Polarized
When Will Arctic Sea Ice Disappear? Projections of Area, Extent, Thickness, and Volume
Francis Diebold et al.
NBER Working Paper, December 2022
Abstract:
Rapidly diminishing Arctic summer sea ice is a strong signal of the pace of global climate change. We provide point, interval, and density forecasts for four measures of Arctic sea ice: area, extent, thickness, and volume. Importantly, we enforce the joint constraint that these measures must simultaneously arrive at an ice-free Arctic. We apply this constrained joint forecast procedure to models relating sea ice to atmospheric carbon dioxide concentration and models relating sea ice directly to time. The resulting "carbon-trend" and "time-trend" projections are mutually consistent and predict a nearly ice-free summer Arctic Ocean by the mid-2030s with an 80% probability. Moreover, the carbon-trend projections show that global adoption of a lower carbon path would likely delay the arrival of a seasonally ice-free Arctic by only a few years.
Political leadership has limited impact on fossil fuel taxes and subsidies
Cesar Martinez-Alvarez et al.
Proceedings of the National Academy of Sciences, 22 November 2022
Abstract:
For countries to rapidly decarbonize, they need strong leadership, according to both academic studies and popular accounts. But leadership is difficult to measure, and its importance is unclear. We use original data to investigate the role of presidents, prime ministers, and monarchs in 155 countries from 1990 to 2015 in changing their countries’ gasoline taxes and subsidies. Our findings suggest that the impact of leaders on fossil fuel taxes and subsidies is surprisingly limited and often ephemeral. This holds true regardless of the leader’s age, gender, education, or political ideology. Rulers who govern during an economic crisis perform no better or worse than other rulers. Even presidents and prime ministers who were recognized by the United Nations for environmental leadership had no more success than other leaders in reducing subsidies or raising fuel taxes. Where leaders appear to play an important role -- primarily in countries with large subsidies -- their reforms often failed, with subsidies returning to pre-reform levels within the first 12 mo 62% of the time, and within 5 y 87% of the time. Our findings suggest that leaders of all types find it exceptionally hard to raise the cost of fossil fuels for consumers. To promote deep decarbonization, leaders are likely to have more success with other types of policies, such as reducing the costs and increasing the availability of renewable energy.
Sea Level Rise Exposure and Municipal Bond Yields
Paul Goldsmith-Pinkham et al.
NBER Working Paper, November 2022
Abstract:
Municipal bond markets begin pricing sea level rise (SLR) exposure risk in 2013, coinciding with upward revisions to worst-case SLR projections and accompanying uncertainty around these projections. The effect is larger for long-maturity bonds and is not solely driven by near-term flood risk. We use a structural model of credit risk to quantify the implied economic impact and distinguish the effects of underlying asset values and uncertainty. The SLR exposure premium exhibits a different trend from house prices and is unaffected by house price controls. Taken together, our results highlight the importance of climate uncertainty in driving municipal bond prices.
Pricing of Climate Risk Insurance: Regulation and Cross-Subsidies
Sangmin Oh, Ishita Sen & Ana-Maria Tenekedjieva
Federal Reserve Working Paper, October 2022
Abstract:
Homeowners’ insurance, a $15 trillion market by coverage, provides households financial protection from climate losses. Insurance premiums (rates) are subject to significant regulations at a state level in the United States. Using novel data on filings made by insurers to regulators, we propose a metric to quantify the extent of regulation in individual states. We provide evidence of decoupling of insurance rates from their underlying risks and identify regulation as a driving force behind this pattern. Rates are least reflective of risk in states we classify as "high friction", i.e. states where regulations appear most restrictive. We identify two sources behind the decoupling. First, in high friction states, rates have not adequately adjusted in response to the growth in losses. Second, insurers have cross-subsidized high friction states by raising rates in low friction states. Our results imply that households in low friction states are disproportionately bearing the risks of households in high friction states. More broadly, our findings question whether insurance rates can play a useful role in steering climate adaptation and whether households will have continued access to insurance.
How Regressive are Mobility-Related User Fees and Gasoline Taxes?
Edward Glaeser, Caitlin Gorback & James Poterba
NBER Working Paper, December 2022
Abstract:
Pigouvian taxes and user fees can address environmental externalities and efficiently fund transportation infrastructure, but these policies may place burdens on poorer households. This paper presents new evidence on the distributional consequences of the gasoline tax, bus and light rail charges and a vehicle miles traveled (VMT) tax. Gas taxes have become more regressive over time, partially because of environmentally-oriented technological change, although the share of expenditures on gas taxes declines with expenditures much less than the share of income spent on gas taxes declines with income. Replacing the gasoline tax with a household-level VMT tax would increase the average tax burden on households in the top income and expenditure deciles, because of their greater use of hybrid-electric and battery-electric vehicles. This progressive shift would be small given current levels of hybrid and electric vehicle ownership, but will be larger in the future if such vehicles continue to be more common among higher than lower income households. An expanded commercial VMT would place a larger burden, as a share of expenditures, on lower income or expenditure households, because better-off households consume more non-tradable goods that do not require transportation. User charges for airports, subways and commuter rail are progressive, while bus fees loom much larger for lower income households.
Ambient temperature during pregnancy and fetal growth in Eastern Massachusetts, USA
Michael Leung et al.
International Journal of Epidemiology, forthcoming
Methods: We used ultrasound measurements of biparietal diameter (BPD), head circumference (HC), femur length and abdominal circumference (AC), in addition to birthweight (BW), from 9446 births at Beth Israel Deaconess Medical Center from 2011 to 2016. Ultrasound scans were classified into three distinct gestational periods: 16–23 weeks, 24–31 weeks, 32+ weeks; and z-scores were created for each fetal growth measure using the INTERGROWTH-21st standards. We fitted distributed lag models to estimate the time-varying association between weekly temperature and fetal growth, adjusting for sociodemographic characteristics, seasonal and long-term trends, humidity and particulate matter (PM2.5).
Results: Higher ambient temperature was associated with smaller fetal growth measures. The critical window of exposure appeared to be Weeks 1–20 for ultrasound parameters, and high temperatures throughout pregnancy were important for BW. Associations were strongest for head parameters (BPD and HC) in early to mid-pregnancy, AC late in pregnancy and BW. For example, a 5ºC higher cumulative temperature exposure was associated with a lower mean AC z-score of -0.26 (95% CI: -0.48, -0.04) among 24–31-Week scans, and a lower mean BW z-score of -0.32 (95% CI: -0.51, -0.12).
On the Geographic Implications of Carbon Taxes
Bruno Conte, Klaus Desmet & Esteban Rossi-Hansberg
NBER Working Paper, November 2022
Abstract:
A unilateral carbon tax trades off the distortionary costs of taxation and the future gains from slowing down global warming. Because the cost is local and immediate, whereas the benefit is global and delayed, this tradeoff tends to be unfavorable to unilateral carbon taxes. We show that this logic breaks down in a world with trade and migration where economic geography is shaped by agglomeration economies and congestion forces. Using a multisector dynamic spatial integrated assessment model (S-IAM), this paper predicts that a carbon tax introduced by the European Union (EU) and rebated locally can, if not too large, increase the size of Europe’s economy by concentrating economic activity in its high-productivity non-agricultural core and by incentivizing immigration to the EU. The resulting change in the spatial distribution of economic activity improves global efficiency and welfare. A unilateral carbon tax with local rebating introduced by the US generates similar global welfare gains. Other forms of rebating can dilute or revert this positive effect.
Large uncertainty in future warming due to aerosol forcing
Duncan Watson-Parris & Christopher Smith
Nature Climate Change, December 2022, Pages 1111–1113
Abstract:
Despite a concerted research effort and extensive observational record, uncertainty in climate sensitivity and aerosol forcing, the two largest contributions to future warming uncertainty, remains large. Here we highlight the stark disparity that different aerosol forcing can imply for future warming projections: scenarios compatible with the Paris Agreement can either easily meet the specified warming limits or risk missing them completely using plausible samples from the IPCC Sixth Assessment Report assessed uncertainty ranges.
Unprecedented fire activity above the Arctic Circle linked to rising temperatures
Adrià Descals et al.
Science, 3 November 2022, Pages 532-537
Abstract:
Arctic fires can release large amounts of carbon from permafrost peatlands. Satellite observations reveal that fires burned ~4.7 million hectares in 2019 and 2020, accounting for 44% of the total burned area in the Siberian Arctic for the entire 1982–2020 period. The summer of 2020 was the warmest in four decades, with fires burning an unprecedentedly large area of carbon-rich soils. We show that factors of fire associated with temperature have increased in recent decades and identified a near-exponential relationship between these factors and annual burned area. Large fires in the Arctic are likely to recur with climatic warming before mid-century, because the temperature trend is reaching a threshold in which small increases in temperature are associated with exponential increases in the area burned.
Ocean currents show global intensification of weak tropical cyclones
Guihua Wang et al.
Nature, 17 November 2022, Pages 496–500
Abstract:
Theory and numerical modelling suggest that tropical cyclones (TCs) will strengthen with rising ocean temperatures. Even though models have reached broad agreement on projected TC intensification, observed trends in TC intensity remain inconclusive and under active debate in all ocean basins except the North Atlantic, where aircraft reconnaissance data greatly reduce uncertainties. The conventional satellite-based estimates are not accurate enough to ascertain the trend in TC intensity, suffering from contamination by heavy rain, clouds, breaking waves and spray. Here we show that weak TCs (that is, tropical storms to category-1 TCs based on the Saffir–Simpson scale) have intensified in all ocean basins during the period 1991–2020, based on huge amounts of highly accurate ocean current data derived from surface drifters. These drifters have submerged ‘holy sock’ drogues at 15 m depth to reduce biases induced by processes at the air–sea interface and thereby accurately measure near-surface currents, even under the most destructive TCs. The ocean current speeds show a robust upward trend of ~4.0 cm s−1 per decade globally, corresponding to a positive trend of 1.8 m s−1 per decade in the TC intensity. Our analysis further indicates that globally TCs have strengthened across the entirety of the intensity distribution. These results serve as a historical baseline that is crucial for assessing model physics, simulations and projections given the failure of state-of-the-art climate models in fully replicating these trends.
A 2-million-year-old ecosystem in Greenland uncovered by environmental DNA
Kurt Kjær et al.
Nature, 8 December 2022, Pages 283–291
Abstract:
Late Pliocene and Early Pleistocene epochs 3.6 to 0.8 million years ago had climates resembling those forecasted under future warming. Palaeoclimatic records show strong polar amplification with mean annual temperatures of 11–19 °C above contemporary values. The biological communities inhabiting the Arctic during this time remain poorly known because fossils are rare. Here we report an ancient environmental DNA (eDNA) record describing the rich plant and animal assemblages of the Kap København Formation in North Greenland, dated to around two million years ago. The record shows an open boreal forest ecosystem with mixed vegetation of poplar, birch and thuja trees, as well as a variety of Arctic and boreal shrubs and herbs, many of which had not previously been detected at the site from macrofossil and pollen records. The DNA record confirms the presence of hare and mitochondrial DNA from animals including mastodons, reindeer, rodents and geese, all ancestral to their present-day and late Pleistocene relatives. The presence of marine species including horseshoe crab and green algae support a warmer climate than today. The reconstructed ecosystem has no modern analogue. The survival of such ancient eDNA probably relates to its binding to mineral surfaces. Our findings open new areas of genetic research, demonstrating that it is possible to track the ecology and evolution of biological communities from two million years ago using ancient eDNA.