Messy
Christopher Clarke et al.
Energy Policy, June 2015, Pages 131–140
Abstract:
In this article, we examine framing effects regarding unconventional oil and gas extraction using hydraulic fracturing (or fracking): an issue involving considerable controversy over potential impacts as well as terminology used to describe it. Specifically, we explore how two commonly used terms to describe this issue – fracking or shale oil or gas development – serve as issue frames and influence public opinion. Extending existing research, we suggest that these frames elicit different top-of-mind associations that reflect positive or negative connotations and resonate with people's political ideology. These associations, in turn, help explain direct and indirect framing effects on support/opposition as well as whether these effects differ by political ideology. Results of a split-ballot, national U.S. survey (n=1000) reveal that people are more supportive of the energy extraction process when it is referred to as shale oil or gas development versus fracking, and this relationship is mediated by greater perceptions of benefit versus risk. Political ideology did not moderate these effects. Further analysis suggests that these findings are partly explained by the tendency to associate fracking more with negative thoughts and impacts and shale oil or gas development more with positive thoughts and impacts. However, these associations also did not vary by political ideology. We discuss implications for communicating risk regarding energy development.
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Evaluating Behaviorally-Motivated Policy: Experimental Evidence from the Lightbulb Market
Hunt Allcott & Dmitry Taubinsky
American Economic Review, forthcoming
Abstract:
Imperfect information and inattention to energy costs are important potential motivations for energy efficiency standards and subsidies. We evaluate these motivations in the lightbulb market using a theoretical model and two randomized experiments. We derive welfare effects as functions of reduced-form sufficient statistics capturing economic and psychological parameters, which we estimate using a novel within-subject information disclosure experiment. The main results suggest that moderate subsidies for energy efficient lightbulbs may increase welfare, but informational and attentional biases alone do not justify a ban on incandescent lightbulbs. Our results and techniques generate broader methodological insights into welfare analysis with misoptimizing consumers.
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Acute Air Pollution Exposure and Risk of Suicide Completion
Amanda Bakian et al.
American Journal of Epidemiology, 1 March 2015, Pages 295-303
Abstract:
Research into environmental factors associated with suicide has historically focused on meteorological variables. Recently, a heightened risk of suicide related to short-term exposure to airborne particulate matter was reported. Here, we examined the associations between short-term exposure to nitrogen dioxide, particulate matter, and sulfur dioxide and completed suicide in Salt Lake County, Utah (n = 1,546) from 2000 to 2010. We used a time-stratified case-crossover design to estimate adjusted odds ratios for the relationship between suicide and exposure to air pollutants on the day of the suicide and during the days preceding the suicide. We observed maximum heightened odds of suicide associated with interquartile-range increases in nitrogen dioxide during cumulative lag 3 (average of the 3 days preceding suicide; odds ratio (OR) = 1.20, 95% confidence interval (CI): 1.04, 1.39) and fine particulate matter (diameter ≤2.5 μm) on lag day 2 (day 2 before suicide; OR = 1.05, 95% CI: 1.01, 1.10). Following stratification by season, an increased suicide risk was associated with exposure to nitrogen dioxide during the spring/fall transition period (OR = 1.35, 95% CI: 1.09, 1.66) and fine particulate matter in the spring (OR = 1.28, 95% CI: 1.01, 1.61) during cumulative lag 3. Findings of positive associations between air pollution and suicide appear to be consistent across study locations with vastly different meteorological, geographical, and cultural characteristics.
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Drilling Like There’s No Tomorrow: Bankruptcy, Insurance, and Environmental Risk
Judson Boomhower
University of California Working Paper, November 2014
Abstract:
When liability is limited by bankruptcy, theory says that firms will take excessive environmental and public health risks. In the long run, this “judgment-proof problem” may increase the share of small producers, even when there are economies of scale. I use quasi-experimental variation in liability exposure to measure the effects of bankruptcy protection on industry structure and environmental outcomes in oil and gas extraction. Using firm-level data on the universe of Texas oil and gas producers, I examine the introduction of an insurance mandate that reduced firms’ ability to avoid liability through bankruptcy. The policy was introduced via a quasi-randomized rollout, which allows me to cleanly identify its effects on industry structure. The insurance requirement pushed about 6% of producers out of the market immediately. The exiting firms were primarily small and were more likely to have poor environmental records. Among firms that remained in business, the bond requirement reduced oil production among the smallest 80% of firms by about 4% on average, which is consistent with increased internalization of environmental costs. Production by the largest 20% of firms, which account for the majority of total production, was unaffected. Finally, environmental outcomes, including those related to groundwater contamination, also improved sharply. These results suggest that incomplete internalization of environmental and safety costs due to bankruptcy protection is an important determinant of industry structure and safety effort in hazardous industries, with significant welfare consequences.
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Public Transit Bus Procurement: The Role of Energy Prices, Regulation and Federal Subsidies
Shanjun Li, Matthew Kahn & Jerry Nickelsburg
Journal of Urban Economics, forthcoming
Abstract:
The U.S. public transit system represents a multi-billion dollar industry that provides essential transit services to millions of urban residents. We study the market for new transit buses that features a set of non-profit transit agencies purchasing buses primarily from a few domestic bus makers. In contrast with private passenger vehicles, the fuel economy of public buses has not improved during the last thirty years and is irresponsive to fuel price changes. To understand these findings, we build a model of bus fleet management decisions of public transit agencies that yields testable hypotheses. Our empirical analysis of bus fleet turnover and capital investment highlights the role of energy prices, environmental regulations, and the “Buy America” mandate associated with receiving federal funding to purchase public transit buses.
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Patrik Sörqvist et al.
Journal of Environmental Psychology, June 2015, Pages 123–127
Abstract:
People tend to idealize eco-labeled products, but can eco-labeling have consequences for performance? To address this question, 48 university students were asked to undertake a color discrimination task adjacent to a desktop lamp that was either labeled “environmentally friendly” or “conventional” (although they were identical). The light of the lamp labeled “environmentally friendly” was rated as more comfortable. Notably, task performance was also better when the lamp was labeled “environmentally friendly”. Individual differences in environmental concern, but not pro-environmental consumer behavior and social desirability indexes, were related to the magnitude of the eco-label effect on performance. Whilst some previous studies have shown similar placebo-like effects of eco-labels on subjective ratings, this is the first study to show an eco-label effect for artifacts in the built environment on performance, and the first study to relate this effect to environmental concern. Psychological mechanisms that may underpin the eco-label effects are discussed.
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While Visitors Conserve, Residents Splurge: Patterns and Changes in Energy Consumption, 1997-2007
Iman Nasseri, Djeto Assané & Denise Eby Konan
Energy Economics, May 2015, Pages 282–292
Abstract:
This study analyzes changes in energy consumption in Hawai‘i between 1997 and 2007 using input-output analysis. Residents increase their energy use by 33% in electricity and 18% in fuel, largely due to direct consumption. In contrast, visitors contract energy demand by 9% and 4% in electricity and fuel, respectively. The findings are robust at per-capita levels. Key drivers are the significant drops in energy intensity of primarily three industries: air transportation, hotels, and restaurants. Further analysis decomposes the change to evaluate the underlying factors.
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Yana Rubashkina, Marzio Galeotti & Elena Verdolini
Energy Policy, forthcoming
Abstract:
This paper investigates the “weak” and “strong” versions of Porter Hypothesis (PH) focusing on the manufacturing sectors of 17 European countries between 1997 and 2009. The hypothesis that well-crafted and well-enforced regulation would benefit both the environment and the firm was originally proposed by Porter (1991) and Porter and van der Linde (1995). To date, the literature has analyzed the impact of environmental regulation on innovation and on productivity mostly in separate analyses and focusing on the USA. The few existing contributions on Europe study the effect of environmental regulation either on green innovation or on performance indicators such as exports. We instead look at overall innovation and productivity impacts. First, focusing on overall innovative activity allows us to account for potential opportunity costs of induced innovations. Second, productivity impacts are arguably the most relevant indicators for the “strong” PH. As a proxy of environmental policy stringency we use pollution abatement and control expenditures (PACE), one of the few sectoral level indicators available. We remedy upon its main drawback, namely potential endogeneity, by adopting an instrumental variable estimation approach. We find evidence of a positive impact of environmental regulation on the output of innovation activity, as proxied by patents, thus providing support in favor of the “weak” PH. This result is in line with most of the literature. On the other front, we find no evidence in favor of the “strong” PH, as productivity appears to be unaffected by the degree of pollution control and abatement efforts.
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Association of Improved Air Quality with Lung Development in Children
James Gauderman et al.
New England Journal of Medicine, 5 March 2015, Pages 905-913
Background: Air-pollution levels have been trending downward progressively over the past several decades in southern California, as a result of the implementation of air quality–control policies. We assessed whether long-term reductions in pollution were associated with improvements in respiratory health among children.
Methods: As part of the Children’s Health Study, we measured lung function annually in 2120 children from three separate cohorts corresponding to three separate calendar periods: 1994–1998, 1997–2001, and 2007–2011. Mean ages of the children within each cohort were 11 years at the beginning of the period and 15 years at the end. Linear-regression models were used to examine the relationship between declining pollution levels over time and lung-function development from 11 to 15 years of age, measured as the increases in forced expiratory volume in 1 second (FEV1) and forced vital capacity (FVC) during that period (referred to as 4-year growth in FEV1 and FVC).
Results: Over the 13 years spanned by the three cohorts, improvements in 4-year growth of both FEV1 and FVC were associated with declining levels of nitrogen dioxide (P<0.001 for FEV1 and FVC) and of particulate matter with an aerodynamic diameter of less than 2.5 μm (P= 0.008 for FEV1 and P<0.001 for FVC) and less than 10 μm (P<0.001 for FEV1 and FVC). These associations persisted after adjustment for several potential confounders. Significant improvements in lung-function development were observed in both boys and girls and in children with asthma and children without asthma. The proportions of children with clinically low FEV1 (defined as <80% of the predicted value) at 15 years of age declined significantly, from 7.9% to 6.3% to 3.6% across the three periods, as the air quality improved (P=0.001).
Conclusions: We found that long-term improvements in air quality were associated with statistically and clinically significant positive effects on lung-function growth in children.
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Ralph Mastromonaco
Journal of Environmental Economics and Management, forthcoming
Abstract:
This paper investigates how information contained in the U.S. Environmental Protection Agencys Toxic Release Inventory (TRI) program, one of the largest environmental right-to-know programs, affects prices in the housing market. I use a strengthening of the reporting requirements for the chemical lead in 2001 as exogenous variation to test for housing price changes near existing firms who must now report. Using a difference-in-differences specification, I find that listing an existing firm in the Toxic Release Inventory lowers housing prices up to 11% within approximately 1 mile. The results suggest that housing market participants do capitalize into prices at least some information conveyed by the TRI program.
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Power to Choose? An Analysis of Consumer Inertia in the Residential Electricity Market
Ali Hortaçsu, Seyed Ali Madanizadeh & Steven Puller
NBER Working Paper, February 2015
Abstract:
Many jurisdictions around the world have deregulated utilities and opened retail markets to competition. However, inertial decisionmaking can diminish consumer benefits of retail competition. Using household-level data from the Texas residential electricity market, we document evidence of consumer inertia. We estimate an econometric model of retail choice to measure two sources of inertia: (1) search frictions/inattention, and (2) a brand advantage that consumers afford the incumbent. We find that households rarely search for alternative retailers, and when they do search, households attach a brand advantage to the incumbent. Counterfactual experiments show that low-cost information interventions can notably increase consumer surplus.
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Empirical Tests of the Pollution Haven Hypothesis When Environmental Regulation is Endogenous
Daniel Millimet & Jayjit Roy
Journal of Applied Econometrics, forthcoming
Abstract:
The pollution haven hypothesis (PHH) posits that production within polluting industries will shift to locations with lax environmental regulation. While straightforward, the existing empirical literature is inconclusive owing to two shortcomings. First, unobserved heterogeneity and measurement error are typically ignored due to the lack of a credible, traditional instrumental variable for regulation. Second, geographic spillovers have not been adequately incorporated into tests of the PHH. We overcome these issues utilizing two novel identification strategies within a model incorporating spillovers. Using US state-level data, own environmental regulation negatively impacts inbound foreign direct investment. Moreover, endogeneity is both statistically and economically relevant.
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Coercive vs. Cooperative Enforcement: Effect of Enforcement Approach on Environmental Management
Dietrich Earnhart & Robert Glicksman
International Review of Law and Economics, June 2015, Pages 135–146
Abstract:
A spirited debate explores the comparative merits of two different approaches to the enforcement of regulatory law: the coercive approach, which emphasizes the deterrence of noncompliance through inflexibly imposed sanctions, and the cooperative approach, which emphasizes the inducement of compliance through flexibility and assistance. Both scholarly and policymaking communities are interested in this topic of enforcement approach within the realms of finance, tax compliance, occupational safety, food and drug safety, consumer product safety, and environmental protection. To inform this debate, our study explores enforcement of environmental protection laws where the debate has been especially spirited yet lacking in much empirical evidence. Specifically our study empirically analyzes the effects of these two approaches on environmental management practices linked to compliance with wastewater discharge limits imposed on chemical manufacturing facilities. For this analysis, we view the enforcement approach as representing a relationship between a regulator and a regulated entity that is measured in multiple dimensions so that we are able to explore the extent of cooperation or coercion. The empirical results reveal that a more cooperative relationship induces better environmental management.
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Revealing Climate Change Opinions Through Investment Behavior: Evidence from Fukushima
Zhen Lei & Anastasia Shcherbakova
Journal of Environmental Economics and Management, March 2015, Pages 92–108
Abstract:
In this study we present a novel research approach to obtaining behavior-based evidence of regional climate change attitudes, using the 2011 Fukushima nuclear plant incident as a natural experiment. Our approach allows us to produce the first non-survey-based empirical evidence of a trans-Atlantic divide in public opinion on the environment and climate change that investors assign to fossil-based and renewable energy. This value is based on the perceived potential of these fuel types to substitute for nuclear generation in the aftermath of the Fukushima crisis. We carry out an event study to examine differences in abnormal returns of global coal and renewable energy companies on European and American stock exchanges. We find that investors trading on U.S. markets exhibit a significantly more favorable perception of coal stock profitability, while investors trading on European exchanges display a more favorable perception about profitability of renewable energy stocks.
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The effect of urbanisation on the climatology of thunderstorm initiation
Alex Haberlie, Walker Ashley & Thomas Pingel
Quarterly Journal of the Royal Meteorological Society, forthcoming
Abstract:
This study assesses the impact of urban land use on the climatological distribution of thunderstorm initiation occurrences in the humid subtropical region of the southeast United States, which includes the Atlanta, Georgia metropolitan area. Initially, an automated technique is developed to extract the locations of isolated convective initiation (ICI) events from 17 years (1997–2013) of composite reflectivity radar data for the study area. Nearly 26 000 ICI points were detected during 85 warm-season months, providing the foundation for first long-term, systematic assessment of the influence of urban land use on thunderstorm development. Results reveal that ICI events occur more often over the urban area compared to its surrounding rural counterparts, confirming that anthropogenic-induced changes in land cover in moist tropical environments lead to more initiation events, resulting thunderstorms and affiliated hazards over the developed area. The ICI risk for Atlanta is greatest during the late afternoon and early evening in July and August in synoptically benign conditions. Greater ICI counts downwind of Atlanta suggest that prevailing wind direction also influences the location of these events. Moreover, ICI occurrences over the city were significantly higher on weekdays compared to weekend days — a result that was not apparent in a rural control region located west of the city. This suggests that the weekly commuting cycle and associated aerosol levels of Atlanta may amplify ICI rates. The investigation provides a methodological framework for future studies that examine the effect of land use, land cover, and terrain discontinuities on the spatio-temporal character of ICI events.
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Central American biomass burning smoke can increase tornado severity in the U.S.
P.E. Saide et al.
Geophysical Research Letters, 16 February 2015, Pages 956–965
Abstract:
Tornadoes in the Southeast and Central U.S. are episodically accompanied by smoke from biomass burning in Central America. Analysis of the 27 April 2011 historical tornado outbreak shows that adding smoke to an environment already conducive to severe thunderstorm development can increase the likelihood of significant tornado occurrence. Numerical experiments indicate that the presence of smoke during this event leads to optical thickening of shallow clouds while soot within the smoke enhances the capping inversion through radiation absorption. The smoke effects are consistent with measurements of clouds and radiation before and during the outbreak. These effects result in lower cloud bases and stronger low-level wind shear in the warm sector of the extratropical cyclone generating the outbreak; two indicators of higher probability of tornadogenesis and tornado intensity and longevity. These mechanisms may contribute to tornado modulation by aerosols, highlighting the need to consider aerosol feedbacks in numerical severe weather forecasting.
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Cécile Carpentier & Jean-Marc Suret
Journal of Environmental Economics and Management, May 2015, Pages 1–18
Abstract:
We analyze the stock market reaction to 161 major environmental and non-environmental accidents, reported on the front page of the New York Times for half a century. To determine if the market induces a real deterrence effect, we extend the event windows up to one year. On average, the market reacts negatively and enduringly to the announcement of an accident. However, this average effect is largely driven by the airline industry and by government interventions. The estimated average abnormal return following environmental accidents does not differ from zero after one year. This does not exclude, in severe events affecting large firms, huge losses in equity value, but the significant negative cumulative abnormal returns estimated immediately after an environmental accident in previous studies do not persist. Our results suggest that in a market driven by institutional investors, the deterrence effect is likely to be weak.
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Top carnivores increase their kill rates on prey as a response to human-induced fear
Justine Smith, Yiwei Wang & Christopher Wilmers
Proceedings of the Royal Society: Biological Sciences, 7 March 2015
Abstract:
The fear induced by predators on their prey is well known to cause behavioural adjustments by prey that can ripple through food webs. Little is known, however, about the analogous impacts of humans as perceived top predators on the foraging behaviour of carnivores. Here, we investigate the influence of human-induced fear on puma foraging behaviour using location and prey consumption data from 30 tagged individuals living along a gradient of human development. We observed strong behavioural responses by female pumas to human development, whereby their fidelity to kill sites and overall consumption time of prey declined with increasing housing density by 36 and 42%, respectively. Females responded to this decline in prey consumption time by increasing the number of deer they killed in high housing density areas by 36% over what they killed in areas with little residential development. The loss of food from declines in prey consumption time paired with increases in energetic costs associated with killing more prey may have consequences for puma populations, particularly with regard to reproductive success. In addition, greater carcass availability is likely to alter community dynamics by augmenting food resources for scavengers. In light of the extensive and growing impact of habitat modification, our study emphasizes that knowledge of the indirect effects of human activity on animal behaviour is a necessary component in understanding anthropogenic impacts on community dynamics and food web function.