Unnatural Gas
Climate Change Risk and the Cost of Mortgage Credit
Duc Duy Nguyen et al.
Review of Finance, forthcoming
Abstract:
We show that lenders charge higher interest rates for mortgages on properties exposed to a greater risk of sea level rise (SLR). This SLR premium is not evident in short-term loans and is not related to borrowers’ short-term realized default or creditworthiness. Further, the SLR premium is smaller when the consequences of climate change are less salient and in areas with more climate change deniers. Overall, our results suggest that mortgage lenders view the risk of SLR as a long-term risk and that attention and beliefs are potential barriers through which SLR risk is priced in residential mortgage markets.
Ageing society in developed countries challenges carbon mitigation
Heran Zheng et al.
Nature Climate Change, March 2022, Pages 241–248
Abstract:
Populations in developed countries are ageing. However, the impact of senior citizens’ consumption on global carbon mitigation is poorly understood. Here we find that senior citizens have played a leading role in driving up GHG emissions in the past decade and are on the way to becoming the largest contributor. Considering the greenhouse gas footprint of household consumption across age groups in 32 developed countries, the senior contribution to national total consumption-based emissions increased from 25.2% to 32.7% between 2005 and 2015. Seniors in the United States and Australia have the highest per capita footprint, twice the Western average. The trend is mainly due to changes in expenditure patterns of seniors. The increasing carbon footprint of senior citizens will probably drive domestic production yet have limited effects on international carbon leakage. The demographic change poses more challenges in local mitigation and calls for deeper public mitigation efforts.
Why marginal CO2 emissions are not decreasing for US electricity: Estimates and implications for climate policy
Stephen Holland et al.
Proceedings of the National Academy of Sciences, 22 February 2022
Abstract:
Marginal emissions of CO2 from the electricity sector are critical for evaluating climate policies that rely on shifts in electricity demand or supply. This paper provides estimates of marginal CO2 emissions from US electricity generation using the most recently available and comprehensive data. The estimates vary by region, hour of the day, and year to year over the last decade. We identify an important and somewhat counterintuitive finding: While average emissions have decreased substantially over the last decade (28% nationally), marginal emissions have increased (7% nationally). We show that underlying these trends is primarily a shift toward greater reliance on coal to satisfy marginal electricity use. We apply our estimates to an analysis of the Biden administration’s target of having electric vehicles (EVs) make up 50% of new vehicle purchases by 2030. We find that, without significant and concurrent changes to the electricity sector, the increase in electricity emissions is likely to offset more than half of the emission reductions from having fewer gasoline-powered vehicles on the road. Moreover, using average rather than marginal emissions to predict the impacts significantly overestimates the emission benefits. Overall, we find that the promise of EVs for reducing emissions depends, to a large degree, on complementary policies that decarbonize both average and marginal emissions in the electricity sector.
Limited impacts of carbon tax rebate programmes on public support for carbon pricing
Matto Mildenberger et al.
Nature Climate Change, February 2022, Pages 141–147
Abstract:
Revenue recycling through lump-sum dividends may help mitigate public opposition to carbon taxes, yet evidence from real-world policies is lacking. Here we use survey data from Canada and Switzerland, the only countries with climate rebate programmes, to show low public awareness and substantial underestimation of climate rebate amounts in both countries. Information was obtained using a five-wave panel survey that tracked public attitudes before, during and after implementation of Canada’s 2019 carbon tax and dividend policy and a large-scale survey of Swiss residents. Experimental provision of individualized information about true rebate amounts had modest impacts on public support in Switzerland but potentially deleterious effects on support in Canada, especially among Conservative voters. In both countries, we find that perceptions of climate rebates are structured less by informed assessments of economic interest than by partisan identities. These results suggest limited effects of existing rebate programmes, to date, in reshaping the politics of carbon taxation.
Meta-analysis reveals an extreme “decline effect” in the impacts of ocean acidification on fish behavior
Jeff Clements et al.
PLoS Biology, February 2022
Abstract:
Ocean acidification — decreasing oceanic pH resulting from the uptake of excess atmospheric CO2 — has the potential to affect marine life in the future. Among the possible consequences, a series of studies on coral reef fish suggested that the direct effects of acidification on fish behavior may be extreme and have broad ecological ramifications. Recent studies documenting a lack of effect of experimental ocean acidification on fish behavior, however, call this prediction into question. Indeed, the phenomenon of decreasing effect sizes over time is not uncommon and is typically referred to as the “decline effect.” Here, we explore the consistency and robustness of scientific evidence over the past decade regarding direct effects of ocean acidification on fish behavior. Using a systematic review and meta-analysis of 91 studies empirically testing effects of ocean acidification on fish behavior, we provide quantitative evidence that the research to date on this topic is characterized by a decline effect, where large effects in initial studies have all but disappeared in subsequent studies over a decade. The decline effect in this field cannot be explained by 3 likely biological explanations, including increasing proportions of studies examining (1) cold-water species; (2) nonolfactory-associated behaviors; and (3) nonlarval life stages. Furthermore, the vast majority of studies with large effect sizes in this field tend to be characterized by low sample sizes, yet are published in high-impact journals and have a disproportionate influence on the field in terms of citations. We contend that ocean acidification has a negligible direct impact on fish behavior, and we advocate for improved approaches to minimize the potential for a decline effect in future avenues of research.
The clean energy claims of BP, Chevron, ExxonMobil and Shell: A mismatch between discourse, actions and investments
Mei Li, Gregory Trencher & Jusen Asuka
PLoS ONE, February 2022
Abstract:
The energy products of oil and gas majors have contributed significantly to global greenhouse gas emissions (GHG) and planetary warming over the past century. Decarbonizing the global economy by mid-century to avoid dangerous climate change thus cannot occur without a profound transformation of their fossil fuel-based business models. Recently, several majors are increasingly discussing clean energy and climate change, pledging decarbonization strategies, and investing in alternative energies. Some even claim to be transforming into clean energy companies. Given a history of obstructive climate actions and “greenwashing”, there is a need to objectively evaluate current and historical decarbonization efforts and investment behavior. This study focuses on two American (Chevron, ExxonMobil) and two European majors (BP, Shell). Using data collected over 2009–2020, we comparatively examine the extent of decarbonization and clean energy transition activity from three perspectives: (1) keyword use in annual reports (discourse); (2) business strategies (pledges and actions); and (3) production, expenditures and earnings for fossil fuels along with investments in clean energy (investments). We found a strong increase in discourse related to “climate”, “low-carbon” and “transition”, especially by BP and Shell. Similarly, we observed increasing tendencies toward strategies related to decarbonization and clean energy. But these are dominated by pledges rather than concrete actions. Moreover, the financial analysis reveals a continuing business model dependence on fossil fuels along with insignificant and opaque spending on clean energy. We thus conclude that the transition to clean energy business models is not occurring, since the magnitude of investments and actions does not match discourse. Until actions and investment behavior are brought into alignment with discourse, accusations of greenwashing appear well-founded.
Energy Prices and Electric Vehicle Adoption
James Bushnell, Erich Muehlegger & David Rapson
NBER Working Paper, March 2022
Abstract:
This paper presents evidence that gasoline prices have a larger effect on demand for electric vehicles (EVs) than electricity prices in California. We match a spatially-disaggregated panel dataset of monthly EV registration records to detailed records of gasoline and electricity prices in California from 2014-2017, and use these to estimate the effect of energy prices on EV demand. Two distinct empirical approaches (panel fixed-effects and a utility-border discontinuity) yield remarkably similar results: a given change in gasoline prices has roughly four to six times the effect on EV demand as a similar percentage change in electricity prices. We explore the implications for optimal EV subsidies, which promote externality reduction benefits and correct for consumer misoptimization stemming from the undervaluation of future electricity costs.
Stylized least-cost analysis of flexible nuclear power in deeply decarbonized electricity systems considering wind and solar resources worldwide
Lei Duan et al.
Nature Energy, forthcoming
Abstract:
New designs of advanced nuclear power plants have been proposed that may allow nuclear power to be less expensive and more flexible than conventional nuclear. It is unclear how and whether such a system would complement variable renewables in decarbonized electricity systems. Here we modelled stylized electricity systems under a least-cost optimization framework taking into account technoeconomic factors only, considering electricity demand and renewable potential in 42 country-level regions. In our model, in moderate decarbonization scenarios, solar and wind can provide less costly electricity when competing against nuclear at near-current US Energy Information Administration (US$6,317 per kilowatt-electric (kWe)) and at US$4,000 kWe−1 cost levels. In contrast, in deeply decarbonized systems (for example, beyond ~80% emissions reduction) and in the absence of low-cost grid-flexibility mechanisms, nuclear can be competitive with solar and wind. High-quality wind resources can make it difficult for nuclear to compete. Thermal heat storage coupled to nuclear power can, in some cases, promote wind and solar.
Tropical cyclone climatology change greatly exacerbates US extreme rainfall–surge hazard
Avantika Gori et al.
Nature Climate Change, February 2022, Pages 171–178
Abstract:
Tropical cyclones (TCs) are drivers of extreme rainfall and surge, but the current and future TC rainfall–surge joint hazard has not been well quantified. Using a physics-based approach to simulate TC rainfall and storm tides, we show drastic increases in the joint hazard from historical to projected future (SSP5–8.5) conditions. The frequency of joint extreme events (exceeding both hazards’ historical 100-year levels) may increase by 7–36-fold in the southern US and 30–195-fold in the Northeast by 2100. This increase in joint hazard is induced by sea-level rise and TC climatology change; the relative contribution of TC climatology change is higher than that of sea-level rise for 96% of the coast, largely due to rainfall increases. Increasing storm intensity and decreasing translation speed are the main TC change factors that cause higher rainfall and storm tides and up to 25% increase in their dependence.
Fueling Alternatives: Gas Station Choice and the Implications for Electric Charging
Jackson Dorsey, Ashley Langer & Shaun McRae
NBER Working Paper, March 2022
Abstract:
This paper estimates an imperfect information discrete choice model of drivers’ refueling preferences and analyzes the implications of these preferences for electric vehicle (EV) adoption. Drivers respond four times more to stations’ long-run average prices than to current prices and value travel time at $27.54/hour. EV adopters with home charging receive $829 per vehicle in benefits from avoiding travel to gas stations, whereas refueling travel and waiting time costs increase by $9,169 for drivers without home charging. Increasing the charging speed of the existing network yields 4.7 times greater time savings than a proportional increase in the number of stations.
Pronounced loss of Amazon rainforest resilience since the early 2000s
Chris Boulton, Timothy Lenton & Niklas Boers
Nature Climate Change, March 2022, Pages 271–278
Abstract:
The resilience of the Amazon rainforest to climate and land-use change is crucial for biodiversity, regional climate and the global carbon cycle. Deforestation and climate change, via increasing dry-season length and drought frequency, may already have pushed the Amazon close to a critical threshold of rainforest dieback. Here, we quantify changes of Amazon resilience by applying established indicators (for example, measuring lag-1 autocorrelation) to remotely sensed vegetation data with a focus on vegetation optical depth (1991–2016). We find that more than three-quarters of the Amazon rainforest has been losing resilience since the early 2000s, consistent with the approach to a critical transition. Resilience is being lost faster in regions with less rainfall and in parts of the rainforest that are closer to human activity. We provide direct empirical evidence that the Amazon rainforest is losing resilience, risking dieback with profound implications for biodiversity, carbon storage and climate change at a global scale.
A market for snow: Modeling winter recreation patterns under current and future climate
Bryan Parthum & Peter Christensen
Journal of Environmental Economics and Management, forthcoming
Abstract:
Throughout the winter months across the globe, mountain communities and snow-enthusiasts alike anxiously monitor ever-changing snowpack conditions. We model the behavioral response to this climate amenity by pairing a unique panel of 12 million short-term property rental transactions with daily local weather, daily local snowpack, and daily local snowfall in every major ski resort market across the United States. Matching the spatial and temporal variation in the level of the amenity with that of related market transactions, we derive market-specific demand elasticities, explicitly accounting for substitution, to model recreation patterns throughout a typical season. Lastly, we combine downscaled projections of local snowpack under future climate scenarios to estimate within and across season trends in visitation during mid and late-century conditions. Our model predicts reductions in snow-related visitation of -40% to -60%, almost twice as large as previous estimates suggest. This translates to a lower-bound on the annual willingness to pay to avoid reductions in snowpack between $1.23 billion (RCP4.5) and $2.05 billion (RCP8.5) by the end of the century.
Rapid intensification of the emerging southwestern North American megadrought in 2020–2021
Park Williams, Benjamin Cook & Jason Smerdon
Nature Climate Change, March 2022, Pages 232–234
Abstract:
A previous reconstruction back to 800 CE indicated that the 2000–2018 soil moisture deficit in southwestern North America was exceeded during one megadrought in the late-1500s. Here, we show that after exceptional drought severity in 2021, ~19% of which is attributable to anthropogenic climate trends, 2000–2021 was the driest 22-yr period since at least 800. This drought will very likely persist through 2022, matching the duration of the late-1500s megadrought.