Getting Clean
Energy Transitions in Regulated Markets
Gautam Gowrisankaran, Ashley Langer & Mar Reguant
NBER Working Paper, January 2024
Abstract:
Natural gas has replaced coal as the dominant fuel for U.S. electricity generation. However, U.S. states that regulate electric utilities have retired coal more slowly than others. We build a structural model of rate-of-return regulation during an energy transition where utilities face tradeoffs between lowering costs and maintaining coal capacity. We find that the current regulatory structure retires only 45% as much coal capacity as a cost minimizer. A regulated utility facing a carbon tax does not lower carbon emissions immediately but retires coal similarly to the social planner. Alternative regulations with faster transitions clash with affordability and reliability goals.
Do cities mitigate or exacerbate environmental damages to health?
David Molitor & Corey White
Regional Science and Urban Economics, forthcoming
Abstract:
Do environmental conditions pose greater health risks to individuals living in urban or rural areas? The answer is theoretically ambiguous: while urban areas have traditionally been associated with heightened exposure to environmental pollutants, the economies of scale and density inherent to urban environments offer unique opportunities for mitigating or adapting to these harmful exposures. To make progress on this question, we focus on the United States and consider how exposures -- to air pollution, drinking water pollution, and extreme temperatures -- and the response to those exposures differ across urban and rural settings. While prior studies have addressed some aspects of these issues, substantial gaps in knowledge remain, in large part due to historical deficiencies in monitoring and reporting, especially in rural areas. As a step toward closing these gaps, we present new evidence on urban-rural differences in air quality and population sensitivity to air pollution, leveraging recent advances in remote sensing measurement and machine learning. We find that the urban-rural gap in fine particulate matter (PM2.5) has converged over the last two decades and the remaining gap is small relative to the overall declines. Furthermore, we find that residents of urban counties are, on average, less vulnerable to the mortality effects of PM2.5 exposure. We also discuss promising areas for future research.
Pollution-induced regulation substitution
Aaron Elrod, Katherine Theyson & Christopher Van de Ven
Economics Letters, February 2024
Abstract:
This paper estimates the previously unexamined effect of Clean Air Act (CAA) monitoring and enforcement (M&E) on Clean Water Act (CWA) M&E. According to the literature, air polluters located close to violating air monitors face more CAA scrutiny, as regulators reallocate resources to these areas. Given limited regulatory resources within states, we examine how this reallocation affects CWA M&E. We find that plants located close to violating particulate matter (PM) monitors are less likely to receive state-level CWA inspections and enforcement actions. These results provide evidence that state regulators substitute resources across federal environmental regulations, which may explain previously observed substitution of pollution across media from air to water as a response to heightened CAA scrutiny.
The Impact of Wind Energy on Air Pollution and Emergency Department Visits
Harrison Fell & Melinda Sandler Morrill
Environmental and Resource Economics, January 2024, Pages 287-320
Abstract:
Using daily variation in wind power generation in the western portion of Texas, we show that the resulting lower fossil fuel generation in the eastern portion of the state leads to air-quality improvements and, subsequently, to fewer emergency department (ED) visits. Spatially, the impact on pollution is widespread, but wind energy reduces ED admission rates more in zip codes closer to coal plants. Using intra-day wind generation and electricity pricing data, we find that more wind generation coming from hours when congestion on the electricity grid is less leads to higher reductions in emissions from east Texas power plants and PM2.5 concentrations and ED admission rates in east Texas. Comparing wind generation effects across low-demand night hours to higher-demand day hours, more NOX and SO2 is offset by wind from night hours, but the time-dependent effects for PM2.5 concentrations and ED admission rates is much weaker, potentially due to differences in exposure.
Cool cities: The value of urban trees
Lu Han et al.
NBER Working Paper, January 2024
Abstract:
This paper estimates the value of urban trees. The empirical strategy exploits an ecological catastrophe -- the Emerald Ash Borer (EAB) infestation in Toronto -- to isolate exogenous variation in neighborhood tree canopy changes. Adding one tree to a postcode increases property prices by 0.40%; the hardest-hit areas lost 7% tree cover, resulting in a 6% property price decline. The tree premium includes the value of tree services and aesthetics. Our results demonstrate a significant impact of trees on mitigating urban heat and generating energy savings. However, the total amenity value of trees exceeds the combined value of these services.
Drinking water contaminant concentrations and birth outcomes
Richard DiSalvo & Elaine Hill
Journal of Policy Analysis and Management, forthcoming
Abstract:
Previous research in the U.S. has found negative health effects of contamination when it triggers regulatory violations. An important question is whether levels of contamination that do not trigger a health-based violation impact health. We study the impact of drinking water contamination in community water systems on birth outcomes using drinking water sampling results data in Pennsylvania. We focus on the effects of water contamination for births not exposed to regulatory violations. Our most rigorous specification employs mother fixed effects and finds changing from the 10th to the 90th percentile of water contamination (among births not exposed to regulatory violations) increases low birth weight by 12% and preterm birth by 17%.
Toxified to the Bone: Early-Life and Childhood Exposure to Lead and Men's Old-Age Mortality
Jason Fletcher & Hamid Noghanibehambari
NBER Working Paper, December 2023
Abstract:
Several strands of research document the life-cycle impacts of lead exposure during the critical period of children's development. Yet little is known about long-run effects of lead exposure during early-life on old-age mortality outcomes. This study exploits the staggered installation of water systems across 761 cities in the US over the first decades of the 20th century combined with cross-city differences in materials used in water pipelines to identify lead and non-lead cities. An event-study analysis suggests that the impacts are more concentrated on children exposed during in-utero up to age 10. The results of difference-in-difference analysis suggests an intent-to-treat effect of 2.7 months reduction in old-age longevity for fully exposed cohorts. A heterogeneity analysis reveals effects that are 3.5 and 2 times larger among the nonwhite subpopulation and low socioeconomic status families, respectively. We also find reductions in education and socioeconomic standing during early adulthood as candidate mechanism. Finally, we employ WWII enlistment data and observe reductions in height-for-age among lead-exposed cohorts.
Lead and delinquency rates: A spatio-temporal perspective
Duncan Mayer
Social Science & Medicine, January 2024
Abstract:
Juvenile delinquency has significant social costs for perpetrators, victims, and communities. To understand the distribution of delinquency offenses this study considers the spatial clustering of juvenile delinquency with lead, race, and neighborhood deprivation using a longitudinal ecological design (N = 4390) and a hierarchical model implemented in a Bayesian methodology that allows space-time interaction. The results show lead exposure is positively related to delinquency offense rates, and over time delinquency rates have become more concentrated in areas with higher levels of lead exposure and shares of Black or African American residents. The study emphasizes the isolation of neighborhoods with social problems and the importance of monitoring patterns of lead and crime at local levels as communities implement lead exposure mitigation programs.
Dust to Feed, Dust to Gray: The Effect of in Utero Exposure to the Dust Bowl on Old-Age Longevity
Hamid Noghanibehambari & Jason Fletcher
Demography, forthcoming
Abstract:
Intensive agriculture and deep plowing caused topsoil erosion and dust storms during the 1930s, affecting agricultural income and land values for years. Given the growing literature on the relevance of in utero and early-life exposures, it is surprising that studies focusing on links between the Dust Bowl and later-life health have produced inconclusive and mixed results. We reevaluate this literature and study the long-term effects of in utero and early-life exposure to topsoil erosion caused by the 1930s Dust Bowl on old-age longevity. Specifically, using Social Security Administration death records linked with the full-count 1940 census, we conduct event studies with difference-in-differences designs to compare the longevity of individuals in high- versus low-topsoil-erosion counties before versus after 1930. We find intent-to-treat reductions in longevity of approximately 0.85 months for those born in high-erosion counties after 1930. We show that these effects are not an artifact of preexisting trends in longevity. Additional analyses suggest that the effects are more pronounced among children raised in farm households, females, and those whose mothers had lower education. We also provide suggestive evidence that reductions in adulthood income are a likely mechanism for the effects we document.
Green Links: Corporate Networks and Environmental Performance
Hossein Asgharian et al.
Review of Finance, forthcoming
Abstract:
We investigate the propagation of environmental performance among competitors and in customer-supplier relationships. We find causal effect among competitors, while the propagation from customers to suppliers and vice versa appears insignificant or does not survive identification tests. The effect is stronger among firms in highly concentrated competitor networks and towards firms with less market and bargaining power than their competitors. We also find significantly stronger propagation of environmental performance among competitors engaged in joint research and development activity. These results show that the propagation stems from both competitive pressure and technological spillover. Importantly, we find that propagation is strong when the competitor improves its environmental performance and when the firm's own environmental performance is poor initially, alleviating concerns that improvements in performance are concentrated among firms, which are already green. Overall, network effects among competing firms are a significant force shaping environmental performance, and a force mostly for good.