Kevin Lewis

March 25, 2020

Attention to Global Warming
Darwin Choi, Zhenyu Gao & Wenxi Jiang
Review of Financial Studies, March 2020, Pages 1112–1145


We find that people revise their beliefs about climate change upward when experiencing warmer than usual temperatures in their area. Using international data, we show that attention to climate change, as proxied by Google search volume, increases when the local temperature is abnormally high. In financial markets, stocks of carbon-intensive firms underperform firms with low carbon emissions in abnormally warm weather. Retail investors (not institutional investors) sell carbon-intensive firms in such weather, and return patterns are unlikely to be driven by changes in fundamentals. Our study sheds light on peoples’ collective beliefs and actions about global warming.

Is Climate Change Changing Minds? Limited Effects of the Physical Environment on Climate Policy Opinion in the United States
Matt Motta
Oklahoma State University Working Paper, February 2020


Conventional wisdom predicts that people impacted by climate change effects should be more supportive of climate change mitigation efforts. However, previous research offers conflicting evidence on this score. To disentangle these conflicting findings, I devise novel and highly-favorable tests of the effects of the physical environment; merging FEMA climate disaster declaration records – which have been shown to be highly influential in shaping public opinion – into five large nationally representative surveys (N = 213,250). Even under substantively and statistically favorable conditions, I find that recent experience with climate-related disaster (N = 29,067) is associated with only a small (1%) increase in support for mitigation policy. These results are robust to several modeling strategies, and do not appear to be the result of ideological “ceiling effects.” I conclude by discussing how these findings can help inform effective climate change policy communication efforts.

Hot Temperature and High Stakes Performance
Jisung Park
Journal of Human Resources, forthcoming


Despite the prevalence of high stakes assessments – and the growing likelihood of heat exposure during such assessments – the effect of temperature on performance has not yet been studied in such settings. Using student-level administrative data for the largest public school district in the United States, I provide the first estimates of temperature’s impact on high-stakes exam performance and subsequent educational attainment. Hot temperature reduces performance by up to 13 percent of a standard deviation and leads to persistent impacts on high school graduation status, despite compensatory responses by teachers who selectively upward manipulate grades after hotter exams.

Colorado River flow dwindles as warming-driven loss of reflective snow energizes evaporation
Chris Milly & Krista Dunne
Science, 13 March 2020, Pages 1252-1255


The sensitivity of river discharge to climate-system warming is highly uncertain and governing processes are poorly understood, impeding climate-change adaptation. A prominent exemplar is the Colorado River, where meteorological drought and warming have been shrinking a water resource that supports more than USD 1 trillion per year of economic activity. Monte-Carlo simulation with a radiation-aware hydrologic model resolves the longstanding, wide disparity in sensitivity estimates and reveals the controlling physical processes. We estimate that annual-mean discharge has been decreasing by 9.3% per °C of warming due to increased evapotranspiration, mainly driven by snow loss and consequent decrease of reflection of solar radiation. Projected precipitation increases likely will not suffice to counter fully the robust, thermodynamically induced drying. Increasing risk of severe water shortages is expected.

Does Information About Climate Risk Affect Property Values?
Miyuki Hino & Marshall Burke
NBER Working Paper, February 2020


Floods and other climate hazards pose a widespread and growing threat to housing and infrastructure around the world. By incorporating climate risk into asset prices, markets can discourage excessive development in hazardous areas. However, the extent to which markets actually price these risks remains poorly understood. Here we measure the effect of information about flood risk on residential property values in the United States. Using multiple empirical approaches and two decades of sales data covering the universe of homes in the US, we find little evidence that housing markets fully price information about flood risk in aggregate. However, the price penalty for flood risk is larger for commercial buyers and in states where sellers must disclose information about flood risk to potential buyers, suggesting that policies to improve risk communication could influence market outcomes. Our findings indicate that floodplain homes in the US are currently overvalued by a total of $34B, raising concerns about the stability of real estate markets as climate risks become more salient and severe.

Is the Risk of Sea Level Rise Capitalized in Residential Real Estate?
Justin Murfin & Matthew Spiegel
Review of Financial Studies, March 2020, Pages 1217–1255


Using a comprehensive database of coastal home sales merged with data on elevation relative to local tides, we compare prices for houses based on their inundation threshold under projections of sea level rise. The analysis separates the sensitivity of housing to rising seas from other confounding characteristics by exploiting cross-sectional differences in relative sea level rise due to vertical land motion. This provides variation in the expected time to inundation for properties of similar elevation and distance from the coast. In a variety of specifications and test settings, we find precisely estimated null results suggesting limited price effects.

The Electric Vehicle Transition and the Economics of Banning Gasoline Vehicles
Stephen Holland, Erin Mansur & Andrew Yates
NBER Working Paper, February 2020


Electric vehicles have a unique potential to transform personal transportation. We analyze the transition to electric vehicles with a dynamic model that captures the falling costs of producing electric vehicles, the decreasing pollution from electricity generation, the increasing substitutability of electric for gasoline vehicles, and the durability of the vehicle stock. Due to the external costs from pollution, inefficiencies under business as usual result from the mix of vehicles as well as the transition timing, the severity of which depends on substitutability. We calibrate the model to the US market and find the magnitude of the inefficiency is rather modest: less than 5 percent of total external costs. The optimal purchase subsidy for electric vehicles and the optimal ban on the production of gasoline vehicles both give about the same efficiency improvement, but the latter leads to a sharp increase in gasoline vehicle production just before the ban. Phasing out gasoline vehicles with a bankable production quota reduces deadweight loss substantially more than the other policies, but may lead to a very large deadweight loss if set incorrectly.

Verification of extreme event attribution: Using out-of-sample observations to assess changes in probabilities of unprecedented events
Noah Diffenbaugh
Science Advances, March 2020


Independent verification of anthropogenic influence on specific extreme climate events remains elusive. This study presents a framework for such verification. This framework reveals that previously published results based on a 1961–2005 attribution period frequently underestimate the influence of global warming on the probability of unprecedented extremes during the 2006–2017 period. This underestimation is particularly pronounced for hot and wet events, with greater uncertainty for dry events. The underestimation is reflected in discrepancies between probabilities predicted during the attribution period and frequencies observed during the out-of-sample verification period. These discrepancies are most explained by increases in climate forcing between the attribution and verification periods, suggesting that 21st-century global warming has substantially increased the probability of unprecedented hot and wet events. Hence, the use of temporally lagged periods for attribution — and, more broadly, for extreme event probability quantification — can cause underestimation of historical impacts, and current and future risks.

Halving warming with stratospheric aerosol geoengineering moderates policy-relevant climate hazards
Peter Irvine & David Keith
Environmental Research Letters, March 2020


Stratospheric aerosol geoengineering is a proposal to artificially thicken the layer of reflective aerosols in the stratosphere and it is hoped that this may offer a means of reducing average climate changes. However, previous work has shown that it could not perfectly offset the effects of climate change and there is a concern that it may worsen climate impacts in some regions. One approach to evaluating this concern is to test whether the absolute magnitude of climate change at each location is significantly increased (exacerbated) or decreased (moderated) relative to the period just preceding deployment. In prior work it was found that halving warming with an idealized solar constant reduction would substantially reduce climate change overall, exacerbating change in a small fraction of places. Here, we test if this result holds for a more realistic representation of stratospheric aerosol geoengineering using the data from the geoengineering large ensemble (GLENS). Using a linearized scaling of GLENS we find that halving warming with stratospheric aerosols moderates important climate hazards in almost all regions. Only 1.3% of land area sees exacerbation of change in water availability, and regions that are exacerbated see wetting not drying contradicting the common assumption that solar geoengineering leads to drying in general. These results suggest that halving warming with stratospheric aerosol geoengineering could potentially reduce key climate hazards substantially while avoiding some problems associated with fully offsetting warming.

Sandy coastlines under threat of erosion
Michalis Vousdoukas et al.
Nature Climate Change, March 2020, Pages 260–263


Sandy beaches occupy more than one-third of the global coastline and have high socioeconomic value related to recreation, tourism and ecosystem services. Beaches are the interface between land and ocean, providing coastal protection from marine storms and cyclones. However the presence of sandy beaches cannot be taken for granted, as they are under constant change, driven by meteorological, geological and anthropogenic factors. A substantial proportion of the world’s sandy coastline is already eroding, a situation that could be exacerbated by climate change. Here, we show that ambient trends in shoreline dynamics, combined with coastal recession driven by sea level rise, could result in the near extinction of almost half of the world’s sandy beaches by the end of the century. Moderate GHG emission mitigation could prevent 40% of shoreline retreat. Projected shoreline dynamics are dominated by sea level rise for the majority of sandy beaches, but in certain regions the erosive trend is counteracted by accretive ambient shoreline changes; for example, in the Amazon, East and Southeast Asia and the north tropical Pacific. A substantial proportion of the threatened sandy shorelines are in densely populated areas, underlining the need for the design and implementation of effective adaptive measures.

Coastal wetlands reduce property damage during tropical cyclones
Fanglin Sun & Richard Carson
Proceedings of the National Academy of Sciences, 17 March 2020, Pages 5719-5725


Coastal wetlands dampen the impact of storm surge and strong winds. Studies on the economic valuation of this protective service provided by wetland ecosystems are, however, rare. Here, we analyze property damage caused by 88 tropical storms and hurricanes hitting the United States between 1996 and 2016 and show that counties with more wetland coverage experienced significantly less property damage. The expected economic value of the protective effects of wetlands varies widely across coastal US counties with an average value of about $1.8 million/km2 per year and a median value of $91,000/km2. Wetlands confer relatively more protection against weaker storms and in states with weaker building codes. Recent wetland losses are estimated to have increased property damage from Hurricane Irma by $430 million. Our results suggest the importance of considering both natural and human factors in coastal zone defense policy.

Climate effects of aerosols reduce economic inequality
Yixuan Zheng et al.
Nature Climate Change, March 2020, Pages 220–224


The climate effects of anthropogenic aerosols have masked some of the warming induced by GHGs along with some impacts of that warming. These temperature effects may be beneficial but are almost certainly overwhelmed by aerosols’ negative health impacts. Recent analyses of economic impacts have concluded that warming harms economies in warm climates, but provides economic benefits in cold climates. Here we investigate whether aerosol-induced cooling would have a positive effect on less wealthy economies in hotter regions and a negative effect on wealthier economies in colder regions. Climate simulations over the historical period both with and without anthropogenic aerosol emissions, using a fully coupled ocean and atmosphere climate model, indicate that in year 2010 anthropogenic aerosol emissions were cooling the Earth by 0.72 ± 0.02 °C relative to a scenario without such emissions. Due to opposing economic impacts in different regions, the net economic impact of aerosol-induced cooling is likely to be small at the global scale. However, these results suggest that the cooling effects of anthropogenic aerosols benefit developing tropical economies while harming developed high-latitude economies, and thus the temperature effects of past aerosol emissions have probably diminished global economic inequality.

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