Partial Pressures
Weaponizing economics: Big Oil, economic consultants, and climate policy delay
Benjamin Franta
Environmental Politics, forthcoming
Abstract:
The role of particular scientists in opposing policies to slow and halt global warming has been extensively documented. The role of economists, however, has received less attention. Here, I trace the history of an influential group of economic consultants hired by the petroleum industry from the 1990s to the 2010s to estimate the costs of various proposed climate policies. The economists used models that inflated predicted costs while ignoring policy benefits, and their results were often portrayed to the public as independent rather than industry-sponsored. Their work played a key role in undermining numerous major climate policy initiatives in the US over a span of decades, including carbon pricing and participation in international climate agreements. This study illustrates how the fossil fuel industry has funded biased economic analyses to oppose climate policy and highlights the need for greater attention on the role of economists and economic paradigms, doctrines, and models in climate policy delay.
Reexamining the Automobile’s Past: What Were the Critical Factors That Determined the Emergence of the Internal Combustion Engine as the Dominant Automotive Technology?
Constantine Hadjilambrinos
Bulletin of Science, Technology & Society, forthcoming
Abstract:
At the end of the 19th-century three technologies had emerged as sources of motive power for the automobile: steam, internal combustion, and electric motors. In 1900, in the United States and around the world, each of these powered a roughly equal number of automobiles. Thus, the early period of automobile development offers fertile ground for the study of technological path choice. At that time, it appeared that the electric motor was poised to become the dominant automotive technology. However, the internal combustion engine achieved this status instead. Although a large number of studies have examined the history of the automobile with a view to determining the reasons for the emergence of the internal combustion engine as the dominant technology for the car engine (especially its choice over the electric motor), no consensus has emerged of what the critical factors were. A close reexamining of the history allows us to identify the years 1900-1904 as the period during which the automobile’s technological path was determined. A review of the conditions prevailing during this period and the stages of development of the sociotechnical systems in which each of the alternative automotive technologies was embedded helps us identify the aspiration for touring as the key factor fixing the path for the technological development of the automobile from that point on.
Different names for “natural gas” influence public perception of it
Karine Lacroix et al.
Journal of Environmental Psychology, forthcoming
Abstract:
In many countries, natural gas is perceived more favorably than other fossil fuels. Here, we experimentally test (N = 2931) how perceptions of natural gas vary depending on what it is called. We find that Americans have stronger positive feelings for the term “natural gas” than “natural methane gas” (d = 0.59), “fossil gas” (d = 0.80), “fracked gas” (d = 0.81), “methane” (d = 0.94), and “methane gas” (d = 0.96). Democrats and Republicans both reported more positive views of “natural gas” than “natural methane gas” or “methane [gas].” But the patterns for the two political parties differed for perceptions of “fossil gas” and “fracked gas,” which were both viewed relatively positively by Republicans but negatively by Democrats. Analyses of open-ended word associations found that many participants associated methane with words like “pollution” and “global warming,” whereas they associated natural gas with words like “clean.” The results suggest that the terms used for this fossil fuel have very different meanings among the public, which may affect people's risk perceptions, consumer choices, and support for related policies.
An Aggregate Perspective on the Geo-spatial Distribution of Residential Solar Panels
Nick Pretnar & Alexander Abajian
University of California Working Paper, January 2021
Abstract:
Residential solar panels in the United States (U.S.) are inefficiently distributed in terms of optimizing solar-electrical production. Controlling for local solar electricity generation potential (insolation), the residential solar share of electrical consumption is relatively higher in cloudier locales like the Pacific Northwest and Northeast than it is in sunnier areas like the Western U.S. and Florida. Rebates designed to increase residential solar adoption in places like Florida and Texas with relatively low solar-electrical shares are ineffective and may lead to net decreases in the residential solar share if housing and electrical consumption are complementary. This is because electrical consumption increases faster in response to a decline in effective residential solar prices than actual demand for panels themselves, thus driving down the solar share despite additional installations. Through the lens of a county-level structural model of demand for housing, electricity, and solar panels, we find that this phenomenon is especially prevalent in locales with high demand for cooling services (e.g., air conditioning, refrigeration, etc.) due to high numbers of cooling degree days. Inability to effectively store solar-produced electricity may be to blame. Our results thus suggest that future policies should subsidize nascent battery technologies in place of direct solar-panel installation rebates if the goal is to increase the residential solar share of electrical consumption.
Panic Selling When Disaster Strikes: Evidence in the Bond and Stock Markets
Thanh Huynh & Ying Xia
Management Science, forthcoming
Abstract:
This study uses disaggregated establishment-level data to identify a firm’s exposure to physical climate risk and examines investors’ reaction to natural disasters in both the U.S. corporate bond and stock markets. We find that, when a firm is exposed to disasters, investors overreact by depressing the current bond and stock prices, causing future returns to be higher. However, firms with a strong environmental profile experience lower selling pressure on their bonds and stocks, although their fundamentals weakened following disasters. The evidence suggests that corporate investment in improving environmental profiles pays off when climate change risk is materialized.
Warming Temperatures, Yield Risk and Crop Insurance Participation
Ruixue Wang, Roderick Rejesus & Serkan Aglasan
European Review of Agricultural Economics, forthcoming
Abstract:
Previous literature have shown that warming temperatures due to climate change are likely to decrease mean crop yields and increase crop yield risk. However, there is limited understanding of how crop insurance participation can potentially affect the adverse crop yield impacts of warming (or extreme heat). This study specifically examines whether crop insurance participation influences the impact of extreme heat on yield risk (i.e. yield variance, skewness and kurtosis). We utilise a parametric moment-based method and county-level panel data to evaluate how crop insurance participation affects the relationship between warming temperatures and the moments of crop yield distributions. Our results indicate that the yield risk increasing effect of warming is further magnified under high levels of crop insurance participation. This result still holds even when allowing for long-run adaptation (although the crop insurance effect tends to be weaker in this case). In general, our results indicate that not only does crop insurance participation adversely impact mean yields under climate change, it also influences the extent by which warming affects yield variability over time. This supports the notion that crop insurance can serve as a disincentive for climate change adaptation in agriculture.
Voluntary purchases and adverse selection in the market for flood insurance
Jacob Bradt, Carolyn Kousky & Oliver Wing
Journal of Environmental Economics and Management, forthcoming
Abstract:
Flood-related events are the most damaging natural hazard in the United States, yet many households at risk do not have flood insurance. Using detailed policy- and claims-level data from the National Flood Insurance Program (NFIP), we conduct a holistic analysis of the market for publicly provided flood insurance in the U.S., focusing on not only high-risk areas subject to an incomplete mandate requiring the purchase of insurance, but also lower risk areas where no such mandate exists. We are able to better understand determinants of demand for insurance in a setting with voluntary purchase and low take-up and therefore provide a more complete analysis of the market for flood insurance in the U.S. than previous work. In addition to exploring correlates of demand for flood insurance, this paper provides quasi-experimental estimates of households’ willingness-to-pay for flood insurance and finds strong evidence to suggest the NFIP failing to utilize full information on flood risk leads to adverse selection in the program.
Life Cycle Assessment of Direct Air Carbon Capture and Storage with Low-Carbon Energy Sources
Tom Terlouw et al.
Environmental Science & Technology, 17 August 2021, Pages 11397-11411
Abstract:
Direct air carbon capture and storage (DACCS) is an emerging carbon dioxide removal technology, which has the potential to remove large amounts of CO2 from the atmosphere. We present a comprehensive life cycle assessment of different DACCS systems with low-carbon electricity and heat sources required for the CO2 capture process, both stand-alone and grid-connected system configurations. The results demonstrate negative greenhouse gas (GHG) emissions for all eight selected locations and five system layouts, with the highest GHG removal potential in countries with low-carbon electricity supply and waste heat usage (up to 97%). Autonomous system layouts prove to be a promising alternative, with a GHG removal efficiency of 79-91%, at locations with high solar irradiation to avoid the consumption of fossil fuel-based grid electricity and heat. The analysis of environmental burdens other than GHG emissions shows some trade-offs associated with CO2 removal, especially land transformation for system layouts with photovoltaics (PV) electricity supply. The sensitivity analysis reveals the importance of selecting appropriate locations for grid-coupled system layouts since the deployment of DACCS at geographic locations with CO2-intensive grid electricity mixes leads to net GHG emissions instead of GHG removal today.
Economic impacts of tipping points in the climate system
Simon Dietz et al.
Proceedings of the National Academy of Sciences, 24 August 2021
Abstract:
Climate scientists have long emphasized the importance of climate tipping points like thawing permafrost, ice sheet disintegration, and changes in atmospheric circulation. Yet, save for a few fragmented studies, climate economics has either ignored them or represented them in highly stylized ways. We provide unified estimates of the economic impacts of all eight climate tipping points covered in the economic literature so far using a meta-analytic integrated assessment model (IAM) with a modular structure. The model includes national-level climate damages from rising temperatures and sea levels for 180 countries, calibrated on detailed econometric evidence and simulation modeling. Collectively, climate tipping points increase the social cost of carbon (SCC) by ∼25% in our main specification. The distribution is positively skewed, however. We estimate an ∼10% chance of climate tipping points more than doubling the SCC. Accordingly, climate tipping points increase global economic risk. A spatial analysis shows that they increase economic losses almost everywhere. The tipping points with the largest effects are dissociation of ocean methane hydrates and thawing permafrost. Most of our numbers are probable underestimates, given that some tipping points, tipping point interactions, and impact channels have not been covered in the literature so far; however, our method of structural meta-analysis means that future modeling of climate tipping points can be integrated with relative ease, and we present a reduced-form tipping points damage function that could be incorporated in other IAMs.
Operationalizing the net-negative carbon economy
Johannes Bednar et al.
Nature, 19 August 2021, Pages 377-383
Abstract:
The remaining carbon budget for limiting global warming to 1.5 degrees Celsius will probably be exhausted within this decade. Carbon debt generated thereafter will need to be compensated by net-negative emissions. However, economic policy instruments to guarantee potentially very costly net carbon dioxide removal (CDR) have not yet been devised. Here we propose intertemporal instruments to provide the basis for widely applied carbon taxes and emission trading systems to finance a net-negative carbon economy. We investigate an idealized market approach to incentivize the repayment of previously accrued carbon debt by establishing the responsibility of emitters for the net removal of carbon dioxide through ‘carbon removal obligations’ (CROs). Inherent risks, such as the risk of default by carbon debtors, are addressed by pricing atmospheric CO2 storage through interest on carbon debt. In contrast to the prevailing literature on emission pathways, we find that interest payments for CROs induce substantially more-ambitious near-term decarbonization that is complemented by earlier and less-aggressive deployment of CDR. We conclude that CROs will need to become an integral part of the global climate policy mix if we are to ensure the viability of ambitious climate targets and an equitable distribution of mitigation efforts across generations.
Increasing probability of record-shattering climate extremes
Erich Fischer, Sebastian Sippel & Reto Knutti
Nature Climate Change, August 2021, Pages 689-695
Abstract:
Recent climate extremes have broken long-standing records by large margins. Such extremes unprecedented in the observational period often have substantial impacts due to a tendency to adapt to the highest intensities, and no higher, experienced during a lifetime. Here, we show models project not only more intense extremes but also events that break previous records by much larger margins. These record-shattering extremes, nearly impossible in the absence of warming, are likely to occur in the coming decades. We demonstrate that their probability of occurrence depends on warming rate, rather than global warming level, and is thus pathway-dependent. In high-emission scenarios, week-long heat extremes that break records by three or more standard deviations are two to seven times more probable in 2021-2050 and three to 21 times more probable in 2051-2080, compared to the last three decades. In 2051-2080, such events are estimated to occur about every 6-37 years somewhere in the northern midlatitudes.
Footprint of greenhouse forcing in daily temperature variability
Maximilian Kotz, Leonie Wenz & Anders Levermann
Proceedings of the National Academy of Sciences, 10 August 2021
Abstract:
Changes in mean climatic conditions will affect natural and societal systems profoundly under continued anthropogenic global warming. Changes in the high-frequency variability of temperature exert additional pressures, yet the effect of greenhouse forcing thereon has not been fully assessed or identified in observational data. Here, we show that the intramonthly variability of daily surface temperature changes with distinct global patterns as greenhouse gas concentrations rise. In both reanalyses of historical observations and state-of-the-art projections, variability increases at low to mid latitudes and decreases at northern mid to high latitudes with enhanced greenhouse forcing. These latitudinally polarized daily variability changes are identified from internal climate variability using a recently developed signal-to-noise-maximizing pattern-filtering technique. Analysis of a multimodel ensemble from the Coupled Model Intercomparison Project Phase 6 shows that these changes are attributable to enhanced greenhouse forcing. By the end of the century under a business-as-usual emissions scenario, daily temperature variability would continue to increase by up to a further 100% at low latitudes and decrease by 40% at northern high latitudes. Alternative scenarios demonstrate that these changes would be limited by mitigation of greenhouse gases. Moreover, global changes in daily variability exhibit strong covariation with warming across climate models, suggesting that the equilibrium climate sensitivity will also play a role in determining the extent of future variability changes. This global response of the high-frequency climate system to enhanced greenhouse forcing is likely to have strong and unequal effects on societies, economies, and ecosystems if mitigation and protection measures are not taken.
Observation-based early-warning signals for a collapse of the Atlantic Meridional Overturning Circulation
Niklas Boers
Nature Climate Change, August 2021, Pages 680-688
Abstract:
The Atlantic Meridional Overturning Circulation (AMOC), a major ocean current system transporting warm surface waters toward the northern Atlantic, has been suggested to exhibit two distinct modes of operation. A collapse from the currently attained strong to the weak mode would have severe impacts on the global climate system and further multi-stable Earth system components. Observations and recently suggested fingerprints of AMOC variability indicate a gradual weakening during the last decades, but estimates of the critical transition point remain uncertain. Here, a robust and general early-warning indicator for forthcoming critical transitions is introduced. Significant early-warning signals are found in eight independent AMOC indices, based on observational sea-surface temperature and salinity data from across the Atlantic Ocean basin. These results reveal spatially consistent empirical evidence that, in the course of the last century, the AMOC may have evolved from relatively stable conditions to a point close to a critical transition.
Satellite imaging reveals increased proportion of population exposed to floods
Beth Tellman et al.
Nature, 5 August 2021, Pages 80-86
Abstract:
Flooding affects more people than any other environmental hazard and hinders sustainable development. Investing in flood adaptation strategies may reduce the loss of life and livelihood caused by floods. Where and how floods occur and who is exposed are changing as a result of rapid urbanization, flood mitigation infrastructure5 and increasing settlements in floodplains. Previous estimates of the global flood-exposed population have been limited by a lack of observational data, relying instead on models, which have high uncertainty. Here we use daily satellite imagery at 250-metre resolution to estimate flood extent and population exposure for 913 large flood events from 2000 to 2018. We determine a total inundation area of 2.23 million square kilometres, with 255-290 million people directly affected by floods. We estimate that the total population in locations with satellite-observed inundation grew by 58-86 million from 2000 to 2015. This represents an increase of 20 to 24 per cent in the proportion of the global population exposed to floods, ten times higher than previous estimates. Climate change projections for 2030 indicate that the proportion of the population exposed to floods will increase further. The high spatial and temporal resolution of the satellite observations will improve our understanding of where floods are changing and how best to adapt. The global flood database generated from these observations will help to improve vulnerability assessments, the accuracy of global and local flood models, the efficacy of adaptation interventions and our understanding of the interactions between landcover change, climate and floods.
How green is blue hydrogen?
Robert Howarth & Mark Jacobson
Energy Science & Engineering, forthcoming
Abstract:
Hydrogen is often viewed as an important energy carrier in a future decarbonized world. Currently, most hydrogen is produced by steam reforming of methane in natural gas (“gray hydrogen”), with high carbon dioxide emissions. Increasingly, many propose using carbon capture and storage to reduce these emissions, producing so-called “blue hydrogen,” frequently promoted as low emissions. We undertake the first effort in a peer-reviewed paper to examine the lifecycle greenhouse gas emissions of blue hydrogen accounting for emissions of both carbon dioxide and unburned fugitive methane. Far from being low carbon, greenhouse gas emissions from the production of blue hydrogen are quite high, particularly due to the release of fugitive methane. For our default assumptions (3.5% emission rate of methane from natural gas and a 20-year global warming potential), total carbon dioxide equivalent emissions for blue hydrogen are only 9%-12% less than for gray hydrogen. While carbon dioxide emissions are lower, fugitive methane emissions for blue hydrogen are higher than for gray hydrogen because of an increased use of natural gas to power the carbon capture. Perhaps surprisingly, the greenhouse gas footprint of blue hydrogen is more than 20% greater than burning natural gas or coal for heat and some 60% greater than burning diesel oil for heat, again with our default assumptions. In a sensitivity analysis in which the methane emission rate from natural gas is reduced to a low value of 1.54%, greenhouse gas emissions from blue hydrogen are still greater than from simply burning natural gas, and are only 18%-25% less than for gray hydrogen. Our analysis assumes that captured carbon dioxide can be stored indefinitely, an optimistic and unproven assumption. Even if true though, the use of blue hydrogen appears difficult to justify on climate grounds.