollution
Nives Dolšak & Karen Sampson
Administration & Society, April 2012, Pages 310-342
Abstract:
This article examines adoption of a market instrument for reducing air pollution across the U.S. states. Because market instruments are viewed as reducing compliance costs, we hypothesize that market instruments should be more likely adopted in states whose electricity prices are higher than the average price in other states, especially their economic peers. Using a hazard model for a panel of 35 states from 1991 to 2003, we find that the adoption and the timing of market instruments are positively associated with the relative price of electricity even after controlling for a slate of variables, including the political context, the severity of air pollution, and neighborhood effects.
----------------------
Cliff Frohlich
Proceedings of the National Academy of Sciences, forthcoming
Abstract:
Between November 2009 and September 2011, temporary seismographs deployed under the EarthScope USArray program were situated on a 70-km grid covering the Barnett Shale in Texas, recording data that allowed sensing and locating regional earthquakes with magnitudes 1.5 and larger. I analyzed these data and located 67 earthquakes, more than eight times as many as reported by the National Earthquake Information Center. All 24 of the most reliably located epicenters occurred in eight groups within 3.2 km of one or more injection wells. These included wells near Dallas-Fort Worth and Cleburne, Texas, where earthquakes near injection wells were reported by the media in 2008 and 2009, as well as wells in six other locations, including several where no earthquakes have been reported previously. This suggests injection-triggered earthquakes are more common than is generally recognized. All the wells nearest to the earthquake groups reported maximum monthly injection rates exceeding 150,000 barrels of water per month (24,000 m3/mo) since October 2006. However, while 9 of 27 such wells in Johnson County were near earthquakes, elsewhere no earthquakes occurred near wells with similar injection rates. A plausible hypothesis to explain these observations is that injection only triggers earthquakes if injected fluids reach and relieve friction on a suitably oriented, nearby fault that is experiencing regional tectonic stress. Testing this hypothesis would require identifying geographic regions where there is interpreted subsurface structure information available to determine whether there are faults near seismically active and seismically quiescent injection wells.
----------------------
Martina Vidovic & Neha Khanna
Environmental and Resource Economics, July 2012, Pages 369-393
Abstract:
We examine whether voluntary pollution abatement programs in which there is no program-specific participation incentive are effective in reducing emissions below what they would have been otherwise. We use data on facility participation in the 33/50 Program and emissions reported to the US EPA's toxic releases inventory (TRI) between 1991 and 1995 for a sample of facilities whose parent firms committed to the program. By focusing on participation by individual facilities we avoid the influence of firm level incentives under the program. The mandatory disclosure of emissions data to the TRI avoids the potential bias evident in voluntarily disclosed data. We find that while facilities with larger total emissions were more likely to participate, there is no evidence of greater participation by facilities that account for a higher share of a parent firm's 33/50 emissions. Although emissions of the 33/50 chemicals fell over the years, we find that participation in the program was not associated with the decline in the 33/50 releases generated by these facilities and the reductions seemed to have occurred for reasons unrelated to the program.
----------------------
Abraham Lioui & Zenu Sharma
Ecological Economics, June 2012, Pages 100-111
Abstract:
This paper assesses the impact of environmental corporate social responsibility (ECSR) on Corporate Financial Performance (CFP) measured by ROA and Tobin's Q. We show that the relationship between firms' return on assets (ROA) and ECSR, strengths and concerns, is negative and statistically significant. We also show that firms' Tobin Q and ECSR, strengths and concerns, are negatively correlated in a statistically significant way. However, accounting for the interaction between firms' environmental efforts and R&D yields a different perspective: while the direct impact of ECSR on CFP is still negative, the interaction of ECSR and R&D has a positive and significant impact on it. ECSR strengths and concerns harm CFP since they are perceived as a potential cost. However, this CSR activity fosters R & D efforts of firms which generates additional value (indirect effect).
----------------------
Olivier Deschenes, Michael Greenstone & Joseph Shapiro
NBER Working Paper, August 2012
Abstract:
Willingness to pay for air quality is a function of health and the costly defensive investments that contribute to health, but there is little research assessing the empirical importance of defensive investments. The setting for this paper is a large US emissions cap and trade market - the NOx Budget Trading Program (NBP) - that has greatly reduced NOx emissions since its initiation in 2003. Using rich quasi-experimental variation, we find that the reductions in NOx emissions decreased the number of summer days with high ozone levels by about 25%. The NBP also led to reductions in expenditures on prescription pharmaceutical expenditures of about 1.9%. Additionally, the summer mortality rate declined by approximately 0.5%, indicating that there were about 2,200 fewer premature deaths per summer, mainly among individuals 75 and older. The monetized value of the reductions in pharmaceutical purchases and mortality rates are each roughly $900 million annually, suggesting that defensive investments are a significant portion of willingness to pay for air quality. Finally, we cautiously conclude that the reductions in ozone are the primary channel for these reductions in defensive investments and mortality rates, which indicates that willingness to pay for ozone reductions is larger than previously understood.
----------------------
Effectiveness of Green Infrastructure for Improvement of Air Quality in Urban Street Canyons
Thomas Pugh et al.
Environmental Science & Technology, 17 July 2012, Pages 7692-7699
Abstract:
Street-level concentrations of nitrogen dioxide (NO2) and particulate matter (PM) exceed public health standards in many cities, causing increased mortality and morbidity. Concentrations can be reduced by controlling emissions, increasing dispersion, or increasing deposition rates, but little attention has been paid to the latter as a pollution control method. Both NO2 and PM are deposited onto surfaces at rates that vary according to the nature of the surface; deposition rates to vegetation are much higher than those to hard, built surfaces. Previously, city-scale studies have suggested that deposition to vegetation can make a very modest improvement (<5%) to urban air quality. However, few studies take full account of the interplay between urban form and vegetation, specifically the enhanced residence time of air in street canyons. This study shows that increasing deposition by the planting of vegetation in street canyons can reduce street-level concentrations in those canyons by as much as 40% for NO2 and 60% for PM. Substantial street-level air quality improvements can be gained through action at the scale of a single street canyon or across city-sized areas of canyons. Moreover, vegetation will continue to offer benefits in the reduction of pollution even if the traffic source is removed from city centers. Thus, judicious use of vegetation can create an efficient urban pollutant filter, yielding rapid and sustained improvements in street-level air quality in dense urban areas.
----------------------
The Contribution of Genetic Modification to Changes in Corn Yield in the United States
Elizabeth Nolan & Paulo Santos
American Journal of Agricultural Economics, forthcoming
Abstract:
We use a large, rich dataset compiled from results of university extension trials to estimate the contribution of genetic modification (GM) to changes in corn yield in the United States from timeA to timeB. Through repeated experimental trials, we obtain consistent estimates of the effect of these traits by using both the Hausman-Taylor estimator and a comparison of fixed effects estimates analogous to the agronomic practice of comparing near-isolines. Our results suggest that GM traits had a positive impact on yield, but that gains associated with combining several GM traits in one hybrid are not necessarily additive.