Where there's smoke
Recent Increases in Air Pollution: Evidence and Implications for Mortality
Karen Clay & Nicholas Muller
NBER Working Paper, October 2019
Abstract:
After declining by 24.2% from 2009 to 2016, annual average fine particulate matter (PM2.5) in the United States in counties with monitors increased by 5.5% between 2016 and 2018. Increases occurred in multiple census regions and in counties that were in and out of attainment with National Ambient Air Quality Standards (NAAQS). We explore channels through which the increase may have occurred including increases in economic activity, increases in wildfires, and decreases in Clean Air Act enforcement actions. The health implications of this increase in PM2.5 between 2016 and 2018 are significant. The increase was associated with 9,700 additional premature deaths in 2018. At conventional valuations, these deaths represent damages of $89 billion.
Whither the Regulatory 'War on Coal'? Scapegoats, Saviors, and Stock Market Reactions
Cary Coglianese & Daniel Walters
University of Pennsylvania Working Paper, October 2019
Abstract:
Complaints about excessive economic burdens associated with regulation abound in contemporary political and legal rhetoric. In recent years, perhaps nowhere have these complaints been heard as loudly as in the context of U.S. regulations targeting the use of coal to supply power to the nation’s electricity system, as production levels in the coal industry dropped nearly by half between 2008 and 2016. The coal industry and its political supporters, including the President of the United States, have argued that a suite of air pollution regulations imposed by the U.S. Environmental Protection Agency (EPA) during the Obama Administration seriously undermined coal companies’ bottom lines, presenting an existential threat to the industry. Under the Trump Administration, industry players have lobbied hard for (and sometimes received) financial subsidies and regulatory changes, with the President seemingly all too happy to play the role of the industry’s savior. Stepping back, we consider the extent to which regulations have really led to the decline in demand for coal and how much the coal industry can actually expect to gain from the de-regulatory policies of the current Administration. To illuminate these questions, we statistically analyze stock market reactions to important events in what critics called the regulatory “war on coal” during the Obama Administration. Using an event-study framework that measures abnormal market activity in the immediate wake of these events, we are able to isolate any potential impact of regulatory developments above and beyond market factors, such as secular trends in natural gas prices and market performance as a whole. Surprisingly, we find no systemic evidence consistent with a “war on coal” based on investor assessments of the industry’s financial prospects in the wake of new regulatory developments, even though our methods do find evidence of stock market reactions to other events, such as bankruptcies of other companies. The very actors with financial stakes in understanding the impact of regulation on the coal industry appear to act as if they never bought into the regulatory “war on coal” narrative. Our findings are consistent with broader evidence about the effects of regulation and with an underlying political economy of regulatory scapegoating, according to which actors in a declining industry prefer to blame regulation rather than competitive factors for their businesses’ decline. By calling attention to the pervasive incentives for scapegoating and cheap talk by politicians seeking to be saviors, we offer an account that can explain the mismatch between our findings and the rhetoric of the “war on coal,” and along the way we also show how important it is for courts, government officials, and the public to demand agencies seek evidence when making regulatory decisions instead of relying on political rhetoric.
Elections and Policy Responsiveness: Evidence from Environmental Voting in the U.S. Congress
Richard McAlexander & Johannes Urpelainen
Review of Policy Research, forthcoming
Abstract:
Do elections affect legislators' voting patterns? We investigate this question in the context of environmental policy in the US Congress. We theorize that since the general public is generally in favor of legislation protecting the environment, legislators have an incentive to favor the public over industry and vote for pro-environment legislation at election time. The argument is supported by analyses of data on environmental roll-call votes for the US Congress from 1970-2013 where we estimate the likelihood of casting a pro-environment as a function of the time to an election. While Democrats are generally more likely to cast a pro-environment vote before an election, this effect is much stronger for Republicans when the legislator won the previous election by a thinner margin. The election effect is maximized for candidates receiving substantial campaign contributions from the (anti-environment) oil and gas industry. Analysis of Twitter data confirms that Congress members make pro-environmental statements and highlight their roll-call voting behavior during the election season. These results show that legislators do strategically adjust their voting behavior to favor the public immediate prior to an election.
Politics, concern for future generations, and the environment: Generativity mediates political conservatism and environmental attitudes
Michael Barnett, William Archuleta & Christina Cantu
Journal of Applied Social Psychology, October 2019, Pages 647-654
Abstract:
Climate change and pollution impact those alive today as well as future generations, suggesting that attitudes toward future generations may be linked with environmental attitudes. Despite the widespread impact of the environmental on human lives, there is considerable partisan divide in the United States with regards to environmental issues. We investigated relationships between political conservatism, generativity, and environmental attitudes in two studies (N = 429 and N = 618). Political conservatism was associated with lower pro‐environmental attitudes; however, political conservatism was also associated with higher generativity and had a positive indirect effect on pro‐environmental attitudes through higher generativity. More politically conservative individuals may have greater concern for future life and thereby have more pro‐environmental attitudes even while having lower pro‐environmental attitudes overall. These results likely reflect partisan polarization with regard to environmental issues. Pro‐environmental messages may be more persuasive for conservatives if they are linked to concerns about future generations.
Be Cautious with the Precautionary Principle: Evidence from Fukushima Daiichi Nuclear Accident
Matthew Neidell, Shinsuke Uchida & Marcella Veronesi
NBER Working Paper, October 2019
Abstract:
This paper provides a large scale, empirical evaluation of unintended effects from invoking the precautionary principle after the Fukushima Daiichi nuclear accident. After the accident, all nuclear power stations ceased operation and nuclear power was replaced by fossil fuels, causing an exogenous increase in electricity prices. This increase led to a reduction in energy consumption, which caused an increase in mortality during very cold temperatures. We estimate that the increase in mortality from higher electricity prices outnumbers the mortality from the accident itself, suggesting the decision to cease nuclear production has contributed to more deaths than the accident itself.
Prolonging coal's sunset: Local demand for local supply
Jonathan Eyer & Matthew Kahn
Regional Science and Urban Economics, forthcoming
Abstract:
The share of U.S electricity generated by coal has fallen from nearly 50% to 33%. This transition offers social environmental benefits but spatially concentrated costs as coal miners and their local communities have suffered. Coal states have responded to shifting demand conditions by introducing incentives for local power plants to purchase coal from local mines. We document that power plants in areas with mining activity are more likely to be coal-fired and to purchase more coal from mines which they share a political boundary even after controlling for the distance from power plants to mines. While politically-motivated coal purchases do result in improved conditions in coal-mining counties in some regions of the country, these benefits are likely to be small compared to the additional carbon costs.
The Greenconsumption Effect: How Using Green Products Improves Consumption Experience
Ali Tezer & Onur Bodur
Journal of Consumer Research, forthcoming
Abstract:
In many situations, consumers use green products without a deliberate choice to use or purchase the product. This research explores how using a green product (e.g., a pair of headphones made from recycled materials) influences the enjoyment of the accompanying consumption experience (e.g., listening to music), even if consumers have not deliberately chosen or purchased the product. Five experiments in actual consumption settings revealed that using a green (vs. conventional) product enhances the enjoyment of the accompanying consumption experience, referred to as the greenconsumption effect. Merely using a green product makes consumers perceive an increase in the extent to which they are valued as individuals by society, which leads to warm glow feelings, and consequently enhances the enjoyment of the accompanying consumption experience. When consumers experience low social worth, the positive effect of using green products on the accompanying consumption experience is amplified. The greenconsumption effect disappears when the negative environmental impact of the green product attribute is low. From a managerial standpoint, the current research identifies instances where brands can benefit from going green and encourages marketers, especially service providers, to promote green products that are instrumental in consumption experiences.
Effects of Mandatory Energy Efficiency Disclosure in Housing Markets
Erica Myers, Steven Puller & Jeremy West
NBER Working Paper, November 2019
Abstract:
Mandatory disclosure policies are increasingly prevalent despite sparse evidence that they improve market outcomes. We study the effects of requiring home sellers to provide buyers with certified audits of residential energy efficiency. Using similar nearby homes as a comparison group, we find this requirement increases price capitalization of energy efficiency and encourages energy-saving residential investments. We present additional evidence characterizing the market failure as symmetrically incomplete information, which is ameliorated by government intervention. More generally, we formalize and provide empirical support for seller ignorance as a motivation for disclosure policies in markets with bilaterally incomplete information about quality.
Nature-Based Solutions Can Compete with Technology for Mitigating Air Emissions Across the United States
Varsha Gopalakrishnan et al.
Environmental Science & Technology, forthcoming
Abstract:
Despite the proliferation of control technologies, air pollution remains a major concern across the United States, suggesting the need for a paradigm shift in methods for mitigating emissions. Based on data about annual emissions in U.S. counties and current land cover, we show that existing forest, grassland, and shrubland vegetation take up a significant portion of current U.S. emissions. Restoring land cover, where possible, to county-level average canopy cover can further remove pollution of SO2, PM10, PM2.5, and NO2 by an average of 27% through interception of particulate matter and absorption of gaseous pollutants. We find such nature-based solutions to be cheaper than technology for several National Emission Inventory sectors. Our results with and without monetary valuation of ecological cobenefits identify sectors and counties that are most economically attractive for nature-based solutions as compared to the use of pollution control technologies. We also estimate the sizes of urban and rural populations that would benefit from this novel ecosystem-based approach. This suggests that even though vegetation cannot fully negate the impact of emissions at all times, policies encouraging ecosystems as control measures in addition to technological solutions may promote large investments in ecological restoration and provide several societal benefits.
Global modeling of nature’s contributions to people
Rebecca Chaplin-Kramer et al.
Science, 11 October 2019, Pages 255-258
Abstract:
The magnitude and pace of global change demand rapid assessment of nature and its contributions to people. We present a fine-scale global modeling of current status and future scenarios for several contributions: water quality regulation, coastal risk reduction, and crop pollination. We find that where people’s needs for nature are now greatest, nature’s ability to meet those needs is declining. Up to 5 billion people face higher water pollution and insufficient pollination for nutrition under future scenarios of land use and climate change, particularly in Africa and South Asia. Hundreds of millions of people face heightened coastal risk across Africa, Eurasia, and the Americas. Continued loss of nature poses severe threats, yet these can be reduced 3- to 10-fold under a sustainable development scenario.
Air Pollution, Behavioral Bias, and the Disposition Effect in China
Jennifer (Jie) Li et al.
Journal of Financial Economics, forthcoming
Abstract:
Inspired by the recent health science findings that air pollution affects mental health and cognition, we examine whether air pollution can intensify the cognitive bias observed in the financial markets. Based on a proprietary data set obtained from a large Chinese mutual fund family consisting of complete trading information for more than 773,198 accounts in 247 cities, we find that air pollution significantly increases investors’ disposition effects. Analysis based on two plausible exogenous variations in air quality (the vast dissipation of air pollution caused by strong winds and the Huai River policy) supports a causal interpretation. Mood regulation provides a potential mechanism.
Reevaluating the ozone nonattainment standards: Evidence from the 2004 expansion
Mark Curtis
Journal of Environmental Economics and Management, forthcoming
Abstract:
In 2004 the EPA implemented the largest regulatory expansion of the National Ambient Air Quality Standards since the program's inception in the 1970's. As a result, polluting plants in hundreds of counties faced significant new regulatory costs. This paper discusses the selection process by which counties were designated as nonattainment and provides empirical evidence on the impacts of these regulations on employment, establishments and establishment size in exposed industries. Results from a nonparametric differences-in-differences matching estimator show that, relative to the constructed counterfactual, employment in affected industries temporarily increased (fell less), the number of establishments permanently decreased and establishment size increased. These findings are consistent with regulation increasing firms' investment and entry costs.
Property rights and the protection of global marine resources
Gabriel Englander
Nature Sustainability, October 2019, Pages 981–987
Abstract:
Managing global marine resources by assigning property rights could align economic and conservation incentives, but only if unauthorized resource use is deterred. Exclusive Economic Zones (EEZs) are country-level property rights to marine resources, covering approximately 39% of the ocean’s surface and accounting for more than 95% of global marine fish catch. However, EEZs might not be respected by unauthorized resource users because the cost of monitoring and enforcing such large areas may be prohibitive. Here we provide the first evidence that EEZs are in fact respected by unauthorized resource users. Using global, high-resolution fishing effort datasets and the ecologically arbitrary boundaries between EEZs and the high seas, we find that unauthorized foreign fishing is 81% lower just inside EEZs compared to just outside. Consistent with the high cost of enforcing EEZ boundaries, this deterrence effect is concentrated in EEZs that are most valuable near their boundaries. Our results suggest that property rights institutions can enable effective governance of global marine resource use.
The concurrent decline of soil lead and children’s blood lead in New Orleans
Howard Mielke et al.
Proceedings of the National Academy of Sciences, 29 October 2019, Pages 22058-22064
Abstract:
Lead (Pb) is extremely toxic and a major cause of chronic diseases worldwide. Pb is associated with health disparities, particularly within low-income populations. In biological systems, Pb mimics calcium and, among other effects, interrupts cell signaling. Furthermore, Pb exposure results in epigenetic changes that affect multigenerational gene expression. Exposure to Pb has decreased through primary prevention, including removal of Pb solder from canned food, regulating lead-based paint, and especially eliminating Pb additives in gasoline. While researchers observe a continuous decline in children’s blood lead (BPb), reservoirs of exposure persist in topsoil, which stores the legacy dust from leaded gasoline and other sources. Our surveys of metropolitan New Orleans reveal that median topsoil Pb in communities (n = 274) decreased 44% from 99 mg/kg to 54 mg/kg (P value of 2.09 × 10−08), with a median depletion rate of ∼2.4 mg⋅kg⋅y−1 over 15 y. From 2000 through 2005 to 2011 through 2016, children’s BPb declined from 3.6 μg/dL to 1.2 μg/dL or 64% (P value of 2.02 × 10−85), a decrease of ∼0.2 μg⋅dL⋅y−1 during a median of 12 y. Here, we explore the decline of children’s BPb by examining a metabolism of cities framework of inputs, transformations, storages, and outputs. Our findings indicate that decreasing Pb in topsoil is an important factor in the continuous decline of children’s BPb. Similar reductions are expected in other major US cities. The most contaminated urban communities, usually inhabited by vulnerable populations, require further reductions of topsoil Pb to fulfill primary prevention for the nation’s children.
Crowding In with Impure Altruism: Theory and Evidence from Volunteerism in National Parks
Matthew Kotchen & Katherine Wagner
NBER Working Paper, November 2019
Abstract:
This paper makes three contributions to the literature on private provision of public goods. First, we identify limitations of the frequently used specification test that distinguishes between the standard models of pure and impure altruism based on the extent of crowding out. While the literature takes as given the result that crowding out should be less with impure altruism compared with pure altruism, we show that, in general, it can be either more or less. Second, we propose a more general test based on the presence of crowding in, rather than the extent of crowding out. Third, we provide empirical evidence. Using a unique panel data set on volunteerism in U.S. National Parks, we estimate the causal effect of changes in public funding within parks on the amount of within-park volunteerism. The overall finding is that each additional dollar of public expenditure crowds in 27 cents worth of volunteerism on average. We show how the estimates of crowding in, along with heterogeneity based on park and volunteer hour types, are theoretically consistent with the mainstay model of impure altruism.