Upside
Heat projections and mortgage characteristics: Evidence from the USA
Eszter Baranyai & Ádám Banai
Climatic Change, December 2022
Abstract:
Climate change is increasingly acknowledged as a fundamental risk to the stability of the financial system. The linkage between residential mortgage lending and local heatwave projections has hitherto received little attention in the climate finance discourse despite recognition of the detrimental effects of extreme heat on economic output measures. Through economic, demographic and other channels, future climate conditions can affect the housing market and, thus, the residential mortgage market. Moreover, the potential for contagion is high considering US residential mortgages’ key role in financial cycles and cross-border effects. First, our paper furthers conceptual and empirical understandings of the nexus between future extreme heat and lenders’ credit risk. Second, for the contiguous US states, we show that interest rates are higher and loan terms are shorter in areas forecast to experience a larger increase in the number of hot days over the coming decades after controlling for a range of factors. Rate spreads are higher still in areas where the number of hot days is projected to be extreme. It is lending from non-banks, rather than banks, that appears sensitive to the changing climate.
Incident dementia and long-term exposure to constituents of fine particle air pollution: A national cohort study in the United States
Liuhua Shi et al.
Proceedings of the National Academy of Sciences, 3 January 2023
Abstract:
Growing evidence suggests that fine particulate matter (PM2.5) likely increases the risks of dementia, yet little is known about the relative contributions of different constituents. Here, we conducted a nationwide population-based cohort study (2000 to 2017) by integrating the Medicare Chronic Conditions Warehouse database and two independently sourced datasets of high-resolution PM2.5 major chemical composition, including black carbon (BC), organic matter (OM), nitrate (NO3−), sulfate (SO42−), ammonium (NH4+), and soil dust (DUST). To investigate the impact of long-term exposure to PM2.5 constituents on incident all-cause dementia and Alzheimer’s disease (AD), hazard ratios for dementia and AD were estimated using Cox proportional hazards models, and penalized splines were used to evaluate potential nonlinear concentration–response (C-R) relationships. Results using two exposure datasets consistently indicated higher rates of incident dementia and AD for an increased exposure to PM2.5 and its major constituents. An interquartile range increase in PM2.5 mass was associated with a 6 to 7% increase in dementia incidence and a 9% increase in AD incidence. For different PM2.5 constituents, associations remained significant for BC, OM, SO42−, and NH4+ for both end points (even after adjustments of other constituents), among which BC and SO42− showed the strongest associations. All constituents had largely linear C-R relationships in the low exposure range, but most tailed off at higher exposure concentrations. Our findings suggest that long-term exposure to PM2.5 is significantly associated with higher rates of incident dementia and AD and that SO42−, BC, and OM related to traffic and fossil fuel combustion might drive the observed associations.
Internalizing Externalities: Disclosure Regulation for Hydraulic Fracturing, Drilling Activity and Water Quality
Pietro Bonetti, Christian Leuz & Giovanna Michelon
NBER Working Paper, January 2023
Abstract:
The rise of shale gas and tight oil development has triggered a major debate about hydraulic fracturing (HF). In an effort to mitigate risks from HF, especially with respect to water quality, many U.S. states have introduced disclosure mandates for HF wells and fracturing fluids. We use this setting to study whether targeting corporate activities that have dispersed environmental externalities with disclosure regulation to create public pressure reduces their environmental impact. We find significant improvements in water quality, examining salts that are considered signatures for HF impact, after the disclosure mandates are introduced. We document effects along the extensive and the intensive margin, though most of the improvement comes from the latter. Supporting this interpretation, we find that, after the disclosure mandates, operators pollute less per unit of production, use fewer toxic chemicals, and cause fewer spills and leaks of HF fluids and wastewater. We also show that disclosure enables public pressure and that this pressure facilitates internalization.
Effects of Early Childhood Exposure to Pollution on Crime: Evidence from 1970 Clean Air Act
Divya Sadana
Environmental and Resource Economics, January 2023, Pages 279–312
Abstract:
Past literature has shown that 1970 amendments to the clean air act (CAA) led to significant reduction in air pollution early 1970s, and that it had positive infant health consequences for the cohorts treated by CAA. Because effects of in-utero and early childhood conditions are persistent, and the health effects can remain latent for years, CAA may impact the future adult outcomes. In this paper, I investigate the impact of the CAA on the future crime. In a difference-in-differences framework, I find that the cohorts that were born in the year of the CAA’s first implementation commit fewer crimes 15–24 years later. The magnitude of this impact is about 6%. Property crimes rather than violent crimes are impacted. I also estimate that CAA reduced the ambient air pollution by 17%. These reduced form estimates suggest that a 1% reduction in air pollution reduces future crime rate by 0.35%.
More Roads or Public Transit? Insights from Measuring City-Center Accessibility
Lucas Conwell, Fabian Eckert & Ahmed Mushfiq Mobarak
NBER Working Paper, January 2023
Abstract:
We propose a theory-inspired measure of the accessibility of a city's center: the size of the surrounding area from which it can be reached within a specific time. Using publicly available optimal-routing software, we compute these "accessibility zones" for the 109 largest US and European cities, separately for cars and public transit commutes. Compared with European cities, US cities are half as accessible via public transit and twice as accessible via cars. Car accessibility zones are always larger than public transit zones, making US cities more accessible overall. However, US cities' car orientation comes at the cost of less green space, more congestion, and worse health and pollution externalities.
Who Benefits from Surface Water Pollution Programs?
Qianping Ren & Jeremy West
University of California Working Paper, December 2022
Abstract:
The Clean Water Act provides around 180 million dollars annually for nonpoint source pollution programs. We examine how state governments deploy these funds. We find that watersheds with wealthier and more white populations are less polluted but more likely to receive pollution project funding. Supporting analyses show that these disparities can be explained by spatial differences in local government capacity. Socioeconomically disadvantaged areas have fewer resources to compete for grants and constrained match funding for grant proposal requirements. Our findings suggest that a competitive application process is an inequitable way to determine environmental funding priorities and could amplify justice concerns.
Wildfire Influence on Recent US Pollution Trends
Marshall Burke et al.
NBER Working Paper, January 2023
Abstract:
Steady improvements in ambient air quality in the US over the past several decades have led to large public health benefits, and the policies that helped drive these improvements are considered landmarks in successful environmental policymaking. However, recent trends in PM2.5 concentrations, a key pollutant, have stagnated or begun to reverse throughout much of the US. We quantify the contribution of wildfire smoke to these trends and find that since 2016, wildfire smoke has significantly slowed or reversed previous improvements in average annual PM2.5 concentrations in two-thirds of US states, eroding 23% of previous gains on average in those states (equivalent to 3.6 years of air quality progress) and over 50% in multiple western states. Smoke influence on trends in extreme PM2.5 concentrations is detectable by 2010 and is concentrated in a dozen western states. Wildfire-driven increases in ambient PM2.5 concentrations are unregulated under current air pollution law, and, absent additional intervention, wildfire's contribution to regional and national air quality trends is likely to grow as the climate continues to warm.
Association between exposure to combustion-related air pollution and multiple sclerosis risk
Anna Karin Hedström et al.
International Journal of Epidemiology, forthcoming
Methods: Exposure to combustion-related air pollution was estimated as outdoor levels of nitrogen oxides (NOx) at the participants’ residence locations, by spatially resolved dispersion modelling for the years 1990–18. Using two population-based case-control studies (6635 cases, 8880 controls), NOx levels were associated with MS risk by calculating odds ratios (OR) with 95% confidence intervals (CI) using logistic regression models. Interaction between high NOx levels and the HLA-DRB1*15:01 allele regarding MS risk was calculated by the attributable proportion due to interaction (AP). In addition, a register study was performed comprising all MS cases in Sweden who had received their diagnosis between 1993 and 2018 (n = 22 173), with 10 controls per case randomly selected from the National Population register.
Results: Residential air pollution was associated with MS risk. NOx levels (3-year average) exceeding the 90th percentile (24.6 µg/m3) were associated with an OR of 1.37 (95% CI 1.10–1.76) compared with levels below the 25th percentile (5.9 µg/m3), with a trend of increasing risk of MS with increasing levels of NOx (P <0.0001). A synergistic effect was observed between high NOx levels (exceeding the lower quartile among controls) and the HLA-DRB1*15:01 allele regarding MS risk (AP 0.26, 95% CI 0.13–0.29).
International Spillover Effects of Air Pollution: Evidence from Mortality and Health Data
Seonmin Will Heo, Koichiro Ito & Rao Kotamarthi
NBER Working Paper, January 2023
Abstract:
We study the international spillover effects of air pollution by developing a framework that integrates recent advances in atmospheric science into econometric estimation with microdata on mortality and health. Combining transboundary particle trajectory data with the universe of individual-level mortality and emergency room visit data in South Korea, we find that transboundary air pollution from China significantly increases mortality and morbidity in South Korea. Using these estimates, we show that a recent Chinese environmental policy “war on pollution” generated a substantial international spillover benefit. Finally, we examine China’s strategic pollution reductions and provide their implications for the potential Coasian bargaining.
Future Changes in Active and Inactive Atlantic Hurricane Seasons in the Energy Exascale Earth System Model
Ana Sena, Christina Patricola & Burlen Loring
Geophysical Research Letters, 16 November 2022
Abstract:
North Atlantic tropical cyclones (TCs) have considerable interannual variability, with La Niña and the positive phase of the Atlantic Meridional Mode (AMM) tending to drive active hurricane seasons, and El Niño and the negative AMM often driving inactive seasons. Here, we analyze how active and inactive Atlantic hurricane seasons may change in the future using the high resolution Energy Exascale Earth System Model (E3SM). We performed atmosphere-only simulations forced by sea-surface temperature patterns characteristic of La Niña and the positive AMM jointly, and El Niño and the negative AMM jointly, in historical and future climates. Projected Atlantic TCs become more frequent in the future by approximately 34% during El Niño and negative AMM and by 66% during La Niña and positive AMM, with a significant increase in the portion of intense TCs. Warmer SSTs increase TC potential intensity, with reduced wind shear and increased mid-tropospheric humidity further supporting TC activity.
Creatively Destructive Hurricanes: Do Disasters Spark Innovation?
Ilan Noy & Eric Strobl
Environmental and Resource Economics, January 2023, Pages 1–17
Abstract:
We investigate whether disasters can lead to innovation. We construct a US county-level panel of hurricane damages using climate data, hurricane tracks, and a wind field model and match these to patent applications by the location of their inventor over the last century in the United States. We examine both general innovation and patents that explicitly mention the terms ’hurricane’ or ’storm.’ In line with the current literature that hypothesizes innovative activity driven by shocks, in particular innovation intended to mitigate future shocks, we find that hurricanes lead to temporary boost in damage-mitigating patents a few years after the event. However, we also show there is long-term, lasting over two decades, general reduction of innovation after a damaging storm. We conclude that hurricanes, and possibly other types of disasters, cannot be viewed as a ’benefit in disguise,’ and that these events are unlikely to generate longer-term beneficial dynamics in an adversely affected location.